Rise in Price Was a Sign of Trouble

Pigs are bred at a Longtan Village farm in Changzhou, a sprawling industrial city in eastern China. Outside the city is a factory that processes chemicals from pig guts into a key ingredient in heparin. (Photo: Eugene Hoshiko/AP)

FDA spokeswoman Karen Riley said Friday that the agency was aware that the price of raw heparin increased dramatically last year but did not necessarily see it as a signal of potential quality problems. The rise was apparently the result of the blue ear disease outbreak, she said, but the agency is looking at other possibilities.

"We are aware that with other products in other years, ingredients that look like the approved drug have been added for economic advantage, to make a quick buck," she said.

The price increase is detailed in a report by the Chinese drug information company Oriental Health E-Commerce Business (Beijing), recently renamed Healthoo.com. The company collects data on drug sales and prices from Chinese customs offices and is considered authoritative by Western businesspeople. The heparin report, made public only recently, contains statistics but no commentary.

The Healthoo report shows that the price of crude heparin exported from China went from $629 per kilogram in January 2007 to $1,507 per kilogram in December. The report also shows that more than 50 percent of the crude heparin went to the United States, 37 percent to Germany and the rest to other nations.

The report shows that the cost of refined heparin exported by China rose at about the same rate as that of raw heparin -- strongly suggesting that the increase was driven by the price of the raw material, rather than by processing problems.

In recent years, China has been the world's primary source for the active ingredient in heparin, but in an e-mail Friday, Healthoo said that significantly less heparin is being exported from China now because of the supply problems.

No heparin deaths have been documented in other countries, but the contamination was detected and allergic reactions were reported in France, Germany, Italy and elsewhere. It is unclear whether the lack of reported deaths outside the United States is because of differences in the sources of heparin or of a more aggressive U.S. system of reporting adverse events.

Heparin, which is used as a blood thinner during surgery and dialysis, has been on the market since the 1930s. Like many pharmaceuticals -- especially inexpensive generic drugs -- it is now largely made abroad, increasingly in lightly regulated nations such as China and India. The FDA's ability to oversee the supply chains has become a much-discussed issue on Capitol Hill.

Brant Zell is past chairman of the Bulk Pharmaceuticals Task Force, a group within a larger American organic-chemicals trade association that deals with drug ingredients. He said unusual price spikes, such as the one involving heparin, have buyers "asking questions like, 'Is something unethical going on here?' "

He said the case highlights a new reality -- that when a problem arises with an American-manufactured drug, the FDA usually addresses it quickly and can take action promptly. But when a problem surfaces in China or India, where regulation and oversight are far less strict, it inevitably takes officials longer to determine what is happening and why.

"The truth is that there's not a level playing field here when it comes to regulation in the United States versus a place like China," Zell said. "And since many Chinese are quite a few years behind us in understanding quality control and good manufacturing, problems like with heparin will be hard to avoid because it's just harder to pick up the early warning signals."

Jon Martino, a specialist in tracking and detecting counterfeit drugs and a former global investigations manager for Amgen, a major biotech company, said that U.S. firms that get their unprocessed heparin from China are to some extent "at the mercy" of their suppliers.

"Baxter is dependent on getting" that active pharmaceutical ingredient and "would drop to their knees to get it for their patients," he said. "Maybe they thought it was a temporary glitch in price, maybe they didn't do their due diligence as well as they could have. But the basic point is that they need to get those ingredients, because they have so many customers to supply."

Staff writer Mary Pat Flaherty contributed to this report.