China coronavirus vaccine race is muddied by history of bribes at Sinovac

Sinovac is now seeking to supply its coronavirus vaccine to developing nations, from Brazil to Turkey to Indonesia. While graft and weak transparency have long plagued China’s pharmaceutical industry, seldom has the reliability of a single drug vendor from the country mattered this much to the rest of the world. 

Sinovac is one of China’s two coronavirus-vaccine front-runners, with its clinical testing in the same final stage as Moderna’s and Pfizer-BioNTech’s. Domestically, Sinovac’s vaccine is in second place, with state-owned Sinopharm’s vaccines more widely administered under an emergency-use program. Another Chinese vaccine, developed by CanSino and a military research institute, is approved for emergency use by China’s military.

Sinovac’s vaccine, Coronavac, may end up adopted in a number of developing markets. Officials in Brazil and Indonesia — the most populous nations in Latin America and Southeast Asia — say Coronavac could be approved in coming weeks. In Brazil, São Paulo Gov. João Doria has called it the safest vaccine the country has tested.

Sinovac has not yet released efficacy data, making it unclear whether its vaccine can protect recipients as successfully as the vaccines from Moderna and Pfizer, which were more than 90 percent effective in preliminary analyses.

Sinovac has acknowledged the bribery case involving its CEO, saying in regulatory filings that he cooperated with prosecutors and was not charged. The CEO said in testimony he could not refuse demands for money from a regulatory official.

While Sinovac’s history of bribery has raised concerns among investors of the Nasdaq-listed company, only in recent months has its record taken on such global implications. Governments are weighing the risks of new vaccines from companies like Sinovac against the certainty of more deaths if the pandemic continues.

A review of public records and trial testimonies by The Washington Post reflects that Sinovac’s rise to the front ranks of China’s vaccine industry took place with the help of priority projects from Beijing and kickbacks to officials who assisted in regulatory reviews and sales deals. A number of details from the court cases have not been reported previously, in part because of China’s censored media.

In 2016 court testimony, Sinovac’s founder and chief executive, Yin Weidong, admitted to giving more than $83,000 in bribes from 2002 to 2011 to a regulatory official overseeing vaccine reviews, Yin Hongzhang, and his wife. Yin Hongzhang confessed to expediting Sinovac’s vaccine certifications in return.

Those years corresponded to Sinovac’s breakout period, when the biotech start-up founded in 2001 was handpicked by Beijing officials to lead development of vaccines for SARS, avian flu and swine flu.

Yin Hongzhang, who shares a surname with Sinovac’s CEO but is no relation, was sentenced in 2017 to a decade in prison for taking bribes from Sinovac and seven other companies. Sinovac’s Yin Weidong, now 56, was not charged and continues to oversee the company’s coronavirus-vaccine drive this year.

For Sinovac, that case was not a one-off: At least 20 government officials and hospital administrators across five provinces admitted in court to taking bribes from Sinovac employees between 2008 and 2016.

Sinovac said in 2017 it had launched an internal investigation in response to the bribery cases. It has yet to announce the investigation’s result.

In its latest annual report, released in April, Sinovac said that Yin Weidong “was not charged with any offense or improper conduct and he cooperated as a witness with the procuratorate. To our knowledge, the Chinese authorities have not commenced any legal proceedings or government inquiries against Mr. Yin.”

The annual report said that Sinovac maintained strict anti-corruption policies but that “these policies may not be completely effective.”

In a statement to The Post, a Sinovac spokesman said the company had entrusted the legal system to handle the past bribery cases appropriately. He said the CEO’s ability to do his work was unaffected. Sinovac did not make Yin Weidong available for an interview.

Corruption in China’s pharmaceutical industry is a long-running scourge. Dali Yang, a University of Chicago political scientist, said China’s shift from decentralized drug approvals in the 1990s to centralized reviews in the 2000s created opportunities for graft.

But corruption is no longer as rampant as it once was, after several high-profile crackdowns sparked by drug-safety scandals, Yang said. In 2007, China executed Zheng Xiaoyu, the former head of the State Food and Drug Administration, in a grim warning to the industry. China’s President Xi Jinping launched another broad anti-corruption drive in 2012.

Vaccine mishaps continued to occur in recent years. In 2018, Sinovac’s larger rival Sinopharm recalled 400,000 shots of diphtheria, tetanus and pertussis vaccines for substandard…