Tucked in the foothills of the Austrian Alps, the last fully integrated penicillin plant in Europe faces an uncertain future as China produces the same antibiotics and ingredients at much lower cost for the European market, Reuters reported on Wednesday from Kundl. The Sandoz factory is the only site in Europe making penicillin from start to finish, including key active ingredients.

China's share of EU imports of penicillins and their derivatives, mostly in bulk active pharmaceutical ingredient form, has nearly doubled from 44% in 2019 to 86% last year, Eurostat data cited by Reuters show. Penicillin, discovered by Alexander Fleming a century ago, remains the main antibiotic class for life-threatening infections, and the manufacturing of ingredients for some 1.5 billion daily doses administered in Europe each year is now dominated by China, Reuters said.

Sandoz has asked the European Commission to open an anti-dumping investigation that could lead to tariff measures against Beijing, just three years after a €200-million expansion of the Kundl site that included €50 million of public funds, Reuters reported. Yaani: €200 million is about 20 crore euros, and the public share of €50 million is about 5 crore euros. If the plant closed, Europe "would be fully dependent" on China, Kundl site manager Stephanie Jedner told Reuters.

The falling prices help cost-conscious European governments' public healthcare programmes, but analysts cited in coverage of the report say antibiotic dependence could give Beijing strategic leverage. China has said its industrial support complies with WTO rules and rejected protectionism, according to The Business Standard's summary of the Reuters report. The decision now rests with the European Commission on whether to open the investigation.

The Kundl debate has become a focal point for a wider argument about Western self-sufficiency in essential medicines, after several rival producers announced closures or moves of production to China, Reuters reported.

Sources: Reuters, October 21 (Eurostat data; Sandoz/Kundl site manager Stephanie Jedner); The Business Standard, October 21 summary including China's WTO position.