China’s approval of Pfizer’s antiviral COVID pill may be a turning point in its pandemic strategy

February 15, 2022, 11:31 AM UTC

For the past two years, China has isolated itself from the world by attempting to keep COVID-19 at bay. It has all but sealed its international borders and subjected the few travelers who’ve entered the country to weeks of hotel quarantine.

China has extended its COVID isolationism to foreign vaccines. In immunizing its 1.4 billion citizens from COVID, China’s government has opted for homegrown jabs versus foreign-made ones, meaning it has so far spurned vaccines from Pfizer-BioNTech and Moderna that use groundbreaking mRNA technology.

But China may now be realizing that it needs at least some foreign tools to overcome the pandemic.

On Saturday, China approved Paxlovid, the COVID-19 treatment pill developed by U.S. pharmaceutical giant Pfizer, marking the first time China has authorized a COVID vaccine or drug that was developed outside its borders.

Paxlovid is an antiviral medication given to COVID patients shortly after they test positive for the virus. Clinical trial data released in November showed that adults at high risk of the disease who received the pill were 89% less likely to be hospitalized or die from COVID, leading the U.S. and dozens of other countries to approve the drug in subsequent months.

On Chinese social media, users speculated that the government’s approval of Paxlovid suggests Beijing may be veering from its ‘dynamic COVID-zero’ strategy that seeks to stamp out all COVID-19 infections via closed borders, lockdowns, and mass testing. Social media users and other experts posited that China would need the treatment pills only if it was preparing to battle a more widespread COVID outbreak, which will be all but inevitable if China loosens its strict COVID measures and tolerates more cases.

China’s state-owned messaging organs quickly rejected that idea. Paxlovid’s approval “doesn’t imply that China is giving up on its ‘dynamic zero case’ strategy and choosing to ‘live with the virus,’” wrote state-owned nationalist tabloid Global Times. Instead, Paxlovid will simply become another weapon in China’s “dynamic COVID-zero” arsenal and give China an effective option to prevent severe infections during sporadic outbreaks, the Global Times wrote.

Even if China’s pandemic priorities are not undergoing a wholesale transformation, experts say China’s Paxlovid approval represents a slight crack in its nationalist strategy. By authorizing the pill, China is acknowledging that it cannot defeat COVID alone and may be preparing to gradually shift away from its COVID isolation.

A foreign block

For its vaccination campaign, China has relied exclusively on inactivated jabs from Chinese makers Sinovac and Sinopharm instead of mRNA jabs that are widely deployed elsewhere. In fact, German vaccine maker BioNTech has been asking Beijing to approve its mRNA COVID vaccine for distribution in the mainland since November 2020. More than 15 months later, regulators have still not approved it. Instead, Beijing has prioritized making its own mRNA vaccine, even though that effort hasn’t gotten very far. “China cannot anticipate having a homegrown mRNA vaccine anytime soon,” says Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations.

In the meantime, China has used Sinovac and Sinopharm jabs in a vaccination campaign that has been, in absolute terms, wildly successful. China’s government has distributed 215 vaccine doses per 100 citizens, higher than European Union and U.S. rates of 190 doses and 163 doses per 100 people, respectively.

But China’s vaccines seem to suffer from a critical flaw: The inactivated jabs do not appear as effective against Delta and Omicron COVID variants as mRNA vaccines from makers Pfizer and Moderna.  

Beijing has rejected Western-made mRNA vaccines because it sees no need to rely on a foreign product when it can feasibly manufacture its own version, says Huang. But the absence of mRNA jabs in China’s vaccine rollout has resulted in a large “immunity gap” in the mainland, which has left China’s population uniquely vulnerable to a deadly wave of infections because its has little natural and vaccinated immunity to COVID, says Huang.

He says Paxlovid’s approval is tacit acknowledgement by Beijing that its homegrown defenses against COVID have limits and that any domestic antiviral pill it develops won’t match Pfizer’s results.

“Paxlovid’s efficacy is nearly perfect and does not leave any room for drugmakers anywhere to beat it, so it just makes sense for all countries to approve it,” says biotech investor Brad Loncar.

Multiple Chinese firms are working on developing antiviral pills, but none of them have progressed past clinical trials. Kintor Pharmaceutical, a drug developer based in the eastern city of Suzhou, is perhaps furthest along, but its first clinical trial results released in December did not produce any meaningful data.

Despite state media messaging to the contrary, some experts interpret Paxlovid’s approval as a sign that China knows it can’t maintain its COVID-zero stance indefinitely and plans to deploy the pills to mitigate the worst effects of an unavoidable outbreak.

“China won’t self-isolate from the rest of world and has various measures at its disposal to change tack,” Zeng Guang, a former chief scientist at the Chinese Center for Disease Control and Prevention, said at an investor summit on Saturday, according to Bloomberg.

Loncar agrees. “It doesn’t make sense to keep your entire nation closed versus the outside world for a considerable amount of time simply due to pride,” he says.

Making enough pills

But just because China approved Pfizer’s drug does not mean China will rapidly deploy it. (China did not say how many doses it plans to purchase, and Pfizer did not respond to Fortune’s request for comment.)

Pfizer is struggling to supply Paxlovid to all the countries that have ordered the treatment. In the U.S., Pfizer has produced 365,000 doses, a small fraction of the 20 million doses the firm says it will supply to the U.S. this year.

Pfizer says that some of its supply shortages will ease in coming months as it ramps up production, and CEO Albert Bourla explained last month that he expects Pfizer to produce 120 million doses of the pills this year.

But even all those doses would not be enough to meet China’s need if it experienced a substantial COVID outbreak.

“China has 1.4 billion people; it’s a huge market,” says Huang. “I don’t think Pfizer’s existing manufacturing capacity can meet that demand.”

Manufacturing Paxlovid locally may be one way for China to access a consistent supply of the pills and give Beijing cover to advertise the pill as domestically made.

But local manufacturing of Paxlovid could occur only if China and Pfizer agree to it since China is not included in a deal that allows select countries to manufacture generic versions of the drug. Last November, Pfizer excluded China and India, the world’s largest generic drugmaker, when it committed to waiving patent rights to the drug in 95 countries. The exemptions drew criticism from organizations like the nonprofit Doctors Without Borders, which accused Pfizer of prioritizing profits and putting a ceiling on the global supply of the drug by maintaining intellectual-property rights in China and India.

But experts say that patent rights will not necessarily stand in the way of China eventually manufacturing Paxlovid doses, if Beijing and Pfizer can broker a deal.

“Given its large market size and existing production capacity for the biomedical industry, it is very likely China will have strong bargaining power and desire to manufacture Paxlovid locally,” says Xi Chen, associate professor of public health at Yale University.

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