Last week, FDA Commissioner Margaret A. Hamburg testified before the House Committee on Energy and Commerce, Subcommittee on Health to outline the agency’s case for supporting the fifth authorization of the Prescription Drug User Fee Act (PDUFA), also known as PDUFA V. In addition to offering her support for PDUFA V, Hamburg also discussed renewal of legislation for promoting pediatric drug testing, the need of FDA to invest in science and innovation, and the agency’s efforts in confronting the continual challenges of globalization. In tackling globalization, a basic question arises: does the United States face a pharmaceutical manufacturing disconnect?

In her testimony, Hamburg offered numbers to show the FDA’s record in reviewing applications for new drugs. In fiscal year 2011, FDA approved 35 new drugs, and almost 70% of these drugs were approved by FDA before any other regulatory agency, including the European Medicines Agency. Of 57 novel drugs approved by both FDA and the European Union between 2006 and 2010, 43, or 75%, were approved first in the United States. Preliminary data show that in 2011, over half of all new active drug substances were first launched in the US.

Although Hamburg offered these numbers to show the agency’s record in approving new drugs, they offer another important insight: namely, the US is an important source and market for drug innovation and pharmaceuticals. The US is the largest national market for pharmaceuticals, accounting for 36%, or $310.6 billion, of the $856 billion global pharmaceutical market in 2010, according to data from the IMS Institute for Healthcare Informatics. The top five EU markets (United Kingdom, France, Germany, Italy, and Spain) accounted for 17%, or $147.4 billion, in 2010. Emerging pharmaceutical markets, which include the BRIC countries (Brazil, Russia, India, and China) and 13 other emerging markets collectively accounted for $150.5 billion, or nearly 18%, of the global pharmaceutical market in 2010, according to IMS.

The data reveal the attractiveness of the US for launching new drugs and marketing existing drugs, but when it comes to manufacturing drug products or active ingredients, the US falls short. Approximately 40% of the drugs consumed in the US are manufactured outside the US, and up to 80% of the APIs in those drugs come from foreign sources, noted Hamburg in her testimony.

In her testimony, Hamburg outlined FDA’s efforts to deal with this increased globalization. In July 2011, FDA published a special report, “Pathway to Global Product Safety and Quality,”  a global strategy and action plan for the agency to more effectively oversee the safety of all products that reach US consumers. As detailed in the plan, over the next decade, FDA will focus on strengthened collaboration, improved information- sharing and gathering, data-driven risk analytics, and better allocation of resources through partnerships with counterpart regulatory agencies, other government entities, international organizations, and other key stakeholders, including industry.

Although these efforts by FDA are important and necessary from a public health and safety perspective, the underlying fundamentals engender a larger public policy question beyond the scope of FDA’s regulatory strategy. In a competitive global economy, what should the US be doing to encourage, cultivate, and retain domestic manufacturing of drug products and APIs? In this election year, debates over how to stimulate economic and employment growth are center stage, but what is noticeably absent is a focused plan to stimulate growth in the bio/pharmaceutical industry, a coveted source of high-technology, science-based innovation. That is one debate that is certainly worth having and one that hopefully will be had.

At first blush, a system whereby countries or geographic areas are carved out along socioeconomic lines maximizes profit: prices are set according to consumers’ “willingness or ability to pay,” which can bring previously unaffordable treatments into use. However, a tiered price can work against local competition in a given area, which tends to deliver a lower sustainable price over the long term, according to a critical analysis of tiered pricing done by authors from Medecins Sans Frontieres and Harvard School of Public Health.

Of the case studies examined in the report, Abbott’s price for the HIV treatment lopinavir and ritonavir (LPV/r) remained at $500 in African countries and other “least developed countries” from 2002 to 2007, or until the Clinton HIV/AIDS Initiative announced a generic LPV/r for $470. Abbott then reduced its price to $440, suggesting that manufacturers “do not have strong incentives to reduce tiered prices in the absence of competition, nor are tiered prices immune to competition when it does arise,” according to the report.

In the case of Bristol-Myers Squibb’s antiretroviral (ARV) treatment for HIV, the company created a Category 1 tier including 57 primarily low-income and African countries, but excluding southern African countries, which were lumped into a higher income Category 2. Southern Africa has the highest HIV-prevalence rates in the world, and the impact of a Category 2 placement means that BMS “prices its important second-line drug atazanavir 25% higher, at $547, in southern Africa, compared with $412 in other [Category 1] countries where HIV prevalence is lower, and in a few cases, income is higher,” the report found.

In the case of Lilly’s drug-resistant TB products capreomycin and cycloserine, however, tiered pricing did work to create lower prices than competitive production, but there were special circumstances. For example, TB endemic countries participating in the “preferential price” scheme facilitated by the WHO Green Light Committee beginning in 2002 – a program that also transferred technology to local generics manufacturers in support of local production – did not see a cheaper generic reach the market. In the case of capreomycin, no generic products were WHO pre-qualified for use as of September 2011, and cycloserine had gone up in price by a multiple of four, after Lilly stopped producing the drug. Lilly’s tiered pricing did in fact keep prices at the lowest rates, although demand was low and production capacity was limited.

“Tiered pricing does not necessarily result in the lowest sustainable prices, nor does it reliably lead to price reductions over time,” the report’s authors conclude. “In comparison, when markets are sufficiently large and multiple sources of production exist, robust competition has consistently proven across different therapeutic areas to result in lower prices.” Tiered pricing also leaves “too little decision-making power to governments, which are accountable to their populations under international law for insuring access to medicines.”

Countries that aren’t strong negotiators, and can’t convincingly threaten compulsory licensing, for example, get the short end of the stick with tiered pricing. In 2006, Honduras purchased LPV/r for about six times more than Brazil paid, despite the fact that HIV rates are equivalent in both countries, and Honduras per capita gross national income is roughly 25% of Brazil’s. To create a truly “win-win” situation for manufacturers and patients, governments and manufacturers will need to consider new models that “de-link” medicine prices from R&D costs. How countries contribute to R&D financing as a global public good will influence the new models that help to bring new medicines to the most needy.

Eight strategic issues that should keep “C Suiters” reaching for the NoDoz in 2011

The consensus is that 2011 will be a bad year for Big Pharma.  It must confront a breaking wave of patent expirations, while fiscal retrenchment has created an innovation cycle in reverse as payers find new ways to curb the drugs bill.  Risk-averse regulators are transforming old tools like the FDA “complete response letter” into a registration parking lot, with no exit ramp to connect companies to a distracted — and increasingly impatient — community of clinicians and consumers.

So as the days of January tumble into early darkness, let’s inventory a few of what I call the “night stalkers” — issues that are likely to keep members of the C-suite awake beyond a sensible “lights out” time.  

R&D:  It’s Your Dime!  From both an economic return and societal point of view, the cost of new drug innovation is best shared – across companies and especially across markets.  It is particularly important to maintain the principle that countries make a fair contribution to R&D, through national pricing practices that avoid a “race to the bottom” where every payer seeks the lowest possible transaction cost with the industry.   Yet commitment to this ideal is eroding everywhere, including the US.  A consultation paper on “value based” drug pricing released last month by the UK Department of Health actually puts a clear metric down against sharing the global burden of R&D, calculating that any extra dividend the UK pays for innovation is economically irrational.  It will neither stimulate more domestic R&D or lead to savings – in fact the report says there is no benefit but instead “large costs to be borne exclusively by the UK public.“  Such an argument is predictable had it come from a outlier country like New Zealand, where well-medicated sheep outnumber patients, but as an official statement of policy in the UK it speaks volumes on where this debate is heading.

Corruption and Compliance.  Claims for malfeasances ranging from off-label promotion to deceptive pricing continue to mount, with more than $10 billion in compliance charges imposed on big pharma over the past five years.  With a return on investment of more than 100 to one, in terms of what it costs to litigate, US and European regulators are pushing the extraterritorial reach of enforcement legislation to cover a potentially rich new vein of graft in emerging markets. Here, the industry is finding itself on the front line of a vast cultural disconnect:  in most developing countries, medicines are sold through a web of interconnected relationships dependent on close ties to government. Hence corruption has an entire different meaning — it’s called sharing the wealth — and parsing the cultural divide is going to prove a challenge.

In the US, the scope of action has quietly spread to include criminal charges against individual executives; eventually, a big pharma company will be barred from doing business with government programs that account for more than half the US market.  Despite this, pharma has failed to address the problem from an industry-wide reputational, as opposed to a legal, standpoint.  ”Tops in Fraud” is a ruinous moniker for a business so dependent on basic issues of trust like integrity, quality and safety – when will the industry, as part of a collective action, replace the gamey politicking with good policing?

Technology Transfer Mandates. Know-how and expertise is a tangible asset for pharma, one that should be allocated sparingly to partners who may one day be competitors. This dynamic is particularly evident in the emerging markets, where governments have emerged as formidable industrial policy negotiators in insisting that new innovations be shared with local partners as a condition for market access.  When a drug multinational has to score a deal where it shares production with a local firm, transfers the necessary technology and after a fixed period hands over all remaining exclusive rights to the partner – as Merck recently did in Brazil – one has to ask:  how really different is this from a compulsory IP license that the industry has always characterized as theft?

Conflict-of-Interest Vigilantism.  Governments, academia, activists and the media – all skeptical of the profit motive as driver of a built-in bias – are applying conflict of interest rules to put industry on the defensive and marginalize its role in decisions on everything from publication of clinical trial results to participation in scientific panels that drive access to new medicines.   This narrow view of conflict of interest, which fails to take account of the more diverse factors that motivate and often pre-determine the responses of other interest groups, is a powerful force behind the industry’s eroding reputation.  Yet little has been done to confront and reverse the perception that since drug companies have that simple motive to market, their input on virtually every issue cannot be trusted.  Independent observers like former UN AIDS Program Executive Director Peter Piot have flagged this resistance as a key emerging issue in global health governance, which if left unresolved will limit real progress in disease outcomes.

The Margin Eaters.  There is an emerging social contract that in many ways treats the industry as a quasi-public utility, with pressure to make costly commitments normally not expected of a private enterprise. These now include revenue and profit give backs that conform to fiscal targets set by government, or post-marketing surveillance activity [i.e. REMS] that can require extensive funding of work extending beyond the normal product life cycle marked by expiration of the patent term.  Risk-sharing contracts and the outcomes-based company commitments unleashed by the “total health solution” approaches of personalized medicines are another example.  Such tools may all be positive in the abstract, but the net effect is going to be still more pressure on the bottom line in 2011 and beyond.

Breaching the Registration Firewall.  The era where a marketing license was granted without consideration of cost or pricing is now a historic artifact.   National registration agencies face significant political pressure to build the murky concept of “value” into their scientific review procedures, even though there is no textbook available on how to do this well – because in the end “value” is a matter of judgment and people assess it from different perspectives.  This in turn erodes confidence in the scientific certainty and legitimacy of agency decisions. It is also helping to revive interest in the “medical needs” clause, where regulators can remove existing approved medicines from the market on grounds that the real-world evidence of therapeutic gains fall short of expectations, or where a newer product proves superior.   Predictability through the product life cycle suffers and companies simply grow more averse to risk by shutting down promising research leads prematurely.

Wellcome Foundation — or WalMart? The traditional business model of Big Pharma — with its heavy investment in in-house innovation – is being reconsidered through new approaches that emphasize the outsourcing of R&D:  from research to “search,” with the latter linked to external licensing and partnering.  Taken to its logical extent, the new model could transform companies from innovators to distribution platforms that rely on marketing heft, size and scale to compete rather than science.  Coupled with the ruthless drive for efficiencies that have led to large-scale layoffs of once cosseted professional staff, the trend raises an important reputational question:  if the industry is no longer viewed as a wellspring of science and innovation, what strategy is in play to respond to a world that perceives industry as the WalMart of pills?

Divide and Conquer Marketing.  Stiff competition within therapeutic classes has created unheard of rivalries among companies that once were happy to share the same watering hole.  Some marketers are investing millions in brand-bashing “anti-launch” strategies to limit the uptake of newer alternative products.  The question is whether everyone loses when this logic is applied against the larger patient-first perspective that regulators and the public expect from the industry.

Health and regulatory officials of Brazil are making the rounds with a message for pharmaceutical companies and clinical research sponsors about what a great place it is to do business. Most pharma companies have had operations in Brazil for years, but largely to import and sell products made elsewhere. Now Brazilian officials are offering attractive financing and touting a sound regulatory system and clinical research network to persuade R&D and manufacturing operations to expand their presence in the market.

Washington was a logical choice for conference hosted by the Brazilian Health Ministry last month, coinciding with the signing of a information exchange agreement between the drug regulatory agency, the National Health Surveillance Agency  or ANVISA, and the FDA.  Brazilian officials used the occasion to describe the opportunities offered pharma and biotech firms from its large ($50 billion) retail drug market and the capacity of its export-import bank to finance investment projects. Brazil wants active pharmaceutical ingredient producers to set up shop so domestic manufacturers don’t have to import these products.

One attraction to pharma companies may be growing opportunities to conduct clinical trials in Brazil. The country boasts a large, ready patient population, a universal health care system with hospitals able to support clinical research, and rules to ensure adherence to ethical review standards. A National Clinical Research Network is taking its cue from the U.S. National Institutes of Health in establishing a network of research centers (Pesquisa Clinica), many linked to universities or teaching hospitals able to evaluate and study new technologies, pointed out Reinaldo Guimaraes, Brazil’s secretary of science and technology.  ANVISA has developed capacity to evaluate clinical protocols and monitor studies, while also conducting more plant inspections to ensure compliance with quality manufacturing standards, working with international authorities to approve new vaccines, and streamlining its registration process to cut the time to analyze new drugs to only 12 months.

IP: Still on the Radar Screen
One challenge is concern about the country’s poor record for recognizing and protecting intellectual property rights. Despite a lack of patent protection for medicines until 1996, Brazil is now in compliance with TRIPS, explained Jorge Raimundo, president of Interfarma, the country’s R&D-based pharmaceutical manufacturers’ association. More patents are being registered in Brazil, he said, acknowledging that this has created an immense backlog in patent applications.

However, US companies and key officials at the Office of the US Trade Representative [USTR] complain that the slow speed of patent reviews and regulatory overlaps make it difficult to enforce IP rights in Brazil.  The biggest challenge is coping with the lack of coordination between regulatory approval staff and the patent office. Local generic players continue to take advantage by obtaining marketing rights from officials who do not certify whether the reviewed product is under patent or not.  By the time an infraction of the patent terms is documented, the product is already on the market and competing with the originator.

Despite this implicit homegrown advantage, leading generic drug makers have not yet set up subsidiaries in Brazil, partly due to the complexity of Brazil’s generic policies. Prior to enacting a generics law in 1999, Brazil permitted marketing of “similaires” that did not have to document bioequivalence. In the past decade, generic drugs that meet standards for bioequivalence and interchangeability have become more common and are gaining a larger share of the market. The similaires are supposed to be eliminated by 2014, but are very cheap, and thus still very popular.

Ultimately, the real goal is to attract research operations able to spur development of new treatments that meet Brazil’s key areas of medical need. Brazil offers “spectacular areas for research,” said Raimundo, noting progress in stem cells, genetic engineering, and drugs for neglected diseases. A prime attraction is Brazil’s biodiversity, with 60,000 unique plant species.

Looking for Long-Term Gain
The transition to a new government next month is unlikely to force any dramatic changes in policy toward the sector, considering that the more conservative candidate in the run-off election has a record of supporting aggressive actions to require foreign drug-makers to make essential medicines available at low prices, nvestors can expect the next government to push for pro-generic policies on the international front while seeking to stabilize the environment for the innovative side of medicines in its domestic industrial strategy for the sector. A truly pro-patent approach to innovation may be too much to expect:  although Brazil has weathered the global economic downturn relatively well, the government remains under pressure to reduce its spending, which could prompt cuts in pharmaceutical coverage.  Still, taking a long term view of change, Novartis, Pfizer and other pharma companies are investing and purchasing local operations and launching clinical trials.

A new way for patients to have access to affordable HIV and AIDS medications has come to light via the Medicines Patent Pool—which aims to create a common space for patent-holders to license their technology for use by generic manufacturers in exchange for royalties. Established in July by UNITAID, the Medicines Patent Pool has the potential to reduce the price of existing drugs.

Now, the US National Institutes of Health (NIH) has become the first patent holder to join the Pool, licensing its life-prolonging antiretroviral (ARV), darunavir. Though this is a step in the right direction, making the technology to produce darunavir available to low- and middle-income countries, generic versions of the drug cannot yet be manufactured and sold because pharmaceutical company Tibotec, part of Johnson & Johnson, still holds additional patents on darunavir.

“This license underlines the US Government’s commitment to the Medicines Patent Pool and its goal to increase the availability of HIV medicines in developing countries,” says NIH Director Francis S. Collins, M.D., Ph.D.

“We are encouraged by the support of the NIH, and call on other patent holders to follow their lead,” says Dr. Philippe Douste-Blazy, Chair of the UNITAID Executive Board.

Nelson Otwoma, Director of Network of Persons Living with HIV/AIDS in Kenya and UNITAID board member, adds, “We ask that companies step up and collaborate with the Medicines Patent Pool so that we can quickly see more affordable, easy-to-use pills getting into people’s mouths.”

The move by NIH is likely to put additional pressure on the research-based industry to cooperate with UNITAID in participating as active members of the Pool. Discussions have taken place with numerous companies, but significant differences of opinion remain over whether this argument is as “voluntary” as UNITAID says it is.

In 2006, the company announced plans to save $4 billion to $5 billion, and after its merger with Wyeth last year, Pfizer reported that almost 20,000 employees would feel the effects of those cost-cutting measures. The 6,000 layoffs announced yesterday are part of the previously announced 20,000.

The cuts are part of Pfizer’s “reconfiguring” of its global plant network. Eight plants in Ireland, Puerto Rico, and the US will be shut down over the next several years, with the process concluding in 2015. Six other plants will see reductions in work force. The hardest hit sites were solid-dose factories—three of the eight site “exits” are in Ireland.

Ireland will, in fact, be particularly hard hit. The financially beleaguered island posted a national unemployment rate of 11.4 percent in 2009, and has a debt 13 times larger than its GDP, according to CNBC. Irish newspaper The Independent reports that as many as 785 Pfizer employees could be given the boot, though the government and Pfizer hope the subsequent sale of the factories will preserve some jobs.

The six plant reductions are a little more geographically diverse, including one in the UK and another in Germany, and three are biotechnology manufacturers.

While the company didn’t offer specifics on its decision-making process for the cuts, Pfizer VP of external affairs Ray Kerins said they looked for sites where they could increase efficiency, reduce cost, and eliminate capacity for plants not operating at 100 percent.

“We’re ensuring that production is meeting market demands,” Kerins said.

The US may not have as many H1N1 flu vaccines available from the get-go as originally anticipated, CBS News reported on Tuesday.

According to the report, approximately 45 million doses will be available in mid-October—that’s down from the original plan of 120 million doses. The new plan calls for an additional 20 million doses to be distributed each week after the first batch of vaccines are given.

GlaxoSmithKline announced last Friday that it had begun development for the new vaccine, and that it had locked up enrollment for the first clinical study.

“GSK is making good progress with the development of its pandemic vaccine.” Enrollment into the first study has been completed, and in total GSK will conduct 16 clinical trials of its pandemic vaccine in over 9,000 individuals across Europe, Canada, and the US,” stated Thomas Breuer, head of Global Clinical R&D and chief medical officer of GSK Biologicals. “We continue to work closely with regulators and governments to assess and develop this vaccine.”

Medimmune has also started clinical trials on its H1N1 vaccine, and told the Washington Business Journal that it expects to manufacturer far more vaccines than the 12.8 million doses the government asked it to produce.

Meanwhile, Novartis has already begun shipping its seasonal influenza vaccine to get that out of the way before the second wave of the H1N1 flu hits.

“With the (A) H1N1 influenza pandemic underway, it is important that we take every possible precaution to help protect US citizens from all circulating strains of influenza,” stated Andrin Oswald, CEO of Novartis Vaccines and Diagnostics, in a release. “By receiving the seasonal influenza vaccine early, physicians and public health officials can better prepare for the upcoming flu season.”

The Word Health Organization just bumped the H1N1 influenza to pandemic alert phase 6 (the highest alert level), making it the first worldwide pandemic in 41 years.

According to WHO Director-General Margaret Chan, 30,000 cases of the swine flu have been reported in 74 countries, but there is a very good possibility that the number could be much higher in countries where there aren’t proper testing methods. The H1N1 flu strain, originally dubbed swine flu, first appeared in Mexico and the United States in March and is spread the same way as the traditional flu. However, since the H1N1 flu is so new, there is far less time for people to built an immunity to the virus, hence the flu has been passing briskly from person to person.

Chan stated in a release:

Worldwide, the number of deaths is small. Each and every one of these deaths is tragic, and we have to brace ourselves to see more. However, we do not expect to see a sudden and dramatic jump in the number of severe or fatal infections.

Although the pandemic appears to have moderate severity in comparatively well-off countries, it is prudent to anticipate a bleaker picture as the virus spreads to areas with limited resources, poor health care, and a high prevalence of underlying medical problems.

The AP noted that so far 141 deaths have been associated with H1N1 and that annually 250,000 to 500,000 people die of the regular seasonal flu. The difference is that most of the people dying from swine flu are young, in contrast to the seasonal flu which primarily hits the elderly the hardest.

Each year, the WHO and the Center for Disease Control and Prevention recommend three different seasonal flu strains that they think are most likely to circulate in the upcoming season, and they base their choice on what’s going on in the southern hemisphere and how the influenza will evolve into the northern hemisphere in the upcoming year.

The problem with seasonal flu vaccines and the H1N1 currently being testing for could very well mutate before a vaccine is finished. The 2007–2008 flu season was a particularly rough year as the vaccines produced proved to be only 44 percent effective in fighting the influenza.

A few month’s back, FDA announced that both GSK’s Relenza and Roche’s Tamiflu—both antiviral treatments—proved to be helpful in treating H1N1 if taken with 48-hours of first symptoms. Roche, today, sent us the following statement:

[Roche] continues to ramp up production of Tamiflu and fill orders as they come in. We have the capacity to make 400 million treatment courses a year. We announced last month that Tamiflu production can be up to 110 million courses over the next few months. Last month, we donated another five million treatment courses to the WHO for their use.

GSK spokesperson Jeff McLaughlin told Pharm Exec that GSK has begun the process necessary for development of the new vaccine in both its Canadian and US vaccine manufacturing sites. “The first step in manufacturing this vaccine is to prepare the seed strain for production, which takes several weeks,” he said. “We didn’t receive the seed strain until the end of the May, so we are into that process. The commencement of the production of the new canditate—an H1N1 influenza vaccine begins and first doses are expected to be available in four to six months time and thats subject to regulatory approval.

“Today’s announcement doesn’t change too much of what we have been doing,” McLaughlin said.

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Called “The Toxic Pipeline,” the series is a truly groundbreaking investigation into the counterfeit, adulterated, and dangerous drugs that are made in China and sold to an unsuspecting world. Reporters Walt Bogdanich and Jake Hooker spent the better part of the past year tracking the drug industry’s global supply chain across four continents to locate its faulty links where no regulation of corrupt officials facilitate a crisis level of contamination.

Wiith Hooker working at the source of the problem—in the part of China called chemical country, home to countless unregulated makers of drug ingredients—Bogdanich traveled to Panama, where a tainted cough-syrup ingredient made resulted in a mass poisoning and 350 deaths; to the free-trade zone of Dubai, where products made in China are repackaged or relabeled to erase their provenance; and to Milan, where he found 82 unlicensed Chinese chemical companies, several of them charged with counterfeiting, marketing their services at the biggest annual trade show for makers of pharma ingredients.

Right in the middle of the series, FDA announced that Baxter International’s heparin was killing people—and the Times team was all over the story. With Hooker already deep in chemical country, they were able to track the supply chain back from the Shanghai factory to the tiny village suppliers who process the pig intestines, painting an unforgettable picture of this anything-goes economy with which Big Pharma does more and more business. They dropped a bombshell or two, such as getting the response of China’s FDA: Not our problem.

They also revealed how our own FDA’s investigation into the mess was foundering because—contrary to the agency’s sunny public reassurances that China was cooperating fully—it could not gain, or would not demand, access to the same upstream supply chain that the Times had already covered.

The reporters even beat FDA in IDing the actual contaminant: a molecule apparently manipulated to look and act like heparin, the result apparently of a highly sophisticated—and intentional—adulteration that could easily deceive Baxter’s controls. FDA scrambled to make the same announcement hours after the Times story broke.

Just yesterday, the agency announced that there have been five times as many heparin-related deaths (103) than it had previously reported.

For drugmakers and consumers alike, it’s hard to know which of the series’ revelations is most disturbing: that Chinese drug counterfeiters have achieved such a high level of technical prowess? Or that our own FDA seems to be cowed by, and almost covering up for, China? But we have The New York Times to thank for alerting us—and reminding us of the importance of good, old-fashioned journalism.

Check out the five-part series, “The Toxic Pipeline,” on the New York Times Web site.

The over-sulfated compound found in the batches is unnatural and is more than likely chemically modified, Janet Woodcock, director of FDA’s Center for Drug Evaluation and Research, told press this morning. However, the modified compound mimics heparin’s activities and appears to be heparin when subjected to standard tests.

“It is still to be determined if this compound, when combined with heparin, can produce the allergic reactions reported to Baxter and FDA,” Woodcock continued.

The sulfate was found in batches of heparin manufactured at the Changzhou SPL plant in China, Baxter’s API supplier and ground zero for many of the tainted lots. Over-sulfated chondroitin sulfate is not approved in the United States and shouldn’t be present in heparin, Woodcock said.

Over-sulfated chondroitin sulfate is not a compound that naturally occurs in heparin and is not something that would be purified away during processing. FDA does not know if the contaminant was introduced accidentally or on purpose and is not ruling out counterfeiting.

Unmodified chondroitin sulfate is traditionally used as a dietary supplement and is derived from animal cartilage. The over-sulfated version found in the tainted batches of heparin could only be chemically created.

“It didn’t come straight from the pig—that would be improbable,” one FDA official told the press. “We do not know why or how it was introduced.”

There have been no additional allergic reactions reported since Baxter widened its recall of heparin in February. To date, there have been 19 deaths attributed to allergic reactions stemming from use of heparin.