(Bloomberg) -- Pfizer Inc. has picked a Chinese drug-making giant once embroiled in a global medicines recall for supplying tainted ingredients to make its Covid-19 antiviral pill in the country.

Zhejiang Huahai Pharmaceutical Co. will produce and sell Paxlovid in mainland China for five years, the companies said Thursday in separate statements. Pfizer will provide ingredients to make nirmatrelvir, the antiviral portion of the drug, and ritonavir, which slows the antiviral’s breakdown in the body. Huahai will manufacture and combine the two into Paxlovid. 

Based in eastern China, Huahai is one of the nation’s biggest makers of pharmaceutical ingredients and generic drugs. In 2018, a likely carcinogen called NDMA was found in ingredients that the company manufactured and used in medicines to treat high blood pressure. This led to a global recall of some affected drugs -- including valsartan, irbesartan and losartan -- made by at least 10 companies.

The US Food and Drug Administration subsequently banned drugs made at one of Huahai’s factories, and the European Medicines Agency prohibited the firm from sending the blood pressure drugs to companies in the European Union. The FDA ended its ban last year, however, after an evaluation of Huahai’s corrective actions determined that it had addressed its compliance issues. 

Pfizer has a rigorous quality system in place to ensure that medicines are produced in accordance with all applicable company and regulatory standards, a spokesperson said in response to questions from Bloomberg News about the Paxlovid agreement. Calls to a phone number listed on Huahai’s website went unanswered.

EMA hasn’t published any updates since 2018 when the agency issued a notice of non-compliance against Huahai and said that EU authorities have placed Huahai under increased supervision. 

Covid Zero

Paxlovid became the first foreign Covid antiviral treatment to receive emergency authorization from China’s regulators in February and will be the first made in the country. Expanding access to the drug -- which China currently only imports in small quantities -- could help the country transition to life beyond Covid Zero, the policy which sees coronavirus outbreaks still vigorously stamped out as soon as they occur with mandatory isolation, ubiquitous testing and lockdowns.

Why China Is Sticking With Its Covid Zero Strategy: QuickTake

Victory over the virus will require effective vaccines and treatments, as well as mild variants, Liang Wannian, the head of an expert panel for China’s National Health Commission said in April.  

The deal isn’t expected to have a large impact on Huahai’s earnings as the drug will make up a small portion of revenue, the company’s board said in a filing Thursday. Huahai’s shares have rose 2.8% since the announcement. 

Read More: China’s Covid ‘Triumph’ Lies in Vaccines, Drugs, Mild Variants

In March, four Chinese generic manufacturers, Fosun Pharmaceutical, Apeloa Pharmaceutical Co. and Shanghai Desano Pharmaceuticals Co. along with Huahai, were licensed to produce a cheaper version of Paxlovid for lower-income countries in the United Nations-backed Medicines Patent Pool program.

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