updated 11:30 a.m. ET April 13, 2008

CHANGZHOU, China - On a dusty lane in east China, a small factory sitting amid strawberry and vegetable fields processes chemicals from pig guts into heparin, a commonly used blood thinner linked to 62 deaths and hundreds of allergic reactions in the U.S. and Germany.

The mysterious problems with heparin from the factory and others like it — China’s deadliest product quality scandal since Chinese cough syrup killed 93 people in Central America a year ago — dramatically illustrate the perils of shifting drug production offshore.

With recalls of heparin products now in six countries, it is an issue that regulators are scrambling to address.

In the past two weeks, China’s drug safety agency ordered tighter controls on heparin production. That followed a U.S. Food and Drug Administration order requiring all heparin imports to be tested. The FDA also announced plans to station eight regulators in China and hire five Chinese to work with them.

“This is just the tip of the iceberg in terms of problems with sensitive drugs,” said Dr. Bryan Liang, an adviser to the Partnership for Safe Medicines, an American group working to promote drug safety. “The problem is only going to get worse as more materials come from suspect sources.”

Widespread recall
About 40 percent of pharmaceuticals and 80 percent of the chemical ingredients in drugs are imported, according to U.S. government statistics. A growing share comes from developing countries such as China, India and Mexico that are still building their own drug safety systems.

Heparin is derived from mucous wrung and washed from pig intestines and other animal organs. It has been used for decades to prevent clotting from intravenous procedures, dialysis and heart surgery.

The recent problems were traced to heparin made in China and sold overseas by two western companies among the dozens that market the drug.

So far, China has reported no allergic reactions to heparin used locally.

The U.S. FDA announced Tuesday it had found 62 deaths and nearly 800 severe allergic reactions associated with heparin.

The first reports of such deaths were linked to products sold by Deerfield, Illinois-based Baxter International Inc., the biggest heparin seller in the U.S. But the most recent figures also included patients treated with other brands of heparin.

Baxter recalled nearly all its U.S. heparin injections, as have several other companies.

German manufacturer RotexMedica GmbH recalled batches of heparin from China after some 80 reports of allergic reactions, but no deaths.

Danish, French and Italian authorities are recalling batches of potentially contaminated heparin from China as a precaution, the European Medicines Agency said last month.

Three Japanese drug companies and a U.S. manufacturer, B. Braun Medical Inc., also recalled heparin products from Baxter’s supplier, Waukanee, Wis.-based Scientific Protein Laboratories, which owns the factory sitting among farm fields outside of Changzhou, a sprawling industrial city west of Shanghai.

The FDA says a contaminant, identified as “oversulfated chondroitin sulfate,” accounted for up to half of the active ingredient in some batches of heparin from the factory, known as Changzhou SPL. It has yet to confirm, though, whether the contaminant caused the allergic reactions.

'Globalized supply chain'
Chondroitin sulfate, usually made of animal or shark cartilage, is used as a food supplement for joint pain. It is more than seven times cheaper than heparin, which might tempt suppliers somewhere along the production chain to substitute it. And its chemical similarity to heparin makes it hard to spot, the FDA said.

Heparin was first made in North America and Europe, but production has shifted to lower-cost developing countries over the past 20 years.

The raw chemicals, or active pharmaceutical ingredients, used to make it and many other drugs are now mostly imported from China and India.

“We have an increasingly globalized supply chain,” said James Shen, publisher of the industry newsletter Pharma China. “The Chinese are now major suppliers of bulk pharmaceuticals and also supply intermediate chemicals for drugs.”

“It is likely we will continue to see the same problems with other drugs,” he added.

The U.S. FDA inspects only about 7 percent of foreign drug makers each year; it failed to inspect Changzhou SPL because of what it says was a language mistake.

The raw chemicals for the drug are usually made in small, unregulated workshops, using pig guts from slaughterhouses and sausage-casing factories, processed by chemical companies and eventually drug makers before being delivered to hospitals.

“The supply chain that was used to make the materials is impossible to follow,” said Liang, of the Partnership for Safe Medicines in Virginia. “Add to that, Chinese manufacturers are not averse to cutting corners, as we’ve seen in toys, toothpaste, food and drugs.”

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