Princess Health and Those Big Doors Keep Revolving .Princessiccia

Princess Health and Those Big Doors Keep Revolving .Princessiccia

biotechnology Cerberus government Harvard Pilgrim revolving doors Steward Health Care

Gusty 14:38 Add Comment

A few months ago, we discussed the revolving door that seems to connect US government leadership positions and leadership positions of commercial health care firms. There are other such revolving doors, like two recently discovered just north of here.

State Government to For-Profit Hospitals

As reported by the Boston Herald:

David Morales, a longtime trusted adviser to [Massachusetts] Gov. Deval Patrick, became the latest official to leave the administration as he stepped down from a top health-care post for a private sector gig.

Morales resigned abruptly yesterday to take a position with Steward Health Care System.

Furthermore,

Morales worked as a top adviser during the governor�s first term before taking a $128,000-a-year post in 2009 as commissioner of the Division of Health Care Finance and Policy. His resignation was effective yesterday.

Note that we have previously discussed the Steward Health Care System, the new name given to the Caritas Christi system after it was bought out by private equity firm Cerberus Capital Management. Steward's aggressive plan to stamp out "leakage" raised concerns that the new movement to make practicing physicians employees could push them to do what is best for the company's bottom line rather than for patients.

We previously suggested that deals that turn previously non-profit health systems and physicians' practices into for-profit corporations deserve considerable scrutiny. After Caritas became Steward, state government officials promised close oversight. Now Steward has acquired a new executive who has friends in state government.

Non-Profit Health Insurance/ Managed Care by Way of a Political Campaign to Health Care Venture Capital

This story also came from the Boston Herald:

Four months after his failed Massachusetts gubernatorial bid, Charlie Baker has landed a private-sector job at a Cambridge venture capital firm.

The former Harvard Pilgrim Health Care CEO is now an 'executive in residence' for General Catalyst Partners. He�ll focus on working with small and midsize health-care services companies for the VC firm, which has $1.7 billion under management across five funds.

In addition,

Health-related companies already in General Catalyst�s portfolio include iWalk, a Cambridge developer of orthotic and prosthetic devices, and North Carolina-based TearScience, which specializes in diagnostic and treatment devices for evaporative dry eye in addition to several still in stealth mode.

Note that managed care was originally touted as a way to control health care costs, and that the commercial health care insurance companies/ managed care organizations claim to be doing all they can to control costs. Such a focus on cost control would imply that they ought to be able to vigorously negotiate at arms' length with health care providers and drug and device companies.  Now some device companies have acquired a new venture capital overseer who has friends in insurance and managed care.

Summary

Not only are there revolving doors connecting the national government and large commercial health firms, but also connecting state government and regional hospital systems, and non-profit health care insurers/ managed care organizations and device companies.

This is just some more evidence that people in the leadership of large health care organizations have more in common with each other, even if their organizations are supposed to be competing or negotiating at arms length, than they have with patients, clients, customers and the public at large. 

The various revolving doors appear not to align the interests of leaders of health care organizations with their organizations' stated missions, or with promoting the health of patients.  To truly reform health care, we need to expose these doors to more sunlight, and then think about retarding their spin or even locking them in place.

Princess Health and Who Was Responsible for the Purity of Baxter International's Heparin?. Princessiccia

Princess Health and Who Was Responsible for the Purity of Baxter International's Heparin?. Princessiccia

Baxter biotechnology heparin Mismanagement outsourcing pharmaceuticals

Gusty 11:30 Add Comment

We have posted several times, most recently here and here, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting late last year, hundreds of such reactions, and now 21 deaths were reported in the US after intravenous heparin infusions.

All the heparin related to these events was made by Baxter International. We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. In fact, the company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart. Most recently, we found out that the Baxter International labelled heparin was contaminated with over-sulfated chondroitin sulfate, a substance not found in nature, but which mimics heparin according to the simple laboratory tests used in the Chinese facilities to check incoming heparin. (See post here.)

It is not clear whether Baxter International or Scientific Protein Laboratories had inspected most of the steps in the supply chain, or even knew what went on there. The Baxter and Scientific Protein Laboratories CEOs did not seem aware of where they got the heparin on which the Baxter International label was eventually affixed. But one report in the New York Times alleged that Scientific Protein Laboratories would not pay enough for heparin to satisfy any sources other than the small "workshops."

By the end of this week, it became clear that the counterfeit ingredient was added to the heparin in China. Per Bloomberg,

The contamination was present in the powdered raw heparin purchased by Scientific Protein's plant in China, said Robert Rhoades, a pharmaceutical consultant with Becker & Associates in Washington, speaking for Scientific Protein. The company was unaware of the contamination at the time because it wasn't detected in tests Scientific Protein conducted on the powder provided by suppliers, he said.

Scientific Protein purchased raw heparin from consolidators and refined it further before sending it to Baxter, which uses the ingredient to make the finished drug, Rhoades said. The consolidators obtained the ingredients from workshops in China, he said.

The contaminant 'was very likely introduced at the workshop or consolidator level,' Norbert Riedel, Baxter's corporate vice president and chief scientific officer, has said.

Nonetheless, a number of experts suggested that there was reason not be complacent about drugs made in China. A Washington Post article noted that it was well known that Chinese manufacturers were liable to supply dodgy drugs,

Although the contaminated heparin is the largest and highest-profile instance of tainted prescription drugs made in China, it is not the first. In the late 1990s, a spike in deaths associated with the intravenous antibiotic gentamicin was linked to China-based Long March Pharmaceuticals. Although no definitive link was ever established, tests by German researchers later found a wide range in quality and effectiveness in what were supposed to be uniform dosages of the drug, leading them to write that 'it was assumed' the deaths 'were related to faulty manufacture.'

The Post quoted former US Food and Drug Administration (FDA) official William Hubbard,

The history of some of these developing countries in terms of substituting or counterfeiting concerns is a long and well-documented one....

USA Today quoted former FDA Commissioner David Kessler saying that

the news shouldn't come as a surprise: China is 'as close to an unregulated environment as you can get.' In fact, it's a lot like the USA was in 1906, he says �'that's why we developed an FDA.'

Furthermore, one expert argued that Baxter International was ultimately responsible for the drug that it sold, per the Chicago Tribune,

The presence of a foreign ingredient raises new questions about Baxter's oversight because a lack of record-keeping at the China plant makes it more difficult for Baxter and government inspectors to trace the origin of the raw material for Baxter's product.

'Where are the controls here? What is the process here?' asked Carl Nielsen, who was the FDA's director of import operations and policy before leaving the agency to form a consulting firm in 2005.

'Ultimately, Baxter is the most responsible' for monitoring the quality of products that move through the company's pipeline, Nielsen said.

Yet Baxter International executives have not exactly been jumping forward to claim responsibility. In a letter, again to the Chicago Tribune, Peter J Arduini, President, Medication Delivery, for Baxter International seemed to be deflecting responsibility towards Scientific Protein Laboratories and the FDA, while asserting Baxter did all it could do.

Regarding the issue of active pharmaceutical ingredient that originated in China, Baxter's API supplier for heparin is in fact a Wisconsin-based company, Scientific Protein Laboratories, with whom Baxter and its predecessor in this business has worked for more than 30 years. SPL had been procuring heparin raw material from China for more than 10 years and opened a location in Changzhou, China, in 2004. Baxter worked with the U.S. Food and Drug Administration to obtain the appropriate approvals to work with this facility. For the API we receive from SPL, and for the API we receive from all our suppliers, Baxter performs quality testing of all incoming materials above and beyond what's required, to ensure that incoming API is what our suppliers claim it to be. Unfortunately, as the FDA has said, the problematic heparin API could not have been detected by the testing required of and done by any heparin manufacturer.

Previously Baxter International's CEO, Robert L Parkinson Jr, had dodged responsibility for the supply chain that provided the heparin to Scientific Protein Research's Changzhou facility, as we posted here, and as originally reported in the Chicago Tribune,

Baxter International Inc. does not monitor its supply chain to the extent that it would know that a supplier in China was never inspected before it began shipment of the blood-thinning drug heparin, which is linked to more than 300 illnesses in the U.S., the company's chief executive said Wednesday.

Baxter contracted with a Wisconsin supplier, Scientific Protein Laboratories, and not with that company's Chinese affiliate, Baxter CEO Robert Parkinson said Wednesday in his first interview since the heparin problems surfaced.

'It's not unusual for us not to know that the FDA hasn't inspected a supplier to a supplier,' Parkinson said.

Yet if Baxter International is not responsible for the production of drugs that carry its name, who is? If Baxter International's executives are not responsible for how the drugs it sells are manufactured, who should be?

In an ironic juxtaposition, a small and little noticed news item last week declared that Robert Parkinson received $16,600,000 in compensation in 2007, a 30.5% increase from 2006. In fact, the company's 2008 proxy statement suggests even greater total compensation in 2007, $17,580,718. And Mr Arduini's 2007 compensation was reported to be $2,438,642.

The usual justification for compensation at this level is the brilliance of and great responsibilities borne by the executives who receive it. But, if Baxter International's executives will not take responsibility for their products and how they are made, what again is the justification for paying them the big bucks?

So the case of the contaminated heparin becomes another reason to question the imperial nature of the current leadership of health care organizations.

Princess Health and Fake Heparin, then Sick and Dead Patients. Princessiccia

Princess Health and Fake Heparin, then Sick and Dead Patients. Princessiccia

Baxter biotechnology heparin Mismanagement mission-hostile management outsourcing pharmaceuticals

Gusty 12:18 Add Comment

We have posted several times, most recently here, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting late last year, hundreds of such reactions, and now 21 deaths were reported in the US after intravenous heparin infusions. All the heparin related to these events was made by Baxter International.

We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. In fact, the company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart.

It is not clear whether Baxter International or Scientific Protein Laboratories had inspected most of the steps in the supply chain, or even knew what went on there. The Baxter and Scientific Protein Laboratories CEOs did not seem aware of where they got the heparin on which the Baxter International label was eventually affixed. But one report in the New York Times alleged that Scientific Protein Laboratories would not pay enough for heparin to satisfy any sources other than the small "workshops."

Now the US FDA just reported it identified a contaminant in the heparin that may be responsible for the adverse reactions. This has already been reported today by many media outlets, but I will quote Bloomberg since its article makes the main points most concisely,

Baxter International Inc.'s blood thinner heparin, linked to deaths and allergic reactions, was contaminated with a less-expensive ingredient derived from animal cartilage, U.S. regulators said.

The contaminant, over-sulfated chondroitin sulfate, isn't approved for use in medicine, said Janet Woodcock, the head of the Food and Drug Administration's drug division, in a conference call today with reporters. Regulators are investigating whether the substance was intentionally or accidentally added to raw heparin from China.

'It does not appear to have come straight from the pig,' Woodcock said of the contaminant. 'It doesn't appear to be a natural contaminant that got in there. We don't know how it was introduced or why.'

Adding the contaminant to raw heparin, the active ingredient in the finished product, would have been cheaper than using pure raw heparin, according to the FDA. The agency didn't know how much money would be saved by its use, Woodcock said.

Chondroitin sulfate is taken orally as a dietary supplement to treat joint pain. The over-sulfated version found in the heparin was chemically modified to act like heparin, Woodcock said.

Over-sulfated chondroitin sulfate is generated in laboratories for experimental purposes, said Siobhan DeLancey, an FDA spokeswoman, in an interview. It is chemically altered to add additional sulfates, she said.

Two percent to 50 percent of the contaminated raw heparin samples tested by the FDA were made up of over-sulfated chondroitin sulfate, Woodcock said.

So it now appears, although it is not yet proven that the adverse reactions and deaths were caused not by a trace contaminant derived from a sloppy, primitive, and unsanitary manufacturing process, but from a bulk counterfeit ingredient deliberately introduced because it was cheaper than heparin, yet would fool purchasers into thinking it was heparin.

Thus we see what happens when US health care leaders were happy to put their prestigious logo on a drug whose source was unknown to them, presumably just to save some money. By obviously failing to exert rigorous oversight over how the drug which carried their company's name was produced, they not only allowed sloppy, primitive and unsanitary manufacturing practices, but apparently were easily snookered by counterfeiters who substituted a likely toxic ingredient for the real thing.

This was putting profits before patients. And the results were very bad for patients.

Baxter claims to apply

its expertise in medical devices, pharmaceuticals and biotechnology to make a meaningful difference in patients' lives.

However, rather than its expertise, its sloppy and uncaring leadership seemed to leave some of its patients' lives meaningfully worse.

This case is a glaring demonstration of why we need a new set of leaders of our health care organizations, and a new corporate culture within these organizations. Otherwise, failing to understand the health care context, and failing to put patients before profits will yield more sick and dead patients.

Princess Health and Heparin in an Era of Hogwash. Princessiccia

Princess Health and Heparin in an Era of Hogwash. Princessiccia

Baxter biotechnology FDA heparin Mismanagement mission-hostile management outsourcing pharmaceuticals

Gusty 14:21 Add Comment

Two weeks ago we first posted about an emerging scandal about the production of the drug heparin, a biologic that has been in use for over 70 years. First, we posted about the sudden increase in the frequency and severity of adverse effects due to heparin that carried the Baxter International label. However, its "active ingredient," that is, the heparin itself, was purchased from Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Furthermore, it turns out that the factory was never inspected by either the US Food and Drug Administration (FDA) or its Chinese counterpart.

Last week, we posted about how the CEOs of Baxter International and Scientific Protein Laboratories did not seem aware of the origin of the heparin for which they were ostensibly responsible. Furthermore, it turns out its origin was not just Changzhou SPL, but a series of small, unregulated Chinese factories.

Since then, the plot has continued to thicken.

A congressional investigation is starting. Per the Wall Street Journal,

congressmen asked whether Baxter had known the Chinese plant hadn't been inspected and suggested the company might therefore be distributing an unapproved drug.

In a separate letter to HHS Secretary Michael O. Leavitt, the lawmakers asked for records relating to the FDA's preapproval inspection policy. They also sought an explanation of the agency's interpretation of the legal status of drugs shipped into 'United States commerce by a drug company that knew or should have known that FDA had not performed a preapproval inspection, as is alleged in the Heparin case.'

Chinese regulators dodged any responsibility. Again, per the Wall Street Journal,

China's drug-safety agency, responding to questions about oversight of an exported blood-thinning compound, said checks of pharmaceutical ingredients made in China are ultimately the responsibility of countries that buy them.

The State Food and Drug Administration said it works with foreign counterparts to monitor drug-ingredient production. But it said that based on international practice, 'safeguarding the legality, quality and safety of active pharmaceutical ingredients' is up to importing countries.

The supply chain of heparin in China appears to be even more difficult to trace than previously reported. An investigative report published in the NY Times, first quoted the CEO of Scientific Protein Laboratories, Mr David Stunce, "we have a collection chain in place, and we stick with that." However,

But interviews with dozens of heparin producers and traders in several Chinese provinces, as well as a visit to a village near here dominated by tiny family workshops that process crude heparin from pig intestines, show the difficulties confronting investigators as they seek to trace the supply chain. The picture that emerges is of a chain more complex, and less orderly, than the one Mr. Strunce laid out.

The Chinese heparin market has become increasingly unsettled over the last year, as pig disease has swept through the country, depleting stocks, leading some farmers to sell sick pigs into the market and forcing heparin producers to scramble for new sources of raw material. Traders and industry experts say even big companies have been turning more often to the small village workshops, which are unregulated and often unsanitary.

One of the wholesalers named by Scientific Protein Laboratories, Ruihua Biochemical in Hangzhou, said it provided a mix of crude heparin that it manufactured and some that it bought 'from small factories nearby in several villages.' The owner, Hua Ruihua, said he never inspected the small factories. 'We are not the government,' he said in a telephone interview. 'We have no right to inspect their pigs or intestines or facilities.'

The owner of one of those workshops, Fan Yinan, said, I sold to Ruihua several times before, but since last September I have had no intestines.' He confirmed that 'no one from Ruihua inspected my pigs or intestines.'

Strunce's response was this non-denial denial, "we have no information to suggest your information is true."

Some heparin is produced in primitive and unsanitary conditions. The Times reporters also visited some small factories, whose operations do not exactly inspire confidence in the safety and purity of their products.

Some experts say as much as 70 percent of China�s crude heparin � for domestic use and for export � comes from small factories in poor villages. One of the biggest areas for these workshops is here in coastal Jiangsu Province, north of Shanghai, where entire villages have become heparin production centers.

In a village called Xinwangzhuang, nearly every house along a narrow street doubles as a tiny heparin operation, where teams of four to eight women wearing aprons and white boots wash, splice, separate and process pig intestines into sausage casings and crude heparin.

The floors had large puddles and drainage channels; the workshops were dilapidated and unheated; and steam from the production process fogged up the windows and soaked the walls. There were large ovens to cook ingredients and halls lined with barrels to store enzymes, resins, intestines and wastewater.

'This is our family-style workshop,' said Zhu Jinlan, the owner of one heparin operation, who stopped sorting pig intestines and invited visitors to a back room, where she lives with her husband and child. 'We�ve been doing this about 10 years.'

Experts say the small, unregulated factories could pose dangers because they do not have the same controls and rules as large slaughterhouses, which also produce crude heparin.

'If you don�t control the incoming source, it�s very hard to get rid of the contaminants,' says Liu Jian, a heparin expert at the University of North Carolina.

Mr. Strunce of S.P.L. says his company never buys directly from the crude-heparin producers, only through its wholesalers, which he called 'consolidators' � Changzhou Techpool, its Chinese joint venture partner, and Ruihua. His company, he said, has records documenting all the transactions.

But here in Rugao, producers of crude heparin tell a somewhat different story. A sales manager for a major supplier, Nantong Koulong, said he sells directly to S.P.L. without going through either of the two wholesalers. 'We provided crude heparin to Changzhou SPL,' said the sales manager, Chen Jianjun. Some of Koulong�s stock comes from the unregulated workshops, he said.

The owner of one such workshop, Ms. Zhu in Xinwangzhuang, said she sold to S.P.L. two years ago. She also sells to Koulong. 'We are really a traditional family-style plant,' she said. 'We have no certificate.'

S.P.L. said it never bought directly or indirectly from Koulong.

The large companies cared more about getting heparin cheap than about where it came from. Again, according to the NY Times,

After an outbreak of blue ear pig disease swept through 25 of China�s 31 provinces and regions last year, prices soared, and many drug suppliers had to look to the small workshops. The epidemic, said Cui Huifei, a heparin expert at the Shandong University School of Medicine, 'made those biotech companies inevitably purchase from the family-style plants, for cheaper prices'

A sales manager for another large slaughterhouse in Shandong Province, north of Jiangsu, said he was approached late last year by a buyer for S.P.L. offering what he described as rock-bottom prices for crude heparin.

'It was impossible,' said the sales manager, Wang Shengfu, who works for Shandong Jinluo Group, a major producer of crude heparin. 'Only small factory-style farms could accept that low price.'

The deal was never consummated.

Wherever it gets its heparin, there were problems in the Changzhou SPL Plant. US Food and Drug Administration (FDA) inspectors finally got to the Changzhou SPL plant, and here is what they found, according to the Wall Street Journal,

Food and Drug Administration inspectors found problems at a Chinese plant that made most of the active ingredient for Baxter International Inc.'s blood thinner heparin, but the agency still hasn't pinpointed a cause for hundreds of bad reactions in people who took the drug.

Among other findings, the FDA said investigators found lapses in the Changzhou, China, manufacturer's quality-control procedures and the way it assessed its own efforts to remove impurities from raw materials.

The FDA also said yesterday it was seeking to examine upstream consolidators and small workshops that supplied raw material to the Changzhou factory. FDA inspectors found in its inspection report that some heparin sold in the U.S. included 'material from an unacceptable workshop vendor.'

Baxter International has recalled nearly all its extant heparin products, as reported in the WSJ article above.

Finally, the toll of serious adverse events linked to heparin has increased to 448, possibly including as many as 21 deaths. (See the same article.)

Health Care Renewal has documented numerous cases of financial mismanagement by leaders of health care organizations. We have discussed misleading marketing by drug, biotechnology and device companies, and by hospitals, academic medical centers, and health insurance companies. We have noted how medical education has been twisted into marketing, and clinical science has been manipulated, aided by pervasive conflicts of interest affecting physicians, academics, and various not-for-profit organizations.

But through all that, even I thought that the purity of the drug supply remained sacrosanct. Even I thought that no US or major multinational pharmaceutical or biotechnology company would sacrifice the purity and quality of the drugs they sold to cut their costs.

I may have thought that over-the-top marketing and shoddy research had inflated the benefit/ harm ratio of many drugs and devices. Up to now, however, I never doubted the purity of an FDA approved drug sold in the US with the logo of a reputable drug or biotechnology company.

In my previous academic life in which I spent a fair chunk of my time as an academic hospitalist, I often oversaw the use of parenteral heparin. I never would have suspected that the raw material in a vial of Baxter heparin came from some primitive, unsanitary, uninspected "family style" workshop in China.

We have reached a new low in US health care. The system is now mired in muck. We need a new generation of muck-rakers to clean it out. We need a total overhaul of the management of US health care organizations. We need managers who once again put patients before profits, and before lining their own pockets. Until things change, more people will die, and we will all eventually drown in the hogwash.