After Heparin: - The Pew Charitable Trusts

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INTRODUCTION AND BACKGROUND The heparin tragedy may have been preceded by warning signs that could have suggested a heightened risk of economically motivated adulteration. The OSCS entered the supply chain at a time when a widespread swine virus outbreak had greatly diminished Chinese pig herds. 86 The price of pigs increased in 2007, 87 and the cost of pure heparin as well as heparin crude increased more than 100 percent between May and November 2007 (see figure 4). According to an expert in the pharmaceutical chemical industry, an alert purchasing department might have identified the price increase as a signal of potential risk to the product. 88 A shortage of raw ingredient provides a motivation for deliberate substitutions of cheaper materials. Figure 4 Monthly Chinese export prices for crude and refined heparin, 2006 and 2007 3000 $/KG 2500 2000 Crude heparin 2006 Crude heparin 2007 Refined heparin 2006 Refined heparin 2007 1500 1000 500 0 JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC Source: Beijing Orientbit Technology Co., Ltd. 89 Baxter reports that it has instituted a number of initiatives to secure its supply chain against future adulteration. It is examining its global supply chain practices to identify vulnerabilities, reviewing relationships with high-risk suppliers, reducing the number of suppliers, doing more concentrated audits and reviewing test methods. 90 Baxter does not sell heparin vial products today, although it continues to sell other heparin products, none of which is produced using the supplier implicated in the recalls. 91 As FDA Commissioner Margaret Hamburg has noted, “In this day and age, companies must be able to effectively demonstrate that safety, quality and compliance with international and U.S. standards are built into every component of every product and every step of the production process.” 92 Heparin’s complex supply chain was vulnerable to abuse by perpetrators that have not been identified and therefore never penalized, and Baxter failed to prevent a serious adulteration of its product. Chapter 1 reviews issues of outsourcing, globalization and supplier management. 20 Pew Health Group
CHAPTER1 PHARMACEUTICAL MANUFACTURING: GLOBALIZATION AND QUALITY MANAGEMENT 1.1 Overview The geography and complexity of drug manufacturing have changed dramatically during recent decades, presenting serious new challenges to oversight and increasing the risk that substandard drugs will reach patients. As drug manufacturing moves to foreign countries, and pharmaceutical ingredients are increasingly purchased from overseas suppliers, ensuring manufacturing quality has become much more challenging for industry and regulators alike. The FDA’s regulatory presence in foreign countries is lower than in the United States, and FDA inspectors infrequently travel to developing countries such as India and China, where much of U.S. manufacturing has moved (see section 2.2.1). 93–95 With less oversight, manufacturers may not rigorously observe quality measures, and in some cases individuals manage to deliberately substitute cheaper materials for high-quality ingredients (see section 1.3.2). While the vast majority of drugs in the United States is safe, these changes create significant risks of rare but potentially serious events by which U.S. patients are harmed by substandard or adulterated drugs. This chapter explores the trend toward globalized manufacturing and sourcing of ingredients, and the resulting challenges in industry supply chain quality control. 1.2 Globalization of manufacturing 1.2.1 Movement of U.S. drug manufacturing overseas The number of drug products made at non-U.S. sites doubled between 2001 and 2008, according to FDA estimates. 96 An estimated 40 percent of finished drugs used in the United States are made abroad. 97 Non-U.S. manufacturing site registration with the FDA is growing rapidly, while domestic site registration has leveled off and begun to decline (see figure 5). Site registration in 2005 reached a milestone, according to the FDA’s estimates: for the first time, foreign sites registered with the FDA and subject to GMP inspections outnumbered those in the United States. After Heparin: PRotecting Consumers from the Risks of Substandard and Counterfeit Drugs 21
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REFERENCES 16 Fagan, Kevin. Testimo
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REFERENCES 58 Schwartzkopff, France
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REFERENCES 111 NSD Bio Group. “Po
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REFERENCES 155 State Food and Drug
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REFERENCES 195 U.S. Food and Drug A
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REFERENCES 332 Public Law 111-8—M
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REFERENCES 378 Villax, Guy. Board M
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REFERENCES 429 U.S. Supreme Court,
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REFERENCES 479 Michelle M. Ciolek,
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REFERENCES 521 21 USC §828 (a). 52
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APPENDIX A Expert Interviews Bill A
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acknowledgments We gratefully ackno
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After Heparin: - The Pew Charitable Trusts

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