Heparin's Deadly Side Effects

SPL in Changzhou says it relies on two companies--its joint-venture partner, Changzhou Techpool, as well as a Hangzhou-based firm, Ruihua Biomedical Products Co.--to buy its crude heparin. Strunce has described them as meticulous in ensuring the quality of the crude heparin they buy for SPL. But several small suppliers told TIME they have sold directly to SPL or have been approached by the company, looking for product. And when FDA inspectors showed up in Hangzhou this year, after reports of a spike in deaths and illness, Ruihua Biomedical stiff-armed the investigators. It refused to let them inspect its processing lab and declined to provide a list of crude-heparin suppliers. Before last summer, SPL's China facility had never been inspected by Beijing's drug-safety agency because, says a spokesman, the agency thought "it was a chemical plant." A source close to the FDA's heparin investigation puts it bluntly: "China simply has no regulatory regime to speak of."

That judgment gains credence from a simple fact: the heparin disaster goes beyond Baxter, SPL and their suppliers--none of whom have been charged with wrongdoing and all of whom say they are cooperating with regulators to find out where problems arose in the supply chain and why. French pharmaceutical giant Sanofi Aventis told French regulators and the FDA that it too had found and recalled tainted heparin last spring. (Baxter pulled all its heparin from the market last January.) In April, deputy FDA commissioner Janet Woodcock said the agency had traced the contaminated heparin api, which ultimately found its way to companies like Baxter in 11 countries, to 12 separate Chinese companies. To date, those 12 firms have not been identified by the FDA, Baxter or SPL. But the "working hypothesis," as Woodcock put it, is that the contamination was intentional. In other words, it was not the result of the filth from which crude heparin emerges. "It was economic fraud," said a senior U.S. official.

Why intentional? To cut costs. Heparin suppliers substituted a chemical--oversulfated chondroitin sulfate, or OSCS--that is derived from animal cartilage and used only in dietary supplements, not in medicines. The compound's key advantages: it is, as a Baxter spokeswoman puts it, a "virtual mimic of heparin" in most tests and, according to a congressional investigator, costs only $20 per kg, vs. $2,000 for crude heparin. The suppliers, investigators believe, colluded to substitute OSCS in the crude heparin they passed along for the standard price and pocketed the $1,980 difference for each kilogram they sold.

Working with Baxter, the FDA devised a test that now identifies OSCS in heparin. The FDA will deploy eight full-time staffers in China, including four inspectors and a senior technical expert in foods, medicines and medical devices. And working with its counterpart agency in Beijing--which FDA commissioner Andrew van Eschenbach acknowledges is primarily responsible for drug safety there--the FDA will now be able to do "more timely" inspections in China. In 2008 the FDA did all of 30 inspections in China.