Three Years Later, A Congressional Investigation of the Deadly Adulterated Heparin

Slightly more than three years ago, 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.   Three years later, how the heparin was adulterated, and who was responsible are still unknown.

So now, it seems, there will actually be an official investigation.  As reported by Alicia Mundy in the Wall Street Journal,

The House Energy and Commerce Committee is conducting a formal investigation into the contaminated-heparin crisis of 2008, saying it wants regulators to figure out who was responsible for adulteration linked to 81 U.S. deaths.

The panel's chairman, Rep. Fred Upton (R., Mich.), and two colleagues sent a letter Wednesday to the Food and Drug Administration asking for documents on whether the agency pursued possible culprits in China and pushed the Chinese government for more information.

'The committee is investigating the unsolved case of who contaminated the U.S. supply of heparin,' a blood thinner used by about 12 million Americans annually, said Mr. Upton, joined by Reps. Clifford Stearns (R., Fla.) and Michael Burgess (R., Texas).

Better late than never, I suppose. In March, 2008, I called the case "outrageous," and called for an investigation. You really did hear it here first on Health Care Renewal. So three years later, an investigation has actually begun.

The latest WSJ article noted:

'There is substantial public interest in solving this case' because more than 80% of the standard heparin supply in the U.S. today comes from China, the lawmakers wrote. About 16% of all pharmaceutical ingredients in the country are imported from China, they wrote.

Also,

'There is reason to believe all or some of the individuals responsible for the adulteration are still actively engaged in the Chinese pharmaceutical supply chain, and pose a continuing threat to pharmaceutical products imported to the U.S.,' the lawmakers wrote.

However, why this "substantial public interest" and the existence of "a continuing threat" did not lead to an investigation earlier is still completely obscure.

The article hinted at some partisan discord in the committee that will do the investigation:

Over the last two years, Mr. Burgess and the Energy and Commerce Committee's then-top Republican, Rep. Joe Barton of Texas, pressed the FDA for information on the agency's inspections of Chinese heparin facilities and on the extent of cooperation from national and local Chinese authorities.

At the time, Republicans were in the minority. Their inquiries didn't constitute a committee investigation, and they couldn't demand nonpublic information from the FDA or call hearings. They now are in the majority and have those powers.

The implication is that the Democrats on the committee blocked the investigation. Why they would have blocked an investigation when the executive branch was in Republican hands, and why the matter could not have been investigated in another congressional committee, or by some other organization, is unknown.

So, again, better late than never. An investigation could at least be the beginnings of accountability for the very well paid pharmaceutical company leaders who up to now have denied all responsibility for failing their most important responsibility, to provide pure, unadulterated drugs.

As we have said again and again, 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.)

Hat tip to the Postscript blog.

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FDA to Scientific Protein Laboratories Managerement: "We Are Concerned About Your Fundamental Understanding"

Per Ed Silverman on the Pharmalot blog, we hear of new concerns about a company in the supply chain that ended up with adulterated heparin and dead patients.  Before summarizing what the blog reported, let me summarize the case again.

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 in 2008, hundreds of such reactions, and now over 80 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was sold 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.
- 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.  (For a more detailed summary of the case, look here, and for all our posts on this topic, look here.)

The FDA Letter

Pharmalot reported that the US Food and Drug Administration (FDA) sent a warning letter dated January 20, 2011, to Scientific Protein Laboratories LLC, and provided a link to the letter. 

The letter identified continuing serious problems with Scientific Protein Laboratories' operations:

During our July 28, 2010 - September 3, 2010, inspection of your active pharmaceutical ingredient (API) manufacturing facility, Scientific Protein Laboratories LLC, located at 700 E. Main Street, Waunakee, WI, investigators from the Food and Drug Administration (FDA) identified significant deviations from Current Good Manufacturing Practice (CGMP) for the manufacture of drugs. These deviations cause your drugs to be adulterated within the meaning of section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the Act) [21 U.S.C. � 351(a)(2)(B)] in that the methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with CGMP.

The firm failed to adequately respond to complaints about its products, including heparin:

Failure to investigate all quality related complaints whether received orally or in writing according to a written procedure.

For example, your firm failed to conduct a formal investigation concerning a complaint identifying potential contamination with Oversulfated Chondroitin Sulfate (OSCS) in a lot of Heparin Sodium USP (lot 1035-0778) on October 9, 2008. Your firm did not initiate a formal investigation until September 9, 2009. In addition, at that time, your firm failed to extend your investigations to other lots of Heparin Sodium USP manufactured using the same crude lot identified with OSCS contamination. Your investigation did not consider the other lot of Heparin Sodium USP that was associated with the same contaminated crude lot until May 26, 2010, eight months after initiating a formal investigation (i.e., lot 1035-0780, which tested negative for OSCS in June 2010). We acknowledge that you initiated a voluntary recall of Heparin Sodium USP that included lots 1035-0778 and 1035-0780 on October 13, 2010.

In your response, your firm notes that you have revised your procedure to state, �Any SPL employee will inform QA of a customer complaint.� However, this response does not address the fundamental issues that allowed the delays in communications and investigation to occur. Your handling of the heparin contamination complaint suggests the need to evaluate training across all departments about the types of information requiring prompt reporting to the quality unit. Further, your response does not address how you will ensure that complaint investigations are handled in a timely manner.

Also, the firm still had problems overseeing the work of companies that supplied it:

Your firm failed to properly evaluate a contract laboratory to ensure GMP compliance of operations occurring at the contract site

Furthermore, it did not use the proper equipment:

Failure to have equipment for the manufacture of APIs of appropriate design for its intended use.

The FDA seemed concerned that company management did not understand its responsibilities:

The manner in which you addressed this problem [the contamination of the heparin] is very worrisome with respect to the timeliness of the investigation, the identification of all potentially affected drugs, and implementing appropriate actions to resolve these issues. Be advised that your firm has the responsibility to ensure the quality, safety, and integrity of its drugs. FDA expects that your corporate management will immediately undertake a comprehensive evaluation of your quality system to ensure comprehensive compliance with CGMP.

In addition,

However, we are concerned about your firm�s fundamental understanding of what is required by your Quality Unit and the regulatory expectations for a firm that enters into agreements with contract testing laboratories. Although you have agreements with other firms that may delineate specific responsibilities to each party, you are ultimately responsible for the quality of your products and the reliability of test results. Regardless of who tests your products or the agreements in place, you are required to manufacture these products in accordance with section 501(a)(2)(B) of the Act to assure their identity, strength, quality, purity, and safety.

Summary

In previous discussions of the case of the adulterated heparin I speculated about reasons that the current leaders of health care corporations may have abandoned their most fundamental responsibilities, for example:

I submit that corporate cultures increasingly influenced by the arrogant, greedy, amoral leadership of the financial services industry that lead us to the brink of another depression are also leading us to the brink of a poisonous era in health care. Corporate leaders intent on cutting costs, and paying themselves as much of the resulting proceeds as possible, may see quality and safety as just another cost cutting target. Corporate leaders brought up in the culture of finance, but untrained and inexperienced in engineering, science, and medicine find it all too easy to ignore quality and safety and focus on the bottom line.

The FDA letter to Scientific Protein Laboratories seems to confirm my fear that leaders of health care corporations no longer seem to understand their most elementary responsibilities for providing safe products, in this case, pure, unadulterated drugs. It did not speak to why that may be the case, but certainly does not contradict my theory above.

The letter provides some reassurance that the FDA, at least, has not forgotten the case of the adulterated heparin. However, despite the number of deaths involved, this case has been relatively anechoic, and never fully investigated.

So here I go again: 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).

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Why is Johnson and Johnson "Spinning Out of Control?"

Last week, a New York Times article by Natasha Singer and Reed Abelson cataloged some of the problems afflicting the giant health care corporation Johnson and Johnson. 

Little red flags jut out from the shelves at a CVS drugstore in suburban Boston, alerting shoppers to shortages of nearly a dozen Johnson & Johnson products. Among them are Motrin, Rolaids, children�s Tylenol liquid and adult Tylenol, Mylanta, Pepcid AC and even some Neutrogena skin care products.

'Looking for Tylenol pain relief products?' asks one of the signs. The notices at CVS serve as a stark reproof to Johnson & Johnson, whose brands have for more than a century been synonymous with quality. Some of its products are in short supply at drugstores and supermarkets because the McNeil Consumer Healthcare unit of J.& J. last year recalled about 288 million items, including about 136 million bottles of liquid Tylenol, Motrin, Zyrtec and Benadryl for infants and children.

Johnson & Johnson has had to recall such a variety of products because of quality-control problems across product lines, in multiple factories and in several units last year. Some of its consumer products, for instance, may have contained bits of metal. Others came in bottles with a moldy smell. And some products have gone missing from stores with hardly an explanation. All of this has put the company and its manufacturing under the intense scrutiny of lawmakers and officials at the Food and Drug Administration.

'It looks like a plane spinning out of control,' says David Vinjamuri, a former J.& J. marketing employee who now trains brand managers at his company, ThirdWay Brand Trainers.

The article noted how the current widespread manufacturing problems at J+J seem to contradict the company's famous credo.

dating from 1943, saying that the company owed its first responsibility to the mothers and fathers, doctors, nurses and patients who use its products.

The article noted that the company's problems

have not been limited to its over-the-counter products, which could suggest that the company may suffer from even broader problems. Last year, its DePuy medical device unit recalled two kinds of hip implants, affecting tens of thousands of patients worldwide. Its vision care unit recalled millions of soft contact lenses sold abroad.

In fact, the company also has had major ethics problems. We noted here, for example, that last October J&J and Ortho-McNeil Janssen, a Johnson and Johnson subsidiary,were found by a jury to have defrauded the Lousiana Medicaid system by minimizing safety problems with the atypical anti-psychotic drug Respirdal, with a penalty of over $250 million.

Moreover, the NY Times summary is already out of date. The Los Angeles Times just reported yesterday even more recalls.

Why does the company seem to be in a tail-spin? Ms Singer and Mr Abelson listed several possible causes:

The reasons for McNeil�s woes remain unclear. Some critics, including former employees, say Johnson & Johnson has lost sight of its credo, while others suggest that the company decentralized its oversight of manufacturing and quality control in error.

Others say it was simply a matter of cost-cutting. The December lawsuit, for example, cited two unnamed former employees who contended that the company failed to address the manufacturing problems at McNeil because it was trying to save money.

Other former employees who are not involved in the lawsuit say that J.& J. seemed to hesitate in recent years to invest in new manufacturing equipment.

'It takes a lot of money to buy equipment and maintain quality,' says Patrick Bols, who left Johnson & Johnson�s pharmaceutical division in the late 1990s and owns stock in the company.

Why, however, would the company lose sight of its sacred credo? Why would it excessively cut costs in a way that would diminish its ability to carry out its most basic function, to produce pure and unadulterated drugs?

I submit that one clue can be found in a recent news article in Nature Biotechnology about the march of drug and biotechnology companies forced into legal settlements. [Ratner M. Crossing the line. Nature Biotech 2010; 12: 1232-1235. Link here.]

People are rewarded for improving a firm's financial performance - right up the chain to the CEO, [former US Department of Justice and current Vogel, Slade & Goldstein attorney Ms Shelley] Slade says. 'Their concerns are pleasing Wall Street and shareholders, and bonuses are driven by financial performance. There's a real conflict between what the compliance folks want them to do and what's in their immediate financial self-interest. Sometimes the compliance people don't get the full story from the people in operations.

So what we have here is another argument for the importance of perverse incentives as drivers of health care dysfunction. It is likely that all the management of nearly all health care organizations are driven, not by mythic credos or high-minded mission statements, but by the impetus for short-term revenues driven by desire to earn big bonuses and keep their total compensation in six- through eight-figures. These sorts of incentives will predictably lead to excess cost-cutting, unethical behavior, and outright crime.

So, to repeat like a broken record (if anyone remembers what that means, a broken vinyl audio recording skipping due to surface scratches) - if we really want health care reform, if we really want to lower costs, improve access, and improve quality, we need to abolish the perverse incentives that drive managers of health care organizations.  Somehow we need to make the leadership of health care organizations accountable for fulfilling their credos, mission statements, and really their basic responsibilities.  The patients' interests need to come first.  Drug companies must make pure, unadulterated drugs, and promote them honestly and ethically, and their leaders must first be accountable for doing so.

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"Unreasonably Dangerous" Heparin

It is time for an update on the case of the deadly contaminated heparin sold by Baxter International, which has received much less attention than seems warranted given its human costs (81 lives).  How the heparin was contaminated, and how the contaminated heparin ended up being sold as a US Food and Drug Administration approved American product are still unknown.  Despite the fact that the outcome of this case were so bad, it received disproportionately little attention when it was first made public, and now seems to have become nearly anechoic.

Case 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.  (For a more detailed summary of the case, look here, and for all our posts on this topic, look here.)

Civil Cases Plod Forward
If there is any ongoing official investigation of this case, it has not been made public.  Civil cases filed by patients allegedly injured by the heparin, or by relatives of patients who died allegedly from the heparin, seem to be proceeding at a glacial pace.  However, there is one development in one set of civil cases worthy of note.  As reported two weeks ago by Alicia Mundy in the Wall Street Journal:

A state court in Illinois has granted a partial summary judgment to two plaintiffs suing Baxter International Inc. over contaminated blood thinner, saying that some of the company's heparin was 'unreasonably dangerous.'

The suit involves tainted imported heparin ingredients from China that caused a public health crisis in 2008, and were linked to more than 80 deaths in the U.S. and many other serious allergic reactions.

Some 300 cases nationwide against Baxter and its main ingredient supplier, Wisconsin-based Scientific Protein Laboratories LLC, were consolidated in Chicago in Cook County Circuit Court.

Both companies have said that they weren't negligent and weren't responsible for the deadly reactions among patients.

The Illinois judge's ruling, dated Wednesday, involved a motion for partial summary judgment that named only Baxter. The motion was filed on behalf of two plaintiffs in the consolidated cases, one of whom died.

The ruling cites statements by Baxter's corporate quality vice president and the president of the company's medication delivery division that the heparin was defective.

Baxter argued in its defense that a jury should address the question of whether a product is 'unreasonably dangerous.' The company noted that the two Baxter executives who agreed in depositions that the heparin was defective aren't doctors or scientists. However, Judge Jennifer Duncan-Brice wrote that the issue before her wasn't whether heparin actually caused the death or injury to the plaintiffs, but just whether the product was, as a matter of fact, contaminated.

The most basic responsibility of a pharmaceutical company is to produce pure, unadulterated product.  As the current director of the US Food and Drug Administration wrote in this week's New England Journal of Medicine, the agency's "modern regulatory functions began with the passage of the 1906 Pure Food and Drugs Act, a law, more than a quarter of a century in the making, that prohibited interstate commerce in adulterated and misbranded food and drugs."  However, in the 21st century, drug companies are increasingly failing to produce unadulterated products, and the FDA is having increasing difficulty assuring patients that the drugs they take meet even the most basic safety standards. 

I submit that corporate cultures increasingly influenced by the arrogant, greedy, amoral leadership of the financial services industry that lead us to the brink of another depression are also leading us to the brink of a poisonous era in health care.  Corporate leaders intent on cutting costs, and paying themselves as much of the resulting proceeds as possible, may see quality and safety as just another cost cutting target.  Corporate leaders brought up in the culture of finance, but untrained and inexperienced in engineering, science, and medicine find it all too easy to ignore quality and safety and focus on the bottom line.  (It is ironic that in the quote above, Baxter International's attorneys made light of the judgments of the company's own executives because they are not physicians or scientists.)

Meanwhile, society seems to have been so mesmerized by the mantra that laissez faire capitalism will lead to miraculous "innovation" that we do not even attend to instances in which it lead instead to death.

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).

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GlaxoSmithKline Subsidiary Pleads Guilty to Manufacturing Adulterated Drugs: Three Strikes and ...?

Paxil

First there was Paxil (Seroxat in the UK, or paroxetine), the anti-depressant whose marketing lead GlaxoSmithKline (GSK) to settle allegations of fraud brought by then New York Attorney General Elliott Spitzer in 2004.  That case included allegations of suppression and manipulation of clinical research, and was discussed in great detail in the book Side Effects by Alison Bass.  We posted about various aspects of this case, e.g., more recently here, here, and here. 

Avandia

Then there was Avandia (rosiglitazone), the anti-diabetic drug whose use was just restricted by the US Food and Drug Administration.  This GlaxoSmithKline product inspired a "spin cycle" which provided us with endless grist for the Health Care Renewal mill.  A good summary of the case appeared in September in the British Medical Journal (Cohen D. Rosiglitazone: what went wrong: Brit Med J 2010; 341: 530-534.  Link here)  Once again, it appears that research was suppressed and manipulated (e.g., see here), Avandia critics were attacked by "experts" whose financial relationships with GSK were not always obvious (e.g., see here), and there were allegations that GSK executives tried to intimidate those who disagreed with them (e.g., see here and here). 

Adulterated Drugs

And now it is adulterated drugs.  Here is the version from Bloomberg:

GlaxoSmithKline Plc, the U.K.�s largest drugmaker, will pay $750 million to settle a U.S. whistleblower lawsuit over the sale of defective drugs.

Glaxo and the U.S. Justice Department announced the agreement yesterday, resolving a false-claims lawsuit first filed in 2004 by Cheryl D. Eckard, a former global quality assurance manager for the London-based company.

'This is not something I wanted to do, but because of patient safety it was necessary,' Eckard, 51, told reporters following a Justice Department press conference in Boston. As a whistleblower, she will receive $96 million from the settlement money.

Glaxo was accused in court papers of selling tainted drugs under false pretenses. The medicines, made at a Glaxo plant in Cidra, Puerto Rico, were misidentified as a result of product mix-ups, according to papers filed in federal court in Boston. The affected drugs included the antidepressant Paxil CR and the diabetes treatment Avandamet. [Note that this is a combination drug that includes Avandia - ed]

The settlement includes a criminal fine and forfeiture totaling $150 million and a $600 million civil settlement under the False Claims Act and related state claims, the Justice Department said in a statement.

'We will not tolerate corporate attempts to profit at the expense of the ill and needy in our society -- or those who cut corners that result in potentially dangerous consequences to consumers,' Carmen M. Ortiz, the U.S. Attorney in Boston, said at yesterday�s news conference.

SB Pharmco Puerto Rico Inc., a Glaxo unit, agreed to plead guilty to charges relating to the manufacture and distribution of adulterated drugs made at the now-shuttered plant, the Justice Department said. Glaxo said in July it had agreed in principle with the U.S. to pay 500 million pounds ($791 million) to resolve the investigation.

'We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice requirements and with GSK�s commitment to manufacturing quality,' PD Villarreal, a Glaxo senior vice president, said in an e-mailed statement.

Eckard�s take is the largest ever for a single whistleblower, said Patrick Burns, spokesman for Taxpayers Against Fraud, a nonprofit Washington group that publicizes the use of legal means to combat fraud against the U.S. The federal government will receive $436.4 million from the settlement and participating states will split as much as $163.6 million, the Justice Department said.

Other drugs made at the plant include Kytril, an anti- nausea medication, and Bactroban, an ointment used to treat skin infections, the Justice Department said.

'The false claims arose out of chronic, serious deficiencies in the quality assurance function at the Cidra plant and the defendants� ongoing serious violations of the laws and regulations designed to ensure the fitness of drug products for use,' the government said in court papers.

The U.S. Food and Drug Administration in 2005 seized some Paxil CR lots after it was discovered that the pills sometimes split inappropriately, according to court papers. Some of the pills lacked an active ingredient.

It seems that not only questions about GSK sponsored clinical research about and GSK marketing of Paxil and Avandia, but the company has problems even supplying tablets that contain the pure drugs at the right dose.
Summary and Discussion

First, this is another dreary marcher in the parade of legal settlements that we have now been chronicling for years. This case has some particular features. It included a guilty plea to a crime. Although the allegations included fraud, the fundamental problem seemed to be the selling of adulterated, impure drugs.

So my first comment is that this is the latest instance of a major pharmaceutical company not being able to fulfill its most basic responsibility and reason for being, the manufacture of pure, unadulterated drugs. We previously discussed problems with adulterated drugs made by Baxter International and Johnson and Johnson. We have discussed, seemingly endlessly, how big health care corporations, including but certainly not limited to pharmaceutical companies, have engaged in various sophisticated deceptions involving marketing and clinical research to sell more products at higher prices. Now it seems that while these companies have put so much of their resources into marketing and public relations, not necessarily in honest ways, they have neglected to put the necessary expertise and resources into their most basic manufacturing functions.

So while drug industry sycophants prattle on endless about life-saving innovations, not only have industry marketing and research become less trustworthy, but now we cannot even trust the companies to supply the drug that is on the label in a pure form at the labelled dose.

My next comment is that this is the third big case involving GlaxoSmithKline reported in the last few years. (Although, like the previous cases, the events that lead to recent relevations actually occurred over the last 10+ years.) This would suggest that there is a serious problem with the culture, leadership, and governance at this corporation.

Maybe one reason such problems are allowed to fester is that in the current case, like the last two involving GSK, and as is typical for the legal settlements and crimes we have discussed before, no individuals who authorized, directed, or implemented the problematic behavior seem to have suffered any negative consequences or paid any penalty. In fact, the Guardian just pointed out:

Five of the six senior GlaxoSmithKline executives cited by a whistleblower as part of a cover-up of contamination problems at the group's Puerto Rico factory are understood to still be employed by the pharmaceuticals company.

Cheryl Eckard, who was sacked by the company as a quality control manager in 2003 after repeatedly raising her concerns with a series of GSK executives, received a $96m (�61m) reward this week as part of a $750m criminal and civil settlement between US regulators and the company.

Her evidence stated that she believed company executives refused to acknowledge the gravity of the production violations � which included the wrong strength of pills being shipped � because it would delay the approval of two new drugs by the US Food and Drug Administration.

The court documents allege that Eckard, who had recommended the factory be shut until the issues were resolved, communicated the quality violations at the plant in Cidra to David Pulman, president of global manufacturing and supply; Janice Whitaker, senior vice president of global quality; Peter Savin, vice president of global quality assurance; Diane Sevigny, director of global quality assurance, risk management and compliance; and Jonathan Box, vice president of manufacturing and supply for North America.

All five executives are believed to be still working for the London-listed company, while Pulman is also a member of the company's 18-strong corporate executive team, which includes chief executive Andrew Witty.

As we have said endlessly, penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue. 

When it comes to health care's leadership, society seems to have acceded to defining deviancy down. Until we start holding health care leaders to high standards, expect their organizations not to uphold high standards.  Further, expect organizations that did not uphold high standards in one instance to fail to uphold them in other instances.

See also comments on the Postscript blog.

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More Contaminated Heparin, But Who Leads the Company Who Supplied It?

We have posted multiple times over the last two years about the deadly contaminated heparin from China. (See the case summary and link at the end of this post.)

One of the key players in this case was a company called Scientific Protein Laboratories (SPL). The company that sold the heparin in the US under its logo, Baxter International, had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from Scientific Protein Laboratories, 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.

Even More Contaminated Heparin?

Now it looks like SPL may have sold contaminated heparin elsewhere, after the above story of the contaminated heparin sold by Baxter became public, as reported by Alicia Mundy in the Wall Street Journal:

A major U.S. heparin wholesaler received a complaint from a corporate customer about a contaminated batch of blood thinner in October 2008, but didn't investigate for almost a year, according to a recent Food and Drug Administration notice to the company.

Scientific Protein Laboratories LLC got the customer complaint months after the FDA announced nationwide recalls of many heparin products.

In more detail,

In a report last month, reviewed by The Wall Street Journal, the FDA told SPL that it 'did not adequately investigate a complaint that affected product quality.' The report said SPL didn't begin a probe of the contamination complaint until September 2009, and failed to investigate 'other lots of heparin that may have been associated with the complaint.'

The FDA said Wednesday it cited SPL for 'violations of current good manufacturing practice' and is still investigating. 'FDA believes the issue does not present a significant public-health risk,' it said. An FDA spokeswoman said the batch in question never reached patients.

After SPL looked into the October 2008 complaint, it found that the contaminated raw material was used in two processed batches of heparin , the FDA report said. SPL ended its review of one batch in June 2010. It didn't investigate the second, the FDA said.

It looked like this instance of contaminated heparin did not pose a public health hazard because the company to whom it was shipped, possibly alerted by the case above, tested and rejected the SPL heparin

SPL said Wednesday the heparin lots in question 'passed all the then-required, state-of-the-art testing' to detect contamination, however trace amounts of contaminant, oversulfated chrondroitin sulfate, were found by a customer using their own specialized testing. The company also said no adverse events were reported involving the batch in question. [Ed - apparently because the buyer realized the problem and never used the batch in its products that were provided to the public.]

So even after the whole problem of oversulfated chrondroitin sulfate contaminated heparin had become a public scandal, the company that passed along the heparin that became subject of that scandal had "state-of-the-art testing" that could not adequately detect that specific contaminant, although the company to whom it sold the heparin apparently was able to test for it.

Providing pure, unadulterated products is the most elementary responsibility of drug companies. The US Food and Drug Administration was set up mainly to ensure the purity of drugs (and only later, to ensure their effectiveness and then safety). Yet some US companies have proven unable to assure the purity of their products. (For another prominent case, go here.)  Now we have an instance in which a company still seemed unable to check their products for impurities even after they knew dangerous impurities could be present and had been present in other batches of the products they sold, and even after other companies had figured out how to perform such checks.

As we have said before, seemingly infinitum, if we want a health care system that provides good quality, affordable, accessible care, we need health care leaders who put the wellbeing of patients ahead of their own pocketbooks, and to hold them accountable for doing so.

Holding Leaders Accountable, If Only One Could Find Them

By the way, this case further illustrates how far from that ideal we are, because it is not even obvious who the leaders of SPL who ought to be held so accountable actually are.  The SPL web-site says nothing about corporate governance or leadership. 

After some Google searching, it turns out that the reason for this is that SPL was bought out by private equity firm American Capital Strategies Ltd in 2006, two years before the contaminated heparin scandal became manifest.  Although American Capital Strategies Ltd is publicly traded, its 2010 proxy statement and most recent publicly available annual report (of 2008) say almost nothing about SPL.  Private equity firms are known for acquiring troubled companies and trying to turn quick profits from them, often from stringent cost-cutting and selling off assets.  They are not particularly known for their devotion to better patient care.  None of the top executives and directors of American Capital Strategies Ltd seem to have health care backgrounds or experience or any other reason to sympathize with the core values of health care professionals.

Further Google searching did suggest that the CEO of SPL is one David G Strunce, but revealed little biographical information about him.  How he and other executives of that company might better be held accountable is not obvious.

So what will it take to get the leaders of pharmaceutical companies to take their responsibility to provide pure, unadulterated drugs more seriously? How will society be able to better hold those leaders accountable?  How can we get leaders of health care to put the health of the people ahead of their own financial returns? 

The case of the adulterated heparin suggests these questions will not be easily answered.

Case Summary

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.



(For a more detailed summary of the case, look here.)

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Should the President of the University of Michigan be Held Accountable for Johnson and Johnson's Adulterated Drugs and Defective Devices?

We first started to discuss the intense conflicts of interest generated when leaders of academic medicine are also members of boards of directors of for-profit health care corporations in 2006.

The issue really made the big time in 2010 when the New York Times published a front page article in its Sunday Business section about whether university presidents who also were corporate directors were part of an "academic-industrial complex."

University of Michigan President Mary Sue Coleman as a Director of Johnson and Johnson

One such director we discussed this year is Mary Sue Coleman, President of the University of Michigan, and hence leader of a prestigious medical school and academic medical center, who is also Director of the large health care conglomerate, Johnson and Johnson. This relationship became locally controversial when President Coleman supported a smoking ban on campus, and critics pointed out that Johnson and Johnson is a prominent maker of smoking cessation products.

Now President Coleman's role on the Johnson and Johnson board made it into the national media, as the topic of an editorial in the Detroit News:

Should public officials moonlight as corporate operatives? This is a question being raised at the University of Michigan in the wake of the administration's decision to ban smoking on campus.

While some students have criticized the ban, many take issue with the priorities of the administrators who backed it: Specifically, U-M President Mary Sue Coleman, whose decision-making may have been influenced by her membership on the board of Johnson & Johnson, a private company. The right thing for Coleman to do would be to resign from her corporate position, or, at the very least, refuse to accept payment.

(Not to toot my own horn, but I thank the editorial writer for quoting me as a "high-profile" ethicist.)
The issue in this editorial, and in the earlier discussion of President Coleman's responsibilities for Johnson and Johnson, was whether the latter could influence specific decisions made in the former role.

However, events since our original posts on this case should create a new set of concerns.

Johnson and Johnson's Recall of Over-the-Counter Childrens' Medications

Johnson and Johnson has been dealing with a series of crises generated by revelations of problems in how it manufactures many of its marquee drugs and devices.

We posted here about problems in the manufacture of well known over-the-counter childrens' medications, such as childrens' Tylenol (acetaminophen) and Motrin (ibuprofen), by Johnson and Johnson's McNeil Consumer Healthcare subsidiary. Medications were found to be contaminated, and the plant making them was shut down.

Stringent Cost Cutting, Merger Mania, and Executives Who Don't Understand their Company's Business

Since then, investigative reporting by Fortune suggested that quality control problems were the result of that tactic popular among corporate executives to boost profits and hence their own over-stuffed pay checks, stringent cost cutting:

McNeil's quality-control department thrived for a few years. Then, not long after Larsen retired in 2002, it began to slowly weaken. The culprit was a familiar one -- cost cutting -- but in a subtler form. There were no wholesale layoffs in quality control. Instead experienced staffers were repeatedly laid off and replaced with newbies who mostly lacked technical pharmaceutical experience. By 2008 the analytical laboratory, formerly staffed almost entirely by full-time scientists, was half-full of contract workers, according to a former manager there.

Once stricter than a schoolmarm, the department grew lax. The team that tested the production lines was dubbed the 'EZ Pass system,' according to a former quality-control employee.

Quality problems also appeared to be products of another familiar tactic that "brilliant" CEOs use to quickly boost the bottom line, mergers and acquisitions:

At the end of 2006, J&J, on the hunt for growth amid slowing sales and profits, completed the $16.6 billion acquisition of Pfizer's (PFE, Fortune 500) consumer health care division....

The merger dramatically altered McNeil's position. It had previously been part of the pharma unit, but after the deal it was folded, along with the Pfizer group, into J&J's consumer sector, headed by Colleen Goggins. According to former executives, the difference between divisions was both cultural and financial. 'The people who ran pharma understood the requirements associated with [regulatory] compliance and the investments required to keep that up,' says a former executive. Consumer relied more on marketing, or 'smoke and mirrors,' as an ex-McNeil director scoffs. Perhaps the most striking difference was in profit margins. Companies in the consumer group typically had margins around 10%; McNeil generated more than twice that.

So,

Their new consumer bosses were now in charge of reducing McNeil's spending so that the company could meet the merger targets. Goggins looked to squeeze every cost, former employees say, and her team leaned heavily on McNeil, with its juicy margins, to absorb the cutbacks. 'I was given savings goals that were mind-boggling, unheard-of,' says one former executive.

And the merger brought out another common feature of contemporary management, executives with plenty of power, but almost no knowledge about or experience in the sort of work done by their subordinates:

Because the consumer executives lacked pharmaceutical experience, former McNeil employees say, they demanded ill-advised operational reductions. One VP remembers arguing with one of Goggins's

A Growing List of Recalls and Mistakes

While we learned about how Johnson and Johnson executives pursued all the currently fashionable management techniques to make more money, but likely to the detriment of the quality and safety of their products, we also learned that the problems at the company were not limited to a single factory, the specific products listed above, or a single unit of the company.

The company also recalled some contact lenses made by Johnson and Johnson Vision Care, as reported by the Associated Press,

Health giant Johnson & Johnson has issued its ninth recall of a consumer health product in a year, this time covering millions of 1 Day Acuvue contact lenses sold in Japan and two dozen other countries in Asia and Europe.

The affected contact lenses were mostly sold in Japan and none were sold in the U.S. or Canada, the company said.

Johnson & Johnson said Monday it had received a limited number of complaints from customers in Japan that they experienced an unusual stinging or pain when inserting the Acuvue TruEye Brand contact lenses.

Then it recalled prosthetic hips made by its DePuy orthopedic unit, as reported by Medscape,

An orthopaedic unit of Johnson & Johnson (J&J) is voluntarily withdrawing 2 implant systems for hip replacement after learning that roughly 1 of 8 patients in England and Wales who received the implants needed a second hip replacement operation.

The 2 devices under recall are the ASR XL Acetabular System, a metal cup fitted into the pelvis and the corresponding metal ball that replaces the femoral head, and the ASR Hip Resurfacing System, which is similar except that a metal cap is fastened to the femoral head. Both devices are manufactured by DePuy Orthopaedics of J&J.

Then the US Food and Drug Administration (FDA) warned Johson and Johnson's DePuy unit about its marketing of some different joint replacement products, as reported by the Wall Street Journal,

A Johnson & Johnson (JNJ) unit is marketing joint-replacement products without the required approval from federal regulators, the U.S. Food and Drug Administration said in a warning letter recently made public.

In the letter, the FDA said J&J unit DePuy Orthopaedics Inc. is illegally marketing its TruMatch Personalized Solutions system because it hasn't received appropriate clearance to sell the product. Additionally, the FDA found that DePuy is promoting another system--its Corail Hip System--for uses that haven't yet been approved.

'A review of our records reveals that you have not obtained marketing approval or clearance before you began offering the TruMatch Personalized Solutions System for sale, which is a violation of the law,' the FDA said in the letter.

The FDA added that the Corail Hip System has been misbranded and asked DePuy to immediately stop marketing the Corail system for unapproved uses.

And a few days ago, the now embattled head of the Johnson and Johnson consumer products unit, which was central to some of the earlier recalls, but not to some of the later problems, announced her resignation, as reported by Natasha Singer and Reed Abelson writing for the New York Times,

A longtime senior executive at Johnson & Johnson in charge of the consumer products division is leaving the company early next year, signaling a shake-up after a troubling series of recalls, including of children�s Tylenol, tarnished the company�s reputation in the last year.

The company said Thursday that the executive, Colleen A. Goggins, who testified this spring before a Congressional committee investigating the recalls, would retire in March. Ms. Goggins, 56, has worked at Johnson & Johnson since 1981 and was a member of the company�s senior leadership.

Who Will Be Accountable for a Company in Disarray?

Johnson and Johnson was one of the most trusted names in health care for a long time, perhaps partially because of its forthright response to the apparently external contamination of its Tylenol products in the 1980s. Now it appears to be a company in disarray, battered by numerous recalls of apparently contaminated, adulterated, or defective products, both drugs and devices, allegations that its conventional management wisdom lead to these quality and safety problems, and now with at least one key senior manager leaving.

All that went wrong is not exactly clear yet. Clearly, however, top managers, and the board of directors to whom they report ought to be accountable.

Here is where we return to the case of University of Michigan President Mary Sue Coleman. She is, after all, well-paid to be a director of Johnson and Johnson. Therefore, she ought to be accountable for the type of people hired as top managers, and the general direction of their management. She ought to be accountable for letting Johnson and Johnson CEO William Weldon and consumer products head Colleen Goggins continue in office, and receive outsized compensation, ($19,847,026 and $5,345,737  total compensation respectively last year, see here). She also ought to be accountable for the general thrust of their management, including excess cost-cutting, seeking mergers without clear plans for assimilating them, and putting people who did not understand pharmaceuticals in charge of pharmaceutical production.

The original controversy about President Coleman's role on the Johnson and Johnson board focused on whether her decision to promote a smoke free campus resulted from her conflict of interest.  Then, one defense mounted by President Coleman's spokesperson was:

'It's essential that U-M have a voice and interact with the business world,' said Rick Fitzgerald, a U-M spokesman. 'She thinks it's her duty to understand what the commercial world is doing.'

Now President Coleman has had a chance to have a voice and interact with Johnson and Johnson, and understand what it is doing by assuming a position that gives her ultimate responsibility for the company's top leadership and the direction they took. Now it appears the leadership may have been faulty, and their direction ill-advised.

Will President Coleman take responsibility for that? Maybe some enterprising student journalists at the university should ask her.

Meanwhile, this case now illustrates another important facet of the problems created when leaders of academic medicine serve on boards of directors of health care corporations. The mission of the University of Michigan's medical school and academic medical center includes taking the best possible care of individual patients. Taking the best possible care of individual patients cannot be done when the drugs physicians recommend or prescribe in good faith turn out to be adulterated, or when the devices they employ in good faith turn out to be faulty.

President Coleman's primary interests and entrusted responsibilities include upholding the best possible care for individual patients. Presiding over a company whose sloppy and ill-informed leadership, and misplaced priorities lead to the production of adulterated medicines and defective devices seems to conflict with this primary interest and entrusted responsibility.

Maybe all those academic leaders who accepted apparently cushy jobs on corporate boards will reconsider their decisions when they start being held responsible for their companies' poor leadership and poor decisions leading to poor health care outcomes of the use of their companies' products. They may really start to reconsider when journalists learn that academic leaders are more accessible than the current and ex-CEOs who also populate corporate boards.

Meanwhile, academic medicine ought to really rethink whether continuing to defend the "new species of conflicts of interest" will soon become counter-productive.

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"Proprietary Information," Confidentiality Motions, and the Anechoic Effect; the Case of the Contaminated Heparin

The case of the deadly contaminated heparin sold by Baxter International has received much less attention than seems warranted given its human costs (81 lives).  How the heparin was contaminated, and how the contaminated heparin ended up being sold as a US Food and Drug Administration approved American product are still unknown.  Our most recent post, here, noted that an investigation into the contamination of the active pharmaceutical ingredient (API - actually the heparin itself) in China failed to produce any results, apparently because the Chinese government did not see fit to pursue it.  (Note that a brief summary of the whole case is at the end of this post.)
Now a new story in the Wall Street Journal by Alicia Mundy explains even more about why we do not know more about the contaminated heparin:

Baxter International Inc. faces a new challenge in federal court in its bid to block disclosure of documents about the 2008 contaminated-heparin crisis.

Baxter and Scientific Protein Laboratories LLC are fighting a civil mass tort lawsuit alleging deaths and injuries from imported Chinese heparin in 2007 and 2008. A company that isn't party to that lawsuit says some of the information Baxter and SPL want to keep confidential is important to public health and drug safety, and could reveal information about the sources of toxic heparin in the Chinese supply chain.

The two companies want to keep under seal portions of depositions taken in the case, including those related to Momenta Pharmaceuticals Inc., which helped the U.S. government investigate the contamination. Baxter and SPL say they will be hurt if forced to disclose proprietary information.

They have denied that they were negligent in the deaths linked to the blood-thinning drug, widely used in cardiovascular and other conditions.

So,

On Aug. 3, federal Judge James Carr in Toledo, Ohio, ruled in favor of the confidentiality motion by Baxter and SPL.

On the other hand, there are arguments, admittedly by parties with relevant financial interests, for making more information public:

Last Friday, another company entered the fray, contending that the information in the depositions shouldn't be sealed. Amphastar Pharmaceuticals Inc. said public health could benefit if the depositions shed light on circumstances in China.

Amphastar, which has been competing with Momenta for approval to make a newer and more expensive form of heparin, said the information is also important to a congressional investigation into the Food and Drug Administration's handling of the heparin crisis. Republican leaders of a House committee say the FDA failed to trace the contamination in the Chinese heparin supply chain.

On July 23, the FDA granted approval to Momenta to make the special heparin called enoxaparin, while Amphastar's application remains on hold.

Amphastar said in its court filing that the 'serious safety concerns' involving heparin are relevant to enoxaparin because heparin is the starting material of enoxaparin's active ingredient. Most U.S. heparin supplies come from China.

Of course, the companies who want to keep as much about the case secret as they can are not talking about it:

Lawyers for Baxter and SPL declined to comment on their efforts to restrict information related to Momenta. They referred inquiries to Baxter, whose spokeswoman declined to comment.

So here is more about what we do not know about the deadly contaminated heparin from China. One reason that this case has remained so anechoic is that the companies that sold and processed the contaminated heparin, and are now defendants in lawsuits have used that situation as a rationale for keeping "proprietary" information secret.  There clearly may be reasons that Baxter International, the company that sold the heparin under their (formerly?) prestigious US label  wants to keep secret the details about what efforts it did or did not make to assure that the heparin it sold was pure and unadulterated. There clearly also may be reasons that Scientific Protein Laboratories LLC, the US based company that sold the heparin API to Baxter wants to keep secret the details about what efforts it did or did not make to assure that the heparin API was pure and unadulterated. 

The ability of participants in lawsuits to keep "proprietary" information secret clearly adds to the anechoic effect.  Ironically, it may be that civil legal action, which is sometimes the only way to impose negative consequences on health care organizations that have misbehaved, may have the adverse effect of further hiding information about the events in question. 

However, to promote the safety of individual patients and the health of public, and to prevent another deadly case of drug contamination, understanding details about what happened is absolutely vital. The private pecuniary interests of Baxter International and Scientific Protein Laboratories LLC seem to be directly opposite to those of patients, physicians, and the public at large in this case. It is therefore disquieting to learn that the companies' wishes to keep information they declare is "proprietary" seem to have trumped individual patient safety and public health concerns. (Note that these concerns go beyond the commercial concerns of Amphastar Pharmaceutical, although in this case the pecuniary interests of that company do not seem to be opposed to patient safety and the public health.)

If we really want a health care system that improves the health of individuals and the public, we need it to put health and safety concerns ahead of the incomes of health care corporations.  That such a statement seems not a platitude, but revolutionary is a mark of how our health care system has been turned on its head.

Case Summary


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.


(For a more detailed summary of the case, look here.)

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Are Ill-Informed Leaders the Cause of Drug Manufacturing Mishaps?

Fundamental Corporate Failures

In the last few years, there seems to have been an epidemic of once revered companies suddenly unable to perform the most basic functions necessary for their businesses.  Finance firms ran out of money and ended up bailed out or bankrupt.  An automobile firm produced cars that seemed to accelerate out of control.  Another automobile company, once the world's biggest, went bankrupt and had to be bailed out by the government. An oil company took months to cap a blown out well. 

In the health care world, drug companies which could no longer manufacture pure and unadulterated drugs.  Baxter International sold deadly contaminated heparin (post here). Johnson and Johnson sold contaminated or wrongly dosed over-the counter childrens' medicines (post here).

Another Troubled Johnson and Johnson Factory

Now yet more problems have surfaced at a Johnson and Johnson factory.  As reported by the AP:

A dozen recent federal inspections of a Johnson & Johnson factory for heartburn and other nonprescription medicines show a host of violations that could affect the quality and makeup of the drugs.

A new report on inspections at the Lancaster, Pa., factory in the past month indicates a pattern of ignoring rules for manufacturing and quality, failure to investigate problems that could affect the composition of products, carelessness in cleaning and maintaining equipment, and shoddy record-keeping.

In some cases, medicine batches made during equipment failures were not checked for quality.

Food and Drug Administration investigators had to ask for information many times in some cases, and then wait days to get it.

The scope of the problems was large:

The inspection report, released Wednesday, lists 12 different types of violations, from not determining the impact of equipment failures 'on the manufacturing process and products' to incomplete records of investigations into 'unexplained discrepancies' in manufacturing. The latter problem occurs 'whether or not the batch has already been distributed,' the report states.

Some examples were:

_'Laboratory controls do not include the establishment of scientifically sound and appropriate test procedures to assure that drug products conform to appropriate standards of identity, strength, quality and purity.'

_Procedures to prevent 'objectionable microorganisms' from getting into medicines appear not to have been followed.

_'Deviations from written test procedures are not justified.'

_Staff were not following up 'to determine the causes for repeated mix-up of tablets.'

_Written procedures for cleaning and maintenance did not have enough detail about the methods, equipment and materials to be used.

_The plant did not have recent drug production and quality control records readily available to the inspectors, as is required.

_Samples of drug products taken to determine if they met written specifications were not properly identified.

_There was no preventive maintenance program for at least five types of complex manufacturing or testing equipment.

Previous Problems at Johnson and Johnson Factories
Note that just a few days before this hit the news, the Philadelphia Inquirer reported this follow-up from the problems at the plant in Fort Washington, PA run by Johnson and Johnson's subsidiary McNeil Consumer Healthcare

A federal grand jury is investigating problems at the now-shuttered McNeil Consumer Healthcare plant in Fort Washington that triggered the recall of children's Tylenol and other popular pediatric medicines, according to the company.

The existence of the investigation was made public Tuesday by Louise Mehrotra, vice president for investor relations for Johnson & Johnson, McNeil's parent company.

That report reminded us that there have been problems at a third Johnson and Johnson plant:

[Johnson and Johnson subsidiary] McNeil is now dealing with FDA issues at three drug-making facilities, including one in Las Piedras, Puerto Rico.

Problems at the Las Piedras plant last year set in motion the investigation at Fort Washington.

At Las Piedras, FDA inspectors were chiefly concerned about why it took McNeil more than a year to respond to consumer complaints of a musty smell associated with Tylenol caplets produced at the plant. The smell was traced to a chemical used to treat wooden pallets at the plant.

So three Johnson and Johnson manufacturing plants have recently allegedly failed to uphold basic quality standards, and thus have made medicines that ranged from musty smelling to contaminated. Clearly, the most basic responsibility of a drug manufacturer is to supply fresh, pure, unadulterated drugs, and now Johnson and Johnson, a once iconic American drug and device company, seems to be having trouble fulfilling this responsibility.

Caused by Leadership Shortcomings?
It seems that health care firms, like so many others, have been distracted by financing fantasies and marketing marvels from the most fundamental parts of their business. One wonders how responsible are leaders with little understanding of the fundamentals of the fields in which their firms operate, and who seem to just get richer no badly how their firms perform.

Note that the current Johnson and Johnson CEO William C Weldon's background is in "sales,marketing and international management," not manufacturing, engineering, chemistry, or the biological sciences, per the company's 2010 proxy statement.  In 2009, with one factory already under investigation, his total compensation was over $30,000,000.

The Johnson and Johnson board of directors all get more than $200,000 per year in compensation.  The board does include two biologists and two physicians  (Prof Mary Sue Coleman, is "professor of biological chemistry" at the University of Michigan; Michael M E Johns, MD, a physician; Susan L Lindquist, Professor of Biology at Massachusetts Institute of Technology; and David Satcher, MD a physician.)  However, while it also contains the retired CEOs of a telecommunications company, an electronics company, an airline, a food company, and an bank/ finance company,  it does not seem to contain anyone with experience in manufacturing, much less pharmaceutical manufacturing.  

On the other hand, it includes several people with leadership positions in non-profit health care institutions  with whose primary responsibilities their Johnson and Johnson board membership may conflict.  (Mary Sue Coleman is President of the University of Michigan; Michael M E Johns, Chancellor of Emory University, member of the Institute of Medicine, member of the editorial board of JAMA, and chair of the publications committee of Academic Medicine; Susan L Lindquist, member of the Institute of Medicine; Leo F Mullin, Chairman of the Board of the Juvenile Diabetes Research Foundation; William D Perez, Trustee of Cornell University, and Trustee of Northwestern Memorial Hospital;  and David Satcher, board member for the Kaiser Family Foundation.)   

Note that leaders of non-profit academic health care institutions who also serve on boards of for-profit health care corporations often justify the apparent conflict by the need to "have a voice and interact with the business world," as explained (see post here) by a spokesperson for Mary Sue Coleman.  A university president who sits on a corporate board to "understand what the commercial world is doing," may have not learned enough about that world to make sure it is doing it well.

Finally, several Johnson and Johnson board members are former or current leaders of some of the financial firms whose problems lead to the global financial meltdown, or "great recession," (Anne M Mulcahy has been a member of the Citigroup board since 2004, and was on the FNMA board from 2000 to 2004, both nearly failed, and required government bailouts to survive; Leo F Mullin, currently Senior Advisor to Goldman Sachs Capital Partners, a subsidiary of Goldman Sachs, which just settled charges by the SEC that it misled investors; and Charles Prince, CEO of Citigroup from 2003 to 2007.)   Are these the sort of people we should trust to uphold the fundamental quality of drug manufacturing? 

Health care organizations are increasingly saddled with leaders who do not understand the fundamentals of the health care environment, are not pledged to support their missions, and may be distracted by conflicts of interest.  Such leaders may be increasingly responsible for the dysfunction of modern health care.  True health care reform requires leadership that understands the context, and supports the mission without conflict.

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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.

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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.

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