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Wu, a 54-year-old retiree in China’s south-western Sichuan province, struggled to get hold of antiviral medication when her 92-year-old mother came down with Covid-19 this month.
“By the time I realised my mother had Covid, it had been two days since she had eaten or drunk anything,” she said.
Relatives in Shanghai rushed to send antiviral drugs by post after the local hospital and clinic ran out of supplies, but when the medicine arrived, Wu’s mother had already tested negative.
Drug shortfalls that hit hospitals in Beijing and Shanghai last month as Covid cases surged are now expanding into rural areas as bureaucratic inefficiency, pricing disputes with pharmaceutical companies and overspending on testing capacity have resulted in a shortfall of resources.
Despite pledges by Pfizer, the maker of antiviral medication Paxlovid, to build a factory in China within the coming months, there is no sign that the drug will receive permanent approval for the country’s national health insurance scheme. This puts it out of reach for many Chinese people.
The annual migration of urban workers to their hometowns in poorer provinces is expected to accelerate the spread of Covid to remote regions, raising the risk of even more severe outbreaks. Last week, President Xi Jinping warned that the pandemic was entering a “new phase” and that he was now “primarily concerned about rural areas and rural residents”.
One doctor in a county hospital in Sichuan told the Financial Times that the facility did not have access to antiviral Covid drugs to treat an influx of patients. Instead, practitioners were relying on fever medicine to care for Covid patients until last week.
This echoed complaints from health professionals in Beijing last month, where hospitals ran out of beds, oxygen and drugs after Chinese authorities abandoned their zero-Covid policy of containing the virus.
When the hospital in Sichuan finally received four boxes of Paxlovid and Azvudine, a domestic Chinese antiviral, last week, the doctor said regulatory barriers prevented staff from easily prescribing them. Because of the scarcity, hospitals have to request approval from the local government for each prescription. “It is too troublesome,” the doctor said.
In remote areas, shortages of antigen tests and lack of access to lung imaging equipment have also hindered early diagnoses, allowing the virus to spread.
“It takes more effort to distribute drugs to remote areas,” said Helen Chen, greater China managing partner at LEK Consulting in Shanghai, adding that cities tended to mop up supply of in-demand drugs before rural areas had access to them.
China granted Paxlovid regulatory approval in February 2022, making it the first foreign Covid remedy to enter the mainland market. But the National Healthcare Security Administration, which negotiates drug prices for China’s national health insurance reimbursement scheme, balked at the “high price” quoted by Pfizer.
The NHSA issued an unusual statement saying that negotiations had failed over price. The government likely “broke their silence” to “signal to the public that they made an effort” but that it was “up to Pfizer to deliver the products at a price the government considers reasonable”, said Chen.
Pfizer said it would build a factory in China to manufacture Paxlovid with a local partner, but the US pharmaceutical giant hinted that it was unlikely to lower the drug’s price — a condition to permanent inclusion in the national reimbursement scheme. It also ruled out licensing a generic version for the Chinese market.
“They are the second-highest economy in the world,” Pfizer chief executive Albert Bourla told a conference in San Francisco this month. “I don’t think that they should pay less than El Salvador.”
Under the terms of an emergency agreement, Paxlovid qualifies for reimbursement through the end of March. Bruce Liu, who leads the life sciences division for China at the consultancy Simon-Kucher & Partners, estimated the company could make Rmb10bn ($1.5bn) in revenue under the deal. He estimated 5mn boxes of Paxlovid would be shipped to China by March, far less than demand.
Private buyers have sought out Paxlovid, which has been sold for up to Rmb8,300 in high-end hospitals. In some cases, patients have bought it on the black market, paying as much as $7,000 for the drug or similar remedies of lower quality.
Meanwhile, domestic Chinese products face questions about efficacy and safety. The first Chinese antiviral, Azvudine, developed by drugmaker Genuine Biotech and included on the reimbursement list, was repurposed from an HIV treatment.
A study by China’s pharmaceutical regulator found that the drug contained substances that damaged the genetic information in cells during animal testing. “There are questions about the toxicity of this drug, a risk which makes sense for AIDs patients but not necessarily for someone with Covid,” said Liu.
China’s failure to build robust defences in preparation for an inevitable Covid exit wave has created a legitimacy crisis for President Xi Jinping and his flagship zero-Covid policy.
“They have three years to prepare for this,” said one Shanghai-based pharmaceutical industry insider. “They didn’t have the right vaccines or the sufficient supply of drugs to cope with the case surge.”
As cases rise across China, for Wu’s mother, the recovery from Covid has proved long and painful.
She suffered a brain bleed, her daughter said, and there were still shadows on her lung scan. But since medical guidelines recommend patients take antiviral drugs within five days of infection, they did not use the medication they had.
“We wanted to use antivirals,” Wu said, “but don’t dare to”.
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