[House Hearing, 110 Congress] [From the U.S. Government Publishing Office] THE HEPARIN DISASTER: CHINESE COUNTERFEITS AND AMERICAN FAILURES ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS SECOND SESSION ---------- APRIL 29, 2008 ---------- Serial No. 110-109 Printed for the use of the Committee on Energy and Commerce energycommerce.house.gov THE HEPARIN DISASTER: CHINESE COUNTERFEITS AND AMERICAN FAILURES THE HEPARIN DISASTER: CHINESE COUNTERFEITS AND AMERICAN FAILURES ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS SECOND SESSION __________ APRIL 29, 2008 __________ Serial No. 110-109 Printed for the use of the Committee on Energy and Commerce energycommerce.house.gov U.S. GOVERNMENT PRINTING OFFICE 53-183 WASHINGTON : 2008 ----------------------------------------------------------------------- For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001 ? COMMITTEE ON ENERGY AND COMMERCE JOHN D. DINGELL, Michigan, Chairman HENRY A. WAXMAN, California JOE BARTON, Texas EDWARD J. MARKEY, Massachusetts Ranking Member RICK BOUCHER, Virginia RALPH M. HALL, Texas EDOLPHUS TOWNS, New York FRED UPTON, Michigan FRANK PALLONE, Jr., New Jersey CLIFF STEARNS, Florida BART GORDON, Tennessee NATHAN DEAL, Georgia BOBBY L. RUSH, Illinois ED WHITFIELD, Kentucky ANNA G. ESHOO, California BARBARA CUBIN, Wyoming BART STUPAK, Michigan JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York HEATHER WILSON, New Mexico ALBERT R. WYNN, Maryland JOHN B. SHADEGG, Arizona GENE GREEN, Texas CHARLES W. ``CHIP'' PICKERING, DIANA DeGETTE, Colorado Mississippi Vice Chairman VITO FOSSELLA, New York LOIS CAPPS, California STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania GEORGE RADANOVICH, California JANE HARMAN, California JOSEPH R. PITTS, Pennsylvania TOM ALLEN, Maine MARY BONO, California JAN SCHAKOWSKY, Illinois GREG WALDEN, Oregon HILDA L. SOLIS, California LEE TERRY, Nebraska CHARLES A. GONZALEZ, Texas MIKE FERGUSON, New Jersey JAY INSLEE, Washington MIKE ROGERS, Michigan TAMMY BALDWIN, Wisconsin SUE WILKINS MYRICK, North Carolina MIKE ROSS, Arkansas JOHN SULLIVAN, Oklahoma DARLENE HOOLEY, Oregon TIM MURPHY, Pennsylvania ANTHONY D. WEINER, New York MICHAEL C. BURGESS, Texas JIM MATHESON, Utah MARSHA BLACKBURN, Tennessee G.K. BUTTERFIELD, North Carolina CHARLIE MELANCON, Louisiana JOHN BARROW, Georgia BARON P. HILL, Indiana ______ Professional Staff Dennis B. Fitzgibbons, Chief of Staff Gregg A. Rothschild, Chief Counsel Sharon E. Davis, Chief Clerk David L. Cavicke, Minority Staff Director 7_____ Subcommittee on Oversight and Investigations BART STUPAK, Michigan, Chairman DIANA DeGETTE, Colorado ED WHITFIELD, Kentucky CHARLIE MELANCON, Louisiana Ranking Member Vice Chairman GREG WALDEN, Oregon HENRY A. WAXMAN, California MIKE FERGUSON, New Jersey GENE GREEN, Texas TIM MURPHY, Pennsylvania MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas JAN SCHAKOWSKY, Illinois MARSHA BLACKBURN, Tennessee JAY INSLEE, Washington JOE BARTON, Texas (ex officio) JOHN D. DINGELL, Michigan (ex officio) (ii) C O N T E N T S ---------- Page Hon. Bart Stupak, a Representative in Congress from the State of Michigan, opening statement.................................... 1 Hon. John Shimkus, a Representative in Congress from the State of Illinois, opening statement.................................... 4 Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement................................. 6 Hon. Michael C. Burgess, a Representative in Congress from the State of Texas, opening statement.............................. 8 Hon. Jan Schakowsky, a Representative in Congress from the State of Illinois, opening statement................................. 10 Hon. Joe Barton, a Representative in Congress from the State of Texas, prepared statement...................................... 179 Hon. Gene Green, a Representative in Congress from the State of Texas, prepared statement...................................... 180 Witnesses David Nelson, Senior Investigator, Committee on Energy and Commerce, Washington, DC....................................... 12 Prepared statement........................................... 14 Colleen Hubley, Toledo, Ohio..................................... 17 Prepared statement........................................... 19 Leroy Hubley, Toledo, Ohio....................................... 20 Prepared statement........................................... 21 Johanna Marie Staples, Toledo, Ohio.............................. 22 Prepared statement........................................... 23 Janet Woodcock, Director, Center for Drug Evaluation and Research, Food and Drug Administration, Department of Health and Human Services, Rockville, Maryland; accompanied by Deborah M. Autor, Director, Office of Compliance, Center for Drug Evaluation and Research, Food and Drug Administration, Department of Health and Human Services, Rockville, Maryland; and Regina T. Brown, Consumer Safety Officer, Division of Field Investigations, Office of Regional Operations, Office of Compliance, Center for Drug Evaluation and Research, Food and Drug Administration, Department of Health and Human Services, Rockville, Maryland............................................ 44 Prepared statement........................................... 47 Robert L. Parkinson, Jr., chairman, chief executive officer and president, Baxter International, Inc., Deerfield, Illinois..... 98 Prepared statement........................................... 100 David G. Strunce, chief executive officer, Scientific Protein Laboratories, LLC, Waunakee, Wisconsin; accompanied by Yan Wang, Ph.D., vice president of business development and research, Scientific Protein Laboratories, LLC, Waunakee, Wisconsin...................................................... 120 Prepared statement........................................... 122 Clive Meanwell, M.D., chairman and chief executive officer, The Medicines Company.............................................. 159 Prepared statement........................................... 161 Submitted Material Slides accompanying Mr. Stupak's presentation.................... 182 Letter of June 2, 2008, from the Food and Drug Administration to Hon. Bart Stupak............................................... 187 Heparin patent application....................................... 191 Subcommittee exhibit binder...................................... 196 THE HEPARIN DISASTER: CHINESE COUNTERFEITS AND AMERICAN FAILURES ---------- TUESDAY, APRIL 29, 2008 House of Representatives, Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, Washington, D.C. The subcommittee met, pursuant to call, at 11:04 a.m., in room 2123, Rayburn House Office Building, Hon. Bart Stupak (chairman of the subcommittee) presiding. Present: Representatives Stupak, Melancon, Schakowsky, Inslee, Dingell (ex officio), Shimkus, and Burgess. Staff Present: Scott Schloegel, John Sopko, David Nelson, Kevin Barstow, Calvin Webb, Chris Knauer, Kevin Chapman, Elizabeth V. Barrett, Alan Slobodin, and Peter Spencer. OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN Mr. Stupak. This meeting will come to order. Today we have a hearing entitled, ``The Heparin Disaster: Chinese Counterfeits and American Failures.'' Each member will be recognized for a 5-minute opening statement, and I will begin. Today this subcommittee is holding another in a series of hearings examining the adequacy of the efforts of the Food and Drug Administration to protect Americans from unsafe drugs. Today's hearing will focus on the circumstances surrounding the recent catastrophe caused by the contamination of the drug heparin. To date, contaminated heparin has been linked to at least 81 deaths and hundreds of severe allergic reactions in the United States. Today we will hear from two companies responsible for introducing the contaminated heparin into the United States. We will also hear from the FDA regarding the circumstances that led to the introduction of the contaminated heparin and its action after the outbreak was discovered. Finally, we will hear from family members of victims who died after being treated with heparin. To understand how and why this outbreak occurred, it is first necessary to understand what heparin is, how it is made, and where it is made. Heparin is an important anticoagulant, or blood thinner, that is widely used in surgery and dialysis. It is derived from pig intestines and has been marketed in the United States since the 1930s. heparin is a natural product that exists in the lining of the pig's blood vessels. Membrane of the intestine are collected and processed to form a dried substance known as crude heparin. Crude heparin is then further refined and made into an active pharmaceutical ingredient, API, that is sold to drug companies that manufacture the final product. It is now estimated that China produces over half of heparin's active pharmaceutical ingredients. Indeed, all of the tainted heparin in this case was manufactured from API produced in China. Baxter, the final manufacturer of the contaminated heparin, has a complex international supply chain shown on the slide we have up on the screens. Their supply chain starts in China, where 10 to 12 Chinese workshops make crude heparin. This crude heparin is then either sold to middlemen called brokers or sold directly to two companies that consolidate the product. These consolidators then sell the crude heparin to Scientific Protein Laboratories. It is an American company with a plant in Changzhou, China. SPL, Scientific Protein Laboratories, also has a plant in Wisconsin that produces heparin API from the crude heparin. This heparin API is then sold to Baxter, another American company, which manufactures finished heparin products at its Cherry Hill, New Jersey, plant. In November 2007, Children's Hospital in St. Louis, Missouri, began noticing adverse reactions in their dialysis patients. On January 7, 2008, the Missouri Department of Health and Senior Services notified the Centers for Disease Control and Prevention, who, in turn, notified the FDA and Baxter of the cluster of adverse events. On January 17th, almost 3 months later, Baxter, which produced about 50 percent of the heparin used in the United States, initiated an urgent nationwide recall of nine lots of heparin products after there was an increase in adverse reactions patients suffered while being given heparin products. On February 11th, FDA announced that Baxter had halted manufacture of multi-dose vials of heparin because of serious allergic reactions and low blood pressure in patients. On that same day, FDA announced that approximately 350 adverse events associated with heparin had been reported since the end of 2007, and the FDA classified 40 percent of these events as serious, including four deaths. Days later, Baxter recalled all of its heparin injection and solution products remaining on the U.S. market. As of today, there have been 81 deaths and at least 785 severe allergic reactions associated with heparin since January 2007. Sixty-two of these deaths occurred between November of 2007 and February of 2008. FDA's investigation into the cause of the outbreak revealed that heparin API made by Changzhou SPL contained a contaminant called oversulfated chondroitin sulfate. Chondroitin sulfate is made from animal cartilage and is cheaper than raw heparin. By itself, chondroitin sulfate does not have blood-thinning properties. However, it can be chemically altered to form oversulfated chondroitin sulfate, which mimics real heparin and is less expensive. Because oversulfated chondroitin sulfate mimics heparin, it was not detected by standard tests. Oversulfated chondroitin sulfate is not an approved drug in the United States, and it should not have been present in heparin. In samples collected from Changzhou SPL in China, FDA found that this contaminant was present in amounts ranging from 2 to 50 percent of the total content of the API. The contaminant was also found in some of Baxter heparin lots associated with adverse reactions. To date, it is not known whether this contaminant entered the supply chain accidentally or was introduced intentionally. Because oversulfated chondroitin sulfate is not normally found in nature and is produced through chemical modification, evidence would suggest that this contaminant was intentionally introduced at some stage in the supply chain. While FDA must be applauded for its outstanding efforts in responding to this outbreak, it must also be held accountable for one glaring and fatal mistake: in 2004, a series of FDA blunders resulted in an FDA decision to approve Changzhou SPL to sell heparin HBI to Baxter without first the FDA conducting a pre-approval inspection of Changzhou SPL's production plant, as is the FDA's policy. This plant was not registered in China as a drug manufacturer, and Chinese officials had never inspected the plant either. If FDA had conducted such an inspection in 2004, would they have concluded that Changzhou SPL was not capable of meeting current good manufacturing practices, as was concluded by the FDA's inspection after heparin deaths? It was not until February 20th that the FDA began an inspection of the Changzhou plant. In that inspection, FDA determined that Changzhou SPL was incapable of providing safe heparin API to the United States. We may never know whether an FDA pre-approval inspection would have prevented this outbreak from occurring. However, it is regrettable that FDA did not inspect this plant sooner, as this may have positively impacted the events related to the heparin tragedy we are discussing today. While this subcommittee's ire regarding the safety of drugs in this country has been directed toward the FDA, perhaps a greater responsibility to ensure the safety of drugs in this country lies with the drug companies themselves. Make no mistake about it: both Baxter and SPL have failed the American public. One only needs to look at the FDA's inspection report of Changzhou SPL, which revealed, and I quote, ``significant deviations'' from U.S. current good manufacturing processes in the production of heparin API. FDA found that Changzhou SPL's processing steps provided no assurance that they were capable of removing impurities. It found that SPL failed to have adequate systems for evaluating both the crude heparin and the suppliers of crude heparin to ensure that their product was acceptable for use. FDA found that the test methods performed by SPL had not been verified to ensure suitability under actual conditions of use. Finally, FDA found that equipment SPL used to manufacture heparin was unsuitable for its intended use. These findings raise several questions. Why was Baxter obtaining a drug product from a facility that the FDA found to be unsuitable? What due diligence did Baxter or SPL perform before they began using this plant to confirm that it could safely make heparin API for the U.S. market? Why did Baxter sell ingredients from this plant when it knew it had never been inspected by the FDA or China? Why did Baxter buy ingredients from a country that provided little oversight and had a history of producing contaminated products? These questions in this case are endless. Hopefully some of these questions will be answered today and that these questions will help this committee to continue to move forward in our quest to fix our country's broken drug safety system. Today we look forward to examining what steps must be taken to strengthen this broken system. I would like to thank all the witnesses for appearing here today, especially the family members who lost loved ones. I'm deeply sorry for your losses; you have suffered. And I appreciate you having the courage to testify before this committee in these very, very difficult times. That concludes my opening statement. I would next like to turn to the gentleman to my left, the ranking member of the subcommittee, Mr. Shimkus from Illinois, for an opening statement, please, sir. OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Mr. Shimkus. Thank you, Mr. Chairman. Last week, this subcommittee focused on the Food and Drug Administration's serious shortcomings in ensuring the safety of drug products imported into the United States. We examined how the system has broken down. We discussed its misplaced priorities, its obsolete information technology, and its resources-starved bureaucratic culture which has failed to confront the serious global challenges warned about for over a decade now. These shortcomings relate directly to the topic of today's hearing: the contamination, very likely purposeful contamination, of Chinese-source heparin. As we take testimony today, we should not forget the FDA's shortcomings are not new. Eight years ago, this subcommittee held hearings on counterfeit bulk drugs, focusing on the cluster of adverse events in the U.S. associated with gentamycin ingredient from China. Those hearings highlighted the need for greater scrutiny of drug ingredients, the need for better data, and the possible need for legislation to fix these issues. The FDA had been on notice about these shortcomings for a long time. And I want to add, had we had moved then, maybe we wouldn't be in this position today. Much of the agency's problems are institutional, which did not change from administration to administration. Certainly the current administration could have done more, but the reality is its predecessor could have done more, too. Congress has to do its part to push harder for institutional change, to provide the necessary resources and to ensure FDA sticks to its mission. I believe this subcommittee's bipartisan work is helping that effort. Today we start with the human face of what happens when safeguards fail. And I thank the Hubleys and Ms. Staples for coming to talk to us this morning. This must be difficult and painful, but you remind us why we are working to improve the system. And thank you. When the drug safety system fails, people get sick. Some die. Some of these people are already very vulnerable, and proving the cause of harm from impurities, adulteration, and counterfeits can be elusive. It is hard to detect harm. Heparin required dramatic statistical spikes in adverse event reports before problems were recognized. That is why information technology is going to be so important. And I also want to applaud Children's Hospital, which I have visited numerous times since I live right outside the St. Louis area, for their being able to identify problems. And I want to give them credit. This is why we have to have confidence in our underlying safety standards and systems, and that is also why we need an agency and manufacturers that can anticipate potential vulnerabilities to prevent tragedy. Today we examine the Chinese heparin contamination which has been associated with hundreds of adverse reactions in patients and scores of deaths. The evidence so far suggests that contamination was a deliberate act by as-yet-identified parties to cut the raw heparin being processed with a substitute that would pass through the standard purity test. It happens to have been driven by economics, the price, and the availability of pigs in China. I have learned in this investigation that FDA inspectors look for a culture of quality at manufacturing facilities. The FDA foreign surveillance inspections are supposed to help encourage and ensure this culture if they happen frequently enough. Certainly the companies are obligated to ensure a culture of quality and maintain vigilance as well. This reflects a systems approach to safety. The evidence we will examine today suggests this system approach wasn't at play here. FDA policies led to the failure to inspect the Chinese plant. Baxter, which marketed the heparin, inspected the plant for the first time just this past fall. After several years of operation, this lack of oversight provided more fertile ground for the shenanigans and the heparin counterfeits to flourish. FDA did a good job after the contamination, but that was too late. This brings me to China and its quality culture or lack thereof. I understand China has been working more closely with the FDA to address concerns about its quality system. This is a positive step. But we hear also that China, while it doesn't deny the counterfeit source, tries to say that counterfeits didn't cause the reaction, as if the adulteration itself was no big deal. Is this an acceptable mindset? Is this going to change any time soon? I hope we see some change through the FDA's new agreements with China. We have to recognize the enormity of the foreign drug problem, one that is growing and one that may take a long time to solve. But lessons from the heparin contamination should help us understand some of the steps we have to be taking going forward. Let me thank the witnesses. And let me especially thank Dr. Clive Meanwell, who will appear on the fourth panel today. He brings a knowledge of heparin, the global drug marketplace generally, and a perspective on regulation and motivation we think will contribute to the broader subject matter raised by the heparin case. And, Mr. Chairman, I want to particularly thank you and your staff for allowing Mr. Meanwell to be in the fourth panel and accommodating our request for this broader perspective. And with that, I yield back my time. Mr. Stupak. I thank the gentleman. And, as you said earlier, this has been a bipartisan investigation. We are working on our Nation's safety and drug supply. So hopefully our legislation will be bipartisan and we can move that along, also, in the same manner and method. With that, I next turn to the Chairman of the full committee, Mr. Dingell, for an opening statement, please. OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN Mr. Dingell. Mr. Chairman, I thank you for your courtesy, and I thank you for holding this hearing and for doing a superb job of leading this investigation into the ability of the Food and Drug Administration to assure the safety of prescription medications from foreign sources. I would hope, Mr. Chairman, that because of your outstanding leadership on this matter and because of what I see on the part of Members on both sides of the aisle, this will lead us to a hope that we will have strong bipartisan legislation to correct some very serious failures in funding of FDA and inadequacies of its budget and its ability to carry out its mission. Today we will continue to examine the tragedy of contaminated heparin, which killed some 81 of our citizens and made hundreds, if not thousands, of people very sick in the United States and in other countries around the world. heparin is a blood-thinning drug given to people receiving dialysis or undergoing open-heart surgery, people whose health is already compromised and for whom contaminated drugs pose potentially fatal consequences. Doctors, hospitals, and clinics have administered millions of doses of this drug in the belief that it was safe and that no one would be endangered by contamination or other failures in the delivery system. And none believed that it would cause a critical allergic reaction. Baxter Health Care, which manufactured the drug, supplies many patient-care items to hospitals, but there was no label that indicated to doctors, hospitals, or their patients that the active ingredient in heparin was made in China, a country with an extremely unreliable drug or food safety regime, as noted by many experts and confirmed in the hearings of this committee. Baxter knew the heparin ingredients came from China. We assume, however, that they and other American firms that owned the Chinese plant had no warning that criminals in China were capable of substituting an inexpensive counterfeit ingredient into the production process that mimicked heparin's properties so closely that it was undetectable by standard tests used to determine the purity in drug products. It should be noted that this exercise appears to have been conducted by the Chinese in connection with other kinds of substances delivered to the United States under the jurisdiction of FDA. And, in other instances, it was impossible to catch the misbehavior because of the way the substance mimicked the substance which it was supposed to replace so closely that it could not be caught. Here, certainly the FDA, the Government agency responsible for assuring safety of Americans' prescription drug products, had no idea that this supply of heparin contained a deadly contaminant until reports of adverse events started to soar upwards. Today we seek actions and answers as to whether these companies or FDA should have been able to prevent the situation. Could they have anticipated the actions that led to these counterfeits? Were they receiving proper cooperation from the Chinese? Did they have the proper authorities and the proper abilities to catch the kind of wrongdoing which we see here? Our investigations so far have revealed that FDA is, here again, woefully lacking in personnel, effective policies, adequate resources, proper funding, and, regrettably, the will at the highest level to perform the duties entrusted to it by the Congress and the American people. That includes procuring adequate funding and informing the Congress of the needs of the agency, something in which FDA is exquisitely deficient. Our citizens can no longer trust that their food, drugs, or medical devices are safe when the FDA says they are, because they can no longer trust FDA. I was disappointed last week by the FDA Commissioner's unwillingness to provide us with the cost of properly conducting foreign inspections. And he has not made the case that a proper effort is being made by FDA to secure either the resources, money, or authorities needed to get foreign inspections or the cooperation of foreign countries. Let us make no mistake: FDA has a dedicated workforce, dedicated public servants who do their best to keep their fingers in the dike. And we commend them for their efforts, and we respect them for their diligence and for their decency. One such employee is with us today, Regina Brown, the FDA investigator who inspected the Changzhou SPL plant last February. I hope this hearing, as well as the legislation that this committee is now working on, which I hope will be enacted this year and which I hope will be done with bipartisan cooperation, will not only protect the American people but will ensure that those dedicated FDA employees who serve on the front line are able to do the jobs more completely and effectively because they are supported by the leadership at FDA and because they are supported by an administration and a Congress that sees that they have the adequate funds and resources to do their job. I thank you, Mr. Chairman, and I yield back the balance of my time. Mr. Stupak. I thank the Chairman. Mr. Burgess for an opening statement, please. OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS Mr. Burgess. Thank you, Chairman Stupak. And thank you, once again, for holding a hearing and conducting this investigation. And today, of course, we are trying to better understand what I believe is one of the fundamental purposes of the Federal Government; that is, the safety and security of Americans. I want to thank all of our witnesses today. I know this is not going to be easy for some of them. I want to thank all of our witnesses, the families, the companies, the Food and Drug Administration, and Dr. Meanwell. I think you will all provide an important link to the story. And, Dr. Meanwell, although you are at the end of several panels, I think it will be your very detailed and thorough testimony, at the end of the day, that ties much of this together. You provide a valuable historical perspective for the issue that we are going to be discussing today. This year, we have had hearing after hearing after hearing regarding the resources, or lack thereof, of the Food and Drug Administration. We have also had many important investigations: the heparin issue that we are discussing today; the melamine scandal of last year; and the ongoing investigation regarding dental devices. And, once again, I do thank the leadership of this committee for examining and bringing to the forefront these issues. This committee is also discussing legislation that will reform the authority of the Food and Drug Administration. While I cannot agree with all of the provisions in the Chairman's FDA Globalization Act, I do welcome an open and honest discussion about the legislation that will transform the system. We are going to hear testimony today about some fault that may lie with manufacturers. We are going to hear testimony today about some fault that lies with the Food and Drug Administration. What we are probably not going to hear about today is testimony that would revolve around the fault of the United States Congress. And I want to reference an article in the New England Journal of Medicine from April 24th. It is titled, ``Playing `Kick the FDA': Risk-Free to Players but Hazardous to Public Health.'' And quoting from this article, ``The fundamental problem is that legislators have heaped more and more responsibility on the Food and Drug Administration without appropriately increasing its budget. Between 1988 and 2007, additional Food and Drug Administration responsibilities were imposed by 137 specific statutes, 18 statutes of general applicability and 14 Executive orders. At the same time, the Food and Drug Administration received a 2007 Federal appropriation of $1.57 billion, less than three-quarters of the budget for the school district in its home county in Maryland,'' closed quote. Now, this hearing should include enhancing the FDA's import alert system and give the Food and Drug Administration a true mechanism to stop products that are dangerous from coming into our country and entering our ports. I have introduced separate legislation, H.R. 3967, the Imported Food Safety Improvement Act of 2007, to do just this in regards to food safety. And I look forward to working with the Chairman to incorporate this idea for active pharmaceutical ingredients that we are discussing today. And today we are seeking answers, answers regarding the contamination of heparin. And heparin is a drug, in my previous life as a physician, I used to administer to my patients. And that is why testimony today is so poignant. And we are going to hear testimony from Johanna Staples, and I just want to quote from her testimony, when talking about, at the dialysis center, a procedure of administering heparin, the procedure was deemed to be successful, so he was given a bolus of heparin and his treatment resumed. Think of the poor individual who actually administered the shot--the doctor or the nurse, the attendant. They are going to carry this information around for the rest of their lives, as well. And it is almost unconscionable that we could have a product that is so distorted from its original intent imported into this country. Now, we are also going to be seeking answers to the safety of the workshop in the People's Republic of China. And you have to ask yourself: is this just an unscrupulous merchant with his thumb on the scale, or is this an activity with malice aforethought done to conflict harm and damage on American patients, and indeed patients worldwide because the European Union and Australia were similarly affected by this? But most importantly, we are trying to get answers to get to the core value of this country, answers to the most basic and fundamental role of the Federal Government. How do we keep Americans safe and secure? When will people, when will food, when will drugs, when will toys be safe again? This committee, which has jurisdiction over these matters, must answer these questions, and we cannot abdicate our responsibility. We have had hearing after hearing on the situation. It doesn't come any closer to resolution; it only seems to get worse. We all know the Food and Drug Administration, which should be the premier Federal agency, has been underfunded for decades throughout many administrations and many Congresses, both Republican and Democratic. However, I don't think it has ever been so clear that more resources are needed in order to get Americans to the point of being safe and secure. The resources must be wisely invested, but they must be increased. And while this committee, Mr. Chairman, doesn't appropriate the money, every single member of this committee knows that this year in Congress we will be lucky if we pass one or two appropriations bills, likely Defense, likely Veterans, which is appropriate and we should do those things, but the appropriation for Health and Human Services not so much. So that appropriation will go through a continuing resolution and likely have level funding for next year. And what this means is that, as much as we engage in brave discourse about how the Food and Drug Administration needs more resources, it is not going to happen. All of these hearings will be full of sound and fury but, in the end, signifying nothing. And that, frankly, Mr. Chairman, I cannot accept. I call on the leadership of this committee, the leadership of the Appropriations Committee and Speaker Pelosi to come together to develop a plan to get critical resources to this important agency. If we don't do this, then I think we all know the answer to this question: is protecting the public a top priority, or is it the priority simply to win in November? I am afraid that I am going to lose my bedside manner, so I am going to yield back the balance of my time. But I do appreciate the Chairman bringing this discussion forward, because it is so critical that we involve ourselves at this level. And I yield back the balance of my time. Mr. Stupak. I thank the gentleman. And, as the gentlemen know, the Dingell-Pallone-Stupak bill provides not only new authority but also the resources for the FDA to do their job, even though the FDA will not tell us the resources they need to do their job, the Dingell bill certainly will do that. There is a hearing Thursday, and I believe it is before your subcommittee, on that bill, so we can begin that markup, so we can move that legislation. So I thank the gentleman for bringing that to our attention. Mr. Burgess. If the gentleman will yield, authorization is critical, but if we don't follow through with an appropriation, then what have we done at the end of the day? And I will yield back. Mr. Stupak. Right. And in our legislation--I don't mean to debate it here this morning, and before I turn to Ms. Schakowsky--we do provide the resources, but we don't think the resources should come from U.S. taxpayers, but from these drug companies that are bringing these APIs, active pharmaceutical ingredients, from foreign areas into this country. They have a responsibility, also have a responsibility, to properly fund FDA to do their job, just as much a responsibility as the U.S. Congress. So hopefully we can get that resolved, and we invite you to participate in that hearing on Thursday. And with that, I would turn to Ms. Schakowsky, please, for questions--oh, I am sorry, not questions--opening statement. OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Ms. Schakowsky. Thank you, Mr. Chairman. The consequences of the contamination of the drug heparin have been truly tragic. I want to sincerely thank the family members of those who fell victim to this crime for being here today and testifying before our subcommittee. We really appreciate you being here. heparin, as well as many other innovative drugs and biologics that have come to us in the past few decades, have made great contributions to medical care in this country. Unfortunately, with great innovation and the use of cutting- edge medical technology, also comes a certain vulnerability to corruption and exploitation. The heparin disaster is just another in a line of dangerous prescription drug events that have exposed vast weaknesses in how we regulate drug safety in this country. Thanks to the leadership of Chairman Dingell and the Chairman of our subcommittee, Mr. Stupak, we have learned a lot about what we can do to strengthen regulation and oversight at FDA and reinforce its presence overseas. My hope is that these hearings will also provide us with some concrete answers and steps to take, as a Congress, to make all points of our drug development, sourcing, manufacture, and sale safer for consumers. In the case of heparin, there are several points along this process where fingers can be pointed. But with ongoing investigations in China and an unclear timeline for getting real answers, we need to be able to move forward quickly and comprehensively to ensure that we are making our drug supply more secure and reliable. I hope that today we'll make progress toward that end. Mr. Chairman, the confidence of American consumers has been shaken. The safety of their children's toys, the food they put on their table and the prescription drugs they take is questionable. One of the reasons I'm so proud to be on this committee is that we can address those fears, and we are taking action to do just that. I know that Chairman Dingell has been hard at work on a large legislative package aimed at making our drugs, devices, food, and cosmetics safer. And I look forward to working with him and all my colleagues on the committee to pass as strong a bill as possible. But it is also time for the administration to take some leadership. President Bush says he is committed to going to Beijing for the Olympics. I hope he also takes time to meet with Chinese officials to force action on their part to get them to give our inspectors the access they need to protect our consumers. I look forward to hearing from our witnesses today. And again, I thank the family members for being here. I yield back. Mr. Stupak. I thank the gentlewoman. That concludes the opening statements by members of our subcommittee. I now call our first panel of witnesses. On the first panel we have Mr. David Nelson, senior investigator for the Energy and Commerce Committee. Next, we have Ms. Colleen Hubley, who lost her husband, Randy, who was treated with recalled heparin. Next, we have Mr. Leroy Hubley, who lost his wife Bonnie, and son, Randy, who had been treated with recalled heparin. And we have Ms. Johanna Marie Staples, who lost her husband, Dennis, who had been treated with recalled heparin. It's the policy of this subcommittee to take all testimony under oath. Please be advised that witnesses have the right, under the rules of the House, to be advised by counsel. Do any of you wish to be advised by counsel during your testimony? Our witnesses indicated they did not. Therefore, I will administer the oath. [Witnesses sworn.] Let the record reflect the witnesses replied in the affirmative. Each witness is now under oath. We will now hear from each witness a 5-minute opening statement. If you wish to submit a longer statement for the inclusion of the record, it will be done. We will begin with opening statements. We'll begin with you, Mr. Nelson. If you would turn on the mic and pull it up there so we can hear you, you have 5 minutes for an opening statement. STATEMENT OF DAVID NELSON, SENIOR INVESTIGATOR, COMMITTEE ON ENERGY AND COMMERCE, WASHINGTON, DC Mr. Nelson. Good morning, Mr. Chairman, Mr. Shimkus and other members of the committee. I'm David Nelson, senior investigator on the staff. And I'm appearing here today to present the staff findings regarding the events that led to at least 81 deaths, and hundreds of severe allergic reactions associated with the manufacture of contaminated heparin, a blood thinner used widely in surgery and dialysis, whose active ingredient was produced in China. The heparin case illustrates both the best and the worst of FDA's performance in drug crises. As with the melamine contamination of wheat gluten that resulted in an untold number of pet deaths last year, events which were highlighted by this subcommittee in hearings in July and October of 2007, FDA acted swiftly once the pattern of heparin's adverse events was identified. FDA moved with speed and efficiency to identify the source of the adverse events, to remove the contaminated Baxter product from the market, to develop a methodology for identifying the contaminant, to require all existing inventories of finished product and active pharmaceutical ingredients to be tested to determine if they contain that contaminant, and to issue an import alert that required the testing of all heparin drug intermediates entering the country. At least we thought they did before we received Dr. Woodcock's testimony late yesterday, when we learned that the import alert covers only one source of Chinese heparin intermediates. As their investigation progressed, FDA received reports from and provided information to, public health agencies around the world. This international coordination and collaboration with scientific experts domestically likely prevented many premature deaths and other adverse events that would have resulted from a lesser effort. To date, FDA has assisted in identifying manufacturers in 11 countries as receiving contaminated heparin API from at least 12 Chinese sources. FDA's inspection of the Chinese factories, albeit after-the-fact, was done efficiently and professionally. After learning of the tainted heparin, FDA conducted a comprehensive inspection in February 2008 of Changzhou SPL, the Chinese source of the API to Baxter, and both of Changzhou SPL's immediate upstream suppliers of crude heparin to that plant. FDA inspectors issued a Form 483, noting significant deviations from current manufacturing practices. Subsequently, FDA analyzed the company's response to the 483, issued an establishment inspection report, and ultimately a warning letter just last week, April 21, 2008, which detailed a host of serious deficiencies at the facility. That warning letter, issued the day before this subcommittee's hearing last week, effectively blocks imports from the Changzhou SPL facility until all outstanding issues regarding cGMPs have been resolved and the plant has been reinspected. The staff investigation covered a number of serious shortcomings with FDA's operations and policies, as well as those of the manufacturers. I'll mention each briefly due to time constraints, but I'm prepared to elaborate on each if the committee have questions. First, FDA has abandoned its mandatory pre-approval inspection policy. Had this policy been in place, the agency would have had no choice but to inspect the Changzhou plant in 2004 before permitting its products into the United States. Because it was optional, a clerical error allowed the official in charge of foreign inspections, a man who saw fit to resign just this past month, to dismiss the request for a pre-approval inspection because it mistakenly appeared in the computer system as having been inspected within the past 2 or 3 years--2 or 3 years before the 2004 request. I think it was inspected in 2002. Second, FDA's woefully inadequate information technology systems resulted in the request to inspect the wrong plant. Now, that computer system permitted three correct unique identification numbers to be ignored. Instead, the official in charge of foreign inspections was permitted to focus only on the plant name that the chemist had entered as ``Changzhou Pharmaceuticals'' instead of ``Changzhou SPL Pharmaceuticals.'' Three, and most seriously, FDA's inspection policy fails to assess relative risk. Perhaps the most serious error made by the agency resulted from its failure to apply common sense to the foreign plant pre-approval inspection criteria. On the screens and on the chart resting there, the eight criteria, mandatory criteria for pre-approval inspections, are listed. The plant mistakenly identified by CDER compliance had only been inspected for its ability to make two simple drugs, neither involving a biological extraction process like heparin. The misidentified plant was, A, located in China; B, the request involved inspection of an entirely new process for which the plant had never been inspected; and, C, the final product was ultimately used in a critical application--sterile injection in high-risk patients. So FDA's pre-approval inspection policy, once it was no longer mandatory, revolved around criteria that ignored geography, ignored the complexity of the manufacturing process and ignored the sensitivity of the final product. It made no sense at all. None of these obvious criteria appeared in the guidance for pre-approval inspection, so FDA approved Baxter's application without sending anyone out to look at the plant. The role of corporate due diligence cannot be relied upon. Wyatt, the predecessor owner of the heparin facility in New Jersey, did a validation process inspection of the Changzhou SPL plant in 2002. This was before the plant was operational. Baxter, who applied to import API from that plant in February of 2004, the sole customer for the production of the plant, did not even send an inspector over to Changzhou until 2007. That inspector apparently spent a day in the plant, found a few troubling items, accepted the SPL statement that it would be fixed, and pronounced the production process acceptable on February 26, 2008, the very day FDA would have been giving plant management an exit interview about its findings. The cGMP violations found by FDA were so serious that we will not permit any product from the plant now into the United States until deficiencies noted in the warning letter have been corrected and the plant reinspected. This is all the time I will take for the oral presentation. The full staff testimony has been presented for inclusion in the record. And I'll be glad to respond to any questions from the subcommittee. Thank you. [The prepared statement of Mr. Nelson follows:] Statement of David Nelson This is the fourth in a series of Subcommittee hearings concerning the Food and Drug Administration's (FDA) ability to adequately protect Americans from unsafe foreign manufactured pharmaceuticals. Today, the staff is prepared to summarize the results of its investigation of the events that led to at least 81 deaths and hundreds of severe allergic reactions associated with the manufacture of contaminated heparin, a blood thinner used widely in surgery and dialysis whose active ingredient was produced in China. The heparin case illustrates both the best and the worst of FDA's performance under this Administration. As with the melamine contamination of wheat gluten that resulted in an untold number of pet deaths last year--events that were highlighted by this Subcommittee in hearings held in July and October of 2007, \1\ FDA acted swiftly once the pattern of adverse events from heparin was identified. --------------------------------------------------------------------------- \1\ See, ``Diminished Capacity: Can the FDA Assure the Safety and Security of the Nation's Food Supply?'' Part II, Tuesday, July 17, 2007, and Part III, Thursday, October 11, 2007. --------------------------------------------------------------------------- FDA moved with speed and efficiency to carry out the following: identify the source of the adverse events; remove the contaminated Baxter product; develop a methodology for identifying the contaminant; require all existing inventories of finished product and active pharmaceutical ingredients (API) to be tested; and issue an Import Alert requiring the testing of heparin drug intermediates entering this country. As their investigation progressed, FDA received reports from and provided information to public health agencies around the world. These aggressive actions that led to international coordination and the collaboration with scientific experts in this country likely prevented many premature deaths and further adverse events. To date, FDA has helped to identify manufacturers in 11 countries that received contaminated heparin from some 12 Chinese sources. FDA's inspection of the Chinese factories, albeit after the fact, was also done efficiently and professionally. After learning of the tainted heparin, FDA conducted a comprehensive inspection in February 2008, of the Chinese source of API to Baxter, Changzhou SPL, and both of the upstream suppliers of crude heparin to that plant. FDA inspectors issued a Form 483 noting significant deviations from current Good Manufacturing Practices (cGMPs). Subsequently, FDA analyzed the company's response to the 483, issued an Establishment Inspection Report (EIR), and ultimately a Warning Letter on April 21, 2008, the day before this subcommittee's last hearing, which detailed a host of serious deficiencies at the facility. \2\ The Warning Letter effectively blocks imports from Changzhou SPL until all outstanding issues regarding cGMPs have been resolved and the facility reinspected. --------------------------------------------------------------------------- \2\ Attached as Appendix A to this statement. --------------------------------------------------------------------------- While FDA may respond quickly to a crisis when the danger to the public health is known, Committee staff found that its routinely poor performance as a regulatory agency, responsible for the safety of food, drugs, biologics, and medical devices, invites catastrophe and may have contributed to the tragic use of contaminated heparin on patients in the United States. Our investigation uncovered a number of serious shortcomings with the operations and policies of FDA: \3\ --------------------------------------------------------------------------- \3\ The attached briefing memorandum for this hearing provides a timeline of the events from January 17, 2008, to date regarding the serious adverse events and deaths associated with the use of Baxter's heparin. FDA, Baxter, and Scientific Protein Laboratories (SPL) witnesses will provide further detail regarding these events. --------------------------------------------------------------------------- 1. FDA Has Abandoned Its Mandatory Pre-approval Inspection Policy FDA acknowledges that they failed to inspect the Chinese facility, Changzhou SPL, prior to the approval of the Baxter supplemental application in 2004, which changed the source of the active pharmaceutical ingredient (API) for Baxter's heparin sodium products from the SPL Wisconsin plant to the newly constructed operation in China. The Changzhou SPL facility is a joint venture by the U.S. firm Scientific Protein Laboratories (SPL), which also owns the heparin API plant in Wisconsin, and with Techpool, a Chinese firm that ``consolidates'' raw heparin from a number of workshops that extract crude heparin from the mucus linings of pig intestines. The SPL and Techpool facilities border one another in Changzhou. While the Chinese Government disputes that counterfeit product was the cause of these adverse events, both FDA and the drug firms involved believe that to be the case. There is no dispute that raw material for the production of heparin sodium containing oversulfated, or hypersulfated, chondroitin sulfate was shipped to the U.S. market. This form of chondroitin was apparently added to crude heparin in China at some stage in the production process by parties that have yet to be identified. This contaminant was not detected in the standard current United States Pharmacopoeia (USP) tests required of both the active pharmaceutical ingredient producer and the finished product manufacturer. Baxter and FDA have advised Committee staff that this counterfeit ingredient was most likely what caused the reported deaths and adverse health effects of patients receiving heparin. Chondroitin sulfate is a very inexpensive product marketed as a dietary supplement here in the United States. The oversulfating process gives it anticoagulant properties that mimic heparin sodium, but at a much lower production cost. One FDA official stated that it costs approximately $20/kilogram (kg) to produce oversulfated chondroitin sulfate versus $2,000/ kg to produce crude heparin. Accordingly, there is speculation that the contaminant was added deliberately to increase profits for the workshops and/or consolidators that ship the crude material to Changzhou SPL, SPL Wisconsin, and other heparin API producers. While an inspection conducted in 2004 would not have detected the counterfeit ingredient in the crude heparin supply in 2007, it is possible that an FDA inspection at that time would have uncovered other indicators of potentially serious problems, including the failure of the SPL plant to register with Chinese authorities. Furthermore, an FDA inspection in 2004 might have revealed many of the serious deficiencies highlighted in FDA's inspection report of February 2008--a report that ultimately resulted in the issuance of the Warning Letter that effectively blocked exportation to the United States. 2. FDA's Woefully Inadequate Information Technology Systems Resulted in Identification of the Wrong Plant For years, this Committee has highlighted deficiencies in FDA's various computer systems. As recently as last week, the Government Accountability Office (GAO) and the FDA Science Board testified before this Subcommittee that FDA computer systems are viewed as problematic at best and at worst, dangerous. \4\ The heparin case illustrates the consequences of this problem. --------------------------------------------------------------------------- \4\ See ``FDA Science and Mission at Risk: Report of the Subcommittee on Science and Technology,'' Prepared for FDA Science Board, November 2007, page 5. --------------------------------------------------------------------------- FDA attributed the lack of pre-approval inspection of the Chinese SPL production facility to a clerical mistake by an FDA chemist who misidentified the plant in his request for such an inspection. The staff interviewed a number of individuals involved in the review process of the 2004 application filed by Baxter to change its API supplier from the Wisconsin source to the newly constructed plant in Changzhou, China. We found that an FDA employee did in fact choose the wrong plant from the pull down menu on his computer. He erroneously picked ``Changzhou Pharmaceutical'' instead of the correct name of the facility--``Changzhou SPL Pharmaceutical.'' Despite this error, he entered the correct ``unique'' New Drug Application (NDA) number and NDA supplement number for the Baxter application and the correct ``unique'' Drug Master File (DMF) number for the Changzhou SPL plant. The FDA computer system, however, is not programmed to recognize these errors and alert the operator of the mistake. It accepted three unique numbers for one plant and permitted the selection of the incorrect plant from a menu of facilities for inspection. Furthermore, since FDA determines which facilities to inspect using the often confusing and nearly identical names of Chinese facilities, rather than the unique identifying numbers assigned to them, it was unlikely that this error would have been detected. Thus, the Center for Drug Evaluation and Research's (CDER) Office of Compliance processed the inspection request for the wrong Chinese facility. 3. FDA Inspection Policy Fails to Assess Relative Risks Our investigation revealed that the wrongly identified facility, Changzhou Pharmaceutical, had been inspected in 2002, 2 years before the heparin request. That facility, however, has only been inspected for manufacturing two drugs: a simple, well-known, and well-characterized diuretic, hydrochlorothiazide, and a simple, semi-synthetic antibiotic, doxycycline. The manufacturing process for each of these drugs is very different from the extraction process required to produce crude heparin. The FDA official who was in charge of determining which foreign plants must be inspected prior to approval to manufacture offered Committee staff two possible explanations for the error in his 2004 decision that Changzhou Pharmaceutical was ``in compliance'' and did not warrant an inspection. This official cited the relatively recent inspection conducted in 2002, and the misconception that the plant was a ``crude heparin manufacturing facility,'' rather than one that manufactured the active pharmaceutical ingredient. Neither explanation justifies the decision to allow a new heparin intermediate supplier, with no history of producing complex, biological-based products, to export product to the United States without prior inspection of its manufacturing facilities. Indeed, of the eight criteria employed by FDA during pre- approval inspections, \5\ none involve geographic location, manufacturing complexity, or final product sensitivity. In fact, as far as Committee staff is aware, there is no systematic rationale for choosing which sites to inspect and which to ignore prior to approval by CDER of a foreign inspection application. --------------------------------------------------------------------------- \5\ Food and Drug Administration Compliance Program Guidance Manual 7346.832, pp. 10-11. --------------------------------------------------------------------------- Intuitively, one would assume that among the most important criteria for prioritizing pre-approval inspections would be geography, complexity of the manufacturing process, and sensitivity of the final drug product. According to these common sense criteria, the supplemental request in 2004 from Baxter to change the manufacturing site of its heparin API from a plant in Wisconsin to one in Changzhou, China, should rank in the highest priority of risks. The plant is located in China, a country that FDA knows lacks a meaningful drug regulatory scheme and knows (or should have known) has manufacturers that to a large extent operate out-of-compliance. Such observations have been documented by FDA during inspections and observed by Committee staff during field investigations. In addition, compared to most chemical syntheses, the process of extracting a drug from a biological source is a very different endeavor. While heparin sodium is an old drug, it is not a simple one to manufacture. Again, it would seem that FDA would prohibit any firm from providing to the U.S. market heparin sodium, its API, or crude heparin without first determining whether the firm could manufacture it properly. Manufacturing complexity should have triggered an inspection by FDA before the product was approved for export. Unfortunately, this was not the case. In its final finished dosage form, heparin is a sterile drug administered to very sick patients, primarily those on dialysis for kidney failure and those undergoing open-heart surgery. Because patients who receive heparin are particularly vulnerable physically, the margin for error in production is virtually zero. Although the sensitivity of the final drug product should have guaranteed an FDA inspection, it did not because this is not a criterion for inspection. 4. The Role of Corporate Due Diligence Cannot Be Relied Upon Committee staff investigation raised a number of questions about the due diligence performed by the various companies involved in this disaster. As previously mentioned, on April 21, 2008, FDA issued a warning letter to Changzhou SPL, where the adulterated heparin allegedly originated. In that letter, FDA details a litany of significant deviations from cGMPs discovered in the manufacture of heparin API at that plant. Those deviations were listed in summary form on FDA form 483 at the close of the team's initial inspection. According to the warning letter, the cGMP deviations observed by FDA at Changzhou SPL were sufficient to require its heparin API to be classified as adulterated under the Food, Drug, and Cosmetic Act. According to FDA's inspection, the Changzhou SPL facility was unable to provide FDA with any assurance ``that processing steps used to manufacture heparin sodium, USP are capable of effectively removing impurities.'' FDA also found that the facility failed ``to have adequate systems for evaluating the suppliers of crude heparin materials, or the crude materials themselves, to ensure that these materials are acceptable for use.'' Moreover, the methods employed to test heparin sodium United States Pharmacopoeia (USP) had not been verified to ensure suitability under actual conditions of use, and the equipment used to manufacture the product was ``unsuitable'' for its intended use. In layman's terms, FDA determined that this plant was unable to manufacture drug product consistent with the requirements under the Food, Drug, and Cosmetic Act. An obvious question that must be asked in relation to FDA's inspection findings is why Baxter obtained drug product from a facility that FDA found to be unsuitable? More specifically, what due diligence did Baxter perform to determine that it could safely manufacture heparin API for the U.S. market before using this facility? Committee staff found several facts that should have alerted Baxter to potential problems, but which appear to have been ignored. For example, Baxter's own records indicate that they were aware that the plant had never been inspected by FDA. It seems very odd that Baxter accepted the risks of using this facility to obtain the API used to manufacture a sterile biologic without an FDA inspection. Moreover, this plant was apparently not one that China's State Food and Drug Administration was aware of since Chinese authorities listed it as a chemical plant rather than a licensed pharmaceutical plant. This too should have been cause for enhanced attention to its manufacturing processes. Finally, Committee staff questions the quality and nature of the inspection performed by Baxter on September 20, 2007, relating to the factory's condition to manufacture drugs. According to records provided by Baxter to the Subcommittee, the scope of that audit was ``to ascertain the cGMP compliance status of Changzhou SPL Co. LTD. facility in China for cGMP Active Pharmaceutical Ingredient manufacturing as well as other potential future products.'' The audit ``consisted of an in- depth review of Changzhou's quality systems and capabilities'' and included documentation and procedures related to incoming materials, sampling procedures, stability operations, quality assurance processes, and stability operations. The results of Baxter's audit differ significantly from those reported by FDA, which inspected the facility only five months later. The Baxter audit team satisfactorily closed out any problems they uncovered during their inspection in a February 26, 2008, letter to Baxter. This was done within days of the onsite inspection by FDA's own investigators, whose findings ultimately led to halting all imports from that facility. The radically different conclusions drawn from the inspections by Baxter and FDA, despite their close juxtaposition in time, suggest that either Baxter's auditors were less than competent or the facility fell radically out-of-compliance in the few months that elapsed between the two inspections. This case also raises troubling questions when viewed in the context of recent testimony by FDA Commissioner Von Eschenbach extolling greater reliance on third party or self- inspection as a substitute for FDA performing its mission. Moreover, this case demonstrates the quality and value of an FDA inspection. Despite the time and translation constraints inherent in an inspection in China, a team of professional FDA inspectors readily determined that Changzhou SPL could not supply safe API for the U.S. market-a conclusion that neither the Chinese authorities nor the corporations involved were willing or able to determine before hundreds of patients were seriously hurt or killed. Although it is most regrettable that FDA did not inspect this plant sooner, when it finally acted, FDA lived up to what is expected from such an important government agency-ensuring that our citizens are protected from unsafe pharmaceutical products. ---------- Mr. Stupak. Thank you, Mr. Nelson. Ms. Hubley, for an opening statement, please. STATEMENT OF COLLEEN HUBLEY, TOLEDO, OHIO Ms. Colleen Hubley. I would like to thank you for allowing me to speak on behalf of my husband, Randy Hubley. I am very familiar with heparin, not only because my husband was on dialysis for the last 18 months, but I have been a dialysis nurse for 7 years. Heparin is a lifeline for dialysis patients. It keeps the blood from sticking to the blood circuit while the dialyzer clears the blood. As a dialysis nurse, I understand the importance of this drug. Now, because of the loss of my husband, I understand even more the importance of making sure that all drugs are safe. Randy was a beloved father, stepfather, grandfather, son, brother, uncle, and last but not least, my soulmate. As his wife and an RN, I cared for him in every way possible. We were certain that no matter what came our way that we could handle it together. After all, I had been a nurse for 25 years, most as an open-heart intensive care nurse. Despite our hope, this man died on January 15th at 2:00 a.m. while I did CPR over him, powerless to save him. He had started dialysis in May of 2006 when his kidney transplant rejected. After undergoing a surgery at the Cleveland Clinic, he needed to start in-center dialysis. On January 7, 2008, Randy started dialysis at the same clinic as his mother. This was the last week of his life. I wish that I could tell you that the last few days of his life were good. It may give me some solace. However, the weekend prior to his death was awful. When he arrived home from dialysis on Friday, January 11th, he had low blood pressure, severe diarrhea, abdominal pain, jaw pain. His throat was sore and felt tight, making him feel he needed to use his inhaler to breathe. He could barely make it to the restroom. This was not my husband. He laid on the couch the whole weekend, trying to give a smile when he could. Monday morning, he was too embarrassed to go to dialysis, fearful of having 12 other patients see him have an accident in a chair because it isn't a quick process to return the blood. He was too stubborn and disgusted with the thought of going to the emergency room and having another, ``Well, really not sure what's going on here,'' answer. We settled on the couch to go to sleep so that I could be near him, and he promised that he would go if it didn't subside by the morning. But at 2:00 a.m., I awoke to him clutching his abdomen, unable to breathe, and finally grabbing his chest. We had already called 911 before he collapsed. In what seemed like hours, I gave him CPR, with my son helping. Even when the paramedics arrived, they could barely get a breathing tube in his throat due to the swelling. He was taken to the emergency room, and we were notified that, even if they got him back, it was hopeless. I watched my husband and my best friend slip away before my eyes. As a nurse, I thought that I would be there to save my husband from any errors, but I guess I was naive. I never thought the life-saving medication we were relying on might be contaminated. Now, after learning that my husband was given contaminated heparin, I understand even more that everything in health care is vital. There should be no acceptable losses. If citizens are truly going to ever feel safe in this country going to the hospital, a doctor, taking your daily medication, we have a responsibility to make sure that everything that is given is free from contamination. I understand that the FDA is overworked and understaffed. I deal with this every day as a nurse. But if you take a deep breath and think for one moment, ``What if that was my mother or my husband?'' My husband was a fighter until the bitter end. He would have given anything for one more day. And I know that he would want me to make sure that this doesn't ever happen to anyone else. Please do not let his death be in vain. We, as a family, need to know that some good can come of this tragedy. While the FDA and Baxter have failed to perform their duty to provide Americans with safe drugs, there are many Americans who have worked very hard to ensure a safe supply. An article was published last week in the New England Journal of Medicine connecting the symptoms of heparin patients, like my husband, to the contaminated drugs sold by Baxter. I want to thank those doctors and scientists who wrote that article and who have worked so hard to help unravel this puzzle and prove these Chinese imports were responsible. I would like to thank this committee for shining light on these issues and, hopefully, for taking action to ensure that our drug supply is safe. Thank you. [The statement of Ms. Colleen Hubley follows:] Statement of Colleen Hubley I would like to thank you for allowing me to speak on behalf of my Husband, Randy Hubley. I am familiar with heparin not only because my husband was on dialysis for the last 18 months of his life, but also because I have been a dialysis nurse for 7 years. heparin is a lifeline for dialysis patients. It keeps the blood from sticking to the blood circuit while the dialyser clears the blood. As a dialysis nurse, I understand the importance of this drug. Now, because of the loss of my husband, I understand even more the importance of making sure that all drugs are safe. Randy was a beloved father, stepfather, grandfather, son, brother, uncle and last, but not least, my soulmate. As his wife and a RN, I cared for him in every way possible. We were certain that no matter what came our way, we would be able handle it together. after all, I had been in nursing for 25 years, most as an open-heart intensive care unit nurse. Despite our hope, this man died on January 15th at 2 am, while I did CPR over him in tears, powerless to save him. Randy started dialysis in May of 2006, when his kidney transplant rejected. We were the first couple in the Toledo area to do ``home hemodialysis.'' This is a process that is done 6 days a week, 2\1/2\ hours at a time, in the comfort of our living room, as opposed to ``in-center dialysis'' done 3 days a week for 3-4 hours at a time. It was one way for us to gain a little more control over his care and also to increase his life expectancy. We were willing to do anything to keep him alive and well for as long as possible. However, after undergoing a surgery at the Cleveland Clinic, Randy needed to start ``in-center dialysis.'' On January 7, 2008, Randy started dialysis at the same Toledo Fresenius clinic as his mother. This was the last week of his life. I wish I could tell you that at least the last few days of his life were good for Randy. I could take some solace in that. However, the weekend prior to his death was awful. When he arrived home from dialysis on Friday, January 11, Randy had low blood pressure, severe diarrhea, abdominal pain, jaw pain, his throat was sore and felt ``tight'' to him, making him feel he needed his inhaler to breathe easier, something he didn't normally need too often. Because of this, he barely could make it to the restroom. This was not my husband! He lay on the couch this whole weekend, trying to give me a smile when he could. Monday morning he was too embarrassed to go to dialysis, fearful of having 12 other patients see him having diarrhea right in the chair, because it isn't a quick process of returning the blood. He was too stubborn and disgusted with the thought of going to the ER and having another, ``Well, were not really sure what's going on'' answer. We settled on the couch to sleep, so I could be near him. He promised that he would go if it didn't subside by morning, but at 2 am I awoke to him clutching his abdomen, unable to breathe and finally grabbing his chest. We had already called 911 before he collapsed, and what seemed like hours I gave him CPR with my son helping me. Even when the paramedics arrived, they could barely get a breathing tube in his throat due to the swelling. He was taken to the ER and we were notified that even if they got him back, it was hopeless. I watched my husband and best friend slip away before my eyes. There isn't enough time to make anyone understand what a loss this has been. There is a void that can never be filled. Randy wanted to spend his last years fishing with his family and spending time with his loved ones. He will not get that chance now, and his grandson will never know what a beautiful person he was. As a nurse, I thought I would be there to save my husband from any errors, but I guess I was naive. I never thought that the lifesaving medication we were relying on might be contaminated. Now, after learning that my husband was given contaminated heparin, I understand even more that everything in healthcare is vital, that there should be no ``acceptable losses.'' If citizens are truly going to ever feel safe in this country, going to a hospital, doctor or taking our daily medication, we all have a responsibility to make sure that everything that is given is free from contamination. I understand that the FDA is overworked and understaffed, it is something I deal with everyday as a nurse, but if you take a deep breath and think for one moment, ``What if that was my mother, my husband--what would I want done?'' My husband was a fighter until the bitter end. He would have given anything for one more day, and I know he would want me to make sure this doesn't ever happen to anyone else. Please do not let his death be in vain, We, as a family, need to know that some good can come of this tragedy. While the FDA and Baxter have failed to perform their duty to provide Americans with safe drugs, there are many Americans who have worked very hard to ensure a safe supply. An article was published last week in the New England Journal of Medicine connecting the symptoms of heparin patients like my husband to the contaminated drugs sold by Baxter. I want to thank those doctors and scientists who wrote that article and who have worked so hard to help unravel this puzzle and prove that these counterfeit Chinese imports were responsible. And I want to thank this Committee for shining light on these issues and, hopefully, for taking action to insure that our drug supply is safe. Respectfully Submitted, Colleen Hubley Toledo, Ohio ---------- Mr. Stupak. Thank you. Mr. Hubley, sir? Do you want to pull that up and hit the button there, so the green light comes on? Thank you. STATEMENT OF LEROY HUBLEY, TOLEDO, OHIO Mr. Leroy Hubley. Well, I'm going to try to get through this. Mr. Stupak. Take your time. Mr. Leroy Hubley. Mr. Chairman and members of the committee, thank you very much for inviting me to testify at today's important hearing. My name is Leroy Hubley, and I'm from Toledo, Ohio. My wife, Bonnie, died in December after receiving heparin that was later recalled by Baxter. My son, Randy, died a month later under the same circumstances. And I hope that by telling their stories it will bring us to a closer answer that questions like families like mine desperately seek. Bonnie was my wife for 48 years. She had a genetic disease known as polycystic kidneys. The disease affects the kidneys. Specifically, cysts grow in the kidneys. If too many cysts grow and they get too big, then the kidney becomes damaged. All my children have the same disease. But in December 2007, she began to experience unusual circumstances during and after dialysis. She developed diarrhea, vomited, and felt like her heart was beating out of control while on dialysis. Then, during dialysis on December 17, 2007, she developed pain in her chest and abdomen, and the clinic had to call an ambulance. Bonnie was rushed from the dialysis clinic to the hospital, Toledo Hospital. While at the hospital, she had a drop in blood pressure, difficulty breathing, severe diarrhea, and rapidly declined. Three days later, on December 19, 2007, the doctors recommended we remove the breathing tube to end her suffering. Her entire family--our son, daughter-in-law, and grandchildren--were all there. Christmas music played in the background, and each one of us said our goodbyes. Then my wife and love of 48 years drifted away. We did not realize at the time that the heparin she received may have been tainted. We simply tried to deal with the grief that follows the loss of a loved one. However, the nightmare returned only weeks later when my son, Randy, returned home to Toledo following surgery in Cleveland Clinic. On January 7, 2007, he started dialysis at the same clinic in Toledo as my wife did. Randy had been receiving dialysis for approximately 8 months before at other locations. However, as you will hear my daughter-in-law Colleen describe--which you already did--when Randy started dialysis at the same clinic as my wife; he, too, developed nausea, low blood pressure, abdominal pain, fatigue, and diarrhea. After a week later, my 47-year-old son was dead, leaving behind three children and a grandchild. Again, we attributed his death to a cruel twist of fate--that was, until we found out about the January recall of heparin. When we contacted the dialysis center, they confirmed our fears that the heparin given our loved ones had been recalled by Baxter. Now I am left to deal not only with the pain of losing my wife and son, but anger that an unsafe drug was permitted to be sold in this country. The FDA and Baxter have not done their job. Somebody sure as hell didn't. I want to know what is going to be done to rectify this matter. I want to know if my daughter, Dawn, and the millions of others who continue to receive dialysis are safe. I want to thank the scientists and doctors that have found a link between the counterfeit heparin and these deaths. I hope the members of the committee will take steps to protect all of us and make it right. Thank you very much. [The prepared statement of Mr. Leroy Hubley follows:] Statement of Leroy Hubley Mr. Chairman and Members of the Committee: Thank you very much for inviting me to testify at today's important hearing. My name is Leroy Hubley and I am from Toledo, Ohio. My wife, Bonnie, died in December after receiving heparin that was later recalled by Baxter. My son, Randy, died a month later under similar circumstances. I hope that by telling their stories it will bring us all closer to answer the questions that families like mine desperately seek. Bonnie was my wife of 48 years. She had a genetic disease known as polycystic kidney disease or ``PKD.'' This disease affects the kidneys. Specifically, cysts grow in the kidneys. If too many cysts grow or if they get too big, the kidneys become damaged. All of my children also have this disorder. Bonnie received a kidney transplant in 1995. Last year my wife's body started to reject her kidney. As a result, she had to start hemodialysis in October of 2007. At first, the dialysis sessions were uncomplicated. But in December of 2007, she began to experience unusual symptoms during and after dialysis. She developed diarrhea, vomited, and felt like her heart was beating out of control while on dialysis. Then, during dialysis on December 17, 2008, she developed pain in her chest and abdomen and the clinic needed to call an ambulance. Bonnie was rushed from the dialysis clinic to Toledo Hospital. While at the hospital she had a drop in blood pressure, difficulty breathing, severe diarrhea, and rapidly declined. Three days later on December 19, 2007, the doctors recommended removing her breathing tube to end her suffering. Her entire family--our son, daughters, in-laws, and grandchildren were all there. As Christmas music softly played in the background, we each said our goodbyes. Then my wife and love of 48 years drifted away. We did not realize at that time that the heparin she received may have been tainted. We simply tried to deal with the grief that follows the loss of a loved one. However, the nightmare returned only weeks later, when my son Randy, returned home to Toledo following a surgery at the Cleveland Clinic. On January 7, 2007, he started dialysis at the same Fresenius clinic in Toledo as Bonnie. Randy had been receiving hemodialysis for approximately eight months before at other locations. However, as you will hear my daughter in law Colleen Hubley describe, when Randy started dialysis at the Toledo Fresenius Clinic, he too developed nausea, low blood pressure, abdominal pain, fatigue, and diarrhea. About a week later, my 47-year-old son was dead, leaving behind his own three children and a grandchild. Again, we attributed his death to a cruel twist of fate. That was, until we found out about the January recall of heparin. When we contacted the dialysis center, they confirmed our fear, that the heparin given to our loved ones had in fact been recalled by Baxter. Now I am left to deal not only with the pain of losing my wife and son, but anger that an unsafe drug was permitted to be sold in this country. The FDA and Baxter have not done their job. I want to know what is going to be done to rectify the matter. I want to know if my daughter, Dawn, and the millions of others who continue to receive dialysis, are safe. I want to thank the scientists and doctors who have found the link between the counterfeit heparin and these deaths. I hope that the members of this committee will take steps to protect us all and make it right. Respectfully Submitted, Leroy Hubley Toledo, Ohio ---------- Mr. Stupak. Thank you for your testimony. And, Ms. Staples, for your opening, if you would pull that forward and press the button there. STATEMENT OF JOHANNA MARIE STAPLES, TOLEDO, OHIO Ms. Staples. I want to sincerely thank the committee for providing the opportunity for us to share the stories of our loss. It's a remarkable thing you're doing, and it's appreciated beyond words. In this land of freedom and opportunity, we've come to expect to be protected and safe. It's overwhelming to discover that there are circumstances beyond our control from which you are not sheltered. We have a false, empty sense of security, and we are neither safe from harm nor catastrophe. Dennis Staples was important--important to me as my husband of nearly 32 years. He was my best friend, my confidant, my sounding board, companion, partner, editor, and financial advisor. He was my pride, my past, my present, my life, and my heart. He was important as a father, a new grandfather, a brother, uncle, brother-in-law too. He was important to friends, family, acquaintances, and to his public. He was an entertainer and well-known radio announcer in Toledo for over 20 years. He was important to the region in which he lived. And, much to his dismay, he was an icon in the community that he so loved. Without contempt or malice, he accepted the hand that life dealt him regarding his health. He accepted disease without anger and was resolved to do the best he could with whatever came his way. On the last conscious day of my husband's life, he had a truly splendid morning. In a superb mood, he was looking forward to a special dinner out at a local steakhouse with dear friends. Dennis was thinking about last-minute preparations for his first-ever birthday party. He was astounded that he would actually be able to celebrate his 60th. Upon awakening the last day, my husband carefully proposed his game plan for the day before I left to teach. Dennis went to dialysis the last day he knew life. Treatment was delayed because his permanent catheter was not functioning. He needed dialysis, and his blood wouldn't flow. In an attempt to improve this problem, his nurse give him Activase. The procedure was deemed successful, he was given a bolus of heparin, and treatment resumed. Shortly after he began dialysis this time, he suffered an event. He became unresponsive and stopped breathing, causing cardiac arrest. His caregiver was speaking to him at the time of the event, and CPR was immediately administered. Medical procedure was followed, 911 called, and paramedics arrived on the scene in just 3 minutes. Emergency personnel began life- saving measures, and I too arrived in moments. We were transported by ambulance less than 5 minutes away to the hospital emergency room where ER staff was waiting. Again, Dennis received immediate attention. My husband arrested and survived the event, but without neurological recovery. Professionals were unable to save his life, and he never again regained consciousness in spite of everyone's best efforts, continuous care, and speedy initiation of medical treatment. I truly want this statement to be that very poignant and touching piece that exemplifies the man of whom I speak. I want to honestly reveal all the reasons why we are so devastated by his loss. I know I have the passion and the motivation, but I fear I don't have adequate skills to speak eloquently enough to give you a real description of the complex man I can no longer see, hear, touch or smell. I loved my husband with all my heart and dearly miss him every minute of every day with an ache that cannot be dulled or cured. If he were taken to us even a day too soon, that day was still priceless to us, and we will never get it back. Dennis lapsed into coma that day before he turned--the day he turned 60 years old. We lost Dennis, but he lost too. He lost his life, his birthday, his party, and the chance to visit one last time with all of his friends and loved ones nestled around him to celebrate his life with him. Baxter supplied tainted heparin to medical facilities for use in patients in great need. Researchers have found the link between corrupted heparin and the deaths of many unsuspecting people. This drug certainly increased heparin's--Baxter's corporate bottom line. Baxter delivered larger dividends to stockholders according to their 2007 annual report. Board members received additional benefits while failing to recall a bad drug, a drug that was already known to have serious adverse effects. So my husband and many other ailing patients who received that drug suffered needlessly. Dennis and many others died. Thank you. [The prepared statement of Ms. Staples follows:] Statement of Johanna Staples I want to sincerely thank this committee for providing us this opportunity to speak and share the stories of our loss. It is a remarkable thing that you are doing for our families and we appreciate it beyond words. In this land of freedom we have come to expect that we are protected and safe. It is an overwhelming experience for us to find out that there are circumstances that are beyond our control--circumstances from which we are not safe. We might think we are protected from harm and catastrophe, but it is an empty and false sense of security. End-stage renal patients must be connected to a machine and submit to recurrent dialysis treatments. Each treatment lasts 4 or more hours while the patient's blood is systematically removed from their body and toxins are carefully cleared from their blood as it flows through the dialysis machine and then returned. This process is repeated usually three times per week and more for patients like my husband. In this process many life-saving drugs are used due to renal failure, drugs that are essential to this treatment. Patients need to know the drugs that they must use are reliable and secure. That's what I thought. Patients can remain on dialysis for an unlimited period of time. Actually they can remain on dialysis for many years. Transplantation is the ideal decision for someone with this disease, but my husband always felt that someone else should have the kidney and opportunity and he discarded the idea of receiving a transplant. I so want this statement to be that truly poignant and touching piece that really makes you think about the man of whom I speak. I want it to be a statement that honestly reveals all the reasons why we are all so devastated by the loss of Dennis Staples. I know I have the passion and the motivation to tell you of our loss but I fear I don't have adequate skills to speak eloquently and give you a true sense that really shares with you all of the facets of the complex man that I can no longer see, hear, touch, or smell. I loved my husband with all my heart and dearly miss him every minute of every day with an ache that cannot be dulled or cured. Even if he was taken from us a single day too soon that day was still priceless to us and we can never get it back. Dennis lapsed into coma the day before he was to turn 60 years old. We lost Dennis--but he lost us too. He lost his life, his birthday, his party and his chance to visit one last time with his loved ones and his friends nestled around him to celebrate with him. Dennis Staples was important. He was important because he was my husband of nearly 32 years. He was my confidant, my sounding board, my companion, my partner, my editor, my business partner, my financial advisor, my pride, my past, my present, my life, and my heart. He was important as a father and new grandfather. He was important to his brothers, his nieces, nephews, and to his brothers and sisters-in-law. He was important to his friends, his family, his acquaintances, and his public. He was an entertainer and well-known radio announcer in Toledo for over 20 years. He had many listeners who have reported and continue to report that they miss him dearly. He was important in the community in which he lived but he was also important to his family. He, much to his dismay, was an icon in the community that he so loved. He accepted the hand that was dealt him regarding his health without contempt or malice. He accepted his disease without anger and was resolved to do the best he could with whatever came his way. Dennis Staples was a man who possessed incredible integrity. He was a man who had an amazing intellect and an extensive vocabulary. He had a quick wit and an equally remarkable capacity for love. He loved everything about life: politics, music, trivia, learning, cooking, performing, acting, reading, and writing. He loved his family and friends and he loved life. He was a humble man who lived in a body that was old before its time. He had a heart of gold and would share whatever he had to help out someone in need. In conversations he gave you unconditional attention and had a way of making you feel like he couldn't wait to hear what you would say next. On the last day of my husband's conscious life he had a truly splendid morning. He was in a superb mood, busy planning a special dinner at a favorite local steak house with one of our beloved doctors and his wife. Dennis was actively thinking about last-minute preparations for his first-ever birthday party and he was so amazed that he would actually be able to celebrate the 60th anniversary of his birth. When we awoke that last day, he carefully laid out his proposal of the ideal plans for the day so that we would have the same game plan before I left for work to teach my disabled kindergarten students. As I left the house for work Dennis said, ``You go to school, and I'll go to dialysis and when we both get home, you can get me bathed and change my dressings, and I will relax while you get ready.'' He was looking forward to dinner out so much that he barely spoke of anything that wasn't related to dinner, his birthday and his party. This dinner would be our chance to spend quality time with a truly caring doctor that we had really good reasons to trust. This is a physician for whom we hold the greatest respect and he is a man to whom we owe so many thanks for repeatedly going above and beyond the call of duty on our behalf. On our medical journey there have been a multitude of doctors and we have had the distinct pleasure of being connected with some of the very best. This is important because disease takes a horrific toll on its victims. That toll is key to the sheer number of doctors that must be involved in the life of a diabetic. To begin, there are complications with digestion, heart, eyes, lungs, kidneys, other organs and limbs. There are Critical Care, Primary Care and Infectious Disease Physicians; Cardiologists, Endocrinologists, Nephrologists, Neurologists, Ophthalmologists, Radiologists, Urologists, plus Pulmonary and Retina Specialists, along with Cardiac, General, Neuro-surgeons and Vascular Surgeons, and a host of other medical personnel who I haven't the time to name. When our daughter Lexi picked up Dennis for his dialysis treatment that Wednesday, he was almost giddy with plans for the day. He was chatty and quick to share with her what he planned to do that evening. When they arrived at the treatment center, while Lexi was collecting and helping him into his wheelchair, they were approached by a firefighter who asked, ``Do you need help?'' My husband responded with a short and sweet answer, ``No, thanks.'' Followed by, ``Well good, because I would hate to see my hero fall down.'' The firefighter went on to talk to Dennis about how he had had a genuine impact upon his life when the young fireman-to-be was an intern at the radio station where my husband had worked with his partner, Bob Kelly. This young community helper praised Dennis again and offered him further assistance if he were ever to need it. In the weeks leading up to his death, Dennis was made to suffer many indignities without complaint. He was no stranger to dreadful experiences. He worked hard to maintain his health and yet he still had to deal with losing his ability to walk and drive. This formerly independent man was forced to rely on the assistance of others to move about and to care for all of his personal needs. He needed others to help bathe and clothe him. He needed us to do his dressing changes. He needed assistance with every facet of his daily life--assistance for just about everything he did, for transportation, mobility, and for all his ongoing treatments. Dennis would have worked far longer if his health hadn't interfered with his life plans. Twenty-eight months before he died, Dennis had to go on dialysis because his kidneys failed. Sixteen months before he died, he retired from his job because he could no longer reliably go to work. Yet, he was able to rebound and move on from all these things. But he could not survive the contaminated heparin. There were many people who paid their respects at the funeral home. There were many people that I had never met. There were people who he helped when he worked as a counselor at a local hospital. There were people who listened to his daily radio program and missed hearing his voice. There were local politicians and well-known entertainers, local celebrities, and personalities from all types of media. We even received proclamations from both our mayor and the city council on my husband's behalf. In our local newspaper his passing was actually given celebrity obituary status. As my husband often marveled, he really felt that he had become a big fish in our little local pond. He would have been so touched to see the outpouring of grief from our community at his death--and that death was far too soon. Over the years, Dennis had made a multitude of local commercials for both radio and television and accordingly I am often reluctant to watch and/or listen to local stations for fear that I might be surprised and startled to hear his voice when I least expect it. The last day of Dennis' conscious life he went to dialysis as usual. Treatment was delayed because his permanent catheter was not functioning and blood could not be pulled from nor returned to his body. He needed his dialysis. His nurse gave him a drug called Activase in an attempt to help his blood flow. This procedure was deemed successful so he was given a bolus of heparin and his treatment resumed. Shortly after Dennis began dialysis for the second time, he suffered an event. My husband became unresponsive and he stopped breathing causing cardiac arrest. His caregiver was speaking to him at the time of the event and CPR was immediately administered. Medical procedure was followed and 911 called, with paramedics arriving in only 3 minutes, since their station was located across the street and visible from the front of the center. Emergency personnel began life-saving measures. I arrived at the dialysis center in time to be transported by ambulance along with my husband in record time, to the hospital emergency room. This hospital was less than 5 minutes away from the treatment center where he arrested. Upon arrival at the emergency room, Dennis received immediate attention by a waiting ER staff. Dennis survived the event but without neurological recovery. He never again regained consciousness in spite of everyone's efforts, and the speedy initiation of medical treatment. Professionals were unable to save his life. I worked hard to celebrate my husband's life and make my peace with his loss. I thought I was well on my way to learning how to deal with his passing--and then I found out about the contaminated heparin. As people were permitted to suffer and die from this crop of tainted drugs, in 2007 Baxter Pharmaceuticals CEO Robert L. Parkinson, Jr., was paid, in total compensation, $17.6 million dollars, nearly 1.5 million dollars a month. Baxter's global net sales totaled 11.3 billion in 2007, at an increase of 9% from 2006. Sales in the United States alone totaled over $4.8 billion, an increase of 5% over the prior year. International sales totaled over $6.4 billion, increasing 11% compared to the prior year. Baxter reinstituted quarterly scheduled payments of dividends in 2007, and increased the annual 2007 dividend rate by 15 percent. Heparin, a drug that could have been recalled sooner, made untold profits. It was made more economically with ingredients that could be produced less expensively in China. Baxter paid an increase of $340 million in cash dividends to shareholders and total dividends for 2007 were over $700 million. In late 2007, Baxter's board of directors reevaluated stockholder dividends based on company profitability and they declared a quarterly dividend that represented a 30% increase over the previous quarterly rate. Company profitability surely increased for 2007--but at what cost? Baxter supplied tainted heparin for use in medical facilities to patients who were in need. This drug surely helped to increase Baxter's corporate bottom line. Baxter provided greater dividends to stockholders plus additional benefits to board members, while the corporation failed to recall a bad drug; a drug that was already known to have adverse effects--so my husband and many other ailing patients who received the drug suffered needlessly. Dennis and others died. I just don't blame Baxter and their drive for profits. I also blame the FDA for not doing its job to ensure that the drugs sold in this country are safe. In conclusion, I want to thank the hard working doctors and scientists who have worked to unravel this tale of deception. While Baxter and the FDA failed, the scientists and doctors who recently published their findings in the New England Journal of Medicine have done their job, and done it well. They have proven that the sudden drops in blood pressure and the other symptoms which my husband and others suffered from before their death were caused by the contamination. Finally I want to thank this Committee, in advance, for doing its job and passing the laws that are needed to secure a safe drug supply for my fellow citizens. Respectfully Submitted, Johanna Staples Toledo, Ohio ---------- Mr. Stupak. Thank you. And thank you to all of our witnesses on this panel and thanks for your courage and your eloquence in helping us out. As I indicated in my opening statement, this is a series of hearings we have had. This is our sixth one on drug safety alone. And you certainly help to motivate us to work harder on this issue. You also put a human face on all these hearings that we have had. I think this is the first one on drug safety where we actually had some victims come in, because it is difficult for you, just as it is for all of us up here to see these repeated mistakes, and hopefully you will motivate us to correct them with legislation and other things that we can do. Let me, if I may, ask a few questions. Ms. Hubley, you have confirmed that your husband was given heparin that was produced by Baxter. Is that correct? Ms. Colleen Hubley. Yes. Mr. Stupak. You stated that your husband had been on dialysis since May of 2006? Ms. Colleen Hubley. That is correct. Mr. Stupak. Had he ever previously suffered any adverse reactions to heparin? Ms. Colleen Hubley. No, not that I was aware. And I did dialysis at home for him. Mr. Stupak. You stated you have been a nurse in the dialysis unit. Ms. Colleen Hubley. Correct. Mr. Stupak. You also said you gave dialysis to your husband at home. Have any of your other patients had allergic reactions while they have been on heparin? Ms. Colleen Hubley. You know, I knew that this question would probably come up; and it is very difficult to know. When you are at work, you have 12 patients, sometimes more. Each one of them is getting a bolus of heparin and hourly heparin doses. I don't--I can't tell you for sure it was the heparin. We certainly weren't thinking that back in those months. The side effects, did we see them? Yes. Some of them are normally seen in dialysis patients; some of them are not. Were there more? If you ask my opinion, yes, I believe that there were. Mr. Stupak. OK. Thank you. Mr. Hubley, if I may ask you a question or two. You stated your wife began dialysis in October of 2007 and that the first--at first, the dialysis sessions were uncomplicated. Mr. Leroy Hubley. She started dialysis at the Toledo Hospital. Mr. Stupak. And that was in October of 2007? Mr. Leroy Hubley. When she lost her kidney, the transplant she had for 12 years. And she was doing fine in the hospital. She didn't mind it a bit. I said, by God, maybe we won't have to need another transplant if you like dialysis. She started going over to the one closest to the house. She only did about five or six times there. First time, I went over to pick her up, and the dialysis nurse said, you will have to come back in about an hour. She has a very high temperature. The lawyer said, this is awful confusing. But I went to pick her up an hour later. They told me, you'd better take her over to the emergency room because we can't get the temperature down. So we went over to the emergency room at Toledo Hospital, and she died right there in the waiting room. They said, it's a damn good thing that she was here because you have 5 minutes to bring her back. They brought her back. Prior to that, she was in the hospital for about 2 months because they didn't know what was wrong with her. She was losing her kidney, and they finally found out she was losing her kidney. Gave her all these tests. She was fine. Then, after she died in the emergency room, they put her back in the hospital and says, Oh, well, she needs a bypass surgery. For crying out loud, you tested her for 2 months before and you didn't find anything wrong with her except she was losing her kidney. Whether she needed that or not, I don't know. Then we put her in rehab. Then they shuttled her back and forth to the forensic center, the same place where she was at before. And a couple days later they called an ambulance, sent her back to Toledo Hospital, and she died a couple days later. Mr. Stupak. Let me ask you the same question I asked Colleen. Has it been confirmed that your wife had heparin manufactured by Baxter? Mr. Leroy Hubley. Colleen found out from the dialysis center that they did have it. And they pulled it off the shelves right away. Mr. Stupak. Thank you. Ms. Staples, you stated that your husband had been on dialysis for about 2 years, just over 2 years before his death? Ms. Staples. Yes. Mr. Stupak. At any time prior had he suffered any adverse reactions to heparin? Ms. Staples. Not to my knowledge, no. Mr. Stupak. Have you been able to confirm that your husband was given heparin produced by Baxter? Ms. Staples. It was information that was requested and confirmed. Mr. Stupak. OK. Thank you. Mr. Nelson, you indicated in your statement that there's an import alert for heparin, or the API, heparin API, active pharmaceutical ingredients, from Changzhou SPL only? Mr. Nelson. That's right. We understood the import alert would cover all heparin intermediates coming in from China. According to Dr. Woodcock's testimony, it only applied to Changzhou SPL. Mr. Stupak. OK. Were there other plants or companies in China that produced heparin? Mr. Nelson. Well, the FDA has told us and the world that there's 12 Chinese sources, different Chinese sources of contaminated heparin, that have been confirmed. Mr. Stupak. OK. In the United States, the import alert is out for Changzhou heparin, correct? Mr. Nelson. Changzhou heparin. Mr. Stupak. OK. How many ports can they ship into the United States? Is it like around 300? Mr. Nelson. 321, I think. Mr. Stupak. 321. How many FDA inspectors do we have? Do you know? Mr. Nelson. How many ports have FDA inspectors? Ms. Staples. Yes. Mr. Nelson. I believe about 90. Mr. Stupak. OK. Mr. Nelson. That's not necessarily full-time, 24 hours a day. Mr. Stupak. So if you have approximately 300 ports where heparin can come in, possible, and only 90 inspectors or 100 inspectors at most, so our chance of catching it if it came in from different ports is 1 in 30--1 in 3? Mr. Nelson. Well, it's certainly problematic. We were out in San Francisco on a food investigation, and we watched the data entry reviewers, who are inspectors assigned to examine the electronic information coming in from Customs. And they had about 1,000 entries a day each or about 1 every 30 seconds where they had to make a decision as to what it was and whether it should be inspected. Ms. Staples. OK. So human error could occur again, and heparin could come in if you have about 30 seconds to make a decision whether or not to allow this product into the United States? Mr. Nelson. Well, it certainly does increase the chance of human error if there's no import alert. Mr. Stupak. Let me ask you this, Mr. Nelson: as the senior investigator, has the Committee received all the documents and conducted all the interviews that this committee felt necessary regarding the preapproval inspection process at the FDA on this heparin issue? Mr. Nelson. No. We have been denied documents, and--to the best of my knowledge, we've been denied documents. They've supplied us a lot of documents. We haven't been able to locate any of them. They come from the Office of Chief Counsel, and we've been refused the opportunity to interview employees at the Office of Chief Counsel. Mr. Stupak. All right. As a senior investigator, why is it necessary to receive the documents and to do the interviews that you wish to do from the FDA personnel or its lawyers? Mr. Nelson. Well, the--we believe that the lawyers in the Office of Chief Counsel review all important policy decisions, must pass on all important policy decisions and many of the critical enforcement decisions, including warning letters and import alerts, before they're permitted to go into effect by the Agency. Mr. Stupak. OK. Mr. Nelson, Baxter appeared to have performed its own audit of the plant in September of 2007-- that's at Changzhou SPL--and found that the plant was in compliance with good manufacturing practices. Is that true? Mr. Nelson. That's correct. They sent somebody over there for 1 day. Mr. Stupak. OK. That was September of 2007; and 5 months later, after this heparin outbreak, the FDA found significant problems at this plant, and it wasn't in compliance with the good manufacturing practices. Is that correct? Mr. Nelson. That's correct. In fact, it was so out of compliance that the conditions on the import alert are that it--it cannot be allowed to ship into the United States until not only have they responded to the criticisms that were found on the 483, but that FDA has to go over there and reinspect, which is something that rarely occurs. Mr. Stupak. Now, Mr. Nelson, there's a document book right there to your left. Under Exhibit No. 30 in the exhibit book, there appears to be a copy of the audit performed by Baxter, which is dated September 20, 2007. Do you have that document, sir? Mr. Nelson. I do, sir. Mr. Stupak. On the third page of the exhibit under section Audit Purpose, it states, and if I can quote, ``To perform a GMP audit of the Changzhou SPL Company, Ltd., facility in China in order to verify the effectiveness of their quality systems and technical capabilities with regard to applicable Baxter and regulatory requirements.'' Do you see that, sir? Mr. Nelson. I do. Mr. Stupak. And is that the purpose of this audit? Mr. Nelson. That's the stated purpose of the audit. Mr. Stupak. All right, Mr. Nelson. Now, under the heading, Audit Scope, does it say the following--again, I quote--``To ascertain the cGMP compliance status of Changzhou SPL, the audit consisted of an in-depth review of Changzhou's quality systems and capabilities including but not limited to the documentation and procedures associated with the following areas.'' Do you see that? Mr. Nelson. I do. Yes, sir. Mr. Stupak. OK. Now, Mr. Nelson, it appears that the areas examined by this audit were the same areas and issues examined by the FDA team a couple months later in February 2008. Is that correct? Mr. Nelson. Generally, that's correct, sir. Mr. Stupak. OK. These areas that were examined include incoming materials and sampling procedures, warehouse, manufacturing areas, packaging areas, stability operations, QC, laboratory operations, and even the quality assurance process. This appears that Baxter was performing a good manufacturing audit. Is that correct? Mr. Nelson. That's correct. Mr. Stupak. Mr. Nelson, under the executive summary on that Exhibit No. 30, it appears that Baxter audit found only one major observation related to the CG&P which involved microbial limits testing, and that if--and that the one problem was addressed; and this facility should be considered approved for routine manufacturing of heparin, according to that document. Is that correct? Mr. Nelson. I believe so, sir. Mr. Stupak. Exhibit No. 30 also contains a letter dated September 18, 2007, from Baxter to Dr. Yan Wang, I'm sorry. Dr. Yan Wang. In this letter, Baxter notes and I quote, ``The current audit risk assessment that you--your facility is rated as acceptable.'' Do you see that? It's on the first page of Exhibit No. 30. Mr. Nelson. On the first page? Mr. Stupak. Yes. Mr. Nelson. Yes, sir. Mr. Stupak. OK. That's the December 18, 2000--so Baxter considered this facility acceptable in December of 2007, is that correct? Mr. Nelson. That's correct. Mr. Stupak. All right. September of 2007. I'm sorry. Let me go to Exhibit 31, next exhibit, and this is another letter to Dr. Yan Wang, dated February 26, 2008, in Exhibit 31, where Baxter notes that the few audit observations that apparently were observed, and it states, ``have been satisfactorily addressed.'' is that correct? Mr. Nelson. That's correct. Mr. Stupak. In fact, Baxter notes in this letter, quote, ``We are pleased to inform you that this audit has been closed.'' Do you see that? Mr. Nelson. I do, sir. Mr. Stupak. Thank you. Mr. Shimkus for questions, please. Mr. Shimkus. Thank you, Mr. Chairman. Again, we appreciate your testimony. And we're sorry that you have to be here with those results. I think many Members of Congress--there's a piece of legislation, the Kidney Care Improvement Act--something to that extent--which has driven a lot of Members to visit dialysis centers in the past 2 years. I think I've attended and visited five separate ones throughout my congressional district. So there are amazing things we can do when you are assured of quality. I appreciate your service in that. I met one guy who came out here who was on dialysis for 25 years, which is amazing. My questions are going to be brief to the grieving family members: all three of you learned of the heparin recall after the deaths. Is that correct? Ms. Colleen Hubley. Yes. Mr. Shimkus. And how did you learn? How did you get that information? Ms. Colleen Hubley. When I returned from my bereavement leave with my husband, I hadn't kept in contact with really anyone from work. I came back, and there was notes posted all over. And my patients were actually asking me, is the heparin okay; is the heparin okay? You know, everyone wanted to run heparin-free, which is awful. You don't want to do that. And I--I was like a little bit shell-shocked, I guess, and I responded to them, Yes, it's all right. They took it off the shelves. And we were using a dilute heparin at that time. I sat down for a minute and read some of my e-mails. And obviously this is my job probably on the line right now, but I read it, and the things just kept playing into my head. And I'm thinking, it's a huge coincidence if the heparin didn't have something to do with it. The symptoms were very consistent with what I saw in my husband and in my mother-in-law. Mr. Shimkus. Of course, Mr. Hubley, just from your daughter-in-law? Mr. Leroy Hubley. Yes. Mr. Shimkus. And Ms. Staples? You will need the mic. I'm sorry. Ms. Staples. I came in close contact with folks that had treated my husband and found out about the recall. And then I said, Wait, he had to have the same heparin. Mr. Shimkus. Right. Ms. Staples. How long was this in effect? How long was there a problem? Mr. Shimkus. Right. Ms. Staples. And---- Mr. Shimkus. Then the other thing, since a lot of us have visited these dialysis centers--I mean, there are multiple chairs, multiple facilities, people in the waiting room, people outside. And we know those who are on dialysis, they run the gamut of health. They're all in dialysis, but as far as the other healthy conditions, I imagine that lot number, as you mentioned, probably had a lot of your--patients concerned because--I mean, you imagine a lot, a big lot, would go to the same facility. So a lot of these other patients that probably were healthier did not have the extreme adverse effects, but they probably still had some effects, would you---- Ms. Colleen Hubley. Right. And I think it did vary. In my opinion, I think you have--you do have the spectrum. Of all of you sitting up there, if you were all on the machine, you all have different co-morbidities that complicate your health. Mr. Shimkus. Right. Ms. Colleen Hubley. And the people who were sicker responded less favorably. Mr. Shimkus. And as a former critical care nurse and--I mean, I had open heart surgery 3 years ago. So I understand all that work you've done in there. And when your life is on the line, you really appreciate the professionals who do that type of service. Let me ask you, has there ever been any follow-up by the Centers for Disease Control or any other Federal agencies to you individually? Ms. Colleen Hubley. No. Mr. Shimkus. Mr. Hubley, same? Mr. Leroy Hubley. No. Mr. Shimkus. Ms. Staples? Ms. Staples. No. Mr. Shimkus. I think my follow-up from the chairman is, so you were never contacted by the CDC or anybody else? Ms. Colleen Hubley. No. Mr. Shimkus. Mr. Nelson, thank you for your work. It's new for me to have someone on staff right there so I can grill and ask questions to. It is maintained by the FDA that the manufacturers--that a preapproval inspection would not have identified the contamination. For example, on page 9 of her testimony Dr. Woodcock states, there is no justification for the theory that contamination of heparin would have been prevented if the inspection of the Changzhou SPL had occurred in 2004. Would you care to comment on that statement? Mr. Nelson. Yes. But first, Mr. Shimkus, it has been a completely bipartisan investigation. The counsel sitting next to you could have been sitting down here in terms of his knowledge of the process. Mr. Shimkus. We're very fortunate to have him. And just for the folks in attendance, I'm new on this committee. But the staff, the bipartisan staff, works well on both sides. So I appreciate that comment. Mr. Nelson. I think it's intuitively obvious that an inspection in 2004 is not going to catch contaminated heparin introduced, or contaminants introduced, into the manufacturing process in 2007. But that's not the right question. Given the observations that were found by the FDA inspectors in February, the serious allegations of the deficiencies, particularly in the control of the supply chain by Changzhou SPL, would it ever have been allowed to ship product into the United States with that dicey a sourcing of ingredients itself? That's the real question. Clearly, if the plant was in the same shape, the records were in the same shape--and we have no reason to believe they were in any better shape back in 2004--the plant would have not been allowed to ship the contaminated product into the United States. Baxter would have had to continue to source out of Wisconsin or somewhere else. And so there is some chance that an inspection in 2004 would have prevented this, yes, sir. Mr. Shimkus. And that's kind of the comments that we were talking about in last week's hearing, about just reviewing the manufacturing processes may have helped--may help in this whole process. The failure of the FDA to initially inspect has been attributed to the misidentification of the Chinese plant. Does FDA maintain that it would have inspected the plant if it weren't for the clerical error? Mr. Nelson. The head of the Foreign Operations Division in the Center--CDER compliance, the person that made the decision in this particular case and would be making this decision if the same case would arise today, said that he--had he had the same information today that he had back then, he still wouldn't have sent out inspectors. And the critical question here is, why does--why do CDER's policies that permit an option of an inspection to determine whether a plant coming online, or part of a plant coming online, is capable of producing the material, ignore the fact that the plant is in China? I mean, the FDA knows full well, from all the GMP inspections they do do in China, that it's really problematic whether there's going to be serious GMP problems at any of the plants they inspect there, because the Chinese don't have a decent inspection system, and they know it. Secondly, they ignored the fact that while it was a misidentified plant, the plant they did identify had never manufactured heparin or any similar substance, ever. It had been inspected for hydrochlorothiazide manufacture, which is a simple diuretic, and it had been inspected for doxycycline, which is a relatively simple tetracycline-like antibiotic. But it had never produced a plant that came from--a substance that came from a biological extraction process like heparin. And thirdly, there seems to be no accounting for the fact that this raw material was going to go into a process and come out as a drug that was sterile for critical use. I mean, one would think there would be special care taken for the raw ingredients that go into sterile products at the end use. And I'm sure that the individual involved was not aware of the possible contamination, wasn't aware that the USP tests wouldn't have detected it. But the fact of the matter is that there is some risk, and they should have sent somebody over there. Mr. Shimkus. And thank you. And I will yield back my time. Mr. Stupak. I thank the gentleman. Ms. Schakowsky for questions, please. Ms. Schakowsky. First, let me express my gratitude to David Nelson for the great work that he and the investigative staff have done on this. I really appreciate it. I wonder if the Committee--has the Committee gotten the documents and interviews that we requested regarding the preapproval inspection process at the FDA? Mr. Nelson. We've gotten interviews of all the operational people that we requested to be interviewed. We have not gotten interviews with the counsel that make many of these decisions or at least have veto authority over these decisions. Ms. Schakowsky. And why is it necessary to get documents and interviews from FDA lawyers? Mr. Nelson. Because they have a very influential role in policy. There's an expression that I've heard from more than one member of the Food and Drug bar that goes like this: If FDA wants to do something and we agree with it, it's a question of policy, and they can do it; if we disagree with it, it's a question of law, and it's our call. And that has been consistent through many administrations. The Office of Chief Counsel exerts an enormous amount of influence over FDA policy and, in this particular case, over enforcement decisions. Ms. Schakowsky. So you are saying that the--that they actually have veto power over any policy change? Mr. Nelson. Generally, yes. I don't have 100 percent certainty of that, but that's certainly the events--the questions that we've looked into, that's been true. Ms. Schakowsky. Would the lawyers also have a say in the issuance of import alerts? Mr. Nelson. Yes. Ms. Schakowsky. All of them? They sign off on them? Is that---- Mr. Nelson. At least all the broad ones they do, and also the warning letters. Ms. Schakowsky. Has this constrained the Agency in taking action to protect the public from unsafe food and drugs? Mr. Nelson. Yes. There seems to have been a shift in policy in recent years. And I don't mean to attribute it solely to this administration; there's a pendulum that swings back and forth. But where we've been in the more deregulatory era of this administration, there have been interpretations coming out of the Office of General Counsel that have restricted--they have a very restrictive or conservative view of what FDA's authority is that is not consistent with precedence in earlier years. And as far as I know, it's not the result of court decisions, but rather a change in FDA's view--counsel's view of the law. Ms. Schakowsky. Well, we were told after the deaths in Haiti and Panama from diethylene glycol that had been substituted or added to glycerin in China and cough syrup and other medications that CDER asked for an import alert that would require testing of all batches of glycerin from China. The Office of Chief Counsel said such an alert would exceed the legal authority of the Agency, but they cited no law to that effect. Mr. Nelson. That's what we were told by FDA enforcement personnel. Ms. Schakowsky. So the position of the chief counsel was that Americans had to die before importers would be required to test their glycerin from China? Mr. Nelson. So it would appear. I mean, the question is, can you show that there is an appearance that the product is violative? And apparently if it's violative elsewhere to the point of being fatal, it doesn't count. Ms. Schakowsky. I think you answered this: is this consistent with the legal constraints passed on FDA in the past? You are saying that there seems to have been a change in policy in this regard? Mr. Nelson. In recent years there's been an announced change in policy. I mean, the number of warning letters that were permitted under the first chief counsel in the current Bush administration greatly, greatly restricted the use of warning letters and, presumably, of import alerts. Ms. Schakowsky. So what does this tell us about the need to enhance the ability of FDA to stop drugs and other imported products that threaten the public health? Mr. Nelson. Well, I think it clearly shows that Congress, if it wants tighter enforcement, if it wants the FDA to be able to act to protect the public health more readily and easily, regardless of who happens to be the chief counsel at the time, that it needs to make that authority very explicit in law, so there's no--there's no ambiguity. Ms. Schakowsky. So would you say then--since that apparent change then--in general, Americans are less safe when it comes to feeling secure when it comes to their prescription drugs? Mr. Nelson. That's not just my opinion. That's the opinion of a lot of the operational field personnel inside FDA that we've talked to. Ms. Schakowsky. Once again, as I did in my opening statement, let me thank the family members. You know, putting a human face on that, talking about your loved ones, as hard as it may be, adds an urgency to the issue. And I can assure you that this committee will do everything it can under the leadership of Mr. Stupak and Mr. Dingell to adequately respond to the pain that you're feeling. Thank you. Mr. Stupak. I thank the gentlewoman. Mr. Burgess for questions, please. Mr. Burgess. Thank you, Mr. Chairman. Mr. Nelson, this hypersulfated chondroitin sulfate, where is it used? Does it have a legitimate use at some point? Mr. Nelson. Well, there are plants in China that produce it. We have--we've seen Web sites where it's available for sale. There is a Chinese patent, that I believe is in the exhibit book---- Mr. Burgess. Yes, 32 is under the tab. Mr. Nelson [continuing]. That was translated and provided to us by counsel for SPL; and it prefers--actually, that patent refers to a U.S. patent that specifically addresses the question of--in fact, it argues that the--this oversulfated ingredient will actually enhance heparin's qualities, blood- thinning properties. Mr. Burgess. Now, is that held to be the case in China or is that the case in this country? Would anyone reasonably think that this would be a good idea? Mr. Nelson. Well, nobody in this country could add that to a drug product without having filed an application with the Food and Drug Administration. I have no indication that that's happened. Just because something's been patented doesn't necessarily mean it works, and it doesn't necessarily mean there aren't adverse consequences that may have been identified in test tubes that don't occur until it's put into human beings. Mr. Burgess. Well, I guess what I'm getting at, does this stuff show up anywhere in commerce in China? Is it found to be useful for any type of treatment? Mr. Nelson. I don't know of its uses. But it is produced and sold. Mr. Burgess. Produced and sold. And in any sort of quantity? Mr. Nelson. I can't answer that. There's Web sites that we've found, but I have no idea what it's sold for. Mr. Burgess. Would it be cheaper than the active ingredient in heparin? Mr. Nelson. We've looked into that. Chondroitin sulfate is a common dietary supplement in the United States, and it sells for somewhere between $20 and $60 a kilo in wholesale form. The oversulfating adds some cost to it. We haven't been able to get an exact number on that, but it's not a huge addition to the cost, we're told. And yet the--a kilo of heparin is $2,000. So it's somewhere approaching 100 times less expensive. Mr. Burgess. So for a person who didn't care what they were doing, there would be a financial incentive. Mr. Nelson. Clearly. As there was in adding the melamine, as there is in adding--in substituting or adding the diethylene glycol to glycerin. Mr. Burgess. But this compound is so stealthy because of the fact that it hides in the normal USP testing under the peak for heparin, is that correct? Mr. Nelson. That's what--that's what I'm told, yes. Mr. Burgess. So unless you do very sophisticated testing to break out that peak, you're not going to know if it's hiding in there; is that correct? Mr. Nelson. Sophisticated and relatively expensive, although not on a per-dose basis. We asked specifically what the cost was for the testing. We're told $12,000 to $14,000 a lot, which comes out to about 1.7 cents a dose. Mr. Burgess. So certainly within the realm of possibility as far as the pricing. So now, going forward, will we be doing that testing at every port of entry in this country? Mr. Nelson. That's a question you need to direct to Dr. Woodcock, because what we're going to do going forward isn't obvious from what FDA has done today. Mr. Burgess. It would just seem to me, sitting here, to make sense. It's going to be very, very difficult to do inspections across China, India--wherever else we may need to do them. What is it, 3,000 or 6,000 foreign drug manufacturer applications that are on file with the FDA? It's a lot. Mr. Nelson. It's a lot. It varies everytime you ask them. Mr. Burgess. And if you're going to do 20 percent--every 5 years or something, I think, was a figure that sticks in my mind; and don't quote me. But I mean, that's a lot of inspections to do, and it just seems to me if--now that we've identified this as a potential problem, it's hard to imagine that people are going to be able to resist the financial temptation to perhaps try it again-- maybe not next year, maybe not the year after, but a decade from now. Would it not seem reasonable, rather than try to go everywhere, that we would have to go across the world to test that product as it comes into our country? Mr. Nelson. It's a complicated question. I mean, the general principle that FDA operates under, that QAQC managers operate under, is, you can't test into compliance. You have to understand the entire process because---- Mr. Burgess. If I could just interrupt you, this isn't testing into compliance. This is thuggery. This is thievery. This is high crime and a direct assault on the American public. I mean, this is not just testing for normal product manufacture, in my opinion, for what it's worth. Someone did this deliberately. They found a product much cheaper than the active ingredient. We can hide it under the peak, under their normal testing, and no one will be the wiser until people drop dead, at which time we've made a lot of money. And we're off to doing other things. But it's not something that we would normally encounter in the normal manufacture. There's no way to get hypersulfated chondroitin sulfate in the normal manufacture of porcine intestine heparin; is that correct? Mr. Nelson. That's my understanding. Mr. Burgess. So someone with malice aforethought has to do something to get it into the chain of commerce; is that correct? Mr. Nelson. That's correct. Mr. Burgess. Same with the melamine in the dog food. Mr. Nelson. Yes. And the melamine provides an interesting analogy. And I don't know whether this really holds, but melamine in the dog food was so that the protein test would show greater protein than the wheat flour or wheat gluten itself. That was an innovation occasioned by the fact that 10 years earlier they had developed another substance that did the same thing, but then tests were developed for that. So they had to find something else to fool the test. Mr. Burgess. Right. Mr. Nelson. And I don't know enough about the chemistry of this drug or these compounds to know, but it seems to me that if we develop a test that identifies hypersulfated chondroitin sulfate and that's all we do, that somebody will find another way to beat that test. Mr. Burgess. But it's a superanalytical mass spec in microcapillary electrophoresis, if we're doing that to every heparin product at 1.7 cents a dose, I mean that's a pretty cheap insurance. I would imagine Baxter in the future would not want to market a product that didn't have at least that level of certainty around it. But it sure begs the question--I mean, melamine, okay, that's a pretty crude effort; and if you're looking, you are going to be able to find it. But this was not crude. This was sophisticated. This was stealthy. Melamine was a thumb on the scale; this is a knife in the back for someone that I think deliberately intended harm. To whom, I don't know--the United States pharmaceutical industry, patients, individual patients? I have no idea. But this is much more egregious than the finding of a high nitrogen inert product in dog food, in my opinion. Ms. Hubley, let me just ask you, because you are the dialysis nurse and the expert about dialysis centers that is with us, and thank you for being with us. I know it's been difficult for you and your family. You know, heparin's not a completely innocuous drug. I mean, when I prescribed it, it scared me to death, to be perfectly frank. And there are some side effects that can occur. Did you have a procedure? Did the dialysis centers generally have a procedure for documenting side effects for any medication? Not just for heparin, but during the process of the dialysis, whether it be the dialysis bath itself or any of the medications that are used? Ms. Colleen Hubley. Yes, we do. Mr. Burgess. And what typically happens to that list of adverse events, or side effects, however you might characterize them? Ms. Colleen Hubley. They're filed with our compliance book folder that our clinic manager has. Mr. Burgess. And from time to time that's reviewed by whom? Ms. Colleen Hubley. The clinic manager, regional manager, and, I'm assuming, probably the higher-ups. Mr. Burgess. Yes. I guess what I'm getting at, this data is being collected. We've gone through a lot in this committee about the information technology available to the FDA. At some point is that data de-identified and aggregated and submitted off to someone so that trends can be followed? Ms. Colleen Hubley. You know, I don't--I think it's a very difficult trend to follow. You have people come in, and some patients may get ill on dialysis without heparin; some may get sick with heparin. But there were things that--in the last several months, prior to all of that, that as you look back, you don't know how it happened. Mr. Burgess. And that's what I'm getting at. How is it that normal processes would identify this? I have talked to veterinarians back in my district, to talk about pet deaths, before the melamine stuff came to light. And, of course, in a veterinary practice, you might accept the fact that no one was keeping track of the side effects from eating dog food. But in a dialysis center where you have a relatively ill and restricted population, is there some way to feed that information back to whomever, be it the FDA or some other agency? Ms. Colleen Hubley. Yes. Because if a patient has an untoward reaction or something that occurs during dialysis, it's noted in the charting. Now, it may not require a---- Mr. Burgess. A notification? Ms. Colleen Hubley. Yes. A form that we would have to fill out. But it would definitely be in the charting, because if you are treating a low blood pressure, you are charting what you are doing for that low blood pressure. If someone is having severe pain on treatment, you're going to chart that. So, I mean, it would be difficult. But yes, it could be done. Mr. Burgess. OK. All right. Thank you, Mr. Chairman. I will yield back the balance of my time. Mr. Stupak. I thank the gentleman. For adverse events, as you are well aware, I think it's been about 6 years, FDA's been required to put 1-800-FDA-1088 to report adverse events. It's been 6 years; they still haven't done it. So for people to report adverse events, if we're waiting for the FDA, it will be a cold day in you-know-where. Mr. Melancon--not in your district. But Mr. Melancon for questions, please. Mr. Melancon. Let me thank the families for putting a face on this concern and this dilemma for the Congress and for the American public. And just because you are not getting all the questions doesn't mean that you haven't served a great purpose. And I thank you for that. Mr. Nelson, is it possible--and just to do some follow-up to what the chairman was asking earlier--is it possible that Baxter appeared to perform an audit that found almost no major deviations from the cGMPs just 5 months prior to FDA's inspection and closed out this audit about the same time your inspection of Changzhou SPL was concluding, and yet your audit found so many problems with this plant that it barred its product from entering the United States? What explains why your inspection found major problems while Baxter's audit found only a handful of minor deviations? Mr. Nelson. Well, just to be clear, Mr. Melancon, we didn't do the GMP investigation. What we were reporting on is the results of the FDA's---- Mr. Melancon. Yes, FDA. I'm sorry. Mr. Nelson [continuing]. GMP investigations. And it is conceivably possible--well, no, it isn't. If you look carefully at the observations, it really isn't possible for a plant to have fallen that far out of compliance in 5 months. The Baxter audit, cGMP audit in 2007, some 3 years after they began receiving product from the plant, was performed in a day. I have no idea, but I suspect that they didn't have--they had to rely entirely upon the company for translation of the records, and they obviously didn't look back very carefully at the supply chain. I mean, FDA at least went--not only inspected the plant but went back to the consolidators. If we could put that slide up again, showing the supply chain in China, you can see that Changzhou SPL used two consolidators. These consolidators are putting together the crude heparin that is actually manufactured in the workshops. It's combining them. It's basically preparing for them to go into the Changzhou SPL plant. And the FDA went to the two consolidators that supplied Changzhou SPL. One of the consolidators is Changzhou SPL's partner, the 45 percent partner; and, in fact, the Changzhou--Changzhou, I'm sorry, SPL plant joins the consolidators' operation in China, the tech pool operation in China. Mr. Melancon. Should the consolidators or should Changzhou SPL be the place for quality control? Or is it one and the same? Mr. Nelson. It's got to be throughout the entire system, obviously. Mr. Melancon. Yes, from the beginning, right. In your mind, was Baxter's audit insufficient, or did the plant just fall out of compliance? And does this suggest that Baxter's audit missed major problems that were occurring at this facility? FDA's team was able with just two people in about a week to find so many problems with this plant; and we're now barring products from this facility from entering the United States. I mean, why is it so easy when our guys went in? Mr. Nelson. Well, I think that there's--there may have been a difference in the--there is certainly a time difference. Mr. Melancon. The time difference was 5 months. Mr. Nelson. Well, no. There was a time difference in the amount of time spent in the plant. Baxter had one person go in there for 1 day. FDA--which for a plant of this complexity, I'm told, usually takes a couple of weeks if it was here in the United States--sent two inspectors, one, a chemist, to review the laboratory practices and one investigator to do the rest of the GMP investigation. And they had 5 days at the facility. So if you want a measure of how hard people were looking, time alone would suggest a difference between what FDA was looking for and what Baxter was looking for, although they should have had the same concern about quality. Mr. Melancon. Just the time of travel to get to China, they could have done what they did, it appears, in that 1 day over the telephone. We've been told repeatedly by the drug industry that they police their own facilities in the supply chains. What kind of grade would you give Baxter in how it policed this facility? And if, in fact, FDA was able to find the kinds of cGMP deviations, as noted in Ms. Brown's report, nearly 5 months after Baxter's inspection? Mr. Nelson. Well, Baxter's was an incomplete, bordering on failure. Mr. Melancon. Did Baxter believe this plant was suitable in how it produced heparin API for the U.S. market, whereas the government agency responsible for protecting the public health, said this plant was unsuitable once it conducted its own investigation? So is that the case? Mr. Nelson. It would appear to be the case. We have both the FDA and the company here today, and I suggest that those questions could be put to them. But the appearance is clearly--you are clearly correct. Mr. Melancon. Thank you, Mr. Nelson. And I yield back my time. Mr. Stupak. I thank the gentleman. Mr. Inslee for questions, please. Both Mr. Inslee and Mr. Melancon, if you have opening statements, we'll put them in the record if you so wish. Mr. Inslee. Thank you. I want to thank the families. My mom had kidney failure. I am particularly sensitive to the grief this is causing your families and all the families in the dialysis community. Your efforts here really will, I hope, pay off in getting the government to act. Listening to the testimony, I reflect, though, can you imagine what we would do if al Qaeda had put some foreign substance in heparin? Can you imagine what the threat level would go to? Can you imagine how the FDA would respond then? Can you imagine how we would quit being somnolent and actually do something to protect us from this nefarious stuff going on in China? We would really act then; and I would just hope that we start to react with some degree of responsibility. I want to ask Mr. Nelson: have you reviewed Dr. Woodcock's testimony? Mr. Nelson. I did, sir. Mr. Inslee. And did you find anything surprising in there? Mr. Nelson. Well, the most surprising part to me dealt with--and I say, literally, ``surprised.'' I was not aware from listening to the press conferences and from the interviews that only Changzhou SPL was subject to an import alert. Mr. Inslee. Why is that surprising? Mr. Nelson. Because we thought--one would have thought that all heparin intermediates and products containing heparin from China would have been subject to an import alert, would have been detained without physical examination, which is what an import alert is. Mr. Inslee. And as I understand it, there's been at least 12 separate companies that have identified as having a contaminant that went to at least 11 different countries; is that right? Mr. Nelson. That's the FDA numbers. Mr. Inslee. And there's only one manufacturer that's been subjected to that import alert; is that correct? Mr. Nelson. That's correct. Mr. Inslee. And why is that important? Why is that deficient? Maybe it's obvious, but I'll ask you. Mr. Nelson. Well, it is because those products are detained automatically by Customs. What FDA--I'm sorry--what Dr. Woodcock's testimony goes on to say is that there are U.S. importers, drug manufacturers, that use these intermediates--five of them, I understand--who have agreed to perform these tests that Dr. Burgess is talking about, these tests that identify the contaminant; and their supplies are going through without being stopped at all. And for those other importers that have not agreed to do the test, the FDA has alerted its field offices to detain the imports as they come in to identify, detain them, and require that they be tested, but not put them into an import alert status. So whether those imports are actually detected is much more subject to human error than if they were subject to an import alert. Mr. Inslee. Well, why would you possibly not--if you know there are 12 companies that have been involved in this, I can't see any justification for only putting one on an import alert. I mean, is there any rationale for that? Mr. Nelson. Not that I know of. Mr. Inslee. And as far as the ones that have agreed to be tested, is that a matter of public knowledge? Mr. Nelson. No. FDA has not identified the firms, or their sources in China, the companies whose active ingredients-- active pharmaceutical ingredients--for heparin are going to be permitted through without being stopped. Mr. Inslee. And have the importers, the American companies that are using this material, have they been told which ones are having the testing--the Chinese companies, which ones of the Chinese companies are having testing and which ones are not? Mr. Nelson. I don't believe so. I mean, the American drug manufacturers that make the final product that have agreed to perform these tests know who their suppliers are. Customs probably has been told to allow the products through that are going from those specific Chinese firms to the American firms. But nobody's been alerted outside of the involved parties. Mr. Inslee. So I want to make sure that I do understand this. There are 12 Chinese companies that our Federal agencies have identified had used a contaminant, this chondroitin sulfate material. It's gone to 11 companies, but only one is on an import alert; is that right? Mr. Nelson. That's correct. Mr. Inslee. And only one of those has been publicly identified? Mr. Nelson. That's correct. Now, there are two other American manufacturers who have been identified as having received contaminated heparin. Those names are publicly known, although they have not--well, that's not true. At least one of them has not experienced any adverse events. The other, I noticed, is being sued, in press accounts today. Mr. Inslee. Now, would you agree with me, knowing what we know, that this really does present an extraordinary and unnecessary risk for the American people with this knowledge base to allow so many holes in our net? Mr. Nelson. It doesn't make a lot of sense to me. Perhaps it's because I don't really understand how secure they think the net is. But from our investigations around food and drugs, it's very problematic. Mr. Inslee. Well, this committee in our half-dozen hearings believe the net, if not shredded, has serious holes, particularly in China. And one of my concerns, too, if you look at the melamine incident, this incident, you know, it just seems like there might be a temporary interest in these subjects that gets dissipated as time goes on. And that's why I think having an import restriction that is clear and unambiguous and identified for these 12 ought to have been the appropriate response. And I think you agree with me--I think. But do you have any comments on that? Mr. Nelson. Yes, sir. FDA resource limitations really come into play here. I haven't asked them, but I would suspect they're not doing many inspections involving wheat gluten from China right now. I mean, that was last year's crisis and, quite frankly, they put a full court press on that. They have put a full court press on this heparin. But they don't have the ability to sustain those. They don't have enough people. They don't have enough laboratory resources. They don't have enough expertise to do anything but respond from crisis to crisis. And they do a relatively good job of responding during a crisis, once it's identified. Mr. Inslee. The manufacturers of the raw heparin, the smaller that--we've been told some of them are just sort of what I would consider unregulated operations. Is there any inspection protocol in the Chinese system for all of the raw manufacturing facilities? Mr. Nelson. There's no Chinese regulation of the heparin facilities, or there wasn't, none that I'm aware of now, all the way through to the API producer. I mean, they don't regulate the workshops, they don't regulate the consolidators, and they don't regulate firms like API, like Changzhou SPL, that make the final API. They are outside the system for two reasons. Basically, they consider anything that's not a finished drug manufacturer to be a chemical plant not subject to their pharmaceutical regulations. And if they don't manufacture for the Chinese market, drugs for the Chinese market, they're not registered either. So none of these firms were even registered with the Chinese Government when they began production in 2004 without any inspection from us. Mr. Inslee. Did the finished manufacturer use this test routinely to identify the sulfate, the chondroitin sulfate; did they use that test routinely, internally, do you know? Mr. Nelson. I know that until this outbreak they didn't. I mean, now they--now they test it. SPL Wisconsin, for example, doesn't have the capacity to; and that's pretty big--exclusive to their business. But they have the University of Wisconsin that does the testing for them. I'm not qualified to talk about the kinds of tests. But they certainly were not contained in the USP monographs of required testing prior to the discovery of this contaminant. Mr. Inslee. Thank you. Mr. Stupak. I thank the gentleman. Let me thank this panel and then thank you for coming and helping us here today. I know it's been very, very difficult, and we certainly do appreciate it. And on behalf of the full committee and this subcommittee, we appreciate your willingness and your courage for testifying today. Thank you, and we'll dismiss you. Thank you very much. I now invite our second panel of witnesses to come forward. On our second panel we have Dr. Janet Woodcock, Director of the Center for Drug Evaluation and Research at the Food and Drug Administration. Dr. Woodcock is accompanied by Ms. Deborah Autor, who is director of the Office of Compliance at the FDA's Center for Drug Evaluation and Research, and Ms. Regina Brown, who is a Consumer Safety Officer in the Division of Field Investigations at FDA, Office of Compliance within the Center for Drug Evaluation and Research. It's the policy of this subcommittee to take all testimony under oath. Please be advised that witnesses have the right, under the Rules of the House, to be advised by counsel during your testimony. Do any of you wish to be advised by counsel? The indication is no. Therefore, I ask you to rise, please raise your right hand and take the oath. [Witnesses sworn.] Let the record reflect the witnesses replied in the affirmative. Each and every one of you are now under oath. We will begin with an opening statement. Dr. Woodcock, I understand you're going to give the opening statement. Dr. Woodcock. Yes. Mr. Stupak. OK. We will hear a 5-minute statement. You may submit a longer statement for inclusion in our hearing record. Dr. Woodcock? STATEMENT OF JANET WOODCOCK, DIRECTOR, CENTER FOR DRUG EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES, ROCKVILLE, MARYLAND; ACCOMPANIED BY DEBORAH M. AUTOR, DIRECTOR, OFFICE OF COMPLIANCE, CENTER FOR DRUG EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES, ROCKVILLE, MARYLAND; AND REGINA T. BROWN, CONSUMER SAFETY OFFICER, DIVISION OF FIELD INVESTIGATIONS, OFFICE OF REGIONAL OPERATIONS, OFFICE OF COMPLIANCE, CENTER FOR DRUG EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION, NORTH BRUNSWICK, NEW JERSEY Dr. Woodcock. Thank you, Mr. Chairman, members of the subcommittee. I'm Janet Woodcock, director of the Center for Drug Evaluation and Research at the FDA. I'm accompanied by Deborah Autor, who is director of CDER's Office of Compliance, and Regina Brown, who is an investigator and national expert in pharmaceuticals from FDA's Office of Regulatory Affairs. Thank you for allowing me to discuss the important issue of the contamination of the U.S. heparin supply and its implications for our ability to maintain drug quality in the United States. First, I would like to extend my deepest sympathies to the families of patients who were harmed by this contaminant. Patients who are dealing with life-threatening or chronic illness should be able to trust that life-saving medicines are of the highest quality. FDA needs the help of Congress to make sure that a tragedy like this does not happen again. Unless we act, another catastrophe will occur. The U.S. drug supply has long been one of the world's safest. In fact, Americans may have forgotten that our drug supply was once dangerous and that great vigilance is required to maintain its current safety. In some parts of the world, consumers purchasing a medicine may have a 50 percent chance of getting a product that is not what's on the label. The reliable quality of U.S. drugs is a result of a framework that was put in place over 60 years ago by Congress and implemented by the FDA to control and regulate the manufacture and movement of pharmaceuticals in the United States. However, since that time, there have been dramatic changes in the way drugs are produced and used. First, many more Americans are taking many more medicines and relying on those medicines to maintain their health. The number of pharmaceutical products on the market has grown very rapidly; thus, the risk posed by quality problems and the complexity of regulating pharmaceutical quality have grown as well. heparin is a good example of this. Heparin is not simply used by specific individuals to treat a specific condition. It's ubiquitous in health-care settings. Heparin is found in hospital wards, outpatient clinics, in emergency rooms, operating rooms, cath labs, dialysis centers, and even in home- health-care settings. Heparin is used in medical devices, and it's part of in vitro diagnostic agents. A problem with heparin thus has a potential to have widespread impact on our population. Second, the sites of production of pharmaceuticals have changed. FDA has traditionally been configured to regulate a domestic industry using a field force that's located in district offices around the United States to perform inspections. Over the past 15 years, the majority of active pharmaceutical ingredient manufacture and actually increasing amounts of finished drug product manufacture has moved off our shores, been outsourced. For example, generic drug applications processed in 2007 at the FDA referenced over 1,000 foreign sites; 450 of those were in India, 497 of those were in China for API manufacture of those generic drugs. And only 151 of them were in the United States. The rest were in other countries around the world. The FDA of the last century is not configured to regulate this century's globalized pharmaceutical industry. Third, the complexity of modern manufacturing arrangements require more sophisticated oversight methods on the part of regulators. Currently, some generic drug applications submitted to FDA may reference up to 15 different facilities that contribute or could contribute ingredients to the finished product. As has been seen with heparin, intermediates and products can move through a complicated web of distribution and processing. Contaminated heparin from China actually ended up in a large number of different products around the world. More sophisticated IT approaches are needed to monitor these supply chains. For example, as the GAO and this subcommittee has pointed out, we must have the ability to verify drug products that are being imported to make sure they should be allowed to enter the United States. In the past 5 years, the number of drug import lines, individual shipments, coming into the U.S. has grown from 140,000 to 312,000, approximately. Our current nonautomated approach to entry screening cannot continue. We need to be able to assure that both the product and the site of manufacture are acceptable before any drug gets into our country. Finally, in the face of all this growth and change, FDA's relative inspectional resources have diminished. The number of foreign sites making drug products for import into the United States has more than doubled since 2001, but our inspectional coverage, which was already dangerously low and was discussed with this subcommittee in 2000, has declined by 35 percent in the same time period. But this situation can be addressed. The remedy is simple. All parties throughout the chain, from production of API and other ingredients through brokers, distributors, importers, to finished product manufacturers, must be responsible for assuring the quality and integrity of the products they produce or handle, and FDA must have the tools to hold them accountable. These tools include resources, authorities, and scientific capacity to make sure this system is doing what needs to be done. We must build a new system for pharmaceutical quality for the 21st century and prevent a tragedy like heparin from happening again. Thank you. [The prepared statement of Dr. Woodcock follows:] [GRAPHIC] [TIFF OMITTED] T3183.001 [GRAPHIC] [TIFF OMITTED] T3183.002 [GRAPHIC] [TIFF OMITTED] T3183.003 [GRAPHIC] [TIFF OMITTED] T3183.004 [GRAPHIC] [TIFF OMITTED] T3183.005 [GRAPHIC] [TIFF OMITTED] T3183.006 [GRAPHIC] [TIFF OMITTED] T3183.007 [GRAPHIC] [TIFF OMITTED] T3183.008 [GRAPHIC] [TIFF OMITTED] T3183.009 [GRAPHIC] [TIFF OMITTED] T3183.010 [GRAPHIC] [TIFF OMITTED] T3183.011 [GRAPHIC] [TIFF OMITTED] T3183.012 [GRAPHIC] [TIFF OMITTED] T3183.013 [GRAPHIC] [TIFF OMITTED] T3183.014 [GRAPHIC] [TIFF OMITTED] T3183.015 [GRAPHIC] [TIFF OMITTED] T3183.016 [GRAPHIC] [TIFF OMITTED] T3183.017 Mr. Stupak. Ms. Autor, do you want an opening statement? Ms. Autor. No, sir. Mr. Stupak. Ms. Brown, an opening statement? Ms. Brown. No. Mr. Stupak. All right. Then we'll begin questions. Dr. Woodcock, how long have you been--you were acting director and then director of CDER, so how long a time is that? You were acting director for a period; now you've recently been promoted as director of CDER. Dr. Woodcock. Being under oath, I am very bad with dates, so I will give you an approximate time. In the fall in October, I believe, I was acting director of CDER, and recently I was made permanent center director. Mr. Stupak. Most of your time at the FDA has been in CDER, right, the Center for Drug Evaluation and Research? Dr. Woodcock. Correct. Mr. Stupak. So how long have you been at CDER? Dr. Woodcock. I was head of the Center for Drugs from 1994 to--I went on detail out of the Center for Drugs in 2004. Although I was still in the position, I wasn't acting in the position. Mr. Stupak. All right. Let me ask you this. You said you need help from Congress, Congress is trying to give you help. Have you made any opinion on the Dingell legislation which is pending? Have you rendered an opinion, is that a good piece of legislation as something we should pass to help out FDA? Dr. Woodcock. We are evaluating the---- Mr. Stupak. No, I'm asking you, have you made an opinion? Dr. Woodcock. I haven't completed my opinion. I think it makes a good start. Mr. Stupak. OK. How about the Internet pharmaceutical legislation we've had for the last 10 years? Have you made any decisions on any of that legislation over 10 years, whether it's good or bad that Congress would help you out if we passed that legislation? Dr. Woodcock. I don't have an opinion on that. That's more of a legal issue, I believe. Mr. Stupak. OK. Well, you're the director, and you know you said you need help from Congress. You're here under oath. So we're trying to ask you, what is the help you need? How much money did you request for inspections this year, for foreign inspections of plants? Dr. Woodcock. In 2009? Mr. Stupak. Sure, for 2009, in your role. Dr. Woodcock. I believe there was a $5 million increase. Mr. Stupak. A $5 million increase, at $45,000 per inspection overseas, is not very many inspections. Dr. Woodcock. That was for the criminal investigators. Mr. Stupak. Just the criminal investigators. How about for inspections of drug plants overseas? Dr. Woodcock. I don't believe there is a provision for any increase. Mr. Stupak. Kyle, put up this map, would you? So there's no increase in inspections, but yet inspections seem to be the key here, is it not? Dr. Woodcock. Inspections are one essential piece. We need to---- Mr. Stupak. OK. Now, the FDA inspects in the United States every 2.7 years. With China, it's 30-plus years, correct? Correct? Dr. Woodcock. Well, 30-plus--I think 2.7 you would say correct. 30-plus is an extrapolation. As a scientist, I have to tell you we don't get there often enough. Mr. Stupak. Well, let me tell you, there's 714 plants that we know in China right now. You inspected, at most, 20 last year. You do the math: 20 of the 714, how many years will it take you to inspect one of these plants? My math, it's about 40 to 50 years. I'm being kind at 30 years, am I not? But yet you, as director of CDER, who is responsible for this, you just testified you have not asked for extra money for inspections. So is this acceptable, every 30 years? Dr. Woodcock. I believe that FDA needs more inspectional resources. That is what I just said in my opening statement. Mr. Stupak. Sure. We're trying to help you, but you won't tell us what you need. So how can Congress help you if you won't tell us what you need? Kyle, would you put up the first map, please, that we had today? Let me ask you this, Doctor. There's no doubt that these plants should have been inspected in China, right, Changzhou SPL? Dr. Woodcock. That was an error on our part. Mr. Stupak. Right. I realize that. How about the consolidators, should they be inspected by the FDA? Dr. Woodcock. I will defer that to Deb Autor. Mr. Stupak. Ms. Autor, should consolidators be inspected? Ms. Autor. In the normal course, consolidators would not be our first priority for inspection, but, ideally, yes, we would look at them as well. Mr. Stupak. OK. How about brokers, should they be inspected, Ms. Autor? Ms. Autor. I think that the best way to ensure the integrity of the products coming through from the workshops to the brokers to consolidators and, ultimately, the API manufacturer and finished dosage manufacturers, have everybody in that supply chain responsible for the quality and integrity of the products. Mr. Stupak. The workshops should also be inspected, right? Ms. Autor. If we have the resources, I think that we would be happy to go to the workshops. Mr. Stupak. What is the amount of resources you need to do that? Ms. Autor. Excuse me? Mr. Stupak. What is the amount of resources you need to do that? The Commissioner didn't know last week. The head of CDER doesn't know. Maybe, Ms. Autor, you would know. Does anyone know what the resources the FDA needs to do their job? Dr. Woodcock. If you're asking a very specific question about what do the resources need to, what, inspect every plant in China or every foreign facility every other year? Mr. Stupak. You're the expert. I'm asking you. What do we need? Dr. Woodcock. To answer your factual question, I believe that to do a--there have been multiple estimates. Jane Haney gave you an estimate in writing in 2000 that said it would be $23 million. I think that was a very low estimate that isn't correct. And, of course, the number of facilities have at least doubled. Mr. Stupak. Do you have a number or not? Dr. Woodcock. Yes. Mr. Stupak. Please give it to me. Dr. Woodcock. I believe the number to inspect every facility around the world outside the U.S. every other year would take about $225 million. Mr. Stupak. And do you realize the Dingell legislation, if passed today, would bring in about $300 million a year for drug inspections? Are you aware of that? Dr. Woodcock. I didn't do the math. Mr. Stupak. Are you aware it would also bring in $600 million a year for food safety? We've had seven hearings on that this year. So why aren't you endorsing the Dingell legislation? Dr. Woodcock. I am giving you my technical---- Mr. Stupak. Sure. Let me ask you this question. I know you can't give an opinion on Dingell legislation. We've been waiting for it many years. Dr. Woodcock. May I tell you one more thing about this? Mr. Stupak. Sure. Dr. Woodcock. All right. It would be important, I think, to have the same level of coverage of a domestic inspection as foreign. Mr. Stupak. Absolutely. We've been saying that for years. Dr. Woodcock. It would also require an increase of about $100 million over and above the figure I just gave you. Now, I believe that---- Mr. Stupak. Very good. And the FDA asked where this 2009-- your total budget for inspections is $9 million, and next year you go to a whopping $11 million. Not enough to make a drop in the bucket. How many firms ship active pharmaceutical ingredients, APIs, from overseas to the United States? How many firms are there? Dr. Woodcock. As you know, that's another thing that we need improvement on. Mr. Stupak. Right. You really don't know, do you? It's somewhere between 3,000 and 7,000. Isn't that correct? Dr. Woodcock. It is most likely between 3,000 and 7,000, most likely on the lower end. Mr. Stupak. That's really close. Let me ask you this. What's the number of heparin producers in the world? Do you know that? Can you narrow that one down for us? Dr. Woodcock. The number of heparin producers? Mr. Stupak. Of the active pharmaceutical ingredients that ship it to the United States. How many plants worldwide are making heparin API for shipment to the United States? Dr. Woodcock. Do you know the answer to that? Ms. Autor. I don't know. I do believe that our total foreign inventory is about 3,300. That's the best number for foreign manufacturing. About 80 percent of them are---- Mr. Stupak. How about on heparin here? How many do you have on heparin? Ms. Autor. We wouldn't have any reason to count worldwide heparin suppliers. We would only be focused on what we're shipping to the United States. Mr. Stupak. After the heparin outbreak, you wouldn't go back and check to see how many plants are producing heparin for the United States? Ms. Autor. For the United States, yes. Mr. Stupak. Yes, active pharmaceutical ingredients for the United States. How many are there? Ms. Autor. I would have to check the exact number. But with heparin, what we have done is put in place a sampling assignment so that we are confident of the quality of all the heparin brought into the United States. Mr. Stupak. Sure. But how many heparin manufacturers are there in China? Can you answer that one? Ms. Autor. I don't have that number. But, again, the point is that we have checked on the quality of the heparin coming into the United States. Mr. Stupak. But how do you know that if you don't know where it's coming from? How can you inspect a substance if you don't know where it's coming from? You have 300-and-some ports that allow product in this country. You have 94 inspectors, at most, in the FDA. Your chances of getting caught are one in three. And you don't even know where it's coming from. Ms. Autor. What we have in place is a sampling assignment at the border, which stops all heparin coming into the country and holds it until we're satisfied. Mr. Stupak. And who makes that decision at the border? Ms. Autor. That's made by the import inspector. But, again, we have---- Mr. Stupak. And who is the import inspector? Do they work for the FDA or the Customs-Border Patrol? Ms. Autor. That decision would be made by the FDA. Mr. Stupak. And earlier testimony showed they have 30 seconds to make that decision, right? But we don't even recognize the name of the company that's sending it from China, because we don't know who it is. Because you don't know how many plants manufacture heparin active pharmaceutical ingredients in China for shipment to the United States, do you? Ms. Autor. I'm confident, sir, that all the heparin coming into the border is being stopped and checked to see whether it's being tested for the overly sulfated chondroitin sulfate. Mr. Stupak. And are you just as confident you know of every heparin producer in the world that's shipped products to the United States? Ms. Autor. I don't have that information at my fingertips, but, again---- Mr. Stupak. So how can you be confident? If you don't know who is shipping it out, can you be confident you're catching it at the border? Let me ask you this. Can you tell us what five companies have agreed to test its products, its heparin products? What are the five companies? Ms. Autor. There are actually six, but I don't have---- Mr. Stupak. OK. What are the six? Ms. Autor. I don't have their names at my fingertips now, sir. Mr. Stupak. Dr. Woodcock, do you know the six of them that have agreed to test its products? Dr. Woodcock. The heparin sodium for injection, the product that is used in dialysis---- Mr. Stupak. OK. Right. Do you know the six companies? Dr. Woodcock. We know who they are. I don't have their names in front of me. Mr. Stupak. All right. Now, look, you're the experts. You don't know, so how is the inspector at the border going to know? You're the experts. You've done an investigation. If you can't tell me the six companies, how is the port inspector at the border, who has 30 seconds to make up their mind, going to know the names of them? Ms. Autor. Because they do know. They are told to consult with our center import people who are responsible for those---- Mr. Stupak. Well, let me ask you this. Can you tell us the top 12 Chinese companies that have produced contaminated API, heparin API? Can you tell us those companies? Ms. Autor. I do know those 12 companies. However, I do not know whether that is public information. I would be happy to provide that to the committee if the committee makes a request for that. Mr. Stupak. Do you think the American people don't have a right to know which people produced contaminated heparin for shipment to the United States? Ms. Autor. I do not know whether I have the authority to release that information. But, again, I would be happy to release it if the committee requests it. Mr. Stupak. I just requested it. So would you get it to us, so we can put it out publicly, so at least the American people know? All right. Let me ask you this. My time is just about up. Ms. Autor, at last week's hearing on the FDA foreign inspection program, the Commissioner suggested that the FDA's inspection would not have detected the tainted heparin. Of course, we don't know that, because we never inspected it. Nevertheless, FDA's team found that the way this plant was operating essentially made the products unsafe for U.S. market. Doesn't this suggest that, had the inspection been scheduled at the facility as part of its normal pre-approval process, the FDA may have found that this plant was unable to operate safely; thus, it would have required adjustments to the facility's operations, which may have impacted the outcome of today's hearing? Ms. Autor. I do not believe we have any reason to think that. As you know, Mr. Chairman, the inspection that was not done was in 2004. The contamination that we have seen with heparin did not occur until at least 2006, 2007. I think, in all likelihood, what would have happened is we would have inspected, we would have found GMP problems, they would have corrected them, and Changzhou SPL would have gone on to become the heparin supplier for Baxter, as they did. We do know that we have companies that we did inspect that were heparin suppliers to China that were in compliance but, nonetheless, became purveyors of contaminated heparin. So complying with GMP---- Mr. Stupak. But if you would've had your 2.7-year inspection like you do in this country, you probably would have caught it then, right? Ms. Autor. I don't have any reason to think that. Again, we did inspect firms---- Mr. Stupak. How about do you have an opinion on this one? If you don't inspect a plant until every 30 years or 40 years, what's the deterrent effect, then, of inspecting plants? Ms. Autor. Sir, I would be happy to go and inspect a lot more of these firms a lot more often if I had the resources. Mr. Stupak. Right, but you guys can't tell me the resources you need either. So let me go back to ask that question. If you don't inspect the plant 30 to 40 years, it encourages, as opposed to discourage, adulteration of drugs as we have here in heparin, right? Ms. Autor. We absolutely need in place a better system for inspections, as well as a better system of corporate responsibility throughout the supply chain. There's no question about that. Mr. Stupak. All right. Just one more. I'm very disappointed, Dr. Woodcock and others, that this is the second heparin hearing this week. I would think that, by now, you would anticipate our questions and have some answers for us, like inspections, number of plants that produce it, number of heparins coming into the United States from different plants from overseas. I hope we can do a better job at being prepared. With that, I'll turn to Mr. Shimkus. Mr. Shimkus. Thank you, Mr. Chairman. As you all know, and I think it may be important to take this back to the Administrator, that there's going to be a bill that's going to be presented that's going to move. You've identified, even in your opening statement, that there are IT issues, product and site manufacturing and testing problems. You've identified resource constraints. I think my colleagues on the other side are trying to handle these in a manner that we ought to take seriously. And the Agency ought to be prepared to engage with the Committee so that we get to a point where--and so, I'd just ask--these committees are interested. This is the Oversight and Investigations. We're not the authorization committee of substance. However, the folks and the investigators on both sides are pretty well deep into the weeds of this. And I would hope that the committees would turn to their expertise on the analysis on both sides as to how we can start addressing this. So I want to encourage you, which I will do to the administration, to start engaging to help us figure out how best to answer these questions. Because we can do so in a bipartisan manner. If you don't come to the table, then you may not have a chance to really impact it in a direction that you think is going to be helpful. So I'd just throw that out. I do want to follow the Chairman's line of comments, just on the porcine components that are used in so-called low- molecular-weight heparin and pancreatic supplement, certain insulins, poractant-alpha, for treatment of respiratory diseases, syndromes and other neonates and stuff that I don't even have any idea what I'm talking about, but they sound very important and probably as important as the heparin use. Because of this specific experience--and we're talking about all these drugs that are coming out of pigs and all these ingredients that help us do all these great advances--what has the FDA done to check that these and other porcine-sourced API products regulated by you all are not subject to adulteration? Dr. Woodcock. That's a good question. For low-molecular- weight heparin, it is sourced from heparin, regular heparin, much of which is sourced from China, the API. The low- molecular-weight heparin supplies in the United States have been tested and are not contaminated. They've been tested using the FDA test. Around the world, there is significant contamination of the low-molecular-weight heparin supply, and we are in contact with regulatory authorities around the world to deal with this situation. For pancreatic enzymes, we are actively looking at that. We have been looking at that for some time. For the surfactant product, I think the newer drugs have much more sophisticated control tests and identity tests on them, and so they are subject to a lot more testing before they're released than an older drug like heparin. And so I think we can be confident that that product is tested adequately. Mr. Shimkus. And when you use the terminology ``looking at,'' what do you mean? I mean, do you mean testing? Do you mean looking at early in the process, through the process, a final lab test? What do you mean by ``looking at''? Dr. Woodcock. We are looking at the capacity--we have been doing this, actually, for a while for the pancreatic enzymes, and we are looking at the capacity to process, to screen out contaminants. Those processes and those products have tests of potency that are somewhat more specific than the heparin test was. So we are scientifically evaluating it for its robustness and its vulnerability to something like this. Mr. Shimkus. I hate to ask this question, but in ``looking at,'' did you increase your inspections of plants overseas? Is that part of the ``looking at''? Dr. Woodcock. We have been focusing our inspectional resources right now on the heparin issue. We certainly have been putting this into our algorithm of something we will need to get to. Mr. Shimkus. Have we increased the inspection of overseas facilities that produce heparin? Is that part of the ``looking at''? Dr. Woodcock. Oh, yes, of heparin, yes. Mr. Shimkus. What about other porcine--what's the terminology, porcine supplements? Dr. Woodcock. Source product. Mr. Shimkus. Source product. Dr. Woodcock. Certainly, we will do that. Mr. Shimkus. We will, but we have not? Dr. Woodcock. We are focusing on heparin, but we have had the same thought that you have had. Mr. Shimkus. This another issue that we are trying to get our hands around, as far as Dr. Burgess followed up on the questions, that this, somewhere along the chain, intentional dilution or hiding of, not a pure supplement or a pure additive or whatever the right, the chemical term is for this. Part of the debate has been that the number of pigs available, I mean, or the lack thereof, caused the price to go up, and so someone may have used a dilution aspect to make sure that they could still meet or even sell what--and then, again, there's where the sinister aspect of this--in a way in which it hid from the test. Again, going back to resources--and I think the point of many of us will be we want to--you almost have to, in these countries in which we're importing drugs from, we almost have more certainty along the whole chain of events. Was there anything that raised a flag to the FDA about the supply of pigs, that that may trigger nefarious activities in the supply chain? Dr. Woodcock. Deb, would you like to take that? Ms. Autor. Sure. There's certainly more that FDA could do here in terms of having tools and resources to address this: a dedicated foreign inspectorate, inspecting importers, administrative destruction authority. There's a lot of things we could do to be stronger here. But, frankly, I do not believe that it would be reasonable to expect the agency to be monitoring the price of heparin and to see that red flag. That responsibility should fall on manufacturers. They have the best ability, the best information, the best incentives to ensure the integrity of the quality of their products, and they should be paying attention to that. And when the price starts to go up, they should think either that something is wrong with the supply chain or that there is an opportunity for something nefarious to happen, given that price shift. But again, it has to be the manufacturers. FDA will not be able to keep up with that for every product that's in the marketplace. Mr. Shimkus. Let me just follow up with this question. As we know, industry, they have an interest in making sure that they don't sell bad products, whether that's--and I think there are some folks that will say they're all going to go after the mighty buck and they are not going to care. And there's some of us that believe that, no, they do care, because their brand name is important, their product is important, the litigiousness of the society and the lawsuits, especially in this country, will make them pay dearly for failure. What we're going to have to address--and this isn't a legislative hearing that's going to happen on the language of the bill. But what we're going to have to address is, how do we marry--there's going to be talk about certification of inspectors or whether they're FDA inspectors or do you all certify them, and then there's an inspection of the inspectors and all sorts of things. But again, you're coming in saying that we need resources, we need IT, we need a better inspection regime. And I, again, want to throw that back to you all to--and I see the Chairman of the full committee is here. And, you know, I can guarantee you that you would rather be in the room helping than on the receiving end. And that's what I'm going to still encourage you to do. Let me finish by--the Chinese have said that contaminated heparin from China did not cause the adverse reactions in the United States. You have said that the oversulfated chondroitin sulfate found in the contaminated heparin could have been the cause. What should we make of this disagreement, and who is right? Dr. Woodcock. The Chinese authorities had tested one lot of material that they found to be negative for the contaminant. And that lot was implicated in adverse events. We have tested that lot in three labs and have found a contaminant, and we also agree that the lot is implicated. But that was the basis of the Chinese scientists' reasoning that the contaminant could not have been associated with the adverse reactions. Mr. Shimkus. My last question--and I appreciate the extension of the time--is, what does this attitude suggest about China's appreciation of the seriousness of the adulteration in the first place? Dr. Woodcock. Well, I think this was a disagreement over analytical results. But we do stress, we agree, that products should not have been contaminated under any circumstances, regardless of whether there were any adverse events associated with it or not. Mr. Shimkus. And I think we can end it up by saying--we use it all over the place on the Hill--we need to trust but verify. And the question is, how much are we verifying? And that's part of the debate. Mr. Stupak. I thank the gentleman for his questions. Mr. Dingell, any questions? Mr. Dingell. Mr. Chairman, I thank you for your courtesy. These questions for Ms. Autor and for Dr. Woodcock, they will require only a yes or a no. And we will begin in each instance with Ms. Autor. Is it your view that FDA should inspect foreign drug facilities more frequently than it does now, yes or no? Ms. Autor. Yes. Mr. Dingell. Dr. Woodcock? Dr. Woodcock. Yes. Mr. Dingell. Given that FDA only inspects foreign drug facilities on average once every 13 years, in your opinion, does FDA need a substantial increase in resources to inspect foreign drug manufacturers at a frequency similar to that which it investigates or reviews the behavior of domestic manufacturers? Ms. Autor? Ms. Autor. Yes, although the frequency should be risk- based. Mr. Dingell. Dr. Woodcock? Dr. Woodcock. Yes. Mr. Dingell. Is it your view that FDA should have the ability to deny entry to imports if the facilities in which they were produced refuse, delay, or impede an inspection? Ms. Autor. Yes. Dr. Woodcock. Definitely. Mr. Dingell. Is it your view that all drug facilities should be subject to an initial inspection before they can begin shipping products or ingredients? Ms. Autor. Yes. Mr. Dingell. Yes or no? Dr. Woodcock. Yes. Mr. Dingell. Now, in your opinion, would requiring drug facilities to register and pay a fee on an annual basis to help clean up FDA's databases and to provide for a more accurate accounting of firms providing drugs to American manufacturers-- Ms. Autor? Ms. Autor. In my opinion, yes, that would be a good step. Mr. Dingell. Dr. Woodcock? Dr. Woodcock. Yes. Mr. Dingell. Is it your view that having a unique identifier attached to each drug facility and each importer would allow FDA to move more quickly to track down manufacturers in the event of a safety incident? Ms. Autor. Absolutely. Dr. Woodcock. Crucial. Mr. Dingell. In your opinion, would it be useful for FDA to be able to explicitly require manufacturers to know and to verify the safety of their supply chain; in other words, to verify that the ingredients that make up the drugs they sell to the American people have been manufactured, processed, shipped, and warehoused in such a way that the quality of the product has not been compromised? Ms. Autor. Yes. Dr. Woodcock. Yes. Mr. Dingell. Now, Dr. Woodcock, there are some questions-- oh, by the way, I wanted to say something to Ms. Brown. Ms. Brown, your good work is known to the Committee, and I want to commend you for it. Thank you. Ms. Brown. Thank you. Mr. Dingell. We need folks like you in Government service. Thank you. Ms. Woodcock, in your testimony you note that Changzhou SPL has been added to import alert 6640. This is a general import involving a number of foreign firms that FDA has found to be so out of compliance that their products cannot enter until FDA has reinspected and found them to be radically improved. Is that correct? Dr. Woodcock. Me? Mr. Dingell. That's to Dr. Woodcock, please. Dr. Woodcock. That's my understanding, yes. Mr. Dingell. But crude heparin, the heparin active pharmaceutical ingredient or finished heparin products are not under a general import alert like, say, the five species of fish from China that went on import alert last summer. Is that correct? Dr. Woodcock. That's my understanding. My understanding is there's a different legal standard, as was alluded to earlier, for an import alert. Mr. Dingell. Now, in your testimony you state that FDA has identified a total of 12 Chinese sources of contaminated heparin going to 11 different countries. Is that correct? Dr. Woodcock. Yes. Mr. Dingell. Now, I'm going to try to understand this. Some of the importers you are allowing, then, in Food and Drug to bring products from Chinese sources are being permitted to do so because they voluntarily agreed to apply the tests that you at Food and Drug have developed for counterfeits. Is that correct? Dr. Woodcock. That's correct. Mr. Dingell. But you have not identified publicly the importers or their Chinese suppliers. Is that correct? Dr. Woodcock. That's correct. Some of that we received under confidentiality agreements with other countries. Mr. Dingell. All right. I'm going to ask that you submit those names to the Committee for the purposes of the record. Dr. Woodcock. Certainly. Mr. Dingell. Now, can you tell me--you said that you've received these under confidentiality agreements? Is that the reason? Dr. Woodcock. Yes. Mr. Dingell. What is the authority for you receiving that kind of information under confidentiality agreements? Why is it that you can't just receive the information? Why are you constrained in what you may do with it or the circumstances under which you can receive it? Dr. Woodcock. My understanding is that we have signed these agreements with other countries in order that they would give us the information and that we would be able to give them the information that---- Mr. Dingell. Have you no other way of getting this information? Dr. Woodcock. That has been explored extensively because we really would like to have free interchange with international regulators. However, we are constrained by our own laws that restrict how much information we can release publicly. And for us to give---- Mr. Dingell. Let me try to simplify this, because that clock is very cruel. Are you telling me you have no other way of compelling the production of this information? Dr. Woodcock. Some of it involves foreign firms that have never shipped into the United States. Mr. Dingell. I know. Have you no other way of getting this information? I want you to have the information. Dr. Woodcock. Thank you. Mr. Dingell. Don't you think you need the information? Dr. Woodcock. It's what other countries give us voluntarily right now, because we have these agreements. Mr. Dingell. Dear friend, I'm trying to get some answers to these questions, and you must cooperate with me. Are you barred--why are you not able to just say, ``We want this information''? Dr. Woodcock. Actually, my understanding is the concern is, if we release--we have lots of confidentiality laws in the United States that prevent us from releasing information we have publicly, right? And Congress passed those laws. If---- Mr. Dingell. So you need then to have this law changed so that you can just go in and say, ``We want the information.'' is that right? Dr. Woodcock. If we could freely give information to other countries, they would be more willing to freely give it to us. Mr. Dingell. We're going to see that you get the information. Now, is it correct that there are other importers that have not agreed to voluntarily test their Chinese imports of heparin? In other words, you've got some companies that have not agreed to voluntarily test the imports of Chinese heparin. Ms. Autor. The major suppliers of heparin have all agreed to test that. Any other heparin coming to the border is stopped and tested by us. Mr. Dingell. So you have some that have not? Dr. Woodcock. May I clarify that, please? Mr. Dingell. I'm sorry? Well, yes. Just answer the question, yes, please. Dr. Woodcock. I do not want to make patients in the United States feel afraid, all right? The heparin for injection, as I was trying to say earlier, that is the kind of heparin used in dialysis labs and so forth, that heparin is all being tested, and we know who the manufacturers are, and we know who the suppliers are. There are many other types of sources, though, that go---- Mr. Dingell. Right. Let's try and make this very simple. Yes or no, you have companies that have not agreed to voluntarily to test Chinese imports? Yes or no? Ms. Autor. I don't know if they have refused or if we have not had that discussion. But, again, the contaminant is detectible, and all heparin coming in is being tested. Mr. Dingell. But they have not done so. Is that right? Ms. Autor. I'm sorry? Mr. Dingell. But they have not done so. Is that right? Ms. Autor. At this point, there are suppliers with whom we don't have that agreement. Compounding, for example. Mr. Dingell. All right. So you have some that have not. You don't know why? Ms. Autor. I am not engaged in those details, sir, no. Mr. Dingell. All right. Will you procure the information and tell us why? Ms. Autor. Certainly. Mr. Dingell. And I want you to submit to us the names of the companies of which you know that have not agreed to voluntarily test their Chinese imports. Please submit that for the record. How many of them are there, please? Do you have any idea? Ms. Autor. Again, I do not manage those details on a day- to-day basis, sir. Mr. Dingell. All right. So the situation, then, is that these importers are being permitted to continue importing even though they've not signed the agreements that the others have done to require voluntary testing. Is that right? Ms. Autor. All of their heparin is being stopped and tested. And, again, the contaminated product has been recalled, and the firms that we know that have been affected, that have been associated with contaminated heparin in the U.S., have stopped shipping that contaminated heparin. Mr. Dingell. OK. So you have stopped them, and you are inspecting them. And if I understand it correctly, FDA entry reviewers now have an opportunity to investigate or review these substances as they come in for a total of 30 seconds. Is that right? Ms. Autor. No, sir. I think that---- Mr. Dingell. That's the average that they have. Ms. Autor. That is correct. But, for this situation, I am certain that they are stopping it and fully considering it and consulting with others in FDA to make sure that there is not contaminated heparin entering the U.S. Mr. Dingell. Now, that's a wonderful statement, but how are you certain? Ms. Autor. Because I believe we have a system in place that does that. Mr. Dingell. How can you assure me under oath that you are able to see to it that these are properly investigated? Now, you're under oath. How can you give me that assurance? Ms. Autor. Yes, sir. We have a sampling assignment in place which gives direction to the people in the field that they are to stop the heparin and ensure that it is being tested before it enters commerce. Mr. Dingell. So you are telling me, then, that your instructions to the field are just as effective as an import alert? Ms. Autor. They should be, yes, sir. Mr. Dingell. Can you make that statement again under oath? Ms. Autor. Yes, sir. Mr. Dingell. Boy, oh boy, oh boy, you have great confidence in your oath. Now, you have heard, then, of dangerous contaminated product that has come in from many sources in China. You have not gotten assurances from many of the importers that they will test the raw materials or the heparin that's coming in. And FDA has placed only one firm on import alert. Please tell me how that is protecting the American public. Ms. Autor. Again, sir, I believe that there is adequate protection with respect to heparin coming into the United States. And I think the question really is, how do we prevent this from happening next time? And we really need to have a new system in place of corporate accountability and better tools and resources for FDA. We need the help of Congress to stop this from happening again. Mr. Dingell. We are trying to find out, first of all, whether you are protecting the American public. It's pretty clear, on the basis just of the questions, that you're not. Now, I'm a friend of Food and Drug. I want you to have the authority to do what you have to do. I want you to have the pay and the personnel and the financial resources that it takes. I want to see to it that you have the capability in terms of procuring the cooperation that you need from importers and others. I want to be able to see to it that you could assure that manufacturers in China meet the same requirements for good manufacturing practices that Food and Drug imposes by statute on American manufacturers. You cannot tell me that you are able to do that in China. You don't have enough people. You don't investigate them often enough. You haven't been able to stop the importers from bringing this in without the agreements that they're going to provide the necessary inspections in China. American manufacturers have to engage in manufacturing using, quote, ``good manufacturing practices,'' closed quote; Chinese don't. How does this situation protect the American public? Dr. Woodcock. For heparin, we're stopping it at the border---- Mr. Dingell. Not all of it. Dr. Woodcock [continuing]. Unless we have an agreement with the---- Mr. Dingell. You see, you've told me enough. Eighty-one people have been killed; hundreds have been made sick. It is not only in this country that people have been made sick or killed; it is in other countries around the world. You are imposing constraints only, in a real sense, on a few of them. And that's only by voluntary agreement with the manufacturer and not by actually foreclosing these goods from being imported until you have an agreement which ensures that the American importer will properly inspect the plant which manufactures this stuff, which has, as you might well know, killed a fair number of Americans. Dr. Woodcock. We must also remember that this is an essential drug, and we can't simply stop the heparin supply until we have put every single thing in place. We have to balance between access to heparin and our care in---- Mr. Dingell. In other words, you want to balance between killing people and not killing people, as opposed to a balance between seeing to it that the laws are properly enforced and people can't be killed. Isn't that right? Why can you not mandate these inspections in China in order to protect the American public? Do you have a statutory bar, a financial bar? What do you have that causes you all this pain and trouble? Ms. Autor. If I understand the question correctly, sir, you're asking why we don't mandate manufacturers to inspect their suppliers. That is not currently the system we have in place. That is a system that I think we should move to, where everybody in the supply chain is responsible for ensuring the integrity and the quality of the components coming to them. That is not historically the system we have had. The best way to ensure that we get that system in quickly is to change the laws. Mr. Dingell. Why can't you just say to these importers, ``You don't test, you don't bring it in''? Is there a bar to you doing that? Dr. Woodcock. Well, testing, that is essentially what we are doing. We're saying unless---- Mr. Dingell. But you're not doing it. You've already told me that you're not compelling them all to test. Some of them have not agreed to do so, and so some of them are not doing so. Mr. Chairman, I find Food and Drug to be the most trusting institution in the world. You folks are more trusting than a kindergarten class. Ms. Autor. I do not believe, sir, that I would be able to put all heparin coming into the United States on import alert. I do not believe that that would be---- Mr. Dingell. I would be embarrassed, Mr. Chairman, to come up here and testify this way. I yield back the balance of my time. Mr. Stupak. I thank the gentleman. Mr. Burgess, for questions, please. Mr. Burgess. Thank you, Mr. Chairman. A lot of questions are unanswered. Let me just be sure that I understand a couple of things now. To voluntarily test all Chinese imports, you said that's not occurring at the present time, in response to one of the Chairman's questions. But all heparin coming into this country is being tested. Those companies are not doing voluntary testing. You referenced some of the compounding practices are perhaps not under voluntary testing. But all heparin coming into this country is currently being tested. Is that correct? Ms. Autor. Yes, I believe that to be true. Mr. Burgess. Why don't we just stop heparin active ingredient from coming in from other countries? Ms. Autor. There are two reasons. One, I think we need to be concerned about potentially causing a shortage of a medically necessary drug. Two---- Mr. Burgess. Now, would that be important for this committee to consider? Ms. Autor. Absolutely. And, two, under our current legal scheme, I do not believe we have the authority to stop all heparin that's coming in at the border. What we should have is a system where it's incumbent upon the manufacturers to show to us that their products meet FDA requirements, that they have approval, that they have the quality and the integrity and the safety necessary to come in. That's not currently the system we have in place, sir. Mr. Burgess. Well, it's pretty difficult, at least as I try to put this all together, with as many foreign manufacturers as we have far-flung across the globe and the people that you have to do the inspections. But we certainly can drill down on the points of entry into this country. And that, to me, really seems to be where the rubber meets the road on this. Yes, we should have manufacturers that do their due diligence in the field, as we heard, I think, you testify to just a few moments ago. Now, I actually heard Mr. Nelson say that--what did he tell us--that corporate due diligence cannot be relied upon. So there's a little disconnect between what you said and what he said. But giving you the benefit of the doubt, at this point, manufacturers cannot assume that the FDA is going to do their quality control for them. Is that correct? Ms. Autor. That is correct. Mr. Burgess. Manufacturers have an obligation to do that themselves. Is that not correct? Ms. Autor. They do. And we should be holding them accountable. And I think you raise a very important point. Right now, at the border, our authorities are 70 years old. We have to show that there appears to be something wrong with a product in order to keep it out. With drug import lines growing from 142,000 in 2002, of drugs, to 312,000 in 2007, to expect FDA at every one of those 312,000 circumstances, with probably 30 seconds to look, to be able to show that there's something wrong with the drug is not realistic. We need a system where it's incumbent upon the manufacturers to show there's something right about their drug before it comes into this country. Mr. Burgess. But even with that documentation and that verification, still the FDA is going to have to do the testing at the point of entry. And you have to have the ability to stop something dead in its tracks from coming into this country. Do you have that now? Ms. Autor. In certain circumstances, we do. It's not about testing. It's about making sure that those requirements are met. And we do need to have that authority. We should be able to hold these companies accountable. We can do some of that, but we could do more with better tools and resources. Mr. Burgess. But with testing, with heparin, with recognizing what was happening--and then we heard testimony over the previous panel that tests would cost 1.7 cents per dose. So that seems to me something we should just be doing now with heparin, because we know there are people out there that are dishonest, we know they have a stealthy way to adulterate the product, and we know that people can die as a consequence because of the testimony you heard from our previous panel and because of the New England Journal of Medicine study that just recently came up and was part of the informational packet that was handed out. We know all these things to be true. So heparin ought to really be subject to that additional, whatever it is, the testing, the microcapillary electrophoresis or whatever was done to document the safety of the product. That should just be a given now. Dr. Woodcock. Yes. We got together with the international pharmacopeias, who are the international bodies that set testing standards for drugs that move in commerce. Mr. Burgess. These are the folks who had the test that didn't work before? Dr. Woodcock. Yes. The USP and the European pharmacopeia. And so they have agreed to, on an expedited basis, put in new testing based on the FDA-developed test that would then be required to screen the products worldwide. Mr. Burgess. Now, let me ask another question that Mr. Shimkus brought up. Surfactant, does that mean--is the active ingredient surfactant being imported from overseas? I'm not sure I heard that correctly. Does anyone know the answer to that? Dr. Woodcock. I don't know where it's imported from. I once knew, but I cannot remember the answer. We can get back to you with that. Mr. Burgess. Well, I guess the question I've got in my mind is, we have this new test for heparin, and we're going to be pretty certain that our heparin supplies are now safe. But what's next? Who is thinking like a criminal and trying to develop the next model--the melamine, the ethylene glycol, now the hypersulfated chondroitin sulfate? Is there any computer modeling that anyone is looking at to try to discern the next level of thuggery that's going to come across our borders from the People's Republic of China, not to mention any particular country? Dr. Woodcock. That's a level of sophistication and information management that we don't have right now. We need to get a grip on the basic inventory of firms and their unique identifiers. And then that's another thing. What you're alluding to, that sort of general intelligence about what's going on there with the drug supply and the sources is something we would like to also develop. Mr. Burgess. I mean, I don't know how this happened, but you've got a patent there in China from 2005, and now 2 years later we're looking at this problem. When someone put all of this together, some clever scientific mind who also happened to be not just devious but deadly, I just think there's got to be some way we've got to be able to try to anticipate these things before they happen. Because, otherwise, you're looking at an adverse event reporting system that we heard from the dialysis nurse is not-- it's hard to aggregate that data and get it in a place where it's going to be meaningful. And we just heard testimony from the last panel that a month goes by and we lose two individuals from one family. I mean, that's a pretty harsh reality to have to accept. So is there a way to be more proactive about this and try to figure out where the next threat is coming from? Ms. Autor. Sir, I agree with you, it's a tragic situation. And I believe, with respect to the systems and the threat analysis that you're talking about, I would love to get there. I think we're a long away from there. I think there are a lot of things we can put in place in the interim which would go a long way toward trying to prevent this kind of problem. I think having pedigree for products, having good distribution in importer practices, having testing for impurities, having modern manufacturing signs--all of those things are things which will help to ensure the quality and integrity of the drug products. It may never be possible to anticipate all kinds of thuggery, but we can put a system in place that's looking for it, where the manufacturers are looking for it, the suppliers are looking for it, the importers, the brokers are all looking for it, and FDA is holding them accountable and also looking for it. And that's where we need to go. Mr. Burgess. Well, one of our jobs here in Congress, of course, is to defend the borders. And this, to me, is fundamental border defense. And it is one of the things that we ought to be paying for, one of the things that Congress ought to fund. We've heard a lot of discussion about the President's budget. What is the dollar amount that was given to the FDA in the recently passed House budget? I realize the House and Senate have not come to a unified budget resolution. The President's number is well-publicized and well-criticized. What is the House number? Dr. Woodcock. I don't know the answer to that. I'm sorry. You mean particularly for pharmaceuticals? Mr. Burgess. Well, for the FDA overall. We were talking about the budget increases under the President's budget didn't do nearly enough. And we've heard other figures bandied about today. What was the figure that we put to the FDA as a result of our budget discussions this year? Dr. Woodcock. I don't know the answer. Mr. Burgess. That's a problem. I don't know the answer either. And I've had several good minds working on this for a couple of days, and they can't find the answer either. So, apparently, in the most transparent Congress in American history, we don't know the amount of money that we budgeted last month for the Food and Drug Administration. And that's a problem in my mind, that we're willing to criticize the work that you do, we're willing to criticize the White House for coming up with a budget, but the reality is we can't even tell from our own budget what we're going to give you next year. That's assuming we even get to the point where we do Labor- HHS appropriations, which, quite frankly, I'm pessimistic that we'll see that happen. Let me just ask one last question. We're going to be involved and embroiled in the whole debate over biosimilars here in just a very short period of time. What are the implications for the generic biologics or the biosimilar, the bioidentical drugs, what are the implications for that debate from what we've learned about the heparin issue? Dr. Woodcock. I'm fairly expert in this area. I can tell you that the production of the recombinant products, which most of the biosimilars are, or are being contemplated to be, is very tightly controlled. And, ordinarily, API---- Mr. Burgess. But not in China. Dr. Woodcock. In China, as well. China has very little recombinant fermentation that they're engaging in now, but I'm sure they're interested in getting into that. Mr. Burgess. They certainly are. And if the money is there, I'll bet they follow the money. Now, how are we going to protect ourselves if this same larcenous individual, who has yet to be identified, who slipped this stealth product into the heparin, how are we going to protect ourselves with the bioidenticals that we're now charging down the road to approve? Dr. Woodcock. I think what we have to say is that we need a safety net that includes more frequent inspections, protections at the border, so that we know what the inventory is and we don't let things in unless they are affirmatively okay. We need the best possible science. And we need the IT systems to support all that and track these. And those tools for FDA then could be used to hold the manufacturers accountable. That's a principle of quality management, is that the supply chain in every step of the manufacturing maintains that quality. We can do that, FDA can do that, if we have the tools. Mr. Burgess. But we didn't do it with respect to the active pharmaceutical ingredient for heparin. Now, let me just ask you this one last question. Are we ever going to get to the point where we have a synthetic heparin and we don't have to rely on animal sources? Dr. Woodcock. Yes, there certainly are alternatives on the market now to heparin for some indications. And there are certainly individuals or firms that are interested in developing synthetic versions. However, of course, there's a cost differential, and there's a great interest in the country in holding down health- care costs and keeping affordable drugs on the market. And these two things are a tension. Mr. Burgess. Thank you. I'll yield back, Mr. Chairman. Mr. Burgess. Thank you. I yield back, Mr. Chairman. Mr. Stupak. I thank the gentleman. Ms. Schakowsky, for questions, please. Ms. Schakowsky. Thank you, Mr. Chairman. Ms. Brown, I would like to ask you a few questions. From February 20th of this year to February 26th, you were the investigator on an FDA team who inspected the Chinese plant, actually went there, known as Changzhou. After all this time, I'm still wondering how to pronounce it. Is it Changzhou? Changzhou SPL, which supplied the purported tainted heparin. Is that correct? Ms. Brown. Yes. Ms. Schakowsky. And your inspection of Changzhou SPL revealed significant deviations from U.S. current good manufacturing practices. Isn't that correct? Ms. Brown. Yes. Ms. Schakowsky. And I would like to ask you some questions about this inspection and your findings. First, isn't it true that you found that Changzhou SPL's processing steps provided no assurance that they were capable of removing impurities? Ms. Brown. Yes. Ms. Schakowsky. And isn't it also true that you found that Changzhou SPL failed to have adequate systems for evaluating both the crude heparin and the suppliers of crude heparin to ensure that the product was acceptable for use? Ms. Brown. Yes. Ms. Schakowsky. And, in fact, didn't you find that the Changzhou SPL received crude heparin material from an unacceptable workshop that was used to manufacture heparin, manufacture heparin API, and that this API was imported into the United States? Ms. Brown. Yes. Ms. Schakowsky. And you also found that Changzhou SPL failed to ensure raw materials were of an acceptable identity, quality, and purity before use. Isn't that correct? Ms. Brown. Yes. Ms. Schakowsky. Now, can you tell us why understanding the origin, quality and purity of these materials are essential for meeting good manufacturing practices, particularly when you're making a biologic such as heparin? Ms. Brown. In particular for heparin, the certificate of analysis that came with the crude material into Changzhou SPL was the only source identifying it as crude heparin from a porcine source. Ms. Schakowsky. From a---- Ms. Brown. From pigs. Ms. Schakowsky. I see. And why is that important, the fact that that was the only document? Ms. Brown. Because Changzhou SPL actually had just begun PCR testing, which verified the pig origin of the crude heparin in June or July of 2007. So it was a relatively new test that they were doing. Prior to that, they hadn't done it at all in China. Ms. Schakowsky. I see. Didn't you find that the test methods performed by Changzhou SPL had not been verified to ensure suitability under actual conditions of use? Is that what you're saying, that it was unverified? Ms. Brown. Yes, unverified. The tests that they ran were USP compendial methods, and we ask firms to verify that the methods are suitable for use with their particular product. Ms. Schakowsky. I see. So what does it mean when the FDA says that Changzhou SPL's test method had not been verified to ensure suitability under actual conditions of use, and why is this important? Ms. Brown. Well, one of the tests that they ran was a protein test that was a turbidity test. They put a required solution in a big test tube and then added their substance to it. And if turbidity showed up, then the crude heparin did not have protein in it. And if it didn't show up, then there was protein there. Or--I think it was the opposite. If it got turbid, there was protein in it. So it's kind of a crude test. And the first steps of the purification process for heparin involves getting rid of protein. So they tried to do process validation, and they used this turbidity test in the process validation too, and they never showed that it was repeatable. Ms. Schakowsky. OK. Ms. Brown. So it may not have been suitable for use as an in-process test and even as a finished product test. Ms. Schakowsky. And you reported that? Ms. Brown. Yes. Ms. Schakowsky. You found that the equipment SPL used to manufacture heparin was unsuitable for its intended use. Isn't that correct? Ms. Brown. Yes. Ms. Schakowsky. And how was it unsuitable? And why is this important? Ms. Brown. There were three different pieces of equipment that I found unsuitable for use. The first one was these big polyethylene tanks that they dissolved heparin up in just prior to the last manufacturing step, which was a lyophilization--a freeze-drying step. And these PE tanks were scratched on the bottom, very scratched, as though somebody had been chopping stuff out of them with plastic. Like, I could--I ran my fingernail along it. It was like playing an accordion. And there was also stuff adhering to the bottom of these tanks, and they were marked---- Ms. Schakowsky. This is inside the tanks? Ms. Brown. This is on the inside of the tanks where crude heparin would be right before it became the API, right? So I scratched stuff off the inside of the tank. And this was a tank that was marked clean. A second PE tank I turned over and liquid fell out of the handles, the molded, PE, it comes from a mold, polyethylene-- and a liquid fell out of the handles into the bottom of the tank. And it was marked clean. So it wasn't a clean tank. Ms. Schakowsky. ``Stuff.'' Do we know what stuff was in there? Ms. Brown. The stuff I scratched off? No, I don't know what it was. It was a little gray-colored. It wasn't white, is all I know. Another piece of equipment was the centrifuges that they used to get rid of the waste protein. They used two of them. They had one that would be in use, and then they'd clean the sludge out of the other one while--to find out how long they should run the one that was going, like, will it last 30 minutes without getting too full? And that was a very unusual manufacturing step. It wasn't described in the procedures for how to use the centrifuges. So you had to actually be at the plant to figure out what they were doing. Normally, you see one centrifuge and you run your material through it and separate the solid from the liquid. The third piece of equipment that was a little--that was outstanding to me was their lyophilizer. They didn't have the software that would provide for the person running it, for the parameters that he put---- Ms. Schakowsky. What is that? Ms. Brown. Oh, the lyophilizer is the big freeze-dryer. So you put in these trays of liquid, and they turn into solid after days, sometimes. You freeze the liquid, and then you warm it up slowly, and they're under vacuum, so it turns into a solid material. All right. So for this lyophilizer, there were no records of the actual parameters that were punched into the screen at the front of it--but there was no screen at the front of it. There was no way to tell what temperatures they actually used to dry the material. Ms. Schakowsky. So this is clearly substandard or not up to par on what it should be? Ms. Brown. Yes. The settings weren't there. Ms. Schakowsky. They just weren't there. Why couldn't Baxter's audit have found these things, do you think? Ms. Brown. I don't know. I walked through facilities as part of my inspection. I don't know if they did that. Ms. Schakowsky. In your book, if you would--do you have it? OK. If you could hand that to her. It says 18, which is Exhibit 18 in the exhibit book. Ms. Brown. OK. Ms. Schakowsky. OK. Item F of that EIR states the following: ``there was no person with special knowledge of heparin at the firm to guide decisions made by the quality unit.'' So, Ms. Brown, I would assume that if a plant was making heparin API, it would want to have a person with, quote, ``special knowledge,'' unquote, of that product in case deviations from any manufacturing process were observed. Wouldn't you agree? Ms. Brown. I think it's--they had a quality unit there, which consisted, I believe, of four people. And they were trying to track what was going on at the firm. The person with the special knowledge I mentioned because, when I arrived, management was aware that there were Baxter recalls and that there were adverse drug events and deaths in the United States. It was middle of February. And the general manager of the firm, Mr. Wang, was the one who described the process to me and the process of how he thought that impure materials were removed from the crude heparin to make it into the heparin API. And he said he wasn't a heparin expert. And so, he was really the person who gave me my fullest extent of knowledge during the inspection. Ms. Schakowsky. So neither he nor the others had any special knowledge. He had the most knowledge, you're saying? Ms. Brown. I believe so. Yes. Ms. Schakowsky. OK. Thank you very much. I think I've run out of time. I appreciate your answers. Ms. Brown. Thank you. Mr. Stupak. All right. Just a couple of follow-up questions, if I may. Ms. Brown, I want to thank you for your thorough inspection of this Changzhou facility. I couldn't help but notice that, during the testimony of our first panel, especially the family members, you were touched by that. And I could see that it brought home to you the importance of the work you do day-in and day-out and many of the employees at the FDA. So we thank you. Let me ask you this question, Ms. Autor. You said, we should hold them responsible, being Baxter, in response to a question put by Mr. Burgess. Now, this plant was never inspected in China by the FDA. Is that a violation of the law, to send active pharmaceutical ingredients from a plant that's never been inspected for sale here in the United States? Ms. Autor. Well, I'm not a lawyer for the agency, so you could ask them. But my understanding is that is not a violation, no. Mr. Stupak. It is not a violation. Ms. Autor. No. No. But obviously, the law could be changed to allow that and to give FDA, for example, the authority to require a recall. Right now, we can't even require a recall if there is a product in commerce that we believe is dangerous. We can only ask. Mr. Stupak. Can you tell me the last time the FDA asked for recall authority? Ms. Autor. I cannot offhand, but I can tell you right now that I think it is something that would be very helpful to the agency. We have it for devices; we don't have mandatory recall authority for drugs. Mr. Stupak. Dr. Woodcock, has FDA ever asked for recall authority? Dr. Woodcock. I don't know. Mr. Stupak. I can tell you the answer right now. I have been here for 12 years. And the answer is no, you have never asked for it. Dr. Woodcock. I do not know. Mr. Stupak. OK. Let me ask you this: is it a violation of the law to ship a product from China from a plant that has not been approved to the United States? Do you know that? Dr. Woodcock. My understanding is, as Ms. Autor said, is it is not a violation of the law. Mr. Stupak. OK. So for Baxter having them send products to the United States from a plant that was never inspected by the FDA, there's no penalty the FDA can assess to them? There's no fines, no costs, no nothing, right? Dr. Woodcock. That's my understanding. Ms. Autor. And we don't actually have civil money penalty authority for drugs at the moment. Mr. Stupak. I realize that. I realize that. Would you like that authority? Ms. Autor. I would. Mr. Stupak. Would you? OK, good. Let me ask you this, some questions Mr. Dingell asked. And it's my understanding, currently the burden of proof is on the FDA to document that a drug is unsafe. Is that correct? Dr. Woodcock. Yes. Ms. Autor. The burden is that we must show that it appears to be adulterated or misbranded or unapproved. Mr. Stupak. OK. So wouldn't it make the FDA's job of protecting Americans a lot easier if foreign firms had the burden to prove that their drugs are safe before they ever could be shipped to the United States? Ms. Autor. Absolutely. Dr. Woodcock. Yes. Mr. Stupak. OK. Is that authority you're going to ask for? Ms. Autor. I cannot speak to what the agency will officially ask for. As somebody who does this day-in and day- out, I can tell you that would be a very useful tool. Mr. Stupak. Would you agree with that, Dr. Woodcock? Dr. Woodcock. Yes. Mr. Stupak. Is that authority you would ask for, as head of the Center for Drug Evaluation and Research? You evaluate these drugs, so it would be your department that would have to make that determination. Is that authority you would ask for? Dr. Woodcock. Again, we don't ask for authorities directly. This would be a tool that the Center for Drug Evaluation and Research would find very helpful. Mr. Stupak. You're right. You don't ask for authority directly, you just said. And so, how do you work with Congress then, if you never ask us for the authority? If you're supposed to be the expert, how are the Members of Congress supposed to know, if you never ask for the authority? Dr. Woodcock. Well, we are providing you with this input right now, that we feel this would be a very useful authority, along with civil money penalties, the ability to stop products at the border and not let them in, mandatory recalls and so forth. Mr. Stupak. How about subpoena power? Would you like subpoena power? Ms. Autor. I think that would be very useful. Mr. Stupak. Dr. Woodcock? Dr. Woodcock. I agree with that. Yes. Mr. Stupak. Hallelujah. I asked you that a few years ago; you said, no, you didn't need it. I'll bring back the testimony, just so you know. We're making progress. We're making progress. Let me ask you this question. Go to Exhibit No. 20, if you would, Dr. Woodcock, in the exhibit book. Exhibit No. 20. OK. Now, in your heparin investigation, this is--you've got Exhibit No. 20. It's a 3-page report here. Dr. Woodcock. I have an establishment inspection report, tab 20. Mr. Stupak. OK. Now, were you able to make this inspection of this--consolidators for heparin, correct? Dr. Woodcock. Is this Hangzhou? Mr. Stupak. Yes. Dr. Woodcock. Yes. Yes. Mr. Stupak. OK. Now, there were two, and you were able to make this--there were two consolidators. Were you able to inspect the other consolidator? Ms. Autor. I think Ms. Brown could best talk about what happened in China. Mr. Stupak. Ms. Brown? Ms. Brown. Yes, I inspected both. Mr. Stupak. Did you have any trouble obtaining the information or going through these plants, getting the information you requested? Ms. Brown. Yes, I had a little trouble at both of them. Mr. Stupak. At both of them. In what way? What would the trouble be? In gathering information? Allowing us to see things? Explain that. Ms. Brown. At Changzhou Techpool, we had no trouble accessing records or walking through the facility, but we couldn't copy--get copies of any of the records that we had looked at. Mr. Stupak. OK. Ms. Brown. That is the first one. At Hangzhou we were able to walk through, but we were not able--that was only on one day. The next day, we were refused further walks through the lab, which we hadn't walked through. Mr. Stupak. But a lab would be critical, would it not, to determine what happened? Ms. Brown. Yes. And we were refused access to all records. And I think, as I recall, the president of the firm didn't want to answer any more questions about the--that would be like an inspection. Mr. Stupak. OK. Well, Dr. Woodcock, you mentioned in your testimony this international agreement that you have with China, a memorandum of agreement. Dr. von Eschenbach mentioned it last week when we were talking about heparin when he was here. So how does this agreement help, if you can't go to the lab, they won't answer your questions, and you can't make copies of records? How does that help us be safer and do our inspections that are required? Dr. Woodcock. Well, obviously, we need the ability to do those things for any supplier. And we need the ability to not accept the API, whatever it might be, if we have not been able to do the inspection. And Debbie might say more about the agreement. Ms. Autor. I believe the memorandum of agreement with China was useful in that it helped us to expedite these inspections. We were able to get to Changzhou SPL, for example, in something like 5 days, which is relatively unprecedented. And it helps by establishing opening lines of communication between us and the Chinese regulators. But---- Mr. Stupak. But it doesn't help you to get in the labs, doesn't allow you to make copies, doesn't allow you to talk to the employees. Ms. Autor. It does not. It does not. Mr. Stupak. So you get to the country a little faster and you can see where the place is located, and that's about it, right? Ms. Autor. The agreement is a start, but it is not the answer to all Chinese drug quality issues. That's correct, sir. Mr. Stupak. Well, Ms. Autor, isn't it really true that-- because Baxter's audits found this plant to be satisfactory, had it not been for the heparin crisis, the subsequent FDA inspection of this plant would likely be shipping drug product into the United States? In other words, you wouldn't have known this plant was operating out of compliance without good manufacturing practices, had it not been for the crisis, in the physical inspection, right? Ms. Autor. I'm not sure I follow the question, sir. I'm sorry. Mr. Stupak. All right. You would have never known that this plant was even operating, without this heparin situation, right? Ms. Autor. But for the heparin situation, this firm would have been considered for inspection on an annual basis, along with the other---- Mr. Stupak. Thirty or 40 years from now. Ms. Autor. It would be put in the list of roughly 3,300 facilities that are ranked. And I can't say exactly with application of our risk model whether or when this would have come up for inspection. And, again---- Mr. Stupak. If you receive from a manufacturer a certificate--did you receive a manufacturer's certificate here from Baxter that this plant was manufacturing heparin and that it passed their inspection? Would the FDA have received that information? Ms. Autor. No, sir, probably not. Mr. Stupak. That's for Baxter's internal use, then, right? Ms. Autor. Yes. Mr. Stupak. How do you become aware, then, of a plant that is manufacturing and is going to ship a product, an API, an active pharmaceutical ingredient, to the United States, how do you become aware of it? How does the FDA become aware of it? Ms. Autor. Well, there is our registration and listing system, and there also is a system at the border where we keep a count of who is coming---- Mr. Stupak. What is the sanction if people don't register with the FDA? Ms. Autor. If a foreign facility is not registered and not listed, if it's not listed, its product would be considered to be misbranded. And, at this point---- Mr. Stupak. But how do you know that? I mean, if someone doesn't tell you, we're starting up this plant in Changzhou, China, how do you know? You don't know, do you? Ms. Autor. We would know at the border that they're bringing a drug in, that's correct. Mr. Stupak. OK. Dr. Woodcock. In addition, for most products in the United States, just to be clear, that are approved products, they must submit an application for the particular plant, a manufacturing supplement to allow that plant to be used, the material from that plant to be used as an ingredient in the finished drug product. That's not true for monograph products. It's not true for compounding. And so there are a few other instances where that is not the case, and we have to rely on registration and listing. Mr. Stupak. But, really, without an inspection, you don't know what a plant's producing, right? Dr. Woodcock. That's right. And that's why we try to go to--for pre-approval inspections to plants. This was an error that we did not visit this plant the first time. Mr. Stupak. And we don't know if a plant is meeting the good manufacturing practices unless it's inspected? Dr. Woodcock. That's correct. Mr. Stupak. Do you know how many plants are out there that have not been inspected? Ms. Autor. I imagine there are a quite a few. The number of foreign sites making FDA-regulated drugs in 2001 was about 1,200. In 2007, it was about 3,000. And our number of drug inspections has actually declined from 2001 to 2008. Mr. Stupak. And your IT information, OASIS, says it could be as high as 7,000, correct? Ms. Autor. I would rely on the drug registration listing and not on OASIS for that number, sir. Mr. Stupak. Really? Why do you have two sets of numbers then? Ms. Autor. We certainly need to improve our IT systems, and we're working to do so, absolutely. Mr. Stupak. I've been hearing that since 1998. Mr. Shimkus, questions? Mr. Shimkus. Thank you, Mr. Chairman. I just have a brief one. The question is after--Ms. Brown, we appreciate your inspection. So you go, and you inspect, and you give a report, and that report goes to the administration. And it's kind of an intro to you, but response to Dr. Woodcock or Ms. Autor, or whoever's the best answer. When would we expect that FDA inspector to return to that facility? Does anyone know? Ms. Brown. I would only return if I got an assignment. Mr. Shimkus. OK. Ms. Autor. How soon would we return? I'm sorry---- Mr. Shimkus. There's a lot of identified problems with this facility. What triggers our return? Ms. Autor. I expect at this point that the company will respond to our warning letter in writing, and we will go back and verify any corrective actions that they've undertaken before we consider this issue to be resolved. So I think it would probably be within the space of about a year, depending on where they respond and how they've responded. But that's a guess. Mr. Shimkus. So if the company then writes in a response and ends up saying, ``We've corrected all these deficiencies,'' what's the timeliness of a return inspection? Ms. Autor. We would go back--we'd have to look at the response and see how adequate it was. If we got to a point where we felt there had been an adequate written response, then we would make it a priority to go back there. But it could be a matter of months, it could be a matter of years, depending on the response. Mr. Shimkus. If it was an inadequate written response, you would go back? Ms. Autor. No, if it was adequate. Remember, at this point---- Mr. Shimkus. But if it is an inadequate response---- Ms. Autor. Then we would tell them it's inadequate. At this point, they're not allowed to ship products into the United States. So how quickly we will go back there will depend on when we think these issues might be resolvable and they may be allowed to ship---- Mr. Shimkus. And have we ever reauthorized facilities to ship again with an adequate written response without a follow- up inspection? Ms. Autor. Not when there's an import alert. We would go back for an inspection. Mr. Shimkus. Say that again? Ms. Autor. If there is an import alert, as there is here, where all the company's products are detained at the border without physical examination, we would go back and verify that the corrective actions are adequate and have been adequately implemented before we lifted that import alert. Mr. Shimkus. You used a terminology that there is a risk model. Is there a risk model? Ms. Autor. There is a risk model, sir, which involves taking the foreign inventory and we run it through our domestic risk model, which means we rank the facilities based on risk presented by the product, process, and facility. And we then, from there, look at other factors, like when the facility was last inspected, when they shipped to the United States, and various other things. And we use that to rank our foreign facilities for inspection. However, given the fact that we have roughly 3,300 foreign facilities, we rank about 100. And then we end up inspecting, say, 300 or so. It doesn't--I would not tell you that that risk model therefore means that we have covered all high-risk foreign facilities. Mr. Shimkus. And then I want to end up on just--since we have you here, and Members do this every now and then. How does this whole debate about our processes, and with a pharmaceutical company that we know of and we have these problems, how does this affect our ability to know the safety and efficacies of drugs that are reimported? Ms. Autor. You are talking about personal importation? Mr. Shimkus. Yes. Ms. Autor. I believe that that also raises public health concerns, because we do not know where those products come from. We do not know the conditions under which they were manufactured. We do not know the conditions under which they were stored or their labelling. Another issue where there are quality concerns. Mr. Shimkus. There is really no trail there? Ms. Autor. Correct. Correct. And even at this point, we do not have pedigree for drugs coming into this country. And that would be very useful, as well as the ability to inspect importers and to prohibit sale of drugs, for example, that weren't declared as drugs when they were imported. Mr. Shimkus. Yes. And I know that's something that, in previous Congresses, this committee itself had done a lot of good work on reimportation. I'm just going to yield the rest of my time to Dr. Burgess. Mr. Burgess. Thank you. I appreciate the gentleman yielding. When we had our food safety hearings earlier this year, the comparison with FDA and USDA on the concept of equivalence--the United States Department of Agriculture requires the facilities, although they're in a different country and they may do things differently, that they be equivalent to the standards that we have in this country--and we learned that there is no standard of equivalence for imported food from the jurisdiction of the FDA. Does this concept of equivalence apply to the active pharmaceutical ingredients that are imported? Dr. Woodcock. Yes, it applies. We would require these to meet U.S. standards. It is more about our ability to find them, track them, keep them out and hold the manufacturers accountable. Because we don't have the reach, as we have said, and we don't have the tools, the authorities, to do this as effectively with this flood of imported drugs coming into the country. But they are supposed to be to our standards--to meet our standards. Mr. Burgess. When you say ``authority,'' do you lack the authority in a foreign country to go in and make the demands that it be equivalent to United States manufacturer? Ms. Autor. We do not have the authority to demand entrance to a foreign facility. We do have the authority to keep things out of the country that appear not to comply with our standards. Mr. Burgess. Now, when we had--and it may be a little bit of a different jurisdiction, but certainly with food safety and certainly as applied to the Consumer Product Safety Commission, which is obviously a different agency but still some of the same concepts apply, it seems like we've been told at several different junctures that we can't keep things out because of trade agreements, that that then becomes an issue for international trade. Has that become an issue for the active pharmaceutical ingredients? Ms. Autor. I'm not a trade expert. I think there are concerns raised with respect to putting different burdens on foreign commerce than on domestic commerce. But I think---- Mr. Burgess. Has that been at all an impediment toward getting the absolute import ban that you were after? Ms. Autor. I think, at this point, the biggest impediment is the standard in our law which requires us to show an appearance of a violation. And that's a difficult hurdle to overcome. But I think that if we can meet that burden, then I have not heard trade concerns raised at that point. But, again, if it were incumbent upon the manufacturers to show us that their products should come in, then that would be a much easier burden on the agency and a much better way---- Mr. Burgess. Can you state that again for me? Ms. Autor. Yes. If it were incumbent on the manufacturers or the importers to show us that their product meets FDA requirements before they are allowed to come into this country, then that would be a much tighter net and a much better way of ensuring the safety and integrity of the American drug supply. At this point, it is incumbent upon the FDA. And, for example, if we have not been into a facility, we can't keep the product out just because we haven't been there. And at this point, there are a lot of facilities, as we said, that we have not been in. Mr. Burgess. What prevents you from having that higher standard, tighter net, that you just described? Ms. Autor. Well, the standard in the law is the same one it's been since 1938. It talks about an appearance of a violation, which is really based on, I think, historically, looking at the product and seeing if there is something wrong with it, and obviously that's an antiquated concept. Mr. Burgess. Yes, it would seem so. And I guess I'm having trouble with the fact that it hasn't been looked at, addressed. I mean, Mr. Stupak has been here for 12 years, 14 years. He hasn't fixed it yet after all this time? Mr. Stupak. I'm in the majority now. I'm going to get to it, Mike. Mr. Burgess. When? When? You've been in the majority for 14 months. I mean, it's time, Mr. Chairman. Ms. Autor. I think if you look at the history of food and drug law, sir, you will see that it is often a crisis that compels change. And it is often not until a crisis that a change is made. But I would submit that we currently have a crisis and an opportunity to make real change. Mr. Burgess. I would agree with that observation. Now, do you think that your inability--or the fact that you had to demonstrate that the product was harmful before you could issue the import ban, did that in any way interfere with the product recall that was going on in this country? Did that slow things down? Ms. Autor. I think that we have been able to, on a rapid basis, put in the necessary safety net with respect to heparin. It would be a little easier if we were able to put in an import alert for all heparin and say, you have to show us the test results before the product comes in. I do not believe we currently have the authority to do that. But, again, I believe that we put in an adequate safety net promptly with respect to all imported heparin. Mr. Burgess. Of course the question probably should be asked to the manufacturer. But it seems like it would be in their enlightened self-interest not to allow a product into the country that would then be damaging to them just even from a publicity standpoint or the negative branding that would occur, or undoubtedly has occurred, because of this situation we find ourselves in now. Dr. Woodcock. All the major manufacturers are doing testing. In fact, they voluntarily went back and looked at all their prior lots of API, back into 2006 and so forth. What we're talking about, though, there are many smaller uses of heparin, smaller manufacturers and so forth, who may not have the capacity to test. So we're stopping all those, making sure we test them or they're tested before they get in. Mr. Burgess. I guess the point I'm trying to get at, though, is, was there anything in this restrictive standard that you have that's been in place since 1938 that delayed getting the appropriate recall done of the product? Was the manufacturer less likely to go forward with the recall because you had to comply with the 1938 law? Ms. Autor. I would not say it delayed it. But because of the appearance standard, the burden is on the agency initially to do the sampling of the heparin and the testing of the heparin that's coming in. Whereas, if the burden were different, if it were the manufacturer's responsibility to show that their product complied with our requirements, then we could ask them to give us the data in the first place to let the products in. With respect to the actual recall of products and interstate commerce, at this point I would not say there was particular resistance by the manufacturers to do the recalls or delay because of our authority. But, in my experience, there certainly have been situations where manufacturers have been reluctant to do recalls and they have been delayed because we did not have the authority to order those recalls. Mr. Burgess. But that was not the case with this product recall? Ms. Autor. No, sir. Mr. Burgess. And in fact, when the dawning first started to occur that there was a problem, but perhaps the depth and the breadth of the problem was not anticipated, was there a concern that we were going to remove a product from the armamentarium that was very necessary for some medical therapies to continue? Dr. Woodcock. Yes. And we have a shortage team and routinely in our operations have to look at, for medically necessary drugs, the balance between creating a shortage and losing lives, perhaps, because there's a shortage of an essential drug, versus a recall. And so we operated that, in this case, because this particular manufacturer's supplying about half the U.S. heparin supply, is my understanding, of this type of heparin, USP heparin for injection. Mr. Burgess. How long did it take before you, as an agency, were convinced that you had an alternative, a satisfactory alternative stream of product to meet the medical demands? Dr. Woodcock. It didn't take us a very long time. We have a very, very good shortage team. I can't tell you exactly, because we were--the initial thought by the CDC, for example, was this was yet another problem with the dialysis tubing or the membranes and so forth. And so it took a while to sort out and then actually link it with Baxter. And then it was felt perhaps it was just the large multi- dose vials, because those were the ones we got reports on. That was put into play. And then we got a bigger picture, the bigger picture that it might be associated with all of the heparin, the vials of heparin that Baxter was shipping. Mr. Burgess. Has the agency prepared a timeline as to when the first reports were coming in, when your involvement was, when Baxter's involvement was? Dr. Woodcock. Yes. Mr. Burgess. Is that something you could make available to the committee? Dr. Woodcock. Yes. Mr. Burgess. OK. I would appreciate that. Mr. Chairman, I yield back the balance of my time. Mr. Stupak. I thank the gentleman. Just a quick question. Now, the FDA will have to go back and reinspect this plant before it can ship heparin to the United States, correct? Ms. Autor. Yes. Mr. Stupak. Who pays for that, the taxpayer or the manufacturer of the heparin? Ms. Autor. The taxpayer pays for that. We do not have any authority to have anyone else pay for that, at this point, sir. Mr. Stupak. OK. When you go back to do the reinspections, is there any limitation on what you can inspect? Is it going to be just the plant? Or can you go back to the workshops where this heparin first originates, as you had indicated earlier it might be helpful to inspect those? Ms. Autor. We can go back. I cannot say whether they will admit us or not, or whether they will allow us to do a full inspection. We can certainly go there and ask to inspect. Mr. Stupak. So it's still up to them whether or not you will be able to inspect the workshop or the consolidator or things like that. Ms. Autor. Correct. In this country, if an inspection is refused, we can go to court and seek a warrant. We cannot do that in a foreign country. Mr. Stupak. OK. Dr. Woodcock, you indicated a couple of times to Mr. Burgess and Mr. Shimkus that we should hold the drug manufacturers responsible. It seems to contradict the policy of the FDA. Drug manufacturers must be held responsible for drug safety, you say. But how do you justify, then, the position of the Office of the Chief Counsel that companies making approved drugs, like Baxter, should not be held liable in State courts for injuries caused from drugs like heparin because it was approved by the FDA? So how do we hold them responsible if you are going to give them immunity from prosecution for injuries because they were FDA-approved, even though we have adulterated drugs which, unfortunately, we have deaths associated with? How do you justify that? It seems like a contradiction. Dr. Woodcock. I was saying that we need to hold manufacturers accountable for the compliance and for quality throughout the entire supply chain. As you know, I'm a physician. I'm not really qualified to comment on the liability issues. Mr. Stupak. But don't you see the contradiction there? Just because the FDA approves a drug doesn't necessarily mean that it's always going to be safe, does it? Because it can be adulterated, like heparin or melamine or DEG in toothpaste that we've seen before. Dr. Woodcock. That's correct. Mr. Stupak. OK. I have nothing further. Mr. Burgess? Mr. Burgess. If I could just clarify one point. Now, at this juncture, we can't say for certain if this contamination of the heparin was intentional or unintentional? Dr. Woodcock. We have no evidence one way or the other. Mr. Burgess. Could I just ask under what plausible scenario it could be unintentional? Dr. Woodcock. Through our chemical analysis and our collaborators, we were able to discern that this was chemically modified chondroitin sulfate. Mr. Burgess. Right. Dr. Woodcock. And it is not--we have also done investigations and determined it really wouldn't be present in the pig, in the animal. So it wouldn't be an impurity that would have resulted from problems, say, in the purification process. Mr. Burgess. You are telling us it was intentional because it appeared in multiple manufacturing sites and in multiple locations? Dr. Woodcock. That's certainly the highest probability. Mr. Burgess. And the pig didn't suddenly change genetically to start manufacturing this stuff in its gut. Someone put it in. Dr. Woodcock. We looked into that, because possibly the viral disease that was in China or whatever might have altered the sulfation patterns of the chondroitin sulfate. And we have concluded that this is not a naturally occurring sulfation pattern. Mr. Burgess. I am reassured to know that. So no spontaneous generation of this stuff within the pig's intestine. Dr. Woodcock. That's right. Mr. Burgess. So under what plausible scenario could it be unintentional? Dr. Woodcock. Well, it is hard to determine how it could have been introduced accidentally. In some cases, as was said earlier, the contamination was up to 20, 30 percent or higher of the heparin. And that does strain one's credulity that it could have accidentally gotten into the crude heparin or API. Mr. Burgess. Several years ago, when the manufacturer of Tylenol in this country was faced with a situation where there was suddenly--I don't remember--arsenic that appeared in a Tylenol capsule, I mean, clearly that was an after-market addition, after they did the appropriate investigation. So is it likely that we are going to find a similar situation here, that this is a Tylenol problem on just a much larger scale? Dr. Woodcock. I don't know the limitations of our ability to determine the root cause of this. I would defer to Deb Autor about that. Ms. Autor. I don't think we know yet at what point in the supply chain the overly sulfated chondroitin sulfate would have been introduced. But we found it at various points in the supply chain. So if you are asking if it's an after-market addition, I think that is unlikely. Mr. Burgess. You think that is unlikely? Ms. Autor. Yes. Mr. Burgess. So it was adulterated at the site of manufacture or multiple locations simultaneously? Ms. Autor. I don't think we know yet. And it may not be one place or one point in the supply chain. But I think we know enough to think it is not always at the end of the supply chain. Mr. Burgess. Is there anything about the molecule for hyper-sulfated chondroitin sulfate that would allow you to trace it? Or is it pretty much ambiguous once it gets out there into the universe, you can't tell where it was manufactured or where it came from? Dr. Woodcock. That would be fairly sophisticated, say, doing isotope analysis or something like that. We are working with our international counterparts. We had a meeting of international regulators several weeks ago. And that's how we found this web from China, where it was originating. It didn't just come out of this plant, it came from many plants. The heparin sources around the world were contaminated. So that gives us a better picture, and we're continuing to collaborate with them. But I think it will be hard to trace chemically. Mr. Burgess. OK. I will yield back, Mr. Chairman. Mr. Stupak. If it came from many plants, as you just said, then have you inspected those plants it came from? Dr. Woodcock. We haven't inspected them all. They didn't all ship into the United States. Mr. Stupak. I realize that. But there's nothing that prevents a drug from going from here to Germany--I mean, from China to Germany and then over from Germany to the U.S. if they originate out of China, is there? Dr. Woodcock. Well, you can only import into the United States if you are approved for import in the United States. Many of these products---- Mr. Stupak. Right. The only one that's not right now is Baxter International from that one location. That's the problem a lot of us are having. Dr. Woodcock. Oh, I see. Well, many of them don't have approved NDAs or ANDAs. They aren't approved for marketing in the United States, and they are not shipping into the United States. Mr. Stupak. So you think. Dr. Woodcock. As best we can tell. As I said, we need better IT systems and better systems at the border. Mr. Stupak. Let me ask you this. Let me ask you this. Exhibit 32 is the--you don't have to look at it. It's the Chinese patent for oversulfated chondroitin sulfate. And in 33, there's a U.S. patent. And some of these go back to--well, the one actually goes back to 1967, 1978, 1980, 1989, 1989. The Chinese one is published in 2006. Do you have any knowledge that oversulfated chondroitin sulfate has ever been used in the past as a blood thinner or an anticoagulant where it was polled or actually marketed oversulfated chondroitin sulfate? I mean, it's interesting you have two patents, one in China and one here in the United States. And I would think that someone must have tried this in the past. Dr. Woodcock. Right. There is also in here about anti- inflammatory and pain-killing activity. There is a product that had been marketed in Europe that was very similar. Mr. Stupak. Similar. Dr. Woodcock. We don't have chemical comparison directly in the laboratory. But that was used in humans in Europe. So these types of products, which are oversulfated gags, have been used, and there's certainly a lot of knowledge in the scientific literature that they have anticoagulant properties. So it's no secret that they have these activities. Mr. Stupak. Well, I just noticed, I thought the patent on the U.S. one actually mentioned heparin. That's why I--on page 2 of it, it sort of mentioned heparin. That's why I wanted to know if it had been used before, oversulfated chondroitin sulfate in heparin, to mimic as an anticoagulant. Probably, after you look at these patents, probably no big surprise that it happened this way. Dr. Woodcock. I see. Well, it's certainly not approved in the United States. If it had been used somewhere in the world, it would be investigational use. Mr. Stupak. Thank you. Seeing no further questions of this panel, I will excuse this panel and thank you for your time and testimony. I will now invite our third panel of witnesses to come forward. On our third panel we have Robert L. Parkinson, Jr., who is chairman, CEO, and president of Baxter International, Inc.; Mr. David Strunce, who is the chief executive officer of Scientific Protein Laboratories, LLC. Mr. Strunce is accompanied by Dr. Yan Wang, who is Scientific Protein Laboratories' vice president for business development and research. Gentlemen, it's the policy of this subcommittee to take all testimony under oath. Please be advised witnesses have the right, under the rules of the House, to be advised by counsel during their testimony. Do any of you wish to be represented by counsel today? Mr. Parkinson, were you going to say something? Mr. Parkinson. Yes. Mr. Stupak. Do you wish to be represented by counsel? Would you turn on your mic and identify your counsel, just so we have it for the record? And they can advise you, but they can't testify. Mr. Parkinson. Yes. Mr. Ted Hester with King & Spalding. Mr. Stupak. OK, Mr. Hester. Mr. Strunce--am I saying that right, Mr. Strunce? Mr. Strunce. It's Strunce. Mr. Stupak. Do you wish to be represented by counsel? Mr. Strunce. Yes, sir. Mr. Stupak. And would you identify that counsel for the record, please? Mr. Strunce. Mr. Dan Kracov of Arnold & Porter. Mr. Stupak. OK. Is it Mr. Wang? Dr. Wang. Pronounced like W-O-N-G. Mr. Stupak. OK. Do you wish to be represented by counsel? Dr. Wang. Yes. Mr. Stupak. Would you identify the counsel for the record? Dr. Wang. Mr. Kracov. Mr. Stupak. OK, very good. Again, counsel can advise you but cannot testify. Therefore, I am going to ask you all to rise and raise your right hand and take the oath, please. [Witnesses sworn.] Let the record reflect the witnesses replied in the affirmative. You are now under oath. We will begin with a 5-minute opening statement from our third panel. I will start with Mr. Parkinson, if you would, please, sir. And if you have a longer statement, we will include it in the record. If you would pull that forward, press that button there so your mic is on, and we will be ready to go. STATEMENT OF ROBERT L. PARKINSON, JR., CHAIRMAN, CEO, AND PRESIDENT, BAXTER INTERNATIONAL, INC., DEERFIELD, ILLINOIS Mr. Parkinson. Good afternoon, Mr. Chairman and members of the Committee. My name is Bob Parkinson, and I am the chairman, chief executive officer and president of Baxter International. I'm very grateful for the opportunity to speak with you on the crucial topic of medical product safety. Before I begin my formal opening comments, I would like to say a word to the families who took the time to be here today and make the effort to be here today. Like everyone in the room, I am tremendously moved by your testimony. I am terribly sorry for your loss. And I know that these are very painful circumstances, and you have my deepest sympathy. Baxter has built its reputation over 75 years by consistently producing quality products for critically ill patients and patients with life-threatening diseases. We're alarmed that one of our products was used in what appears to have been a deliberate scheme to adulterate a life-saving medication, and that people have suffered as a result. We deeply regret that this has happened, and I feel a strong sense of personal responsibility for these circumstances. I feel this responsibility because of who we are and what we do as a company. Each day, over 6 million infusions of Baxter's products are administered to patients around the world with life-threatening diseases and conditions. We're not a traditional pharmaceutical company. We don't make pills or tablets. We don't do direct-to- consumer advertising, and we don't make lifestyle drugs. We develop and manufacture products that are injected, infused, or inhaled by patients who need them to stay alive. Because our products are used in critical-care environments, they have to be safe and effective every time. And this time they were not. No matter what the reason, this is my responsibility because Baxter's name was on the product. And my heart goes out to every patient and family member who may have been harmed by Baxter's heparin. Members of the Committee, we all share the same objective: to ensure patient safety. And this presents an increasing challenge since, as the events of recent weeks demonstrate, we live in a world in which every day new risks are emerging. I would refer the Committee to our written submission, which discusses the development of this situation, including what we at Baxter might have done differently, what we're doing going forward, and what we advocate for the industry and the global regulatory community. What the developments of the last several weeks have taught us is that this is both a global and industry-wide crisis and, therefore, one that calls for global and industry-wide responses. Baxter played a leading role in finding and understanding this problem and in developing the test methods to detect it. And I commit to you that we will play a leading role in working with this committee, with regulators not only here but abroad, and with industry organizations to address this and other emerging risks for the long term. Since coming to Baxter 4 years ago, I've been inspired by this special sense of purpose with which Baxter employees come to work every day. Because of our company's mission to sustain and save lives, anything that threatens that purpose cannot be tolerated. We welcome the opportunity to be part of this important discussion. Thank you, Mr. Chairman. [The prepared statement of Mr. Parkinson follows:] [GRAPHIC] [TIFF OMITTED] T3183.018 [GRAPHIC] [TIFF OMITTED] T3183.019 [GRAPHIC] [TIFF OMITTED] T3183.020 [GRAPHIC] [TIFF OMITTED] T3183.021 [GRAPHIC] [TIFF OMITTED] T3183.022 [GRAPHIC] [TIFF OMITTED] T3183.023 [GRAPHIC] [TIFF OMITTED] T3183.024 [GRAPHIC] [TIFF OMITTED] T3183.025 [GRAPHIC] [TIFF OMITTED] T3183.026 [GRAPHIC] [TIFF OMITTED] T3183.027 [GRAPHIC] [TIFF OMITTED] T3183.028 [GRAPHIC] [TIFF OMITTED] T3183.029 [GRAPHIC] [TIFF OMITTED] T3183.030 [GRAPHIC] [TIFF OMITTED] T3183.031 [GRAPHIC] [TIFF OMITTED] T3183.032 [GRAPHIC] [TIFF OMITTED] T3183.033 [GRAPHIC] [TIFF OMITTED] T3183.034 [GRAPHIC] [TIFF OMITTED] T3183.035 [GRAPHIC] [TIFF OMITTED] T3183.036 [GRAPHIC] [TIFF OMITTED] T3183.037 Mr. Stupak. Thank you. Mr. Strunce, for an opening statement, please. STATEMENT OF DAVID G. STRUNCE, CHIEF EXECUTIVE OFFICER, SCIENTIFIC PROTEIN LABORATORIES, LLC, WAUNAKEE, WISCONSIN; ACCOMPANIED BY YAN WANG, PH.D., VICE PRESIDENT OF BUSINESS DEVELOPMENT AND RESEARCH, SCIENTIFIC PROTEIN LABORATORIES, WAUNAKEE, WISCONSIN. Mr. Strunce. Chairman Stupak, Ranking Member Shimkus and members of the subcommittee, I am David Strunce, president and chief executive officer of Scientific Protein Laboratories. I am accompanied by Dr. Yan Wang, vice president of business development and research for SPL and general manager of Changzhou SPL. Dr. Wang is an American citizen who holds a Ph.D. in chemistry and has worked in the pharmaceutical and fine chemical industry since 1993. Our companies supply active pharmaceutical ingredients used by other manufacturers to produce finished drug products. SPL's facility in Waunakee, Wisconsin, has more than 150 employees and has been producing heparin sodium for more than 30 years with an exemplary regulatory record. Changzhou SPL has approximately 30 employees and has been producing heparin API since 2004. SPL and Changzhou SPL are absolutely committed to producing drug ingredients of the highest quality. We are deeply concerned that a contaminant that has been identified in certain API products was made from Chinese crude. We have great sympathy and concern for any patient who has suffered adverse events potentially associated with heparin. Our companies have cooperated fully in the FDA's investigation of the origin of the contaminant identified in heparin products around the world. And we have committed to testing all of our heparin products using the newly identified tests. Let me make a few points. First, the recent worldwide contamination appears to be the result of a deliberate act upstream in the supply chain. The contamination was not SPL- or Changzhou SPL-specific. The contaminant has now been detected in heparin products produced by a wide variety of manufacturers around the world, with no connection whatsoever to our suppliers. Sophisticated new tests have shown that the contaminant was present in crude heparin before it ever reached SPL or Changzhou SPL. Unfortunately, the test used previously throughout the industry did not enable us or other manufacturers to detect the substance. Second, we built the Changzhou facility to access the raw material supply needed to meet the world medical demand for heparin, not to save money. China is the world's leading producer of pigs, slaughtering about five times as many pigs as the U.S. The material from those pigs is absolutely necessary to meet the increasing medical need for heparin, both in the U.S. and other countries. Indeed, more than one-half of the finished heparin products in the United States and globally are made from Chinese-source material. In addition, Chinese raw material is not inexpensive. At times, the cost of Chinese crude heparin has exceeded the cost of North American raw material. Third, we built the Changzhou facility to U.S. and equivalent international standards, and it was registered with the FDA. As photos attached in my written testimony show, Changzhou SPL is a modern facility. We have been quite transparent with the FDA regarding the controls in place for our production chains in China. We understand that the Committee is concerned that this Changzhou SPL facility was not inspected by the FDA before the 2004 approval of the Baxter supplemental NDA. However, Changzhou was fully available and prepared for an FDA inspection. Detailed information on Changzhou SPL quality control and manufacturing processes had been on file with the FDA since 2002. The Changzhou SPL facility also had been audited by third parties for GMP compliance. At the time of the Baxter approval, we believed that the FDA was aware of and was satisfied with the quality systems that had been put in place. As you know, FDA inspected the Changzhou SPL facility this past February, and we now have received a warning letter. As the agency has previously stated, there is no relationship between the inspectional observations referenced in the warning letter and the contamination which occurred upstream in the heparin supply chain. We strongly believe that the facility was in substantial compliance with then-current GMPs for heparin API, and we will provide a comprehensive response to the warning letter. Finally, we are fully supportive of FDA's decision to increase its inspectional capabilities in China and applaud your efforts to provide the agency with additional resources for foreign inspection activities. We recognize that in spite of SPL's strong reputation for quality developed over decades, we, as well as others producing heparin products, must work to regain the confidence of the public. We pledge to continue to work with the FDA, Chinese authorities, and others to uncover the source of this contamination and take whatever steps are necessary to protect the public health. Thank you for the opportunity to participate in today's hearing, and I look forward to addressing your questions. [The prepared statement of Mr. Strunce follows:] [GRAPHIC] [TIFF OMITTED] T3183.038 [GRAPHIC] [TIFF OMITTED] T3183.039 [GRAPHIC] [TIFF OMITTED] T3183.040 [GRAPHIC] [TIFF OMITTED] T3183.041 [GRAPHIC] [TIFF OMITTED] T3183.042 [GRAPHIC] [TIFF OMITTED] T3183.043 [GRAPHIC] [TIFF OMITTED] T3183.044 [GRAPHIC] [TIFF OMITTED] T3183.045 [GRAPHIC] [TIFF OMITTED] T3183.046 [GRAPHIC] [TIFF OMITTED] T3183.047 [GRAPHIC] [TIFF OMITTED] T3183.048 [GRAPHIC] [TIFF OMITTED] T3183.049 [GRAPHIC] [TIFF OMITTED] T3183.050 [GRAPHIC] [TIFF OMITTED] T3183.051 [GRAPHIC] [TIFF OMITTED] T3183.052 [GRAPHIC] [TIFF OMITTED] T3183.053 [GRAPHIC] [TIFF OMITTED] T3183.054 [GRAPHIC] [TIFF OMITTED] T3183.055 [GRAPHIC] [TIFF OMITTED] T3183.056 [GRAPHIC] [TIFF OMITTED] T3183.057 [GRAPHIC] [TIFF OMITTED] T3183.058 [GRAPHIC] [TIFF OMITTED] T3183.059 Mr. Stupak. Thank you. Dr. Wang, do you wish to testify? Dr. Wang. I don't have an opening statement. Mr. Stupak. OK, thank you. We'll turn to questions. Mr. Parkinson, right in there, in that big black book there, is our exhibit book. I asked earlier of Mr. Nelson, Exhibit No. 31. And this is a letter from Baxter to Changzhou SPL dated February 26, 2008. And I think it's the first page there of that exhibit. This letter states that Baxter's audit observations quote, ``have been satisfactorily addressed,'' end of quote, and that Baxter is pleased to inform Changzhou SPL that the audit had been, in quotes, ``closed.'' Coincidentally, on that day FDA was finishing up its inspection of Changzhou SPL. By this time, Baxter was aware of the outbreak of heparin problems, was aware the FDA inspection team was in the Chinese plant, and was aware that the facility might have caused a role in this heparin outbreak. In light of these facts, why did you close the audit on the plant that's possibly responsible for the contaminated heparin? Mr. Parkinson. Well, I can't speak to the exact chronology, Mr. Chairman, in terms of when this letter was sent versus learning of the actual initiation. Mr. Stupak. The date is on the letter right there, isn't it, February 28th? Mr. Parkinson. Well, our letter is dated February 26th. Mr. Stupak. The 26th, okay. Mr. Parkinson. But you cited the date of the FDA? Mr. Stupak. Finished up February 26th, right. Mr. Parkinson. Yes. And so the exact time during the day and what we knew at what time during that day I'm not sure what the exact chronology was during that period of time. Mr. Stupak. But even knowing all these problems, I mean you knew in January we had a problem with heparin. You even knew before that, you actually knew in the fall, didn't you, after St. Louis Children's Hospital, when their dialysis reported the problems? Mr. Parkinson. Yes, we knew the adverse events started to increase late in December, and obviously there was a lot of activity on this subject that took place. Mr. Stupak. Sure. So December, January, late February, 3 months later you're closing the audit because everything is satisfactory? Mr. Parkinson. Well, the audit that was performed in September was what was referred to as a routine inspection audit. I think a very different orientation than an inspection for cause, which was really the nature of the FDA inspection subsequent to the events that transpired. I'm not sure that we learned anything in terms of the adverse events on the product, and so on, that would have said at that point we're going to go back and change our inspection, change the observations. Mr. Stupak. Well, let me ask you this. The exhibit right in front of you, Exhibit No. 30, which I asked a number of questions on. Mr. Parkinson. No. 30? Mr. Stupak. Thirty, Exhibit No. 30. That's your September 2007--Baxter performed a good manufacturing audit of Changzhou, is that correct? Mr. Parkinson. Under 30 was the audit report; 31 is when we thanked them for the response. Mr. Stupak. OK. And you can go to the third page if you want. That's the audit, this is a report from that audit, right? Mr. Parkinson. Yes. With the observations you mean, the site of the observations? Mr. Stupak. Right. Now, you're aware that the FDA had never approved this plant for manufacture of heparin, right? Mr. Parkinson. We were aware of that, yes. Mr. Stupak. Didn't you have a responsibility to tell the FDA that this plant had never been inspected? Mr. Parkinson. We did communicate that to the Agency. Mr. Stupak. When, after? Mr. Parkinson. October of 2003, I believe. Mr. Stupak. So you told the FDA in October of 2003 this plant had never been inspected by the FDA, is that correct? Mr. Parkinson. Yes. Mr. Stupak. Did you, once you told the FDA that did they give you permission then to ship a product to the United States made out of that plant that had never been inspected? Mr. Parkinson. We received approval. We subsequently submitted our---- Mr. Stupak. You received approval in what form, written form? Mr. Parkinson. Written form, yes. Mr. Stupak. Do you have that with you, do you have that written form with you? Mr. Parkinson. I don't have it right here. Mr. Stupak. If you could provide that to the Committee. Mr. Parkinson. We would be happy to do that. We actually submitted the prior approval supplement in February of 2004, I believe, and received the approval 4 months later, and we have written approval of that. Mr. Stupak. All right. So even though it was not inspected you felt you had no more responsibility to make sure the plant was inspected by the FDA then? Mr. Parkinson. After informing the FDA what additional responsibility we had relative to the FDA inspecting, I think, is a matter for discussion. Our broader responsibility, which we shoulder, is the quality of the product which we ensure is maintained in several different ways, not only instructions. Mr. Stupak. Sure. But I said in my opening statement I thought both Baxter and SPL had some responsibility here. Mr. Parkinson. Absolutely. Mr. Stupak. You are both companies that have been around for 75 years. You know before you ship a drug or even produce a drug here in the United States, the plant has to be pre- approved by the FDA, right? Mr. Parkinson. Right. Mr. Stupak. And it wasn't done here. So it seemed like that basic first rule was sort of ignored. Mr. Parkinson. That implies that we depend upon the FDA to ensure the quality of our product. Mr. Stupak. Right. But don't you also depend upon the FDA to assure you that you have that right, if you will, actually the privilege not a right, it's a privilege to sell drugs in the United States? Mr. Parkinson. Yes, it is. Mr. Stupak. And therefore doesn't that pre-approval--that pre-inspection approval gives you that, grants you that privilege? Mr. Parkinson. When we receive the approval for that supplement that we submit, yes, that gives us that privilege to do that. Mr. Stupak. Well, in your audit report it states the purpose of the audit was to, quote, ``verify the effectiveness of Changzhou SPL's quality systems and technical capabilities with regard to applicable Baxter and regulatory requirements,'' isn't that correct? Mr. Parkinson. Yes. Mr. Stupak. OK. It appears that the audit then, this audit, it says in there, again I'm quoting now, ``consistent of an in- depth review of Changzhou's quality systems and capabilities and included documentation and procedures related to incoming materials, sampling procedures to build the operations, quality assurance process, and stability operations,'' isn't that true? Mr. Parkinson. Yes. Mr. Stupak. Well, it appears that the audit found only one major observation related to the good manufacturing processes. Further, it appears that Changzhou SPL was approved to supply heparin API to Baxter as long as it addressed that one problem. In essence, the audit found that Changzhou SPL was capable of meeting good manufacturing products, process, right? Mr. Parkinson. That was our assessment. Mr. Stupak. OK. But then, yet 5 months later the FDA found Changzhou was incapable of meeting good manufacturing products, or practices, good manufacturing practices. FDA's inspection found major problems with the facility while your audit found only a handful of deviations, most of them apparently minor. In fact, FDA found so many problems that it's been barred--that it has barred products from Changzhou SPL from entering the United States. Why did the results of your two audits differ so much? Mr. Parkinson. Well, I can only speculate they were a different point in time. Each audit is obviously a snapshot in time. As I said a minute ago, ours was a routine audit that was initiated prior to any of these events having transpired, and the FDA's was one that was for cause. Knowing all the events that had transpired, I believe they had at least two individuals there for a number of days. As was cited earlier, we had an individual there for a day. One can argue, discuss, debate, perhaps, how much time is necessary. There is a correlation in my experience in the industry that the longer auditors, investigators spend in the facility the more things that they will find. I think it was a different point in time in a different context. Mr. Stupak. What changed in 5 months then between--what would change in your manufacturing process, anything change? Mr. Parkinson. I can't respond specifically to what changed in the manufacturing process from our inspection. Mr. Stupak. Well, were there changes between your inspection and the FDA inspection? Mr. Parkinson. I don't know. I've read the reports, but I don't know that I can ascertain from that whether or not there were specific changes that took place in that period of time. Mr. Stupak. So, well, if there's no change in your manufacturing process and there was no problems with heparin coming out of this plant prior to late '07, how did the chondroitin get into the heparin then? Mr. Parkinson. Well, I've listened to the testimony throughout the day, Mr. Chairman. And again this is speculative, and the working hypothesis I believe is that it didn't enter the supply chain in this particular facility that we're discussing, the audits. I would suggest to you, and the Committee, I think more frequent audits are a good thing. I think more in-depth audits are a good thing. We instituted as a company a policy in 2006 to do more frequent audits of our vendors. Those are good things to do. Mr. Stupak. Sure, they're good things to do. Will you help pay for them then or should the taxpayers pay for them, these inspections? Mr. Parkinson. Our own internal inspections of our own facilities? Mr. Stupak. No, the FDA inspections. I know you don't depend on the FDA inspections you said, so---- Mr. Parkinson. Look, I am open minded. Well, first of all, I would say I think the FDA should do a comparable level of intensity of inspection in all facilities regardless of where they are in the world, okay. And we understand that requires a ramp-up of activity. Now you're asking the question about financing that, and it's the notion of users fees and so on. We're open-minded and receptive to that, okay, and we would like to work with the committee to move forward to discuss the specifics that might be associated with that. Mr. Stupak. Very good. Mr. Strunce, let me ask you this. If this plant in Changzhou is operating, there's never any problems until late 2007, and then suddenly we have this problem with the chondroitin, how did the chondroitin get into the substance? If it wasn't Baxter's responsibility, how about you guys? Mr. Strunce. Well, Mr. Chairman, it seems to me that most of the evidence that we've heard, the testimony we've heard and the testing that has been done on finished product, on API, and on crude heparin and the fact that this contaminant has been found all over the world in supply chains that are completely separate from SPLs, it's clear to me that it entered upstream from Changzhou SPL and consequently the time period of the end of '07 is about the time period when it started to come through, which was undetectable by the analytical methods used in the industry at the time. Mr. Stupak. OK. So if it came from upstream, it had to come from the workshops, the consolidators, or someone before it got to your plant, is that what you're saying? Mr. Strunce. That's correct, sir. Mr. Stupak. Well, in your written testimony you state that part of your rationale for entering into a joint venture in China was to facilitate your ability to monitor Chinese crude heparin suppliers. So if you're monitoring your Chinese crude heparin suppliers, how did the contamination, how did the chondroitin get in the heparin then, if you're monitoring it? That's one of your reasons for going to do business over there, so you can monitor your suppliers. Mr. Strunce. That's absolutely true, and we were monitoring our suppliers. Mr. Stupak. Well, then what broke down? If you're monitoring and it still gets in, what happened? Mr. Strunce. Well, monitoring is not exactly the same thing as living in the facility. We do routine audits of our workshops and of our consolidators. And the fact that this showed up in all of the supply chains coming out of China indicates that it was a very insidious act that attacks the supply chain of most companies producing heparin. Mr. Stupak. So if it attacked most companies, you're the only company being restricted for export to the United States? Mr. Strunce. We're being restricted, but even that's not necessary because we wouldn't ship it anyway unless it were tested. Mr. Stupak. Do you think other manufacturers in China should be restricted for their heparin in the United States until we get this chondroitin supply issue resolved as to which one of the suppliers caused the problem here? Mr. Strunce. No. My strong suggestion is that everybody that makes heparin at any level, from API to finished product, should be using these sophisticated tests that have been developed now before releasing any product. That's certainly what we've volunteered to do for the Agency, and we feel that everybody else should be doing that too. And in fact, we know that most companies around the world are not only testing the products that they have on the market, but are also testing their inventories. Mr. Stupak. But you can't, even if you did the testing you still can't reopen until you get reinspected, right? Mr. Strunce. That's correct. Mr. Stupak. Because of good manufacturing practices that the FDA did not approve of? Mr. Strunce. They---- Mr. Stupak. Could the good manufacturing practices in any way contribute to the chondroitin getting into the heparin? Mr. Strunce. I'm sorry, sir, could you repeat that? Mr. Stupak. Could your lack of good manufacturing processes--okay, could that, because you did not have good manufacturing processes at this plant according to the FDA, even though your audits say they're good, could that manufacturing process have somehow interjected chondroitin into this heparin? Mr. Strunce. Absolutely not. Mr. Stupak. It has to be intentionally put in by a supplier somewhere, right? Mr. Strunce. It seems to us that it's an intentional act upstream in the supply chain. Mr. Stupak. And you have no idea where? Mr. Strunce. We don't know specifically where. Mr. Stupak. Mr. Shimkus for questions. Mr. Shimkus. Thank you, Mr. Chairman. And I appreciate the chairman of the committee, and I think, Mr. Strunce, your last response is that that's what we're trying to find out. I know that's what industry wants to find out, I know that you all want to find out. I know, Mr. Parkinson, that Baxter is a household name, especially in the health care arena. I don't know if individual households, but because of the products you produce. SPL is not. Damage that can be done to the individual lives. And our first panelists are still here just like you were here, and which I appreciated. But of course, there is great damage done to the Baxter name, and it's important for a lot of reasons that you don't sell a product that's faulty. I mean, that's on anything and any manufactured goods. You all sat through the other panels. And the last panel, I would just like to get a generic comment, the FDA, basically the committee, and I think the committee as the whole committee, and I think the FDA, at least at some level, realize that we need to do, from our end, more frequent inspections, that there may be some penalty regime established, there will be a questioner who pays. We'll probably work through this. A U.S. company is already paying income taxes to fund the Federal Government, but what about those companies that aren't U.S. incorporated companies, and there's the debate of the user fee or how else we may deal with this. We do know that we also have to improve the FDA's real-time information flow through information technology, and those of you in the business sector have dealt with that on your own already. What are your comments based upon the responses of the second panel on reforms? You were touching on it with Chairman Stupak a little bit where you would be open. Where would you like to see the Federal Government move and the FDA to be a partner in ensuring this? And that's the user fee debate, that's expansion of authority, and the like. Mr. Parkinson. Well, there's a lot of--it's a great question. There's a lot of dimensions to that. As I said, we support more inspections. Funding should be made available to allow the FDA to do more inspections. The source of that we can debate and discuss. I think it is important for the committee to appreciate that, while that's a good start, that's only one dimension of several aspects of what it's going to take to really fundamentally make a difference to enhance safety of the supply of medical products and pharmaceuticals. The prior committee, to your question, commented on the need to invest in IT. The information systems are woefully lacking and need support. I also think the Agency should consider, and we would be happy to work with them, as I'm sure others in the industry would, to really implement something going forward that we recently implemented within Baxter as a result of this tragic experience, which is to dedicate a group of Ph.D.s and scientists to, not unlike the law enforcement agencies, try to think like the bad guys. Mr. Shimkus. And you're referring to this whole threat evaluation? Mr. Parkinson. Absolutely. Mr. Shimkus. And was this incident really the first wake-up call to move in that direction? Mr. Parkinson. It's a matter of degree, but I think it's the first time that Baxter has proactively established a resource. Mr. Shimkus. The other important thing is, about this approach, is, following up on what Dr. Burgess said earlier, or even some other, and what if this was an intentional use of science and technology to adulterate a common chemical use, slip through the investigation regime, and we would need in essence a credible threat response operation from industry and government to be engaged. Mr. Parkinson. But frankly that's the way we need to think, whether it's due to economic motivations, terrorism, that's the new world and that's the orientation. Mr. Shimkus. So as we move on a process to authorize reforms in the FDA followed up hopefully by the appropriate funding, that we ought to probably get that right with this threat focus? Mr. Parkinson. I think that's right, and I think the E Pedigree Initiative is an important part of that as well. Mr. Shimkus. Mr. Strunce, you indicate that the cost of heparin was not a principal reason for locating your facility in China, is that correct? Mr. Strunce. That's correct. Mr. Shimkus. While the cost of heparin was not a factor for SPL, do you think it plays a role in the incentive among somebody in China to cut the supply with counterfeits? Mr. Strunce. Well, when the counterfeiting appears to have happened at a time when the price was rising for Chinese heparin, it was rising dramatically and is still very high. So in answer to your question I believe that that provided some additional incentive. There was less material available because there were several factors that impacted the shortage of material, which is what drove up the price. So it provided, perhaps, the incentive for someone to use these measures. Mr. Shimkus. Tell me again a size difference between the Wisconsin facility and the facility in China. Mr. Strunce. We have---- Mr. Shimkus. Can we compare, I mean, is there an easy way to compare the almost duplicate models, only changes in size? Mr. Strunce. They're pretty close, but the SPL in Wisconsin has about 150 employees. They produce basically two products: pancreatin and heparin, both from animal source. The facility in China produces primarily only heparin, produces about, I guess about maybe one-fifth of the overall capabilities of the SPL facility. Mr. Shimkus. So it's quite a bit smaller operation? Mr. Strunce. It's smaller. Yes, it is. Mr. Shimkus. Mr. Wang, the FDA inspection of one heparin consolidator quoted the owner to say that his firm has consistently been unable to meet SPL's production needs because there is not enough crude heparin available. He said the number of pigs slaughtered in China had dropped by 200 million since 2005. If SPL was aware of this supply crunch, what did you do to ensure the quality of supply? Dr. Wang. In 2007, we actually reduced our production because the demand cannot meet our need. Mr. Shimkus. Were you concerned about adulteration of the commodity product? Dr. Wang. Yes, we are always on the lookout. At that time in 2007, because of the price increase in heparin, we are always mindful of potential contamination for economic interest. And the major thing we look at, and also the industry is looking at, is probably cheaper heparin from other species. So in 2007, we're putting a test method, a very sensitive test method called PCR, in order to distinguish the porcine-based heparin from other sources. Mr. Shimkus. I've tried to talk to my colleagues about trying to understand the input and the outputs and the quality assurance on both ends of the manufacturing arena, making sure that the product coming in is up to the standards required and the quality out. I think that's the frustration here with the inspection regime. Because the tough thing for public policy people, whether there was deception imposed by additives that mimicked the test results, the reality is we didn't have people walking around facilities or checking facilities. And that's almost impossible to defend, especially when you've got lives that have been lost because of that. So part of the discussion we're going to have is how far back in the supply chain will the FDA inspectors have to go, or will the producers have to go to, and at what cost, because the further you go back, if we're doing it, that means inspectors in a whole chain, if you all do it that means your inspectors that you're paying throughout the whole chain. Can you comment on that or is that just a fair analysis? Mr. Parkinson. Well, I think as we listened from the earlier testimony, the resources and manpower to do it is one thing. You need to get, certainly if it's sourced in China, the cooperation from the Chinese locally to go all the way back and do this. As we all understand now, this a very complex supply chain on a biologic. And typically, to enhance safety of products fundamentally you want to focus on inputs and process, hence the inspections. But this happens to be a product where the detection, in terms of when we receive incoming material to our facility, is very critical that we absolutely expose that bulk to the highest level test. And we always have subjected it to more tests than are required by the USP, titer specification, and so on, because it was biologic, because it's from China and because the supply chain is so complex. So it is a daunting undertaking. Mr. Shimkus. Well, let me just--and my questions here by just reiterating the fact that the committee as a whole, the whole committee, is pretty intent on moving something. And I think most of us agree, we as public policy makers with the FDA, we have to break down stovepipes, we've got to get IT and we're going to have to fund it somehow. It would be helpful for us that industry would be partners in this process, and understanding that we're all going have to give a little bit. So I would encourage you all and folks in the associations at which you may be members of to work with us and the majority here to move something positively that's going to give a better assurance. Because we just feel too many cases right now, not just in the drug issue, but in kids' toys, and in food products, that the public is expecting us to do something. So I appreciate it. Thank you. Mr. Stupak. A couple more questions of me. Mr. Parkinson, you sort of indicated that you policed yourself, you didn't see these problems that the FDA found. I'm really baffled by that. How is it you can have just two divergent findings on the same plant? You have your audit that says everything is fine in the fall of '07 and then they go there in February and they're just worlds apart. Did anything physically happen in the plant in 5 months? Mr. Parkinson. Well, I don't know. I can only speculate. And what I would say would be repetitive to what I said earlier. Different points in time. It was a snapshot. Ours was what's referred to as a routine inspection, as opposed to the Agency went in for cause subsequent to the events that transpired. That leads to a very different kind of inspection. Beyond that I can't really speculate. Mr. Stupak. So when the FDA says that at the Changzhou SPL's processing steps provided no assurance that they were capable of removing impurities, why wasn't that found 5 months earlier? I mean, removing impurities from a product. It's the same process to remove it, right, impurities? Mr. Parkinson. Well, and there's impurities that are also removed in terms of when material comes into our facilities as well. I mean, this is a biologic. And at a certain low level there are impurities beyond this one that was introduced. Mr. Stupak. But they weren't getting removed out of your plant, right, in Changzhou? Mr. Parkinson. I would defer to Dr. Wang in that regard because I don't have the technical expertise frankly to respond to that. Mr. Stupak. OK. Well, let me ask Dr. Strunce and Dr. Wang this. Either of you, Mr. Strunce, or you Dr. Wang, told our investigators that SPL's Changzhou plant was essentially the same facility and operation as your Wisconsin facility. Do any of you remember saying that to our investigators? Mr. Strunce. Yes, that's generally correct. Yes, sir. Mr. Stupak. Did you make that statement then? Mr. Strunce. Yes, sir. Mr. Stupak. OK. Let me ask you this then. And the only difference was China is a little smaller scale than your Wisconsin facility, right? Mr. Strunce. China is, yes, smaller scale. Mr. Stupak. OK. But yet, when your Wisconsin facility was inspected it did not have the same problems as in China. So if they're exactly the same plant, in fact China is a little smaller, why didn't the same problems show up, the same facility, same operation you said? Mr. Strunce. Well, and exactly the same facility doesn't mean exactly the same pieces of equipment, exactly everything is exactly the same. It means the process is generally the same. Mr. Stupak. So the process. So which one has the newer equipment, China or Wisconsin? Mr. Strunce. I'm sorry? Mr. Stupak. Which one has the better equipment, China or Wisconsin? Mr. Strunce. We recently upgraded Wisconsin. We've put in a new purification area. And so probably in that area, yes, Wisconsin has better facilities. Mr. Stupak. But you also do it differently, too, don't you? In China, if you find a batch out of sequence or not right out of specifications, you just reprocess it to see if you get it right the second time where in Wisconsin you don't do that, do you? Mr. Strunce. Well, I believe that the reprocessing was all done in China according to a validated protocol. Mr. Stupak. Why would you do it in China and not do it in Wisconsin? Why would you reprocess if it doesn't meet the specs in one plant and not the other? Mr. Strunce. It's allowed by the FDA to reprocess according to a protocol. Mr. Stupak. So why do you do it in one plant and not the other? If it's allowable, why wouldn't you do it in both plants? Mr. Strunce. I don't know that we don't do it in Wisconsin. Mr. Stupak. OK. So you don't know that. In your Wisconsin facility you have a heparin expert on-site, but in China you don't; according to the FDA report and Dr. Wang's testimony, he's there maybe 15 percent of the time. So why is that? Mr. Strunce. The Changzhou facility has very capable and trained people. As far as a heparin expert we have several in the company. Dr. Wang---- Mr. Stupak. Well, my point being, see, you reprocess in one, you don't in the other, you have experts at one, you don't at the other. It almost seems like you're treating them differently, and it's the ones where you have the least amount of inspections where you reprocess that have these problems. Now, you say it may be one of your suppliers. So let me ask you this. One of your consolidators, Changzhou Techpool Pharmaceutical, is a partner with Changzhou SPL, right? Mr. Strunce. That is correct. Mr. Stupak. And it supplies the majority of your crude to your plant in Changzhou? Mr. Strunce. It has supplied a majority in the past and now it's one of two suppliers. Mr. Stupak. So this partner could be responsible for introducing the chondroitin into this process, right? Mr. Strunce. The consolidator could, conceivably, but we do not think that that's the source. Mr. Stupak. OK. So if you don't think--did you check to see if it was the source? Mr. Strunce. We asked, yes. Mr. Stupak. Do you really think if you just simply ask they're going to tell you? Weren't you going to check it and inspect it? I mean, remember your reason for going to China was to monitor your suppliers. Is the way you monitor your suppliers simply asking? Mr. Strunce. We asked them, we tested the material that we got from them, and some was contaminated, just as some was contaminated from the other consolidator, just as some has been contaminated all over the world. Mr. Stupak. Well, take a look at No. 8 there, Exhibit No. 8 there under Tab 8. This document references all the workshops that supply crude heparin to Changzhou SPL. Which one of the workshops then could be responsible for introducing the contaminant? It's Exhibit No. 8. That's all your suppliers? Mr. Strunce. Yes, sir. Mr. Stupak. So if it's not your consolidator, I guess we're back to the workshops. Any of these be responsible for the chondroitin? Mr. Strunce. Any one is possible. Mr. Stupak. OK. What are you doing to try to figure out which one of these might have possibly done it, besides asking them a question? Mr. Strunce. Well, we do routine inspections of the workshops. Mr. Stupak. Do you do routine inspections of the consolidators? Mr. Strunce. Yes. Mr. Stupak. OK. And in your inspections of your workshops or consolidators did you find any chondroitin sulfate? Mr. Strunce. We found--at the time that we inspected them we found no chondroitin sulfate, nor were we looking for it. Mr. Stupak. OK. So since this incident occurred have you gone back and checked your suppliers or consolidators and did you look for chondroitin sulfate? Mr. Strunce. We started inspection, but at a certain point in time the Chinese authorities took over a very extensive inspection and do not feel that we should be interfering with the inspection of the Chinese authorities. The Chinese authorities are---- Mr. Stupak. Well, the Chinese authorities never inspected your plant to produce heparin. So now you're saying because they said don't check the workshops and the consolidators that you're going to back off? I mean you never even checked your plant, right? Mr. Strunce. That's correct, but there's no relationship between the two facts. Mr. Stupak. Well, did you have to get Chinese permission to manufacture heparin in their country? Mr. Strunce. We are a chemical company, according to them, because we built the plant for the sole purpose of providing product to the United States. We don't sell product in China. Mr. Stupak. OK. So you're considered, then, a chemical company, not a pharmaceutical company? Mr. Strunce. That's correct. Mr. Stupak. All right. So did you get permission to operate as a chemical company in China? Mr. Strunce. We operate--we have all the permits that we need to operate in China in doing exactly what we do. Mr. Stupak. Did you notify the FDA, then, you were producing your license in China as a chemical company to produce pharmaceuticals here for the United States? Mr. Strunce. We notified the FDA that we were planning to produce product for the United States market and we filed a drug master file with the FDA and registered. Mr. Stupak. Right. That you were planning to do it. But did you ever tell the FDA that you were actually doing it, providing? Mr. Strunce. Of course. I mean we have to provide a drug master file. Mr. Stupak. OK. A drug master file. Then what happens after a drug master file? Mr. Strunce. Baxter makes--we give Baxter permission to reference our drug master file. Baxter makes a request to use Changzhou SPL as a supplier. And the FDA approved that. Mr. Stupak. OK. But you also know, as Mr. Parkinson indicated, before that was approved it should have been inspected, right? Mr. Strunce. I know they have the right to inspect it. We were perfectly available, waiting, expecting an inspection. Mr. Stupak. OK. Don't you think--how long have you been in the business, this pharmaceutical business? Mr. Strunce. About 30 years. Mr. Stupak. Have your other plants been inspected by the FDA? Mr. Strunce. Yes, sir. Mr. Stupak. Didn't you think it was odd that this one was not being inspected by the FDA? Mr. Strunce. We were surprised that it wasn't inspected by the FDA. Mr. Stupak. So in your surprise you never picked up the phone and asked the FDA what's the deal going on, are you going to inspect or not inspect, that it was okay to ship a product? Mr. Strunce. Well, we became an approved supplier according to the FDA. So whether they were going to inspect us prior, or the next week, or the next time they had somebody in China, that is not my---- Mr. Stupak. The next time they have somebody in China to do an inspection, that's about 30 or 40 years we figure. Mr. Strunce. Yes. You did the calculation. I didn't know that. I thought it would be weeks or months. We have been ready and willing to be inspected, no problem. Mr. Stupak. Well, how about this? You know, a lot of us indicate, you saw a chart up there earlier today, that we inspect plants in the United States every 2.7 years, in China it's 30-plus years before you get a chance to inspect it. Is that incentive to go develop drugs overseas because you don't have to put up with the FDA hassle and regulations? Mr. Strunce. Quite honestly, we don't consider the FDA a hassle. We have always been very transparent with the FDA about everything we've done. We're inspected, by the way, more often than 2.7 years. We get inspected 18, 12 to 18 months. Mr. Stupak. Where? Mr. Strunce. In Waunakee. Mr. Stupak. In Wisconsin? Mr. Strunce. Yes. Mr. Stupak. Were you surprised that the FDA, like Mr. Parkinson, were you surprised with the FDA's inspection, all the problems they found, starting with impurities all the way down, that even your manufacturing process wasn't suitable for producing heparin, were you surprised at that inspection? Mr. Strunce. I was surprised at the list of the 483, yes. Mr. Stupak. What happened between October of 2007 and February of 2008 when they made that inspection, that 5-month period? Anything happen at the plant that would cause that big drop-off? Mr. Strunce. No, there was no big drop-off. The facility didn't change the way that it produced heparin, it didn't change anything. What changed is the environment and the---- Mr. Stupak. What changed was the chondroitin somehow got into this drug, right? Mr. Strunce. That's correct. Mr. Stupak. And it's one of your suppliers and you don't know which one? Mr. Strunce. It's one of many people's suppliers. There are many companies that have been impacted by this, so it's not just our suppliers. It's our suppliers. Somewhere down our supply stream---- Mr. Stupak. But you're the only company that can't ship product to the United States? Mr. Strunce. We are the only company that--yes, we are the only company that's on an import alert. Mr. Stupak. Right. So it has to be from one of your suppliers? Mr. Strunce. I don't know what that means, sir. I know that heparin has been contaminated all over the world, multiple countries, multiple companies, and it's not coming from us. Mr. Stupak. Well, if it's not coming from you---- Mr. Strunce. Our product was contaminated, but our product is not the only product that was contaminated. Mr. Stupak. So do you think you're being treated unfairly by the FDA then if you're the only company that has the import alert if other companies are supplying heparin that's contaminated to other parts of the world? Mr. Strunce. We are a U.S. company, and I accept the regulation of the FDA. Mr. Stupak. But don't you think it's unfair if the others aren't being penalized and you are? Mr. Strunce. I think that any heparin, not only coming into the United States but going anywhere to be used as a pharmaceutical product, should be tested very thoroughly. Mr. Stupak. OK. I've been stalling for Mr. Burgess to come back. I see he's back. Do you have questions, Mike? Mr. Shimkus. I'm first. Mr. Stupak. Mr. Shimkus, go ahead. Mr. Shimkus. But I'll be short. Mr. Strunce, I think you told me earlier that the China plant is much smaller than the Wisconsin plant, the Wisconsin plant produces two products, the China plant produces heparin only, is that correct? Mr. Strunce. Yes. Only heparin products, yes. Mr. Shimkus. So if you're on the import list, is the Chinese plant closed right now, is it producing, is it selling, where is it going? Mr. Strunce. Since we first heard about the contamination, the plant has been shut down. We are not producing. We are not shipping. We won't produce or ship until we resolve the warning. Mr. Shimkus. Great. The other questions that I have, and you all have the best example, because having a working relationship with the Chinese workforce and the Chinese Government. I think one of the things that frustrated us is that during this whole process when the heparin case burst in the news, many of us recall Chinese officials telling the press that the plant was making heparin for export only and was not making heparin for the Chinese people, so China didn't check on the plant and no one else did. So this gets to the--and you all know, you're businessmen, you all know about corporate culture, culture of industry. Is there a cultural issue as far as--that we should be concerned with on the quality of a product and the concern of the health of our citizens who are receiving product from China? That's an attitude toward quality. You may not want to answer that. Mr. Parkinson. Mr. Parkinson. Well, there's a lot of aspects of that question with cultural dimensions to it. I can speak to a specific experience of Baxter's operations that we have. Our own manufacturing plants which we run in China, which we have five, we employ roughly 2,000 people. And I can tell you the quality of the products coming out of those facilities are superb. They are all used locally in China. We don't export our manufactured product outside of China. The caliber of the workforce, their commitment to quality. Frankly, their commitment to quality standards and environmental standards in China, which is defined here in the U.S. as a U.S. company, has been great. Now, your question has broader ramifications as well, cultural dimensions to it, and I'm not sure how to comment beyond what I've shared. Mr. Shimkus. Mr. Strunce. My concern is the whole, it seems like in this facility, if it's just being sold in the United States and that you met all the requirements to be qualified to have a facility there, export only, it's kind of from the Chinese perspective--they weren't in there, let the buyer beware. And as we were dealing with a multitude of issues as far as import aspects from China, this is that whole cultural debate that we may have to address. Mr. Strunce. Well, I think that, first of all, I believe that the quality, the people that we have in China are excellent employees, they're very dedicated, they've taken FDA training when training has been offered both in China and some actually in the States. And I think from an individual standpoint our company has very dedicated employees. But the supply chain is very long. And I think that we have to be vigilant on the supply chain for the pieces that aren't part of our company. And I think that's where we need to be more vigilant, and perhaps that's an area that as you're looking at a more general picture that might be important also to you. Mr. Shimkus. I think we need to be more vigilant, too. So it's not--as I think we've seen with our FDA. Mr. Chairman, that's all the time that I need for questions, so I yield back. Mr. Stupak. Thank you. If I may, just a quick question or two. Mr. Parkinson, if we can go back to Exhibit 30, page 3. In your inspection there you're saying that there were differences in inspections and difference in degree between yours and the FDA. And on page 3 it says, ``the audit scope for manufacturing as well as other potential future projects.'' What future projects were you going to put in this plant here in Changzhou? Mr. Parkinson. We have no specific plans, Mr. Chairman. Mr. Stupak. Why would it be in there then? Mr. Parkinson. I'm not sure I can answer that question. I don't know. We have no specific plans for future projects in this facility. Mr. Stupak. OK. The next page in the background says that the Changzhou SPL employs a system of quality assurance that complies with the highest level of general manufacturing GMP requirements. The highest level. Other than someone adding chondroitin to the heparin, and no one found that at this plant, those highest levels of manufacturing requirements that you say is in there really doesn't meet what the FDA would call the highest level of good manufacturing requirements, does it? Mr. Parkinson. Certainly not based on the results of the recent inspection. Mr. Stupak. OK. Let me ask you, both Mr. Parkinson and Mr. Strunce, there's been some talk about the economics here of using the heparin and using chondroitin, a difference in cost, and I think Mr. Burgess asked some of those questions of an earlier panel. There was the blue ear disease that went through and wiped out a lot of the swine population in China, right? Mr. Parkinson. That's my understanding, yes. Mr. Strunce. That's correct. Mr. Stupak. Did you ever discuss using the substitute for heparin, then, other than pigs' intestines in your manufacturing process? Mr. Strunce. Absolutely not. Mr. Stupak. OK. Mr. Parkinson? Mr. Parkinson. No. Mr. Stupak. OK. Dr. Wang, in this report, and again in this exhibit, Exhibit 32, this is the Chinese or translation was Chinese, I take it, the patent invention application, and one of the inventors is a Fang Sheng Wang. Any relation to you? That would be like Smith in the United States? Dr. Wang. There are probably 100 million Wangs in China. Mr. Stupak. Right. But no relation? Dr. Wang. No connection. Mr. Stupak. Were you aware of the application to use chondroitin, over-sulfated chondroitin in China, the application? Dr. Wang. No. I only stumbled on this patent application about a month ago. Mr. Stupak. Were you aware of it being in the United States from way back when when they used it? Dr. Wang. No. Mr. Stupak. In fact, in the United States, and the next tab actually mentioned about using chondroitin and heparin. That would be the next tab, it would be 33, on the second page, sort of mentioned it. Were you aware of that one? We're on the top of the second page: The invention contained sulfated and chondroitin sulfate type. Do you see where that is? We're on the top of the page--or any prescription. It goes on further and talks about heparin. Were you aware of this patent? Dr. Wang. No. Mr. Stupak. OK. Seeing no further members to ask questions, we'll excuse this panel and move on to our last panel. Thank you, gentlemen. I would like to have our fourth panel of witnesses come forward. It's Dr. Clive Meanwell, who is the Chair and CEO of The Medicines Company. Welcome, Doctor. It's the policy of the subcommittee to take all testimony under oath. Please be advised that witnesses have the right under the rules of the House to be advised by counsel. Do you wish to be advised by counsel? Dr. Meanwell. No. Mr. Stupak. OK. Then I'm going to ask you to rise, raise your right hand and take the oath. [Witness sworn.] Thank you, Doctor. You're under oath. I will ask for an opening statement if you would. It will be 5 minutes. Then we can put a longer statement for inclusion in the record if you so desire. Doctor. STATEMENT OF CLIVE MEANWELL, M.D., CHAIRMAN AND CHIEF EXECUTIVE OFFICER, THE MEDICINES COMPANY Dr. Meanwell. Thank you very much. Good afternoon. My name is Clive Meanwell. I'm a physician, medical researcher, and the Chairman and CEO of The Medicines Company in New Jersey. In the interest of full disclosure let me say that we market bivalirudin, an intravenous blood thinner that is an alternative to heparin in heart angioplasty and is undergoing FDA review for other uses. In addition, legislation is being considered that could affect the patent life of our product. But I'm not here to talk about that today. I am here because I'm experienced in global research, development regulation, and commercialization of blood thinners, including heparin, and I hope that I can help you to protect patients in need. Throughout history, medical disasters have spurred legislative, regulatory, and scientific innovation. Dangerous adulteration and misbranding of foods and drugs was a common practice worldwide in the 19th century, when for example American soldiers were given adulterated quinine products. A horse named Jim was used to incubate an antitoxin to diphtheria in the early 1900s. After the deaths of 13 children who received the antitoxin, authorities discovered that Jim had developed tetanus and contaminated the product. These and other scandals drove early regulatory innovation that led Congress to enact the Biologics Control Act of 1902 and the Pure Food and Drug Act of 1906. Another therapeutic disaster in the 1930s, when a chemist formulated sulfur with a substance we now call antifreeze, killing at least 100 people, including many children, led to the Food, Drug and Cosmetic Act of 1938. And yet another therapeutic disaster involving thalidomide compelled passage of amendments to the Food and Drug law in 1962. heparin was discovered over 100 years ago and by 1935 researchers recognized its therapeutic value as a rapid and powerful injectable blood thinner. Most heparin is now manufactured from pig intestines using methods developed in the 1950s. Today, heparin is, as we've heard, ubiquitous in U.S. hospitals and more than 10 million patients are given the product each year. We've also heard that it's estimated half the world's crude heparin supply now originates in China, where the supply chain may include unregulated participants. Some experts estimate that 70 percent of China's crude heparin comes from small producers. Production facilities may be quite rudimentary and small producers may not keep records of the source of pig intestines or other information. In the warning letter described today, the FDA effectively shut down imports from one Chinese manufacturing facility because of deficiencies concerning sources, methods, equipment, and records. The average price of heparin in the U.S. is $1.75 per unit. While low cost medications can represent an enormous benefit to patients, razor thin margins can also carry risk if producers are unable to invest in global quality systems. Apart from these manufacturing problems, even properly produced heparin has well-known limitations as a drug, particularly in high risk patients. These include variable levels that affect serious and sometimes fatal bleeding and occasionally life-threatening immune reactions. Let me provide a perspective on what might be done going forward. First, when the drugs are produced in or outside the U.S. by themselves or by third party contractors, manufacturers must develop global quality systems. We cannot assume that FDA or other regulatory agencies will take care of quality control. Second, the FDA needs to allocate inspection resources matched to the global business of pharmaceutical manufacturing. Eighty to 90 percent of active ingredients are now made outside the U.S. That means far more inspections should be made abroad and the FDA must recruit, train, and support inspection staff accordingly. Third, there needs to be much better coordination between regulatory agencies in countries with high quality standards. Fourth, we need better science and testing processes. In last week's publication of two articles on contaminated heparin, FDA produced excellent interdisciplinary science very quickly when the need arose. Congress should support advancement of key regulatory science capabilities. And finally, as highlighted by this heparin crisis, we need not only to assure safety in the production of existing drugs, but also encourage new product innovation. Heparin has been a workhorse drug since the 1930s, but with limitations. Biotechnology has recently produced next generation alternatives to heparin, and further research is needed to prove greater safety and effectiveness, particularly in high risk patients such as those undergoing dialysis, heart surgery and stroke prevention or treatment. In my view, Congress should continue to support measures that encourage such innovation. Mr. Chairman, I would be happy to take questions. [The prepared statement of Dr. Meanwell follows:] [GRAPHIC] [TIFF OMITTED] T3183.060 [GRAPHIC] [TIFF OMITTED] T3183.061 [GRAPHIC] [TIFF OMITTED] T3183.062 [GRAPHIC] [TIFF OMITTED] T3183.063 [GRAPHIC] [TIFF OMITTED] T3183.064 [GRAPHIC] [TIFF OMITTED] T3183.065 [GRAPHIC] [TIFF OMITTED] T3183.066 [GRAPHIC] [TIFF OMITTED] T3183.067 [GRAPHIC] [TIFF OMITTED] T3183.068 [GRAPHIC] [TIFF OMITTED] T3183.069 [GRAPHIC] [TIFF OMITTED] T3183.070 Mr. Stupak. Thank you. And thank you for your testimony. Heparin has been used since the 1930s, I think was your earlier testimony, is that correct? Dr. Meanwell. Yes, sir. Mr. Stupak. What--besides heparin, what else do they use right now for blood thinners? Dr. Meanwell. There are a number of new drugs, one from France called Arixtra, is an ultra short, five-sugar sequence. Mr. Stupak. Has that been approved by the FDA already? Dr. Meanwell. Yes, sir. And that's on the market for the prevention and treatment of leg vein thrombosis, particularly associated with surgery. Three other drugs are approved. One of them is our drug, I'll come back to that in a second. There is a drug called Argatroban, which is from Glaxo, which is a product from a biotechnology company in Texas, which is to treat patients who are allergic to heparin who can no longer receive it. There's a second of those drugs called Lepirudin, which is from a German company which is also on the U.S. Market. But both of the ones I've just described are used in very small numbers of patients so far. The third drug is the product we've developed and are marketing. We can only market it today for patients undergoing acute coronary angioplasty. And we are doing other studies under the supervision of the FDA to try to expand its uses. All of the drugs I've mentioned have a completely different mechanism of action to heparin, have a completely different mode of manufacturing and each of them is synthetic. Mr. Stupak. Is the cost per dose about the same with these four or is heparin a much more inexpensive alternative? Dr. Meanwell. Heparin is definitely the bottom of the market in terms of price, and these other drugs are considerably more expensive. Each of them has undergone testing, which includes health economic testing. In our own case we determine that we can save the hospital about $500 each time it's used even after taking into account the additional price. Mr. Stupak. So it's the least expensive, but it's the most widely used because it has more applications than the other blood thinners, heparin does? Dr. Meanwell. Sir, I think that heparin is an outstanding drug in low-risk situations because it does a pretty good job. But when patients get in a high-risk situation, heparin has a tendency to give up on you just when you need it most, and there I think it sort of runs out of steam as an effective and safe agent. Mr. Stupak. Let me ask you this. In the witness book there, that big black book right there, would you take a look at 34. And I want to go to about page 7. Dr. Meanwell. In section 4, sir? Mr. Stupak. Thirty-four, page 7. There's a--Kyle, if you can try to bring that up. We do not have a good copy of this chart, and we just scanned it in. Let's see if it will work. Because I asked the last panel a question about this blue ear disease that hit the pigs or pigs in China which we lost quite a bit of their--you lost your counsel? OK. You can't see it either. Here is what I was trying to get at. When we look at this chart, and maybe you can see it, there's a yellow line that goes through. Dr. Meanwell. It's not clear, but I do see it, yes. Mr. Stupak. And the average cost of crude heparin, as you see in about 1990 went way down using the yellow line, and it was pretty well flat and went down. And then in about 2006 it shot way up and actually exceeded what it cost here in the United States to make heparin in about 2007. And that's when that blue ear disease broke out in 2006 suddenly, then the cost of heparin from pigs intestines just skyrocketed in China. And then that's where some of us suspect the adulteration, if you will, occurred with the chondroitin. And I wish that map would have showed it, but it's one of those things. In your research and your development here of your alternative, if you will, to heparin, had chondroitin been looked at as--sulfate chondroitin--as a possible substitute instead of the sugar molecules from the pig intestines? Dr. Meanwell. Chondroitin itself, three major products of boiling up pig intestines are heparin, dermatan sulfate, and chondroitin sulfate. Dermatan sulfate is a fairly common impurity that is tested for, has a very minor anticoagulant effect, unreliable, and certainly wouldn't be a good therapeutic. Chondroitin sulfate is even worse. Although it does have molecular structure that might suggest it would be a blood thinner, in reality when you put it in place it wouldn't be. Particularly when Dr. Woodcock mentioned the special structure of this particular chondroitin sulfate, heavy sulfated, doesn't appear in nature, the nearest thing that researchers have found in the animal kingdom is chondroitin sulfate from the cartilage of the squid. This is not an anticoagulant. This drug has been used, or a similar structure drug has been used, as an oral agent in Europe for joint pain. It was put on the European market and actually taken off the European market even as an oral--excuse me, subcutaneous drug--because it provided anaphylactic reaction. So chondroitin sulfate, although people may patent it as such, is not even close to something that we in the United States or in Western science would call a drug for blood thinning. Mr. Stupak. So is it fair to say--and we don't know other than some upstream suppliers, according to our last panel--the person who, or however it got in there, thought it would be appropriate? Is it possible to make that assumption? He thought it would be appropriate, but in reality it does not; there's a patent in China, there's a patent in the United States to use a chondroitin in heparin, and it was just an educated guess that didn't look at the safety ramifications? Is that fair to say? Dr. Meanwell. Sir, I think it is fair to say. I think someone with good chemistry, lousy medicine, and no ethics could do that. Mr. Stupak. OK. Because our information technology is better than the FDA's, Kyle was actually able to color that yellow line. So you can see how at one time the heparin from the pigs is--the red line from China was higher than--the other line there is from the U.S. domestically produced. One time it was higher, then it dropped way down in the 90s there, and then right about the time we had that blue ear outbreak, you can see how the red line just shot above what's domestically being produced. So thanks, Kyle, for doing that so we could see it. With that, I will turn to Mr. Shimkus for questions please. Mr. Shimkus. Thanks, Mr. Chairman. I just want to follow up on that same slide. Mr. Meanwell, should that price spike in the pig shortages, should that have raised red flags to the heparin producer? Dr. Meanwell. I was asked that question a couple of days ago, and I'm not an expert in supply purchasing. But I called some people I know in the industry who are, and I asked them that question. I said, if this happened to your supply chain, what would you do? I think what we all know is that most--this local pharmaceutical supply chain that has been discussed today is mostly governed by contracts. Those contracts set up provisions for price, quality, delivery times, and specifications. And typically, if you go outside of the specs of one of those contracts--say, by 5-plus or 6-plus percent--in other words, more than inflation--first, it would raise a commercial flag. Is this really the best supplier I can get? I pushed a couple of people on it, experts, and they said, Well, if it was 100 percent, I need to know why; I've got to know why. So if you then find that blue ear disease is behind it, that's a reasonable explanation. But then I think one has to ask the question, is this going to be a temptation if I'm not completely sure of my drug supply, and I think common sense would suggest it would be a temptation. Mr. Shimkus. So it should have been a red flag? Dr. Meanwell. I believe so, yes. Mr. Shimkus. And following up--and you said, to a lot of the other questions and the debate, does--China still is--some people are trying to define--it's still developing, but there's parts of it that are very developed. Does relying on China for commodity products of this magnitude with the inspection regimes, or the inspection regimes that we don't have, does China present particular challenges on this front? Dr. Meanwell. I think we know that Chinese science can be outstanding. We know that Chinese production methods can be outstanding. But I think we also know that their pharmaceutical industry is emerging as a global player, and certainly I think it behooves us to be quite cautious in sourcing materials from, frankly, any developing nation. So I don't think there's anything special about the culture of China that makes them--which might have been implied earlier that makes them less careful. I think Chinese people are extremely careful about this kind of thing. But there may be a need for them to develop skills and systems. Mr. Shimkus. The product that you are referring to, that you're involved with, is it licensed in Europe? Dr. Meanwell. Yes, it is, sir. Mr. Shimkus. But not here yet? Dr. Meanwell. It is approved--as I mentioned in my opening remarks, it is approved for a narrow use, which is coronary angioplasty. We are pursuing other uses for it with the FDA's support. Mr. Shimkus. I didn't have angioplasty. We're kind of sharing time and sharing questions. So that's a good sign. Are there possibilities--we were talking about just the cost-benefit analysis, and we know heparin is a workhorse drug; it has been around for a long time. I think you highlighted the fact that it shouldn't be used in some cases when the patient has a lot of other challenging aspects. But there's this whole cost. We know the high cost of new drugs that come to market versus drugs that have been around for a long time, and there's--there is that challenge. Are there possibilities that synthetics for heparin and other animal-source drugs can be developed and produced that would reduce our reliance on the supply from China? Dr. Meanwell. Well, most of the drugs I'm talking about are synthesized in Europe and/or the United States, or both. So, by fact, that would be true. However, I have to point out that the volume, the sheer volume of heparin used in the United States hospitals is enormous. Seventy-nine million units of heparin were--if we look at a moving annual total, as of March 2008, so we'd have to replace 79 million units, and that's a whole lot of heparin. As I said, I think heparin is a very good drug in the right places at the right time. Mr. Shimkus. Would you consider synthetics a more--I think you highlight that might be difficult because of the supply. But would synthetics be a more secure pipeline, that we wouldn't have the long tail of product line? Dr. Meanwell. I believe, earlier, that Dr. Woodcock or Dr. Autor mentioned that the newer drugs coming to the market tend to have a tighter quality chip, if you like. Quality control systems are sort of built in during drug development these days. Obviously, when heparin came to the market in the 1930s, such things weren't yet understood so well. So I think we've never really gone back and engineered all that quality in them. So I think new products coming along tend to be better controlled in general than older products, for those reasons. Mr. Shimkus. And maybe some of the control would be for the proprietary information of producing the synthetic drugs, too, versus being more--not as controlled and then losing the ability to other people who may just reproduce it based upon patent infringement or something. Dr. Meanwell. I think that's true. But I think the principal reason to pursue the quality, which was also mentioned earlier, is patients and reputation. Mr. Shimkus. Mr. Chairman, that's all the time I need. Mr. Stupak. Thanks, Mr. Shimkus. Mr. Burgess for questions. Mr. Burgess. Thank you, Mr. Chairman. And Dr. Meanwell, thank you for sticking it out through a very long day here, our committee work. I really do have to tell you, I appreciated so much your coverage of the history of so many aspects of this debate that we're in today, because I think it is important to put it into historical perspective. A couple of things that were in your testimony that were also intriguing: Number one, you have the comment that the Food and Drug Administration is capable of performing outstanding and interdisciplinary science very quickly when the need arises. And I think that observation was made by one of the other panels here today. But we at this end where we're referenced by a New England Journal article from this morning, where we're quick to kick the FDA, we also need to recognize that the resource is one that does--that does provide a valuable service, and a valuable service to not just physicians in this country, but to patients in this country as well. I appreciate so much your bringing that up in your testimony because again, it's something that I think that gets lost in translation here all too often. You also talk a little bit about some of the work we did in June with the formation of the Reagan-Udall Foundation, which I also thought was a good idea. Now, my understanding is--during our last appropriations process, and that was a USDA appropriation--that the funding for the Reagan-Udall Center was blocked. Is that correct? Dr. Meanwell. I don't know, sir. Mr. Burgess. The think the answer is, yes it was. I know that because I read it in a Wall Street Journal editorial, and they were quite concerned that one of the few things that Congress had done this year was--on an authorizations standpoint was not--the money was not forthcoming for an appropriation. And it was unfortunate, but the reason given for blocking the appropriation was that it would somehow be one more gift to give to the pharmaceutical industry in this country when they really didn't need anything else from Congress. Another statement that you have in here, ``Manufacturers cannot assume nor should they be allowed to assume that the Food and Drug Administration will take care of quality control.'' Again, a point that I think is sometimes missed on this committee. But that's a fairly powerful one. And you follow that up with a quote which I won't quote, but end up, ``nobody wants to cut costs by cutting corners.'' Does not that go to the statement made by the witnesses from the Food and Drug Administration, when the comment was made, ``The best way to ensure integrity of the supply chain was through the manufacturer itself.'' Is that correct? Dr. Meanwell. Well, I don't think there's any single solution, but I have a perspective from being--living abroad, being British, having worked in the European pharmaceutical industry. When the FDA arrives at your plant, everyone stands to attention. It's the gold standard. They perform outstanding work. They perhaps don't perform enough of it, but when they do it, they do it really well. But then, in addition to that, I think there are other factors, such as improved regulatory science that is being supported that is also needed. And then, finally, the industry has to play its role. We are the manufacturers, and therefore, I think we have to take ultimate accountability for the quality of the product. I believe that my colleagues in the industry all agree with that. Mr. Burgess. But then we heard testimony from Mr. Nelson on the first panel. I think the statement he made was, ``Corporate due diligence cannot be relied upon,'' which seems to be counter to that philosophy that you just expressed. Dr. Meanwell. Well, I wasn't clear, in that case. It's my view that the company has to do everything it can to assure the quality throughout the process. I think the FDA has to set the bar. The FDA has to set world-class standards. And the industry should say, okay we'll jump over that bar. I think it's a duality required; and then underpinning both of those key factors is the ability to do outstanding regulatory science of the kind you saw in the New England Journal of Medicine last week. Mr. Burgess. Let me ask you a question: now you are working on a compound that may replace heparin as a synthetic; is that correct? Dr. Meanwell. It's currently replacing heparin in angioplasty. It is now the leading blood thinner used in those cardiac procedures, and we're developing it for heart surgery, for stroke prevention and for arterial blood clots. Mr. Burgess. So these are approved uses. Dr. Meanwell. No, they are not. They are all the ones under development with protocols running. Mr. Burgess. In angioplasty, it is an approved use. Dr. Meanwell. Yes, sir. Yes, it is. Mr. Burgess. What's the cost per unit dose. Dr. Meanwell. Approximately $570 to use the drug in angioplasty. In the health economic perspective studies completed by Harvard, in association with our large, randomized, phase 3 pretrials, even after paying $570 for the drug, the cost saving in an acute heart attack patient or pre-heart-attack patient was still $800, because it reduces bleeding, because it reduces side effects. Mr. Burgess. Now, heparin in that instance would not be-- would not be useful, would not be interchangeable with the product that's under development? Dr. Meanwell. It would be interchangeable. And heparin in that situation is practically free. We're talking about a handful of dollars' worth of heparin by comparison. But in order to use heparin safely in a heart disease patient, you have to add on all other kinds of expensive drugs as well to protect the patient. This was my point earlier, that in the workhorse setting, heparin is excellent. When we really ask it to take care of patients who are extremely sick, undergoing heart surgery, heart procedures, or having heart attacks, it's not quite up to the job. Mr. Burgess. But in a workhorse environment, would there ever be a place where the synthetic product could replace heparin just because of the--because of the sheer volume that you alluded to, that it would be--with the manufacturing process, allow it to keep up with that volume? And then, on a cost basis, would it ever be competitive with heparin? Dr. Meanwell. It's quite difficult to imagine any injectable drug in the current era being sold for a dollar a shot. Mr. Burgess. Yes, it sure is, isn't it? Dr. Meanwell. It really is. It's extraordinary, actually. Mr. Burgess. And as a consequence, of course, the company that's under development with the synthetic product, obviously they want to see a return on their investment, and rightly so. The return on the investment for the development of heparin presumably was recouped somewhere back in the 1930s, so that cost is not layered onto the cost of the drug--of a heparin dose; is that correct? Dr. Meanwell. Well, I'm interested in the history of these drugs. But--I don't really know what they were sold for in the 1930s, but it wasn't much. Mr. Burgess. I don't either. Well, it's an intriguing process that you are going through. And it's certainly intriguing--heparin, and I guess cortisone, back in the 1930s, was derived from the adrenal gland of an ox, which is a fairly labor-intensive process, I guess, to talk an ox out of its adrenal glands for any length of time. And yet, in the 1940s, Dr. Percy Julian, whom we recognized in the last Congress, we actually gave him an award for recognizing the ability to derive cortisone from a soybean precursor. So it made a big difference. And just thinking about the juxtaposition of those two compounds, heparin and cortisone, both discovered in the 1930s, cortisone we have got a fairly cheap method of manufacture, ease of manufacture with a synthetic--not a synthetic, but with an easily derived molecule out of the soybean plant. But heparin still had to go through that relatively labor-intensive process that involved talking a pig out of its intestinal mucosa. Let me--again, I just want to thank you for being here. One of the other issues that kind of gets obscured in all of this, because we get the heparin active ingredient from the pig mucosa, there are other places where heparin could be--from which it could be derived, and I think you allude to beef lung in your paper. And, in fact, as a medical student, I think that's what I recall learning about with heparin back in the 1970s. But we can no longer do that safely because of preons; is that correct? Dr. Meanwell. Yes, sir. I was in a regulatory leadership role in a large drug company at the time when heparin was being sourced from Argentina from cow lungs; and before that, before my time, it was sourced from cow livers. But that had to be stopped because of the risk of mad cow disease. And that was when practically the entire industry switched from bovine cow sources, mainly from South America, to pig sources, mainly from China, as we've heard today. Mr. Burgess. Well, again, fascinating subject and fascinating discussion. A good place to end our talk today. But I appreciate so much you being here and staying with us the entire time. We owe you our gratitude for doing that. I will yield back, Mr. Chairman. Mr. Stupak. Thanks. When was the mad cow disease in Argentina? Dr. Meanwell. Well, that would have been in the late 1980s when I was working on that stuff and trying to switch our heparin across to pig sources. Mr. Stupak. Let me ask you this: you mentioned the FDA in response to Mr. Burgess' questions, the gold standard; they stand at attention, I think you said, when they come in and do an inspection. And this sort of baffles me. Baxter said they did their investigation or inspection audit of the plant in 2007. And then, 5 months later, the FDA does theirs, and they found all these problems with the plant. As I was saying earlier, they were not capable of removing the impurities. They found that they failed to have adequate systems for evaluating both the crude heparin and suppliers of crude heparin. FDA found that test methods performed by SPL had not been verified to assure suitability under actual conditions of use and that the equipment used to manufacture heparin was unsuitable for its intended use. Could a plant like that deteriorate in 5 months to find all these problems that the FDA finds? Or was--in your opinion, would--they almost always have had to be there, wouldn't they? Dr. Meanwell. My opinion, my personal opinion is that that kind of deterioration in 5 months is almost impossible. Mr. Stupak. So those problems were there? Dr. Meanwell. Pardon me, sir? Mr. Stupak. So if it's impossible--so those conditions were always there? They just failed to note them or failed to recognize them? Dr. Meanwell. It's difficult for me to answer that, sir, in terms of whether the conditions were always there. But certainly, that kind of deterioration in 5 months is unlikely in a professionally run plant. Mr. Stupak. All right. I have no further questions. Mr. Burgess? Mr. Shimkus? There being no further questions, thank you. Thank you for your time and thank you for your insight into this issue. It helps us out. That concludes all questioning. I want to thank all of our witnesses today for your testimony. And I ask unanimous consent that the hearing record remain open for 30 days for additional questions for the record. Without objection, the record will remain open. Mr. Stupak. I ask unanimous consent that the contents of our document binder be entered into the record. Without objection, these documents will be entered into the record. [The information appears at the conclusion of the hearing.] Mr. Stupak. That concludes our hearing. Without objection, the meeting of the subcommittee is adjourned. [Whereupon, at 4:22 p.m., the subcommittee was adjourned.] [Material submitted for inclusion in the record follows:] Statement of Hon. Joe Barton Chairman Stupak and Ranking Member Shimkus, thank you for this hearing. The sudden and deadly appearance of contaminated Chinese heparin reminds us why this Subcommittee's investigations and the upcoming legislative work on foreign drug safety are so important. The heparin contamination appears to have been deliberate, not accidental. Through some complex scientific detective work, FDA has a good idea of exactly how the bad heparin actually caused sickness and death. This case also demonstrates how and why we need to improve FDA's information technology and the legal and enforcement authorities it needs to prevent future deadly contamination of drugs, especially those made with ingredients that come from abroad. This is something we have to work together on if we are to accomplish the big changes needed. One of the witnesses at our drug safety hearing last week predicted more heparin-like incidents before the system is fixed. I sure hope not. But realism suggests that it will take more than a few days and some wishes to train new inspectors, fix the information systems, and transform the FDA into an agency that can do the work that we assign to it. While this is being done, we also know that cheats and connivers don't think or care about the harm they cause, and they won't suddenly stop cheating and start caring. The American market is lucrative for both honest and dishonest manufacturers overseas, and it is all-too-obviously vulnerable to schemes. FDA is taking positive steps as it develops information sharing agreements with China, which is the source of more and more foreign drug products. This work is a good thing. I don't think--and I don't think FDA thinks--that this is enough. But I'm not certain that FDA knows how much caution is enough, and that worries me. I believe that we need an FDA focused on the foreign threats. We need an agency that can enforce our standards with speed and reliability at the border. And we need an agency that pays close attention to the foreign environments where the drugs and their ingredients are produced. The heparin mishap revealed that FDA for several years had a policy of waiving pre-approval inspections for foreign plants if the plants had been previously inspected for other drugs, even in China. That must change. When the heparin case burst into the news, I recall Chinese officials telling the press that the plant making heparin for export only was not making heparin for the Chinese people. So China didn't check on the plant, and nobody else did, either. China's attitude seemed to be this: We'll export our product to the United States, but let the buyer beware because we don't care if it is dangerous. A dramatic change in this attitude is needed. We also have to recognize the central role of industry here. Baxter is not in the business of making people sick. Just the opposite is true. Baxter and other manufacturers have a powerful incentive to make every effort to ensure the safety of its foreign suppliers. We cannot rely on FDA to do everything. The onus is on industry to do its part as well. Going forward, the FDA and the industry must be proactive and more watchful of the attitudes of the Chinas, the Indias, the other countries with weak safety controls over exports, and act accordingly. If this doesn't happen, we will have more heparin disasters. I thank the witnesses and hope this hearing can lead to a bipartisan legislative effort to improve the safety of imported drug products. # # # ---------- Statement of Hon. Gene Green Mr. Chairman, I want to thank you for holding this important hearing today on the heparin disaster. This tragic incident has shown us that the FDA needs more oversight and funding to protect our drug supply. heparin is a blood thinner derived from pig intestines that is used for surgical procedures and in dialysis. Most of our imported heparin comes from China and 70 percent of this heparin is made in small, unregulated workshops. Initially, the tainted heparin was believed to be an isolated incident. However, further investigations of the active ingredient in the drug were traced back to a Chinese facility that had never been inspected. This facility was never investigated because the FDA confused the name of the facility with a plant that had a similar name. The fall out from the contaminated heparin products has stretched far and wide. Tainted heparin has been found in at least 10 countries, not including the United States, and has been linked back to at least 12 different Chinese companies. It is believed that a man-made chemical is responsible for the many adverse reactions and 81 deaths associated with the drug. I think we can say with little question that the lack of FDA foreign inspections contributed to the heparin disaster. According to the GAO in FY07, there were 714 drug establishments in China, but only 13 inspections were conducted over the entire year. As another example, India had 410 drug establishments and only 65 inspections were conducted. What is alarming is the fact that 80 percent of the active pharmaceutical ingredients of drugs consumed in the United States are manufactured abroad and most of those drugs are manufactured in China and India. And, the FDA has publicly acknowledged that some foreign facilities may never be inspected. In our hearing last week on the FDA foreign drug inspection program, the FDA again admitted they do not have the resources they need to protect our drug supply and they have been slow to request adequate funding from the Administration. It is clear that congressional intervention is needed to assist FDA with its mission and help protect us from tainted and counterfeit drugs. In light of the heparin incident and the hearing held in this subcommittee, I signed on as an original cosponsor of Mr. Buyer and Mr. Matheson's bill HR 5839, the Safeguarding America's Pharmaceuticals Act. This bill a system by which we will be able to track drugs from the time they leave the manufacturing facility to the time they reach patients in the pharmacy, hospital, nursing home, or doctor's office. It would also provide for one, uniform national pedigree system and raise the standards for drug wholesalers while maintaining State's rights to regulate drug wholesalers. I believe these are important steps that need to be taken to help our pharmaceuticals safe and, I think, relevant to the discussion we will be having today. Again, thank you Mr. Chairman for holding this hearing and I would like to thank our witnesses for appearing before us today. 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