[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
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                    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:]

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    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:]

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    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:]

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    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:]

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    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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