Rise in Price Was a Sign of Trouble

Supply Problems Caused Spike That Some Say Should Have Prompted Scrutiny

The price of the Chinese-produced main ingredient used to make the blood thinner heparin doubled last year, just four months before hundreds of American patients began having severe and sometimes fatal allergic reactions to the medication, according to a report from an authoritative drug information company in China.

The highly unusual increase of the price within a quarter of a year should have been a red flag to drugmakers that something significant -- and perhaps dangerous -- was happening to the ingredient of a medication widely used in life-threatening situations, industry experts said. Heparin contains a substance that is extracted from the intestines of pigs and is collected in slaughterhouses and on farms.

Between November and February, hundreds of Americans experienced serious allergic reactions after taking Chinese-made heparin, and 62 died, the Food and Drug Administration reported this week, sharply increasing its previous estimates. Some patients always respond poorly to heparin, but FDA statistics show three fatal allergic reactions in 2006.

Last month, the agency discovered through chemical testing that heparin made in China and distributed in the United States by Baxter International had been contaminated with inexpensive over-sulfated chondroitin, an altered version of a widely used dietary supplement.

The company that bought the Chinese raw material and began processing the drug -- Scientific Protein Laboratories (SPL) of Waunakee, Wis., and Changzhou, China -- acknowledged this week that the price of unprocessed heparin doubled in China in the last half of 2007 and said the company passed on some of the increase to its customers. Baxter spokeswoman Erin Gardiner said that the company faced "modest" price increases in 2007 because it had long-term contracts, but that it saw a "substantial" rise this year.

Wayne Pines, an SPL spokesman, attributed the price spike to a supply shortage caused by an epidemic of "blue ear" disease in Chinese pigs and by decisions of Chinese villages and companies to get out of pig farming and shift to more lucrative businesses. Pines said the price doubling did not raise any safety concerns.

But some businesspeople who deal in pharmaceuticals said the sudden increase in the long-stable price of an important ingredient should have raised concern among purchasing agents.

"This price increase should be, has to be, seen as a signal to purchasing managers," said Guy Villax, chief executive of the European drug company Hovione and a board member of the European trade association for drug ingredient makers.

"You have a situation here where the supply chain begins in slaughterhouses and villagers' homes, and a sudden disruption of that supply doesn't raise safety questions? I don't know whether anyone could have detected the contaminant early on, but at least they should have been looking," he said.

Villax added that the supply shortage and the steep price increase offered an obvious opportunity for individuals "who don't play by the rules" to make windfall profits by adding cheaper materials to the raw heparin as a way to meet the demand.

The FDA has not said whether it thinks the contaminant was intentionally added to the drug, but officials described it as a heparin-like compound that appeared to have been formulated so that standard quality-control tests could not detect it.

Although officials have not conclusively linked the contaminant to the allergic reactions and deaths, they have said there is clearly an overlap between the two. Chondroitin sulfate does not occur naturally but can be made from pig cartilage.