Plant in China under scrutiny

Baxter Healthcare Corp. spokeswoman Erin Gardiner said testing had detected irregularities in samples of the drug, heparin, that were processed in China from raw material extracted in China. No such irregularities were detected in heparin made from raw materials from China but processed at a supplier's plant in Wisconsin. Gardiner stressed that the findings were preliminary and that the company had reached no final conclusions about what caused the adverse reactions among patients.

Baxter has said that a Chinese plant here, Changzhou SPL, was the source of much of the active ingredient in its heparin. The U.S. Food and Drug Administration said it never inspected the factory because the agency mixed up the company with another one that has a similar name. Changzhou SPL apparently wasn't examined by Chinese drug regulators either, because it isn't licensed as a pharmaceutical manufacturer with the Chinese government.

Such bureaucratic oversights are of growing concern in the U.S., given that China accounts for about 22% of the foreign factories producing drugs for the American market -- more than any other single country. Yet facilities in China accounted for only 6% of the overseas inspections conducted by the FDA from 2002 to 2007.

A report by the Government Accountability Office last fall found that the FDA conducted 88 inspections in China during the five-year period, from a low of nine in 2003 to 21 in 2005. That means the vast majority of the 714 Chinese facilities involved in making drugs for the U.S. market were not inspected. By contrast, Italy, with 150 manufacturing facilities, underwent 131 inspections over the five years.

The FDA has said it would inspect the Chinese factory that was the source of Baxter's heparin this week but didn't specify when.

Heparin is derived from pig intestines, and China has come to dominate the global market thanks to its abundant supply of swine and low labor costs. The country exported more than $100 million worth of heparin ingredients last year, according to various estimates.