More About What We Don't Know About the Contaminated Heparin from China

We last blogged about the case of Baxter International's adulterated heparin here.  (For a more detailed summary of the case, look here.)

In summary, Baxter International imported the "active pharmaceutical ingredient" (API) of heparin, that is, in plainer language, the drug itself, from China. That API was then sold, with some minor processing, as a Baxter International product with a Baxter International label. The drug came from a sketchy supply chain that Baxter did not directly supervise, apparently originating in small "workshops" operating under primitive and unsanitary conditions without any meaningful inspection or supervision by the company, the Chinese government, or the FDA. The heparin proved to have been adulterated with over-sulfated chondroitin sulfate (OSCS), and many patients who received got seriously ill or died. While there have been investigations of how the adulteration adversely affected patients, to date, there have been no publicly reported investigations of how the OSCS got into the heparin, and who should have been responsible for overseeing the purity and safety of the product. Despite the facts that clearly patients died from receiving this adulterated drug, no individual has yet suffered any negative consequence for what amounted to poisoning of patients with a brand-name but adulterated pharmaceutical product.

Now, an article in the Wall Street Journal by Alicia Mundy tells us more about what we don't know,

The Chinese government didn't pursue an investigation into contaminated heparin sent to the U.S. in 2007 and 2008, despite repeated requests from the U.S. for help, according to a congressional probe.

Two House Republicans said Food and Drug Administration officials recently told them that the agency has been "severely hampered" by the lack of cooperation from China in finding those responsible.

Furthermore,

'It is shocking to find out two years after Chinese-made heparin was killing Americans, the Chinese government still has done no investigating to find out why,' said Mr. Barton, the top Republican on the House Energy and Commerce Committee. He called on ... [FDA Commissioner Margaret] Hamburg to air the issue with Chinese officials.

Chinese officials denied there is a problem,

Yan Jiangying, spokeswoman for China's State Food and Drug Administration, said the congressmen's accusations are 'not true.'

Ms. Yan said her agency 'did a very thorough investigation, including very detailed inspection and testing, and surveys of enterprises as well. We signed an agreement with the FDA on drug safety in the end of 2007, and strengthened the monitoring of heparin.'

Note that their investigation, such as it was, did not appear to identify any misconduct or wrong-doing by anyone.

So now we know more about what we do not know about the deadly adulterated heparin from China.

But remember this is a case about heparin sold in the USA by Baxter International, an American company as an American product, resulting in the death of Americans.  Also, remember that the American company obtained the heparin from another American company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. 

Since Baxter International sold the heparin under its own label, should not its leaders be responsible for the safety and purity of the product?  Since Scientific Protein Laboratories LLC furnished the active pharmaceutical agreement to Baxter, and obtained it from a factory it partially owned in China, should not its leaders also be responsible for the safety and purity of the product?

It would be important to find out ultimately where in China the adulterated heparin entered the supply chain, but the current uncertainty about the initial origin of the contamination does not absolve those in the US who sold the active pharmaceutical ingredient, and then sold that ingredient in bottles with a US company label of responsibility for the safety and purity of the drug.

Why have we heard nothing more from Baxter International's and Scientific Protein Laboratories' leaders about the deadly heparin which they had sold?  Why have we heard nothing more about any investigation of these US based participants in this case? 

Both US companies doubtless saved money by buying the heparin from the cheapest Chinese sources they could find, by not directly inspecting and supervising its production, and by at best ignoring the lack of regulation of producers of active pharmaceutical ingredients in China.  They and their leaders benefited from this out-sourced, off-shore production.  (Note that Baxter CEO Robert L Parkinson Jr received total compensation of $14,361,305 according to the company's proxy statement, and six named officers all received more than $2,200,000.) Why aren't they being held accountable for its bad results?

As we have said until being blue in the face, as long as the leaders of health care organizations are not held accountable for the results of their decisions on health care quality, cost, and access (even in such extreme quality violations as those resulting in multiple patient deaths), we can expect continuing decisions that sacrifice quality, increase costs, and worsen access, but that are in the self-interest of the people making them.

To really reform health care, we must hold health care organizations and their leaders accountable (and not blame all the problems on doctors, other health care professionals, patients, and society at large).

Hat tip to Ed Silverman on the PharmaLot blog.

Prosecuting Doctors for Importing IUDs from Canada, but Still No Penalties for Selling Adulterated Heparin from China

Here in Rhode Island, the big health care story recently was the use of unapproved intra-uterine devices (IUDs) by some local obstetrician-gynecologists (OB-GYNs).  The first nuanced summary of the story which just appeared in the Providence Journal, written by Felice Freyer, suggested how the consequences of possible misconduct in health care depend on the clout of those involved.

The Unapproved IUDs

Here are the main points. The issue that caused so much local controversy was the use of unapproved IUDs:

Ten Rhode Island medical groups with 28 doctors told the Health Department that they bought IUDs, a form of birth control, from a foreign source, at prices about half what they had to pay for IUDs approved for use in the United States. Many had stopped using the unapproved devices long before the Health Department began its investigation in June.

Here is what we know about the actual devices they implanted:

An IUD is a T-shaped device that can fit in the palm of a woman’s hand. To prevent pregnancy, doctors insert it into the uterus, where it can stay for years. There are two types available in the United States: the ParaGard copper IUD and the Mirena hormonal IUD. Mirena, the more costly and more popular brand, has a coating of a progesterone-like drug that reduces heavy menstrual bleeding.

Unapproved IUDs Made by an American Company in Finland and Sold in Canada

Most of the "unapproved devices" the doctors were using were apparently made in Finland by an American company.

In most cases, the doctors were using Mirena, which is made at a factory in Finland by an American company, Bayer Healthcare Pharmaceuticals. Only when it comes through approved channels can doctors and patients be assured that a product meets FDA standards. But it is unclear whether Bayer –– or anyone –– makes a version of Mirena that does not meet those standards.

The doctors imported the devices from far-away, exotic Canada.

Most of the devices apparently came from Canada, where the government negotiates with drug and device makers to keep prices low.

There is no reason to suspect the devices were counterfeit, or defective.

'If they’re really from Canada and from a reputable pharmacy, it should be exactly the same thing [as the FDA-approved version],' said Sheryl Ruzek, a retired public health professor at Temple University and vice chair of the board of the ECRI Institute, a nonprofit organization that evaluates medical procedures and products. 'My hunch is the patients were not harmed,' she said.

Potential Negative Consequences for the Physicians

However, the RI physicians are in big trouble for importing them:

In Rhode Island, the state boards that regulate physicians, nurses and nurse-midwives are investigating all those involved. If any are found guilty of unprofessional conduct, they could face disciplinary action such as a reprimand or license suspension. The state attorney general’s office has a Medicaid fraud unit, but declined to comment. The U.S. Attorney also had no comment.

US doctors in other states have also been importing IUDs, and also are in big trouble:

So many doctors were importing IUDs or considering doing so that the American College of Obstetricians and Gynecologists recently took an official stand, issuing an advisory opposing the use of imported devices.

In 2006, the California Department of Health found that eight doctors had used imported IUDs in some 850 women.

In October 2009, an Arkansas doctor was indicted by a federal grand jury for using non-FDA-approved versions of Mirena. He was charged with violation of the Food, Drug & Cosmetic Act, health-care fraud (for allegedly billing Medicaid for the unapproved devices) and money-laundering (for the way he allegedly handled Medicaid reimbursements). The doctor, Kelly Dean Shrum, has not yet come to trial, but potential penalties include fines and imprisonment.

Summary, and the Contrast with the Case of the Adulterated, Fatal Heparin
So to summarize, doctors who imported IUDs from Canada that appeared to be identical to those sold with FDA approval in the US, and were made in Finland by an American company at the same factory in which the US approved IUDs were made have gotten into major trouble with state and federal authorities. There is no clear evidence that the IUDs caused any harm to patients.

I am not defending the doctors' actions. However, contrast the treatment they are likely to receive with another case we have frequently discussed.

We last blogged about the case of Baxter International's adulterated heparin here.  In summary, Baxter International imported the "active pharmaceutical ingredient" (API) of heparin, that is, in plainer language, the drug itself, from China.  That API was then sold, with some minor processing, as a Baxter International product with a Baxter International label.  The drug came from a sketchy supply chain that Baxter did not directly supervise, apparently originating in small "workshops" operating under primitive and unsanitary conditions without any meaningful inspection or supervision by the company, the Chinese government, or the FDA.  The heparin proved to have been adulterated with over-sulfated chondroitin sulfate (OSCS), and many patients who received got seriously ill or died.  While there have been investigations of how the adulteration adversely affected patients, to date, there have been no publicly reported investigations of how the OSCS got into the heparin, and who should have been responsible for overseeing the purity and safety of the product.  Despite the facts that clearly patients died from receiving this adulterated drug, no individual has yet suffered any negative consequence for what amounted to poisoning of patients with a brand-name but adulterated pharmaceutical product.

Yet everyone from state health departments to the federal authorities have jumped into the case of the unapproved IUDs imported, but from Canada, and apparently identical to the IUDs sold in the US.  There is, at least so far, no evidence that the IUDs were defective or dangerous, and no evidence they have harmed patients.  One doctor has been prosecuted for violating the Food, Drug and Cosmetic Act, and for health care fraud and money-laundering.  No one working for Baxter International (or for the identified organizations within its supply chain) has been prosecuted for anything.

What the...?   I do not object to discipline and prosecution of individual doctors who appear to have broken the law.  But why are we so vigorously pursuing individual doctors for an apparently technical violation of laws that did patients no apparent harm, when we are not pursuing health care corporate executives for selling adulterated drugs that likely killed patients? 

F Scott Fitzergald wrote that the "very rich are different from you and me," and it appears that very rich health care leaders have impunity when it comes to conduct that let patients be harmed and die. 

Real health care reform would make top health care leaders as accountable as we now make individual doctors.

$19 Million Means Never Having to Say You Are Sorry?

Johnson and Johnson, the giant diversified health care company, recently shut down a factory that manufactured non-prescription childrens' medication, and recalled its products.  The findings from a US Food and Drug Administration (FDA) inspection of the plant were striking.  As described by Reuters,

The company recalled 40 widely used children's pain and allergy medications, saying some may have a higher concentration of their active ingredients, while others may be contaminated. J&J has had four recalls in the past year of over-the-counter medicines.

In an FDA report issued on Tuesday, inspectors said they found thick dust, grime and contaminated ingredients at the J&J plant that produces Children's Tylenol and dozens of other products recalled last week.

This infuriated the member of Congress who chairs a sub-committee which oversees the FDA:

Democratic Representative Rosa DeLauro sent a letter to the Food and Drug Administration asking questions about how the agency can respond to recalls and quality control lapses.

'I am concerned that the agency does not possess the authority to take appropriate action to address potentially criminal behavior by a corporation,' DeLauro wrote in the letter to FDA Commissioner Margaret Hamburg.

Furthermore,

DeLauro, in her letter, said the company's 'disregard' for manufacturing standards was 'both unnerving and unethical.'

'The corporate oversight observed at this facility appears to be symptomatic of reckless behavior that is clearly unacceptable,' she wrote.

The Reuters report then noted:

J&J has called the manufacturing problems unacceptable and vowed to fix them. The company has suspended production at the Pennsylvania plant where the recalled children's products are made.

Moreover, the company CEO took to the blogsphere (via the company's JNJ BTW blog) to give his response (below in its entirety).

To All Who Use Our Products,

We have a responsibility at Johnson & Johnson to provide you with the highest-quality products possible, and we have worked hard to fulfill that responsibility day-by-day for over a century.

The recent recalls of some over-the-counter medicines from our McNeil Consumer Healthcare operating company are a matter of great concern. They are a disappointment to me, and to the employees of the Johnson & Johnson Family of Companies. You can be confident that we will make whatever changes are needed at McNeil to fully restore the quality of its manufacturing.

As reported, McNeil has suspended all manufacturing operations at its facility in Fort Washington, Pa., until we can be sure that they are operating under the standards we demand of ourselves, and which our customers expect of us. McNeil has also retained independent quality experts to assist in this regard and is re-evaluating quality systems and manufacturing processes across the organization.

I have been assured that the chance of a serious medical event from the recalled products is remote. Even so, this does not give us comfort; one of our companies has let you down.

For now, please check your infants’ or children’s forms of TYLENOL®, MOTRIN®, ZYRTEC® or BENADRYL® and discard any medicines that are being recalled. You can check the list of recalled lots, apply for refunds, and get more information about the recall at McNeil’s dedicated website (http://mcneilproductrecall.com), or by calling 888-222-6036.

We will work hard to earn back your confidence.

Sincerely,

Bill Weldon

This seems like a very important case, because it involves a pharmaceutical company apparently violating its most fundamental responsibility, to provide pure, unadulterated medicine to the public.  While the current case did not apparently lead to major health consequences to patients (as did the case of the contaminated heparin), it still suggests very basic flaws with Johnson & Johnson's operations.

Thus, what is striking about the CEO's message is its remote tone.  He characterizes the problems at the factory as a reason for "great concern" and "a disappointment."  Such language seems designed to reduce the CEO's own connection to the problems at the factory.  This is the language one might use to describe someone else's conduct.  (For example, Politician X's vote on the bill "caused me great concern," and "was a disappointment.")

On the other hand, although the CEO wrote about collective responsibility, ("we have a responsibility at Johnson and Johnson,"), he never suggested he had any responsibility or was accountable for what happened. 

Of course, we have frequently seen language like this when health care organizations are accused of practices that violate their fundamental responsibilities, or could threaten health and safety.  Rather than embracing responsibility, often leaders use language that suggests a fear of admitting anything that could create legal liability.

However,  supposedly the rationale for entrusting so much power, and providing so much compensation to CEOs and other top executives, including those of health care organizations, is the tremendous responsibility they undertake.  In fact, the Johnson & Johnson 2010 proxy statement provides this justification for the executives' stratospheric pay:

Pay for Performance —All components of compensation should be tied to the performance of the individual executive officer and his or her specific business unit or function and/or the Company overall.
• Credo Values— The manner in which financial and strategic objectives are achieved is important. While not always quantifiable, the manner in which employees achieve results should also be a key element of the individual performance review process. During the performance review process, the Company’s set of core values—trustworthiness, respect, responsibility, fairness, caring and citizenship—as set forth in Our Credo should be used to assess how objectives are achieved.
• Accountability for Short- and Long-Term Performance — Annual performance bonuses and long term incentives should reward an appropriate balance of short- and long-term financial and strategic business results, with an emphasis on managing the business for the long-term.

It then goes on the emphasize the company's Credo:

Importance of Credo Values

For more than 65 years, the Johnson & Johnson Credo has guided the actions of the Company and its executive officers in fulfilling their responsibilities to the Company’s customers, employees, community and shareholders. In assessing the executive officers’ contributions to the Company’s performance, the Committee not only looks to results-oriented measures of performance, but also considers how those results were achieved— whether the decisions and actions leading to the results were consistent with the values embodied in the Credo— and the long-term impact of an executive officer’s decisions. Credo based behavior is not something that can be precisely measured and, thus, there is no formula for how
Credo-based behavior can, or will, impact an executive’s compensation. The Committee and the Chairman/CEO use their judgment and experience to evaluate whether an executive’s actions were aligned with the Company’s Credo values.

Thus, last year Mr Weldon's total compensation was $19,847,026. Such an amount ought to pay for a vast amount of responsibility and accountability. (Also, the total compensation of Ms C A Goggins, the Worldwide Chairman of the Consumer Group, who I presume to the the executive just below the CEO who is responsible for products made by the factory which had to be closed, was $5,345,737.)

So again the rules for the executives of big health care organizations seem to be heads they win, tails we lose.  They are paid enough to turn them into a new aristocracy supposedly because of the tremendous responsibility and accountability they assume.  However, when things go wrong, responsibility and accountability vanish in a haze of concern and disappointment (with other peoples' actions.)

On Health Care Renewal we continue to be concerned with and disappointed about our dysfunctional health care system, and its worsening problems with costs, quality and access as long as it is lead by people who can become rich without any responsibility or accountability for their actions.  The robber barons that arose in the late 19th century lead our country and the world into the great depression.  The new health care robber barons will soon lead us into the great health care depression. 

More Questions, No Answers About the Case of the Deadly Heparin - Some Congressmen Weigh In

In 2008, we started posting on how the "active pharmaceutical ingredient" of heparin made in China under apparently primitive conditions, contaminated accidentally or deliberately, was sold in the US bearing the label of a large American pharmaceutical company. Ultimately, many patients were sickened, or died. A summary of our posts on the topic, in smaller type, is below.

- We have posted several times, recently here and here, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting late last year, hundreds of such reactions, and now 21 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was made by Baxter International.

- We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. The company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart.

- Most recently, we found out that the Baxter International labelled heparin was contaminated with over-sulfated chondroitin sulfate, a substance not found in nature, but which mimics heparin according to the simple laboratory tests used in the Chinese facilities to check incoming heparin. (See post here.) Further testing revealed that the contamination seemed to have taken place in China prior to the provision of the heparin to Changzhou SPL. (See post here.) It is not clear whether Baxter International or Scientific Protein Laboratories had inspected most of the steps in the supply chain, or even knew what went on there.

- The Baxter and Scientific Protein Laboratories CEOs did not seem aware of where they got the heparin on which the Baxter International label was eventually affixed. But one report in the New York Times alleged that Scientific Protein Laboratories would not pay enough for heparin to satisfy any sources other than the small "workshops."

- Leaders of all organizations involved, Baxter International, Scientific Protein Laboratories, Changzhou SPL, the Chinese government, and the US Food and Drug Administration, and the US Congress assigned blame to each other, but none took individual or organizational responsibility. (See post here.)

- Researchers (who turned out to have financial ties to a company which is developing an anti-coagulant drug that could compete with the heparin made by Baxter International) investigated the biological mechanisms by which the contamination of the heparin lead to adverse effects, but no one investigated further how the contamination occurred, or who was responsible.  (See post here.)

- Hundreds of lawsuits against Baxter have now been filed, so far without resolution.  (See post here.)

- A recent government report which attracted little attention warned of the dangers of pharmaceutical ingredients made in China and subject to virtually no oversight. (See post here.)

Last week, minority (Republican) members of a committee of the US House of Representatives sent a letter to the Commissioner of the US Food and Drug Administration (FDA) raising a number of concerns of its investigation of contaminated heparin from China.  The letter was summarized in http://www.theheart.org/ (here), but so far has not been noticed by any main-stream media outlets.  The main concerns raised in the letter were:

1. The FDA has not adequately followed up specific and credible information linking Chinese heparin firms to counterfeit heparin or contaminated heparin in several different supply chains.
2. The FDA inspected several Chinese heparin firms in 2008 and 2009 for regulatory compliance issues but did not conduct these inspections consistently and adequately for determining the source of the heparin contamination.
3. The FDA has not adequately followed up with the Chinese government about the heparin contamination-source investigation.

Curiously, though, most of the letter detailed concerns about an FDA inspection of a company called Chongqing Imperial Bio-Chem Co, Ltd, which appears to be separate from any of the firms mentioned above which seemed to be involved with the heparin ultimately sold in the US under the Baxter label.  In fact, I have not seen to date any report on the contamination of that heparin, supposedly whose active ingredient Baxter obtained from  a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions.  Nor have I seen any report on the responsibility of any of these parties for the purity and safety of the heparin.  In particular, given that the heparin was sold in containers with the Baxter International label, and hence given that the doctors, nurses and pharmacists involved in its administration likely thought that it was actually made by Baxter, I have not seen any further discussion of that company's responsibility to provide a pure, safe, unadulterated product to its US patients. 

And all this still begs the question that most of the coverage of the deadly heparin also begged. Are American pharmaceutical companies so besotted with the need for cost-savings that they are willing to buy active pharmaceutical ingredients with unknown provenance overseas as if they were a pig in a poke? If so, why do we allow company leadership to potentially sacrifice quality, and sell adulterated drugs just to enrich their bottom lines (and their executives' salaries)?

As a postscript, a report last week in a New York Times blog reminds us of the monetary stakes here:

A drug harvested from pigs’ intestines has made a low-profile Chinese couple the nation’s wealthiest overnight. Husband and wife Li Li and Li Tan’s Shenzhen Hepalink Pharmaceutical sold 10 percent of its shares this week in an I.P.O. that values their stake at about $6.2 billion, The Financial Times reported.

The I.P.O. also earned Goldman Sachs a near 200-fold profit on its original $5 million investment.

According to the newspaper, analysts say Hepalink’s high valuation is a result of the company being the only one in China that is accredited by the U.S. Food and Drug Administration [presumably after the above case of the deadly heparin] to export the 'active pharmaceutical ingredient' heparin after it has been harvested.

This amount of money sloshing around suggests that the reason this case remains so persistently anechoic is fear of offending those who have been getting very rich from the products of pigs' intestines.

I hope that more investigators with intestinal fortitude step in to investigate the out-sourcing of drug production to dubious suppliers before more patients are poisoned.