Monday, June 13, 2011

The First Contaminated Heparin Case Verdict: Making Money by Giving Patients "the Cheap Stuff"

In February, 2008, we first posted about the case of the deadly adulterated heparin.  (A case summary is appended to the end of this post, and nearly all our posts are here.)  The case is of fundamental importance because it involves the failure of pharmaceutical companies to fulfill their core mission, to supply pure, unadulterated drugs.  It is also of fundamental importance because it may be about how this failure to fulfill core mission was not due to accident, or even simple incompetence, but due to putting financial goals ahead of patient safety. 

The latest event in the very slowly unfolding aftermath of this case was the first verdict against the sellers of the heparin in a civil trial in a US court room.  As reported by the Chicago Tribune,
A Cook County Circuit Court jury Thursday awarded $625,000 to the estate of a man who his attorneys say was given a dosage of a blood thinner made by Baxter International Inc. that contained a contaminated ingredient found in the company's supply chain in China.

The verdict is the first from a case against Baxter and its supplier, Wisconsin-based Scientific Protein Laboratories, from hundreds of lawsuits filed against the Deerfield-based medical product giant. A mountain of litigation has been leveled against the companies after U.S. regulators determined in 2008 that Baxter's heparin was contaminated, from fake ingredients sourced in China.

A statement by the (winning) plaintiff's attorneys underscored that this case may have been about cutting costs winning out over patient safety:
'The active pharmaceutical ingredient in the contaminated heparin received by Mr. Johansen and other Americans was obtained from Baxter (and its supplier Scientific Protein Laboratories') Changzhou SPL,' Johansen estate attorneys Don Nolan of Chicago and David Zoll of Toledo, Ohio said in a statement this afternoon. 'This crude heparin was referred to in the companies' own internal records as 'the cheap stuff.' The contaminant was determined to be a man-made 'fake heparin' called over-sulfated chondroitin sulfate, causing among other effects, potentially fatal allergic-like reactions.'

As explained in this post in the Postscript blog:
Baxter and its ingredient supplier, Scientific Protein Laboratories (SPL), announced in 2008 that the OSCS contaminant was introduced intentionally by their suppliers in China. Financial motives are presumed, because Heparin costs 100 times more to make than OSCS. In addition, Heparin which is harvested and purified from the intestines of pigs, was even harder to obtain in 2007-08 because a global pig disease epidemic had created an unexpected shortage in China and elsewhere.

The timing was right, and seems the chemistry was, too. The OSCS contaminant was not initially discovered because it mimics some chemical properties of Heparin, suggesting that it was introduced by suppliers in China who possessed the biochemical savvy to fool the standard chemical purity tests then in use by Baxter and the FDA. (The assay test has since been improved by the US Pharmacopeia.)
So it appeared in their haste to cut costs, Baxter International, and its US based supplier, Scientific Protein Laboratories, failed to consider that heparin chosen because it was "the cheap stuff" might not turn out to be safe. In particular, they seemed to be wilfully blind to the prospect that pushing for the cheapest price without inquiring too deeply into the details of the supply chain might tempt those down the chain to cheat, and in doing so, to disregard the safety of those patients (in another country) who would be infused with the resulting adulterated product.  This thus appears to be a vivid, and fatal case of mission-hostile management.

Meanwhile, we still await the result of the investigation that was supposed to have started in February, 2011 (see this post.)

To reiterate, 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).

Case Summary

- We have posted several times, recently 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.

- 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.)  Note that SPL was recently bought out and taken private, making its current leadership even less transparent (see post here).  A 2010 inspection of an SPL facility by the FDA revealed ongoing manufacturing problems (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.)  Efforts to make documents to be used in these cases public so far have not succeeded (see post here).

- A 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.)

-  Despite requests from the US, the Chinese government did not investigate the production of the heparin that lead to the deaths (see post here.)

-  In February, 2011, a congressional investigation of the case was announced, but results are so far unavailable (see post here.)


Anonymous said...

We will probably learn more about Weiner's congress inquiry than we ever will about the congress heparin investigation. Am I old or is this country and government really that messed up?

Steve Lucas said...

Of interest may be this Fox link:

regarding how doctors reach for the prescription pad before any thing else. The reality is we are over medicated with drugs of questionable utility and quality.

Steve Lucas

Afraid said...

The way the legal system has evolved is to serve the needs of the legal system and the lawyers and others who earn their living from it. They serve, of course, bigger interests.

Long drawn out cases with token penalties that agree to pay whatever legal costs that have been incurred benefits the system and its constituents at the expense of its customers and its role in our society.

So not only do we see the same ethical challenges in healthcare as we do in the banking system, it could be they all eminate from the judicio-legal system and its exclusion from outside oversight resulting in ineffective "self policing."

Listen again to Arthur's message from the movie Michael Clayton -- it explains it all:

The question remains, when is the time now?

Anonymous said...



Recommended reading:
(1) Hippocrates' Shadow by David H. Newman, M.D.,
(2) Health Care Renewal--a daily MUST, and


Anonymous said...

In this saga, we also have a doctor whose efforts who aren't to blame, for making billions on "the expensive stuff". Let me explain.

If it weren't for the ethical and moral principles of Patrick Soon-Shiong, a doctor, there wouldn't have been an FDA-approved, safe supply of heparin available in the 2007-2008 timeframe when the Baxter-based heparin was being recalled. According to his account recorded in the youtube video cited below, he found the notion of using 'whatever pig material we can get' for heparin 'unacceptable' (1). In 2005, he and his company (Abraxis at the time, later changed to APP Pharmaceuticals) tagged over 300 million pigs, in China, to ensure their intestines were coming from a safe supply. He felt a "moral and ethical obligation" to do this, even though it made his form of heparin the most expensive in the world. Why? Because without heparin, dialysis patients would die, and no surgery could be performed (1).

In 2007, the FDA asked Abraxis to ramp up heparin production because their heparin was "the only safe supply they knew of."(1) In 2007, that statement was a huge challenge to back up. Even if the FDA had been able to inspect all of the Chinese heparin production facilities, it wouldn't have been able to detect the synthetic contaminant with existing standard tests. Not only did the FDA have to come up with improved tests, it had to prove a causal relationship between the synthetic contaminant and the adverse reactions seen in patients treated with the contaminated heparin. Only after accomplishing these two feats, in a short timeframe, could the FDA determine with reasonable certainty that the Abraxis heparin was safe (2).

Also, the world's supply of safe heparin was actually being compromised due to factors beyond human control. This may have partially accounted for the business decision to dilute natural heparin with a chemical look-alike. We don't yet know who was behind that, but it wouldn't surprise me that knowledge of the dwindling supply weighed into that decision.

Dwindling supply was a key motivator for the FDA approving production of heparin from pig intestines in the first place:

"The outbreak in the late 1980s of bovine spongiform encephalopathy (mad cow disease), which causes Creutzfeldt–Jakob disease in humans, led regulators to ban the use of cow viscera for drug pro-duction, so heparin manufacturers switched to pig intestines. The shift to pigs had the unintended consequence of forcing US manufacturers to purchase raw materials abroad because US slaughterhouses could supply only about half of the nation’s demand for theraw material used to produce heparin. China, which slaughters about five times as many pigs per year as the US, is the only country capable of meeting world demand for porcine-derived heparin." (2)

Dwindling supply was most likely a key motivator for diluting heparin with a synthetic contaminant in China:

"The contamination was almost certainly economically motivated. It started at a time when blue ear disease, a virus that kills pigs, had decimated Chinese herds, reducing supply and driving up the cost of pork – and of porcine viscera used to produce heparin." (2)

So, it turned out that literally billions in profits went to Dr. Soon-Shiong, ironically, as a result of putting ethical, patient-oriented principles to work in the production of safe, albeit expensive, heparin. (1)

We need more physician-inventor-enterpreneurs like Dr. Soon-Shiong, who "do well by doing good." (1).

1. ForbesVideo (2009). Billionaire's Medical Breakthroughs. Retrieved from

2. Usdin, S. (2009). The Heparin Story. International Journal of Risk & Safety in Medicine 21, 93–103. This is a reprint of an article in BioCentury, and accessible from the internet for free at

Afraid said...

This last comment smells of preemptive obfuscations, especially as it seems to be trying to justify the profit of many billions of dollars.

In an anechoic world, any echos are often manipulation.