The Heparin Disaster

NEW BAXTER DRUG PROMO MISLEADING

pamela@toledolaw.com (Pamela A. Borgess) — Thu, 07 Aug 2008 16:52:00 +0000

In a letter dated July 7, 2008, the FDA warned that Baxter’s promotion for its bleeding treatment FEIBA VH misleads doctors about the drug’s safety and effectiveness. (Chicago Tribune/Bloomberg News 7/31/08: “Baxter Warned on Hemophilia Drug Promotion.”)

The FDA advised that the "clinical thank you e-mail" submitted for review by Baxter violates FDA policies and is misleading with respect to both the efficiency and the safety of the drug. Specifically, the FDA held that the promotion overstated the efficacy of the drug and minimizes the fact that serious thrombotic events can occur with the drug. In its letter, the FDA states, "By promoting misleading safety and efficacy claims, you are potentially encouraging the unsafe use of FEIBA VH.” A copy of this letter is available by clicking here.

After the heparin debacle, one would hope that Baxter would not be so quick to overstate the safety of its drugs. Apparently, as the old idiom warns, a leopard can never change its spots.

HUBLEY FAMILY FEATURED ON NIGHTLINE

pamela@toledolaw.com (Pamela A. Borgess) — Thu, 31 Jul 2008 13:28:00 +0000

Last night, our client, Leroy Hubley, and his family, were featured on ABC’s television news program, “Nightline,” which discussed the heparin disaster. (07/30/08 Nightline, “Pharmaceutical Companies Must Take Responsibility.”)

The Hubley family, like hundreds of others, lost loved ones as a result of the contaminated heparin sold by Baxter, and supplied by SPL. The Hubley family not only lost their mother, Bonnie Hubley, but their 47 year-old son, Randy Hubley.

Previously on April 29, 2008, the Hubley family, along with Johanna Staples, (another client of Zoll, Kranz & Borgess who lost her husband, Dennis Staples), were invited to tell their tragic stories to the U.S. House Commerce Committee on Energy and Commerce at a hearing entitled, “The Heparin Disaster: Chinese Counterfeits and American Failures.” Video of this hearing is available by clicking on the links below.

Panel I (Witnesses: David Nelson, Senior Investigator for the Committee on Energy and Commerce, Colleen Hubley, Leroy Hubley, and Johanna Marie Staples)

Panel II (Witnesses: Janet Woodcock, Director of the FDA’s Center for Drug Evaluation and Research, Deborah M. Autor, Director of FDA’s Office of Compliance, and Regina T. Brown, Consumer Safter Officer of the FDA’s Division of Field Investigations)

Panels III and IV (Witnesses: Robert Parkinson, CEO and President of Baxter International, Inc., David Strunce, CEO of Scientific Protein Laboratories, Yan Wang, Ph.D., Vice President of Business Development and Research at Scientific Protein Laboratories, and Clive Meanwell, CEO of The Medicines Co.)

In addition, the written statements submitted to Congress by Leroy Hubley, Colleen Hubley Johanna Staples, and other witnesses, are available by clicking on their name below:

• Leroy Hubley
• Colleen Hubley
• Johanna Staples
• David Nelson, Senior Investigator for the Committee on Energy and Commerce
• Janet Woodcock, Director of the FDA’s Center for Drug Evaluation
• Robert Parkinson, CEO and President of Baxter International, Inc.
• David Strunce, CEO of Scientific Protein Laboratories
• Clive Meanwell, CEO of The Medicines Co.

We are proud and honored to represent these brave individuals, who have selflessly agreed to share their private losses and suffering with the public so that the extent and severity of this tragedy may be exposed and hopefully, prevented in the future.

FDA Tells Chicago Tribune That It Can Only “Conclusively” Link 3 Fatalities So Far to Contaminated Heparin

pamela@toledolaw.com (Pamela A. Borgess) — Wed, 30 Jul 2008 21:06:00 +0000

Today the Chicago Tribune reported that the FDA has only been able so far to "conclusively link" three fatalities to contaminated heparin manufactured by Baxter. (07/30/08 Chicago Tribune: Heparin Taint Tied to Deaths.)

According to the article, in an interview Tuesday with the Tribune, the FDA said it completed its review of 93 death reports related to heparin that the agency received from January 1 to March 31, 2008. (07/30/08 Chicago Tribune: Heparin Taint Tied to Deaths.) Of the 10 reports of death from severe shock known as anaphylaxis or hypotension, three of those could be traced to lot numbers of Baxter products that tested positive for oversulfated chondroitin sulfate (“OSCS”). Heparin lot numbers were not known for the other seven deaths from anaphylaxis or hypotension, so the FDA could not determine whether those 7 patients received heparin contaminated with the substance.

Of the remaining 83 reports, 13 were described as "potential complications of heparin use" such as bleeding; and 25 cases were due to causes unrelated to heparin use such as pneumonia, sepsis and kidney failure. (07/30/08 Chicago Tribune: Heparin Taint Tied to Deaths.) In the remaining 45 deaths, FDA spokeswoman Janet Woodcock stated, "clinical information in the adverse-event reports is insufficient to specify the cause of death with clinical certainty,” and that the FDA was missing information from providers or others who filled out the reports to make an adequate determination. She also added, "While some of these [reports] appear definitely related [to contaminated heparin] many are still in the gray zone…We have looked over all of these death reports and a number of them were probably not related to the contaminated heparin."

While it is good that the FDA has finally conclusively linked some of the deaths, many questions are still unanswered. The top five questions that immediately jump out to me are as follows:

1) If additional information is needed to determine whether additional deaths are related, why isn’t this information being gathered or at least requested from the providers or others who filled out the reports to make an adequate determination? For example, we have filed multiple adverse-event reports of clients, but to date WE HAVE NEVER BEEN CONTACTED BY THE FDA REGARDING THESE REPORTS, NEVER BEEN ADVISED OF THE STATUS OF THEIR INVESTIGATION, OR TOLD THAT ADDITIONAL INFORMATION IS NEEDED.

2) Is the FDA relying on death certificates to determine cause of death? If so, this analysis is suspect, as many individuals died before the public recall and before the medical community learned of the contaminated heparin. As such, a medical provider would not have known or appreciated that their patient could have died from an anaphylactic reaction from contaminated heparin.

3) Is the FDA investigating or supporting scientific studies to determine whether the contaminate, OSCS, and its resulting symptoms can cause or contribute to other complications leading to death, such as heart failure? To date, the FDA admits that it has limited knowledge “since the contaminant was only recently discovered.” (See FDA Questions and Answers, updated 7/3/08.) For example, the FDA admittedly does not know whether there are any long term health effects of the contaminant. (See FDA Questions and Answers, updated 7/3/08.) With the New England Journal of Medicine article (that had severely restricted testing parameters) being the only scientific study published to date regarding the effects of OSCS, it may be too quick to report that the only deaths caused by that contaminate are those from anaphylaxis or hypotension.

4) Why has the FDA failed to analyze any of the reports that were filed after March 31, 2008? Or if they have analyzed them, why have they failed to report on them?

5) Why did it take an interview with the Chicago Tribune to ferret out this important information?

Baxter, SPL and the FDA have each admittedly failed the American public with respect to Heparin. As such, it is in their best interests to minimize the national disaster that they allowed to occur. It is no wonder, therefore, that they are quick to try to limit the number of deaths. Speculation is worthless. What we need is science. We implore the scientific community to not accept the FDA’s and drug companies’ unfounded conjectures at face value, but to test and study this contaminate further. Only then will we reach the truth… something that the victims of this disaster and their loved ones deserve.

FDA links 149 deaths to contaminated Heparin

david@toledolaw.com (David W. Zoll) — Thu, 24 Jul 2008 13:13:00 +0000

The FDA recently increased the number of reported deaths in which one or more allergic / hypotensive symptoms occurred in correlation to the receipt of heparin to 149 deaths.

Here is the table from the FDA Report:

Number of Deaths of Patients Receiving Heparin Reported to FDA, January 1, 2007 through May 31, 2008
Month the Medical Event(s) Occurred	Number of Reported Deaths*	Reported Deaths with One or More Allergic/Hypotensive Symptom(s)
Jan-07	6	3
Feb-07	2	1
Mar-07	5	2
Apr-07	7	4
May-07	3	1
Jun-07	5	2
Jul-07	6	3
Aug-07	4	4
Sep-07	3	2
Oct-07	10	5
Nov-07	12	11
Dec-07	34	23
Jan-08	50	32
Feb-08	49	29
Mar-08	14	10
Apr-08	7	4
May-08	5	3
Unknown date	24	10
Total	246	149
*The reports in this table concern heparin produced by any manufacturer.

A review of this table shows a significant spike in events for the months of November 2007 through March of 2008. There is no doubt but that this spike is the result of deaths caused by the contaminant oversulfated chondroitin sulfate (OSCS), which was intentionally added to the raw heparin in China.

While there have been a few deaths related to products sold by other manufacturers, the overwhelming majority of the deaths arose from the administration of heparin manufactured and sold by Baxter.

There is also no question but that this table significantly underestimates the actual number of people who died from the contaminated heparin. The FDA adverse events reports only capture a relatively small percentage of the actual number of adverse events.

According to the FDA: "A small percentage of adverse reactions are reported to Centers for Deisease Control and Prevetnion and FDA by health care professionals and industry."

Therefore the actual number of deaths attibutable to the contaminated heparin is much larger.

Baxter Announces Profits up 26%

pamela@toledolaw.com (Pamela A. Borgess) — Wed, 23 Jul 2008 21:05:00 +0000

Last Thursday, Baxter announced net income of $544 million for its second quarter ending on June 30, 2008, or 85 cents per share, due to higher sales of biotech drugs and vaccines. This is up from $431 million, or 65 cents per share, in the same period last year. (7/17/08 CNBC: “Biotech, Overseas Sales Push Baxter 2Q Profit Rise.”)

In response, Baxter shares rose $2.08, or 3.2 percent, to end at $67.96, and hit an all-time high of $69.66 earlier in the session. (7/17/08 CNBC: “Baxter Shares Hit High on 2Q Profit Growth.”)

In boasting of the company’s success during Thursday’s earnings release, Chairman and Chief Executive Officer Robert Parkinson, Jr., did not mention heparin or the increasing death count linked to its contaminated drug, nor did Baxter bother mentioning how much of these increased profits were a result of foreign manufacturing of drug or drug components in countries with lax regulation and cheaper production costs.

Chinese Authorities Still Doubt Deaths are a Result of Contaminated Heparin

pamela@toledolaw.com (Pamela A. Borgess) — Sat, 19 Jul 2008 18:46:00 +0000

According to Chinese news, the Chinese Ministry of Health announced Friday that despite its “joint investigation” with U.S. drug authorities, it could still not conclude that the multiple U.S. deaths were a result of contaminated heparin sold by Baxter, who bought the raw ingredient supplied by SPL from its facility in China, SPL Changzhou. (07/18/08 China View News: “Cause of deaths still in doubt after Sino-U.S. Investigation on Blood Thinner.”)

As you may recall, China’s drug agency reported the same inability to link the reported deaths in May of this year. (See our May 7, 2008 Blog: China Points the Finger at Baxter and the FDA.”) At that time, the inability of China and the U.S. FDA to cooperate was evident. Chinese officials claimed that Baxter and the FDA failed to provide them with medical records, medical histories, and information on Baxter's manufacturing practices. The Chinese also complained that they had not been given samples of the contaminated product. The FDA complained that it was not provided records from Changzhou Techpool Pharmaceutical Co. (“CZTP”), a company who supplied SPL Changzhou with raw heparin and may have been a source for the contaminant.

U.S. researchers confirmed the link between the adverse events, including death, and the contaminant, OSCS, since at least April 23, 2008, when the results of the first study were reported in an article published online by the New England Journal of Medicine entitled, “Contaminated Heparin Associated with Adverse Clinical Events and Activation of the Contact System.” As reported on the FDA website, “The contaminant activates chemicals in the body called enzymes. These enzymes cause the body to make inflammatory mediators (chemicals that are released by immune cells). Inflammatory mediators can lead to some of the symptoms such as low blood pressure, abdominal symptoms and shortness of breath.” (FDA: Questions and Answers re Heparin.)

It seems, therefore, that the two agencies are still failing to cooperate and exchange pertinent information. Maybe someone should give the Chinese Ministry of Health a copy of the New England Journal of Medicine article.

New International Pilot Program to Facilitate Overseas Inspections

pamela@toledolaw.com (Pamela A. Borgess) — Tue, 15 Jul 2008 21:16:00 +0000

Last week, the U.S. Department of Health and Human Services (HHS) announced a new program in conjunction with the U.S. Food and Drug Administration (“FDA”) to enhance the safety of medical drugs and food exported to the United States. (07/09/08 HHS Press Release.)

Specifically, the program is a pilot project with the European Union and Australian authorities “to jointly plan, allocate for and conduct inspections of drug-manufacturing facilities.” (07/09/08 HHS Press Release.) The program will initially focus on makers of active pharmaceutical ingredients, but will expand to other types of manufacturing facilities if successful.

Additional information about this import safety initiative, as well as other import safety news, reports and blogs are available at the HHS’ import safety website: http://www.importsafety.gov/.

Texas Hospital Quick to Raise Defenses to Heparin OD

pamela@toledolaw.com (Pamela A. Borgess) — Sat, 12 Jul 2008 12:22:00 +0000

In a statement released July 10, 2008, Texas Hospital, Christus Spohn, indicated that the recent heparin overdose of 17 children in its Neonatal Intensive Care Unit, was a result of an error that occurred during the mixing process in its hospital pharmacy. (See 07/10/08 Christus Spohn Statement.) While the hospital claims this mistake in mixing was unrelated to product labeling or packaging, (which has recently resulted in similar deaths), it has not released details as to how the “mixing error,” occurred.

Likewise, in true defense fashion, the Texas Hospital is quick to speculate publicly that the heparin overdose of twins Keith and Kaylyn Garcia, (which was 100 times stronger than recommended), did not directly result in their deaths, before the conclusion of any autopsies. Relatives of the twins had planned a baby shower for their mother today, instead their funerals will be held. (7/11/08 ABC news, “Hospital Error Blamed for More Infant Overdoes.”)

If hospitals spent as much time figuring out ways to eliminate and reduce errors, as setting up defenses to protect themselves from anticipated future litigation, we would all be safer.

Fresenius to Buy APP Pharmaceuticals

pamela@toledolaw.com (Pamela A. Borgess) — Mon, 07 Jul 2008 23:05:00 +0000

Yesterday, Fresenius SE, a German company and the largest worldwide provider of dialysis services, announced that it has agreed to buy the U.S. company APP Pharmaceuticals for $23 cash a share, plus as much as another $6 a share if APP's financial results meet certain targets, resulting in a purchase price ranging from $3.7 to $4.6 billion. (WSJ: Market Watch, 07/07/08, "APP to be Bought by Fresenius for up to $4.6 Billion.") In addition, Fresenius agreed to assume APP's $940 million of debt, net of the company's cash on hand. (Id.)

After the Baxter recall of contaminated heparin, APP became the leading producer of heparin. (WSJ, 02/19/08, "Baxer Rival APP Steps in Quickly to Supply Heparin.")

Analysts opine that the sale will allow Fresenius to "take control of heparin," and "curb the rise in its price." (Reuters, 07/07/08, "Fresenius to Enter World Drug Market with APP.") As a result, Fresenius' U.S. rival, DaVita, Inc., could "'ride the coattails' of that price moderation." (Id.)

The company will become part of the Fresenius Kabi division, a provider of infusion therapy services in Europe, Latin America and Asia.

THE HISTORY OF HEPARIN

pamela@toledolaw.com (Pamela A. Borgess) — Fri, 04 Jul 2008 14:58:00 +0000

Scientists have long realized the need to deal with clotting when disturbing blood flow during dialysis or other procedures. In 1913, John Abel, a pharmacologist at Johns Hopkins University, reported the first successful performance of dialysis in a dog using “hirudin,” an anticoagulant extracted from leeches. (Mark J. Acierno, Vera Maeckelbergh “Continuous Renal Replacement Therapy,” Compendium, May 2008, Vol. 30, No. 5; Research Defence Society Website, “Anticoagulants,” (2008)). This early anticoagulant was unsuitable for human use, however, as it was expensive, difficult to extract and purify, and caused severe heart and lung problems, as well as allergic reactions. (Research Defence Society Website, “Anticoagulants.”)

Heparin, one of the oldest drugs currently still in widespread clinical use, was discovered in 1916 by a second-year medical student, Jay McLean (1890-1957), and his Professor of Pharmacology, William Henry Howell (1860-1945) at Johns Hopkins University in Baltimore. (Wikipedia: Heparin; Rutty, Christopher, Health Heritage Research Services, “Miracle Blood Lubricant: Connaught and the Story of Heparin, 1928-1937.”)

Allthough “the first description of heparin has been clouded in controversy,” it is reported that McLean, working under the direction of Howell, was investigating pro-coagulant preparations, when he isolated a fat-soluble phosphatide anti-coagulant from liver cells from dogs, (hence its name hepar or "ηπαρ," which is Greek for "liver"). (“Practical Haemodialysis Began with Cellophane and Heparin: The Crucial Role of William Thalhimer (1884-1961),” Nephrol. Dial. Transplant (200) 15: 1086-1091; Wikipedia: Heparin.)

Although it appears that “Howell initially seemed not to have welcomed this discovery, perhaps because [he] disagreed with [McLean’s] theories of coagulation,” most historians believe that McLean’s work lead to Howell’s later isolation of a water-soluble polysaccharide anticoagulant in the early 1920s. (“Practical Haemodialysis Began with Cellophane and Heparin: The Crucial Role of William Thalhimer (1884-1961),” Nephrol. Dial. Transplant (200) 15: 1086-1091; Wikipedia: Heparin.)

This early heparin, however, was expensive, toxic and not practically applied by doctors until the early 1930s when a research team lead by Dr. Charles H. Best at Connaught Medical Research Laboratories, (then part of the University of Toronoto), developed a method to make it into a “purified, plentiful and inexpensive supply safe for human use.” (Rutty, Christopher, Health Heritage Research Services, “Miracle Blood Lubricant: Connaught and the Story of Heparin, 1928-1937;” Wikipedia: Heparin.)

In 1928, Best, the head of University of Toronto’s Physiology Department and an Associate Director of Connaught, “decided to break the heparin stalemate and explore its practical value.” (Rutty, Christopher, Health Heritage Research Services, “Miracle Blood Lubricant: Connaught and the Story of Heparin, 1928-1937.”) Best then expanded his team in 1929 to include Drs. Arthur F. Charles (1905-1972), an organic chemist, David A. Scott (1892-1971), a scientist closely involved with insulin production, and Dr. Gordon Murray (1896-1976), a prominent surgeon at Toronto General Hospital. (Id.)

Charles and Scott turned to beef liver because it was cheaper than dog liver and readily available from local slaughterhouses. (Id.) When the price of beef liver increased, they turned to beef lung and intestines. (Id.) In conjunction with Murray’s experimental surgeries on animals using the more potent heparin, the team succeeded in purifying and then crystallizing heparin into a standardized dry form that could be administered in a salt solution. (Id.)

In May of 1935, the first human trials began and “by 1937, it was clear that Connaught's heparin was a safe, easily-available, and effective blood anticoagulant.” (Wikipedia: Heparin.)

FDA first approved heparin drug products for sale within the U.S. in the 1940s. (04/14/08 USP Press Release.)

Congress Demands Documentation Supporting the FDA’s Change in Position Regarding Preemption of Product Liability Lawsuits

pamela@toledolaw.com (Pamela A. Borgess) — Tue, 01 Jul 2008 15:25:00 +0000

On June 26, 2008, Congressman and Chairman of the House of Representatives’ Committee on Oversight and Government Reform, Henry A. Waxman, sent a letter to the FDA Commissioner demanding production of documents that explain why under the Bush Administration, the FDA changed its position regarding whether FDA regulation should bar liability claims. (To view this letter, click here.)

Prior to the Bush Administration, the FDA had a long-standing position that despite its regulation of medical drugs and devices, “product liability lawsuits in state court complement the agency’s regulation of drugs and medical devices, providing an important additional layer of consumer protection against unsafe products.” (See 06/26/08 Letter to Eschenbach.) As such, the FDA did not interfere or challenge the constitutional right of innocent Americans injured by defective products to hold the drug companies responsible in a court of law.

On May 14, 2008, the House of Representatives Committee on Oversight and Government Reform, held a hearing on the issue of preemption of state liability claims related to FDA-approved drugs and medical devices. (We have previously blogged on this hearing and the problem with preemption. See prior blogs, “Should FDA Drug and Medical Device Regulation Bar State Liability Claims?” (05/14/08); “FDA Needs Subpoena Power” (05/21/08); “The Preemption Problem” (06/04/08); “Draft Bill Regarding Preemption To Be Introduced” (06/13/08)).

Despite the FDA’s long-standing position regarding preemption, the current FDA Deputy Commissioner for Policy, Randall Lutter, testified at the hearing that under the Bush Administration the FDA reversed its position and calls such suits a “challenge” to the agency that have “detrimental effects on the public health.” (For a transcript of this hearing, click here. For a video, click here.) As such, under the Bush Administration, the FDA now sides with drug manufacturers. They argue that regardless of any misconduct or failures on behalf of the drug companies, Americans injured by defective drugs should be stripped of their constitutional right to a trial by jury for most, if not all, legal claims, where the drugs are regulated or approved by the FDA, giving negligent drug companies almost complete immunity.

Ironically, this position comes amidst the heparin disaster, wherein the FDA has admitted that it does not have the resources, authority and capability to ensure product safety. (See 04/29/08 Video of House of Representatives’ Subcommittee on Oversight and Investigations Hearing, “The Heparin Disaster: Chinese Counterfeits and American Failures; 04/22/08 Video of House of Representatives’ Subcommittee on Oversight and Investigations Hearing, “FDA’s Foreign Drug Inspection Program: Weaknesses Place Americans at Risk.”) Indeed, the FDA currently does not even have subpoena power, which would allow the FDA to demand certain documents from companies who have sold contaminated drugs. Without this ability, the agency is powerless to obtain internal company documents that a company itself chooses to withhold. (See prior blog, “FDA Needs Subpoena Power” (05/21/08)).

The June 26, 2008 letter asks that the requested information/documents be produced by July 11, 2008.

The United States Pharmacopeia Announces Revised Heparin Monographs

pamela@toledolaw.com (Pamela A. Borgess) — Fri, 27 Jun 2008 20:21:00 +0000

In response to the heparin contamination and resulting deaths, the FDA asked the United States Pharmacopeia (USP) on March 19, 2008 to assist in re-assessing current tests and developing new methods for detecting contaminants, such as over-sulfated chondroitin sulfate, in heparin. (See 04/14/08 USP Press Release.) The USP is an independent, science-based public health organization that sets the official public standards for all prescription and over-the-counter medicines, dietary supplements, and other healthcare products manufactured and sold in the United States. (To learn what a “pharmacopeia” is, click here. To learn more about the USP itself, click here.)

Among other functions, the USP plays a critical role in developing “monographs” for drug substances, drug products, or “excipients,” (substances that act as a vehicle for a drug). A monograph is a written standard that describes the medical drug, device or product and provides a public standard by which to judge its quality or to test it in order to produce a high-quality and consistent product. (See July 2004 USP Monograph Backgrounder for more information.) These monographs may be updated. For example, heparin, which has been sold in the United States since the 1940s, has had a USP monograph since 1950 that has been updated several times. (04/14/08 USP Press Release.)

Monographs are published in the National Formulary (USP-NF), which was originally created in 1888 and contains more than 4,000 monographs for prescription and over-the-counter products, dietary supplements, medical devices and other health care products. (Feb. 2005 USP Program, “What is a Pharmacopeia?”) When a standard is published in the USP-NF, federal and state government agencies, such as the FDA, can recognize and enforce those standards to ensure product compliance and quality. Currently, there are monographs for two heparin drug substances in the USP-NF. (04/11/08 USP Heparin Statement.)

In April of 2008, the USP started working to develop more sensitive methods for detecting contaminants found in heparin. (04/14/08 USP Press Release.) This work was divided into two stages. Stage one would include revisions to the heparin monographs, and was “intended to address rapidly the immediate public health crisis associated with the drug and help ensure an unadulterated supply of heparin.” (06/23/08 USP Press Release.) The second stage would seek additional methods to test for over-sulfated chondroitin and other potential contaminants in heparin.

The USP conducted a “heparin web meeting with the industry” on April 11, 2008. (To view the power point presentation for that meeting, click here.) On April 25, 2008, the USP’s Heparin Advisory Panel provided written recommendations for the revision of the heparin sodium monograph. (To view these recommendations, click here.) An open microphone meeting regarding the recommendations was then held on June 11, 2008. (To view the agenda for this meeting click here. To view the presentation given at this meeting click here.)

As a result of these meetings and recommendations, on June 23, 2008, the USP announced that stage one had been completed and that the monographs for heparin sodium and heparin calcium had been revised and are now available on the USP Web site. (06/23/08 USP Press Release.) The two heparin monographs are posted on the USP Web site at http://www.usp.org/hottopics/heparin.html?hlc. These revised monographs are accompanied by new and updated official USP Reference Standards, that all drug manufacturers who market heparin in the United States are required to meet. (For additional information, see USP “Heparin Monograph Revision Frequently Asked Questions.”)

The USP indicates that it will now turn to “the second stage of revision,” which involves seeking out additional methods to test for over-sulfated chondroitin and other potential contaminants in heparin. (06/23/08 USP Press Release.)

Although these revisions are important and the USP should be thanked for its hard work, as recognized by the USP itself, they are only “one of a series of safety nets that work to assure that U.S. patients and practitioners have access to good quality medicines.” (Statement of USP executive vice president and CEO, Roger L. Williams, M.D., in the 06/23/08 USP Press Release.) These other critical safety nets must also include “dedicated and trusted drug ingredient and product manufacturers who follow good manufacturing practices (GMPs) and sound sampling protocols in support of batch release testing,” and “oversight from the FDA...” (04/14/08 USP Press Release.)

As we have unfortunately now learned from the heparin disaster, when these other safety nets are not in place, the ramifications can be devastating. Companies who do not use good manufacturing practices or purchase product from companies who do not use good manufacturing practices, and do not adequately test their drugs, should be held accountable when those defective drugs cause death and injury. At the same time, the FDA must be given the resources and power it needs to enforce compliance by powerful and wealthy drug companies, including those who want to save money by purchasing product from uninspected and substandard plants in foreign countries.

Who owns Scientific Protein Labs?

david@toledolaw.com (David W. Zoll) — Fri, 27 Jun 2008 02:12:00 +0000

The information in this post is based on information in the public domain.

We have written earlier about Scientific Protein Labs (SPL) and the role they played in providing Baxter with the heparin that had been cut with oversulfated chondroitin sulfate. But unlike Baxter, which is a publicly traded company, the stock in SPL is privately held. 89% of SPL was purchased about 2 years ago for the price of $135 million. The purchaser was American Capital Strategies, Ltd., ("ACAS") a private equity firm headquartered in Bethesda, Maryland, which is publicly traded under the symbol ACAS.

Area biotech sold again: Helps make heparin

The Capital Times

By Mike Ivey
August 23, 2006

A company founded 30 years ago to make use of pig intestines from the Oscar Mayer slaughterhouse has changed owners again.

Scientific Protein Laboratories of Waunakee has been acquired by American Capital Strategies, a Washington, D.C.-area buyout firm that is publicly traded on the Nasdaq stock exchange.

A sales price was not released but the company had sold for $81 million in 2004 to Arsenal Capital Partners, a New York-based private equity firm. Prior to that, the company was a wholly-owned subsidiary of Wyeth Pharmaceuticals.

SPL has 150 employees at its facility here, where it produces the active ingredient used in the manufacture of heparin, a common anti-blood clotting drug. The company also has a small facility in Changzhou, China, with about 30 employees.

Complete Article

ACAS had placed a fair value of $176M on SPL as of 12/31/2007. The total asset value of ACAS is about $11 Billion. Thus SPL represents about 1.6% of ACAS total assets. According to the New York Times story published earlier this week:

American Capital, which owns stakes in some 170 companies, booked $29.6 million in unrealized depreciation related to its investment in Scientific Protein in the first quarter [of 2008].

American Capital’s stock is down about $4 since February, but that appears more related to the company’s write-downs on some of its assets, including mortgage bonds. Jefferies, the investment bank, downgraded American Capital’s stock to underperform in April, but did not mention the tainted blood thinner in its report.

NYT Story May 23, 2008

An article today posted on The Street.com titled "Valuations Haunt American Capital" contains this information:

American Capital's investment in Scientific Protein Labs (referred to as SPL Acquisition in regulatory filings) had a fair value of $176 million on American Capital's balance sheet at the end of 2007. The valuation dropped to $141 million at the end of the first quarter, as American Capital wrote down the value of its preferred-stock investment from $41 million to $10 million. (The news story on the bad heparin broke in the first quarter).
But the firm's $131 million debt investment in SPL was essentially left untouched.
At American Capital's annual investor day last week, one audience member questioned the valuation of Scientific Protein.
"I'm trying to understand, as we're trying to get comfortable with valuations through the portfolio, how the debt of a company that is looking at lawsuits that could probably bankrupt it if even a fraction of them come to fruition, how that can possibly be marked at par?" the unidentified audience member asked a panel of American Capital officials, according to a webcast replay of the event.
American Capital CEO Malon Wilkus, who was in the audience and not on the panel, immediately grabbed the microphone from the questioner, according to an investor who attended the event.
Wilkus said the situation was very sad, but he called Scientific Protein a "very good company ... and we think it will do extremely well," according to the webcast.
He did point out that Scientific Protein had some insurance to cover itself from lawsuits but stopped short of saying how much.
"I think that is about all we can say about the company specifically," he said.

The ACAS public financials do not disclose what amount of money SPL made from the CZ-SPL and China imports. SPL continues to make heparin from domestic sources as well as some other products. But the FDA has blocked any imports of heparin from SPL's wholly owned subsidiary CZ-SPL.

Why Didn’t the Contaminated Heparin Affect Everyone Receiving It?

pamela@toledolaw.com (Pamela A. Borgess) — Wed, 25 Jun 2008 02:16:00 +0000

Much is yet to be learned regarding the contaminate found in the recalled heparin, oversulfated chondroitin sulfate (“OSCS”). However, the first and only study published to date since the January 2008 heparin recall does shed some light on the relationship between the contaminate and the severe reactions, sometimes fatal, experienced by many Americans. (“Contaminated Heparin Associated with Adverse Clinical Events and Activation of the Contact System,” N. Engl. J. Med. 358:23, pgs. 2457-2467, June 5, 2008, available for a charge on the New England Journal of Medicine Website.) One of the issues addressed in this article is a question that we are often asked by our clients, why weren’t all patients who received tainted heparin from a particular lot affected?

In order to investigate this and related issues concerning the biologic link between the contaminant and the reported reactions, the researchers conducted animal testing. (6/5/08 N. Engl. J. Med. article, pg. 2464.) Pigs were chosen because unlike rabbits, horses and rats, only the pig plasma supported an appropriate level of response to the OSCS contaminated heparin, but not the uncontaminated control heparin. (This also may explain why early attempts by Baxter to provoke an allergic response with suspect lots of heparin failed. See Baxter 03/19/08 Press Update and 6/5/08 N. Engl. J. Med. article, pg. 2464.)

The pigs were given a single intravenous dose (5 mg per kilogram) of OSCS-contaminated heparin, uncontaminated heparin, or other substances. (06/05/08 N. Engl. J. Med. article, pg. 2466.) They were then monitored for 60 minutes. Two of six pigs treated with OSCS-contaminated heparin had at least a 30% drop in blood pressure over the first 30 minutes after infusion. One animal remained in a hypotensive state for more than 15 minutes. In contrast, none of the four animals treated with uncontaminated heparin showed any substantive changes in blood pressure. (Additionally, three pigs were given pure synthetic OSCS. All three of these pigs “showed a profound drop in blood pressure [maximal decrease, 45 to 59%] and a concurrent increase in heart rate within minutes after infusion.”)

Interestingly, while not all pigs who received OSCS-contaminated heparin exhibited clinical signs, the researchers found that “induction of kallikrein activity [kallikrein is an enzyme present in blood plasma and other body fluids which can lead to the generation of bradykinin that in turn, impacts the blood vessels leading to hypotension and other symptoms] was evident in all animals that received OSCS-contaminated heparin, even when no substantive changes in blood pressure were observed.” (06/05/08 N. Engl. J. Med. article, pg. 2466, with explanation and emphasis added by Zoll, Kranz & Borgess, LLC.) Based on these findings, the researchers concluded as follows:

“These findings suggest that activation of kallikrein does not always manifest as clinical symptoms, perhaps because of individual variations in control mechanism that regulate bradykinin activity…. The finding that hypotension did not develop in all animals treated with OSCS-contaminated heparin, even at a relatively high dose, is consistent with the observation that the majority of patients who received contaminated heparin did not experience an adverse event. However, it is important to note that all animals treated with OSCS-contaminated heparin showed evidence of kallikrein activation in vivo, even in the absence of clinical signs. Patients undergoing dialysis who are also receiving heparin therapy are already at high risk for hypotension because of their exposure to the dialysis membrane, which can also activate the contact system, and their treatment with angiotensin-converting-enzyme inhibitors, which inhibit bradykinin degradation. Exposure to OSCS-contaminated heparin may further increase the risk and could potentially trigger an adverse event.” (06/05/08 N. Engl. J. Med. article, pg. 2467.)

Thus, the scientific evidence to date suggests that while some patients may not exhibit clinical signs after receiving OSCS, this does not necessarily lead to the conclusion that those patients were “unaffected” by the OSCS, particularly those patients, including dialysis patients, who are already at greater risk.

Hopefully, researchers will continue to investigate the relationship between OSCS and the reported reactions, so that the families of those who have lost loved ones can understand how and why this happened, and continue to hope that it can and will be prevented in the future.

Sherrod Brown Challenges the FDA

david@toledolaw.com (David W. Zoll) — Sat, 21 Jun 2008 19:44:00 +0000

This week Ohio Senator Sherrod Brown sent a letter to the FDA challenging them to evaluate the level of outsourcing by U.S. Pharmaceutical companies, and the impact of that outsourcing on Drug Safety. He also asked Pfizer, who admitted outsourcing 17% of their API ("Active Pharmaceutical Ingredient"), to make public how much money they save by doing so. Sherrod Brown Press release and letters.

Now the FDA has announced that it will spend taxpayer money to set up inspection offices in China and India. (Three offices in China this year, followed by offices in India. Story here.) It seems to me that the drug companies that profit from overseas operations and the lax or total absence of controls and inspections should pay for these offices and the cost of inspecting the foreign operations.

Senator Brown is absolutely right to dig into this issue that is so critical to the health and safety of our citizens. As he stated to Janet Woodcock, head of the FDA:

You also asserted that FDA must have the tools to hold drug companies accountable when they outsource. What, in your opinion, is the best means of holding these drug companies accountable? All parties throughout the drug supply chain should be held accountable for the quality and integrity of the products they produce.

I seriously doubt that the current FDA will hold drug companies accountable. But they must do so. And those injured by the failure of the drug companies to perform their duties must be able to obtain full and fair compensation from the drug companies that have failed to provide products that are safe and effective.

Thank you Senator Brown. Please keep challenging the FDA, Pfizer, and the rest of the phamaceutical industry to do their duty. And please give those persons and families who are injured and killed the ability to seek full compensation. It is ridiculous to protect these companies from liability on the basis that the FDA is doing its job.

As we have seen in the Heparin Disaster, and as I pointed out in my blog yesterday, the Chinese operations, subcontractors and joint ventures of these drug companies are flying under the radar of the FDA. Even when the FDA tries to inspect these companies they cannot do so.

The FDA China Inspections

david@toledolaw.com (David W. Zoll) — Fri, 20 Jun 2008 14:20:00 +0000

The US FDA inspected, or rather attempted to inspect, three heparin manufacturing facilities between February 20th and February 29, 2008. The first facility was that of Changzhous SPL Company, Ltd., ("CZ-SPL") a wholly owned subsidiary of SPL. All of the CZ-SPL product was shipped to Baxter.

This inspection lasted 6 days. This was the first time the FDA had ever inspected the facility, in violation of FDA policy.

The inspection found that the process validation for the purification of Heparin Crude was inadequate . It further found a number of other deficiences, including:

process changes included removal of Heparin Crude quality attributes based on ease of procurement without adequate raw material evaluation.
No impurity profile had been established.
A discontinued workshop's crude heparin was included in lots sold to SPL.
Equipment was not cleaned.

The report states that, beginning in June of 2007, CZ-SPL started testing incoming lots by Polymerase Chain Reaction (PCR) for species verification. In other words, because SPL was worried about counterfeit sheep product being substituted for pig product, it started doing a basic PCR analysis. As a result of the inspection, the FDA issued a Form 483 report.

The second inspection began February 27, 2008. This inspection was of a facility located right next door to CZ-SPL. The neighboring factory is known as Changzhou Techpool Pharmaceutical Co. Ltd. ("CT"). CT is 45% owned by CZ-SPL. All of the product made by CT is sold to CZ - SPL. Importantly, the plant is not registered with the Chinese FDA because it does not make product for consumption in China. Nor is it registered with or inspected by the US FDA. The inspection lasted only 2 days. On both days the company refused to give the FDA copies of basic documents, including raw material crude specification, test methods, cards, certificates of analysis, blend records, and inventory records. The FDA did take photographs, which we are seeking to obtain.

The third inspection was even less successful. This inspection began the afternoon of February 28th and ended the next day when the FDA inspection team was refused reentry into the facility. This facility was located in Hangzhou, China. The name of the firm was Hangzhou Ruihua Biochemical Products Co. Ltd. This firm was a manufacturer and tester of crude heparin that was sold to CZ-SPL for further processing. A photograph of Dr. Wang, the general manager of CZ-SPL and an officer of SPL hung in the entryway of the facility.

The firm refused to provide copies of any records and no samples were collected. The firm is not regulated or inspected by the Chinese FDA or the US FDA. The owner of the firm, Mr. Ruihua, admitted that the firm had been unable to meet the needs of CZ-SPL because there was not enough heparin available. He indicated that CZ-SPL was his sole customer.

Ruiha collects raw heparin from the countryside and nearby provinces. The workshops are all on a list provided by CZ-SPL. However Mr. Ruiha refused to provide any documents, refused to permit the FDA to inspect the laboratory, refused to provide a list of the workshops from which they get the raw heparin, and would not even state the Provinces in which the workshops were located.

On April 21, 2008 the FDA issued a warning letter, which held that the deficiencies and deviations from current good manufacturing processes were so severe that CZ-SPL was barred from shipping product into the United States.

FDA revises information on Heparin

david@toledolaw.com (David W. Zoll) — Thu, 19 Jun 2008 14:12:00 +0000

The FDA has updated its website FDA Questions and Answers on Heparin

The latest version contains new questions and answers about Heparin and its uses, further details on the FDA investigation, and describes the contaminant, oversulfated chondroitin sulfate (OSCS) and its effect on the human body.

For example, the new article adds the following question and answer:

18. Why does the contaminant cause serious adverse events? (new question and answer added 6/18/2008)

The contaminant activates chemicals in the body called enzymes. These enzymes cause the body to make inflammatory mediators (chemicals that are released by immune cells). Inflammatory mediators can lead to some of the symptoms such as low blood pressure, abdominal symptoms and shortness of breath. This mechanism can explain many of the serious adverse events that occurred immediately after patients were given the contaminated heparin.

Tomorrow I will write about the FDA inspections of the Chinese facilities.

Heparin Death Reports Nearly Double

pamela@toledolaw.com (Pamela A. Borgess) — Tue, 17 Jun 2008 14:58:00 +0000

The FDA issued an updated report yeseterday on the number of deaths reported after heparin administration that occurred and were submitted to the FDA from January 1, 2007 through May 31, 2008. (See FDA 06/17/08 “Information on Adverse Event Reports and Heparin.”)

According to the FDA, as of May 31, 2008, there have been 246 reports of death in patients receiving heparin since January 1, 2007. Out of the 246 reported deaths, 149 of the reports included one or more allergic symptoms or symptoms of hypotension. This report is nearly double the FDA's earlier report in April 2008, which advised of 131 reported deaths, with 81 of those reports including one or more allergic symptoms or symptoms of hypotension.

The FDA's Center for Devices and Radiological Health (CDRH) has also recently reported 11 deaths and 86 injuries since January 1, 2008, which have been linked to use of medical devices containing heparin. (06/03/08 FDA web update: "Questions and Answers on Heparin, Medical Devices and In-vitro Diagnostic Assays.") The heparin in the majority of these medical devices was found to be contaminated with OSCS.

Draft Bill Regarding Preemption To Be Introduced

pamela@toledolaw.com (Pamela A. Borgess) — Sat, 14 Jun 2008 01:11:00 +0000

On February 20, 2008, the United States Supreme Court severely curbed the rights of injured victims in the case of Riegel v. Medtronic, which held that the Federal Food, Drug and Cosmetic Act (FDCA) preempts state-law claims seeking damages for injuries caused by medical devices with premarket approval from the FDA. (The problems with preemption have been discussed previously on this blog including, “The Preemption Problem” and “Should FDA Drug and Medical Device Regulation Bar State Liability Claims?”)

However, as reported in the 6/10/08 FDA news Device Daily Bulletin, prominent lawmakers are now seeking to introduce a bill in the next few weeks that would render this harsh U.S. Supreme Court decision moot. (FDAnews Device Daily Bulletin, Vol 5 No. 113, “Device Preemption Ruling Threatened by Draft Bill.”) This important bill would add a subsection to the FDCA stating, “Nothing in this section shall be construed to modify or otherwise affect any action for damages or the liability of any person under the law of any State.” The draft bill is sponsored by Congressmen Pallone and Waxman and is available at: www.fdanews.com/ext/files/FinalBill.pdf.

As this legislation is critical to ensuring the accountability of medical drug and device manufacturers for the safety of their products, we support this new bill.

Heparin Timeline with Web-Links Now Available

pamela@toledolaw.com (Pamela A. Borgess) — Wed, 11 Jun 2008 18:53:00 +0000

Zoll, Kranz & Borgess, LLC has just posted a detailed timeline relevant to the Heparin recall and subsequent litigation. This timeline created solely by Zoll, Kranz & Borgess, also features web-links to almost a hundred articles, videos, and other documents, including public documents from Baxter, SPL and the FDA. Please visit this timeline by clicking here.

Additional U.S. Deaths from Heparin Medical Devices

pamela@toledolaw.com (Pamela A. Borgess) — Mon, 09 Jun 2008 14:08:00 +0000

On June 3, 2008, the FDA announced that there have been 11 deaths and 86 cases of harmful side effects since January 1, 2008 that have been linked to use of medical devices containing heparin. (See 06/03/08 FDA web update: "Questions and Answers on Heparin, Medical Devices and In-vitro Diagnostic Assays.") The heparin in the majority of these medical devices was found to have the same contaminate, oversulfated chondroitin sulfate (OSCS), as found in Baxter heparin multiple-dose vials often used in dialysis and other medical procedures. Products coated with, containing or manufactured with heparin include:

Heparin lock flush solutions in vials and solutions in pre-filled syringes;
Devices used during cardiopulmonary bypass procedures, including certain oxygenators, filters, reservoirs, and cannulae;
Catheters including certain vascular access catheters, drainage, retransfusion and thermodilution catheters, and oximetry probes;
Certain vascular stents and grafts;
Certain assisted reproduction media devices; and
Certain In-Vitro Diagnostic media and related devices

A list of other medical devices and diagnostic products that may contain or be coated with heparin can be found by clicking here. This list also includes the manufacturer or distributor.

In a media interview, the FDA said that these 11 deaths involving heparin medical devices are ``probably in addition'' to the 81 deaths stemming from Baxter heparin multiple-dose vials, though some of the reports to the FDA are ``very sketchy'' and there could be ``some minor overlap.'' (See 6/5/08 Blooomberg News, "Heparin in Medical Devices Linked to 11 U.S. Deaths.")

The majority of reports of death and injury from medical devices containing heparin were associated with use of heparin lock flush solutions in vials and solutions in pre-filled syringes, although reports have also been received for other medical devices listed above. (See 06/03/08 FDA web update: "Questions and Answers on Heparin, Medical Devices and In-vitro Diagnostic Assays.")

This contamination can also lead to inaccurate test results from diagnostic diagnostic devices that monitor heparin or use it as part of the device itself. (See 06/03/08 FDA web update: "Questions and Answers on Heparin, Medical Devices and In-vitro Diagnostic Assays.")

Heparin and medical devices containing heparin have been recalled by Baxter (01/25/08 Baxter recall notice and 02/28/08 Baxter recall notice), American Health Packaging (03/20/08 Am. Health Pkg recall notice), B. Braun (03/21/08 B. Braun recall notice), Covidien (03/28/08 Covidien recall notice), and Medtronic (05/14/08 Medtronic recall notice).

Heparin MDL Sent to Toledo, Ohio

pamela@toledolaw.com (Pamela A. Borgess) — Fri, 06 Jun 2008 19:18:00 +0000

On May 29, 2008, Zoll, Kranz & Borgess, LLC argued before the United States Judicial Panel on Multi-District Litigation that the Heparin Products Liability Litigation be transferred to the Northern District of Ohio, before the Honorable Chief Judge James G. Carr. Other districts, including the Southern District of Illinois, District of New Jersey, Southern District of Florida, the District of Puerto Rico, and the Northern District of California, were suggested by Baxter Healthcare Corp., Scientific Protein Laboratories, LLC, and other parties.

Today the United States Judicial Panel on Multi-District Litigation issued a transfer order, transferring the Heparin Multi-District Litigation MDL No. 1953 to the Northern District of Ohio, before the Honorable Chief Judge James G. Carr.

A copy of the decision is available by clicking here.

Any inquiry regarding this or any other Heparin matter may be directed to either David Zoll or Pamela Borgess at (419) 841-9623.

We have invited all Plaintiff attorneys from across the nation to meet with us and organize for this important litigation. We are committed to working for the common benefit of all Plaintiffs in this action.

Update: Link to story in Toledo Blade

The Preemption Problem

pamela@toledolaw.com (Pamela A. Borgess) — Wed, 04 Jun 2008 20:13:00 +0000

Baxter, along with other drug manufacturers, continues to advocate for complete immunity from the majority of suits involving unsafe medical drugs under a legal concept called “federal preemption.” (See Baxter’s “Response to Preemption Discussion to Quaid’s Lawsuit.” See also testimony of Dennis and Kimberly Quaid at the Committee on Oversight and Government Reform’s 5/14/08 hearing, “Should FDA Drug and Medical Device Regulation Bar State Liability Claims?” The full transcript and video of this hearing is available by clicking here.) Baxter and other drug manufacturers argue that regardless of misconduct or failures on their part, Americans injured by defective drugs should be stripped of their constitutional right to a trial by jury for most, if not all, legal claims, where the drugs are regulated or approved by the FDA.

This argument is not only legally and ethically problematic, but is based on the flawed assumption that the FDA has the resources, authority, and capability to ensure product safety. Unfortunately, as the heparin debacle as reminded us, such is not the case. Since the contaminated heparin recall, the significant shortcomings in the FDA’s ability to protect this county against unsafe drugs and medical devices, has been on the forefront of the news media, as well as the agenda of Congress. Reports exposing the depth of the problem continue. This week USA Today published an article entitled “Drug Companies Drain Scientific Brains from FDA,” which reports that the FDA continues to lose its most experienced scientific minds to major drug companies with more financial resources. This has led to staffing problems for the agency, which has a turnover rate twice that of other agencies.

A previous study conducted by USA Today and reported in an article entitled “FDA Advisers Tied to Industry,” found that “more than half of the experts hired to advise the government on the safety and effectiveness of medicine had financial relationships with the pharmaceutical companies that will be helped or hurt by their decisions.”

With their undeniable influence at this and other levels of our government, it is no wonder that drug companies have gained support for federal preemption of medical drug and device lawsuits. It is also no wonder that Americans continue to die from unsafe drugs and medical devices.

Yet, our constitution gives every-day Americans injured through no fault of their own, a powerful weapon against corporate corruption and greed, the right to a jury trial. In a United States court of law, a regular American can hold even the wealthiest and most powerful corporation accountable. Attempts by Baxter and others to sacrifice that constitutional right for protection of its corporate profits, should be not be permitted.

SPL story in Wisconsin State Journal

david@toledolaw.com (David W. Zoll) — Mon, 02 Jun 2008 20:14:00 +0000

The Saturday, May 31, 2008 edition of the Wisconsin State Journal ran a story on Scientific Protein Labs, the supplier of the contaminated heparin to Baxter. (SPL was formerly a division of Oscar Mayer, the hot dog company.) The story is worth reading for several reasons.

First, it describes the process involved in processing pig intestines into the raw sugar powder used to make heparin. This powder is called the api, or active pharmaceutical ingredient. Here in the United States, SPL controls its supply by actually processing the pig intestines. One 22 ton semi load of pig guts is processed down into just six pounds of heparin powder.

In China, SPL - Changzhou (SPL-CZL), an SPL joint venture, bought processed pig guts, rather than act as the parent company and purchase the raw pig guts. SPL-CZL purchased the material after some processing had been done. SPL - CZL then shipped the heparin powder in bags from China to Wisconsin. SPL did not even open the bags in Wisconsin, but simply forwarded them to Baxter's Cherry Hill, New Jersey plant. These bags contained material that had been "cut" with a counterfeit product that mimicked heparin. Up to 30% or more of the material was actually oversulfated chondroitin sulfate (OSCS).

What is new in this article is the admission that Baxter bought all of its raw heparin only from the China operation. The raw heparin that is made by SPL from domestic pigs is all sold to Sanofi Aventis, another drug company.

All of SPL's heparin was made in the United States until 2004, when it acquired the China operations. In China SPL purchases its raw materials from two different companies, and each of them obtain the processed raw material from 10 other workshops, which do the initial processing of the pig intestines. So the supply chain of SPL is much different than that here in the United States, a fact which should have been known by Baxter.

The most critical admission in the latest article is the admission by SPL that it feared suppliers would try to sell it counterfeit products because of the blue ear pig disease that was ravaging the pig supply in China. It started testing its incoming supplies to make sure that sheep intestines weren't being substituted. But amazingly it never utilized the common test of NMR until after it was too late.

It didn't even own an NMR machine.

CEO Strunce stated that he has learned a lesson. "The lesson is that you have to be constantly vigilant."

Mr. Strunce, that lesson was taught in drug manufacturing 101. You must have missed that class.

Where will the cases go? MDL update

david@toledolaw.com (David W. Zoll) — Fri, 30 May 2008 20:33:00 +0000

Yesterday I had the honor to present oral argument before the United States Judicial Panel on Multidistrict Litigation. This is a very distinguished panel of Federal Judges from around the country who meet once a month to decide if particular groups of cases should be consolidated before a single judge for purposes of discovery, and, if so, to decide which judge should hear the cases.

The Court sat yesterday in Asheville, North Carolina to decide several dozen matters. One of them was MDL 1953, the Heparin Disaster cases. The first attorney to argue asked the cases be transferred to San Francisco, even though there as yet are no cases pending there, because San Fran is closest to China, where some of the discovery needs to be done.

I argued second for Toledo. My reasons included the following:

Toledo has the best resources and is most convenient, and we were the first to file, had the most cases, and it would be best not to have the cases heard in Baxter's back yard of Illinios.

I pointed out that Chief Judge Jim Carr has the time, experience, dedication and resources to resolve these cases in a fair and expeditious manner, pointed out that our Toledo courthouse has state of the art equipment in the clerk's office and courtroom, run by tech savvy skilled personnel.

I indicated that Baxter's claim that all the witnesses were in either New Jersey or Illinois was really incorrect. The main issue in this case isn't what Baxter or SPL did, but what they didn't do. Why they failed to perform critical customary testing of incoming raw material for purity, and why they relied on Chinese subcontractors to perform this critical purity testing without documentation. NMR analysis is a basic fundamental test that is done for purity. It should have been used for Heparin.

Finally I concluded that Toledo was centrally located and convenient to the entire country. I pointed out that the federal courthouse in Toledo was only 45 minutes from Detroit Metro, which has a state of the art Northwest hub with connections throughout the world, and that it is much easier to drive from Detroit Metro to the Toledo courthouse than to go from OHare to downtown Chicago. I ended by mentioning that Northwest has just announced a new nonstop flight from Detroit to Shanghai, China.

After my argument other attorneys argued for Puerto Rico, Illinois and New Jersey. I am cautiously optimistic that the cases may be referred here. I expect a decision within thirty days.