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  - March 18, 2008 -  

Global Supply Chain: Monitoring Quality in China isn’t Easy, as Heparin Problem Shows


Monitoring Quality from Afar is Difficult and Costly; Constant Inspections are the Price of Doing Business, One Chinese Pharma Maker Says



SCDigest Editorial Staff

SCDigest Says:
As we’ve seen from recent recalls of products ranging from toys to toothpaste, offshoring without a comprehensive quality infrastructure is a recipe for potential problems, risks that can cost huge amounts of money and ultimately jeopardize a brand or even an entire company.

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The problems associated with some batches of the drug Heparin made from active ingredients from a now suspect Chinese factory is just more evidence of the challenge of maintaining product quality and safety in offshore manufacturing, characterized by less mature production processes and supply chain ecosystems.

As many as 19 people have reportedly died as a result of taking contaminated doses of the blood-thinning drug Heparin distributed by Baxter International, though all the deaths are still under investigation. However, Baxter has halted production and distribution of the drug for a time in the face of apparent contamination coming from one of its Chinese suppliers of the active ingredient in the drug.

The US FDA said the contaminant was found in the active ingredient from Baxter's supplier, Scientific Protein Laboratories LLC, and it was present in large quantities. Scientific Protein Laboratories is a US company with a plant in Wisconsin and another in Changzhou, China as part of a joint venture. Baxter has said the questionable Heparin had been made from a Chinese raw ingredient.

China says Buyer Beware

As the Heparin problem unfolded, Chinese government officials said that it is up to buyers and importers to audit the quality of drugs made in China.

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

The Wall Street Journal recently reported that “Makers of crude heparin -- who extract the chemical from pig intestines, often in small workshops, and supply this raw material to companies such as Changzhou SPL and other producers of refined Heparin -- say that they face little oversight from Chinese health authorities.”

(Global Supply Chain and Logistics Article - Continued Below)




(Global Supply Chain and Logistics Article - Continued)

Quality and Safety Infrastructure is Needed

As we’ve seen from recent recalls of products ranging from toys to toothpaste, offshoring without a comprehensive quality infrastructure is a recipe for potential problems, risks that can cost huge amounts of money and, ultimately, jeopardize a brand or even an entire company.

But that oversight and infrastructure costs money – both for the importing company and the suppliers, costs which are often not factored in to the original sourcing decision.

According to another Wall Street Journal story, Shenzhen Hepalink, another Chinese supplier of Heparin that sells to Baxter competitors, the parade of inspection and audits is almost continuous.

“The Shenzhen Hepalink plant has been inspected and approved nine times in recent years by government health authorities, including the U.S. Food and Drug Administration, China's drug watchdog, and German regulators. Buyers have done their own audits 25 times,” the Wall Street Journal story says, “To track a process that starts with crude heparin extracted from pig intestines, the company keeps more than 300 pages of data for each batch to ensure traceability of each lot.

When recalls happen, tracing back through the supply chain can be difficult, even for US domestic manufactured products. Traceability for offshored goods using offshore suppliers – amazingly difficult. Heparin, for example, is often purchased by import trade companies who may source from several direct suppliers (each using other sub-suppliers). The trade companies may consolidate product from several sources for sale to US or European manufacturers or distributors.

Shenzhen Hepalink, however, says it can trace the crude Heparin it uses back to specific groups of pigs. It says that it only works with suppliers who source the raw innards from government-regulated slaughterhouses and follow strict rules to minimize contamination.

Is this an accurate claim? It’s impossible to know for sure.

When FDA officials last month toured the Changzhou SPL factory at the center of Baxter's Heparin recall, they described findings that indicated flaws in record-keeping and a lack of evidence that appropriate steps were being taken to effectively rid crude heparin of possible contaminants.

An inspection report released by the FDA late last month says that Changzhou SPL's processes for the "repeated and efficient removal of impurities" have "not been evaluated" to determine their effectiveness. The report also says that "manufacturing instructions" followed at the plant were "incomplete."

Is the complex offshore supply chain a real risk to consumers and businesses that import these products? Is it really possible at this stage to sufficiently guarantee safety and quality – and at what cost to importers? Are these costs being fully considered? Let us know your thoughts at the Feedback button below.

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