MILAN — In January, Honor International Pharmtech was accused of
shipping counterfeit drugs into the United States. Even so, the Chinese chemical company — whose motto is “Thinking Much of Honor” — was openly
marketing its products in October to thousands of buyers here at the world’s biggest trade show for pharmaceutical ingredients.
chemical companies made the journey to the annual show as well, including one manufacturer recently accused by American authorities
of supplying steroids to illegal underground labs and another whose representative was arrested at the 2006 trade show for
patent violations. Also attending were two exporters owned by China’s government that had sold poison mislabeled as a drug
ingredient, which killed nearly 200 people and injured countless others in Haiti and in Panama.
chemical company, Orient Pacific International, reserved an exhibition booth in Milan, but its owner, Kevin Xu, could not attend. He was in a Houston jail on charges of selling
counterfeit medicine for schizophrenia, prostate cancer, blood clots and Alzheimer’s disease, among other maladies.
companies hardly represent all of the nearly 500 Chinese exhibitors, more than from any other country, they do point to a
deeper problem: Pharmaceutical ingredients exported from China are often made by chemical
companies that are neither certified nor inspected by Chinese drug regulators, The New York Times has found.
Because the chemical companies are not required to meet even minimal drug-manufacturing standards, there
is little to stop them from exporting unapproved, adulterated or counterfeit ingredients. The substandard formulations made from those ingredients often end up in pharmacies
in developing countries and for sale on the Internet, where more Americans are turning for cheap medicine.
In Milan, The Times identified at least 82 Chinese chemical companies that
said they made and exported pharmaceutical ingredients — yet not one was certified by the State Food and Drug Administration in China, records show. Nonetheless, the companies were negotiating deals at the pharmaceutical show, where suppliers wooed customers
with live music, wine and vibrating chairs.
One of them
was the Wuxi Hexia Chemical Company. When The Times showed Yan Jiangying, a top Chinese drug regulator, a list of 186 products
being advertised by the company, including active pharmaceutical ingredients and finished drugs, Ms. Yan said, “This
is definitely against the law.”
Yet in China, chemical manufacturers that sell drug ingredients fall into a regulatory hole. Pharmaceutical
companies are regulated by the food and drug agency. Chemical companies that make products as varied as fertilizer and industrial
solvents are overseen by other agencies. The problem arises when chemical companies cross over into drug ingredients. “We have never investigated a chemical company,” said Ms. Yan, deputy director of
policy and regulation at the State Food and Drug Administration. “We don’t have jurisdiction.”
China’s health officials have known of this regulatory gap since at least the mid-1990s, when a chemical company sold
a tainted ingredient that killed nearly 100 children in Haiti. But Chinese regulatory agencies have failed to cooperate to stop chemical companies from exporting drug products.
In 2006, at
least 138 Panamanians died or were disabled after another Chinese chemical company sold the same poisonous ingredient, diethylene
glycol, which was mixed into cold medicine.
China has an estimated 80,000 chemical companies, and the
United States Food and Drug Administration does not know how many sell ingredients
used in drugs consumed by Americans.
examined thousands of companies selling products on major business-to-business Internet trading sites and found more than
1,300 chemical companies offering pharmaceutical ingredients. How many others
sell drug ingredients but don’t advertise this way on the Web is not known.
If the Milan show is any guide, most, if not all, are not certified by China’s drug authorities.
China exports drug ingredients to customers in 150 countries, said Sun Dongliang, a Chinese trade official who helped organize
his country’s Milan exhibitors. Many suppliers have passed inspections by drug authorities
and sell active pharmaceutical ingredients, or A.P.I.’s, of high quality, buyers say.
Sometimes you can just have your lunch on the floor of the factory because it’s so clean and so perfect, sometimes
much better than in Europe,” said Jean-François Quarre, a French drug company official
who had a booth in Milan. But Mr. Quarre cautioned that he has seen the other side as well.
At their worst,
uncertified chemical companies contribute to China’s notoriety as the world’s biggest supplier
of counterfeit drugs,
which include unauthorized copies as well as substandard, even harmful, formulations. “Underregulated manufacturers
are increasingly becoming the source of A.P.I.’s used in the production of counterfeit medicine,” R. John Theriault,
until recently Pfizer’s head of global security, said in a statement to Congress.
Because United States drug regulators require pharmaceutical suppliers to meet high standards, the American
supply chain is among the world’s safest. But as China’s chemical suppliers multiply, Congressional investigators are questioning the F.D.A.’s ability
to protect consumers.
Chinese chemical companies recognize their limitations in making pharmaceuticals.
don’t have the resources and means to produce medicine,” said Gu Jinfeng, a salesman for Changzhou Watson Fine
Chemical. “The bar for producing chemicals is pretty low.”
Even so, Watson
Chemical advertises that it makes active pharmaceutical ingredients. But Mr. Gu said he would export them only to countries
with lower standards than China, or if “we
can earn really good profits.”
A Trail of Steroids
before the Milan trade show, United States officials made an announcement that brought home the global reach and attendant dangers
of China’s expanding chemical industry. The officials disclosed that
they had dismantled a 27-state underground network for steroids and human growth hormone, arresting 124 people in “Operation
trail almost always led to China. Thirty-seven
companies there supplied virtually all of the bulk chemicals, federal officials said.
Of the 37
suspect companies, all but one unnamed by the American authorities, The Times identified eight. Records show that six are
uncertified chemical companies, including Hunan Steroid, which marketed its products at the Milan convention.
want to see the old customers and develop the new market,” said Sun Xueqin, a deputy export manager for Hunan Steroid.
Ms. Sun said the company sold raw pharmaceutical ingredients in Europe and America and more advanced pharmaceutical ingredients in India, among other places.
Hunan official, Huang Zili, said the company did not sell to the United States, and declined to comment on the government’s contention that Hunan was a supplier of bodybuilding drugs. Hunan has not been charged with any crime.
as the accusations are in Operation Raw Deal, health experts say they believe that counterfeit drugs, particularly those sold
on the Internet, pose a greater threat to a broader segment of the American public.
facts are irrefutable,” Mr. Theriault, the former Pfizer official, told Congress. “The importation of counterfeit,
infringing, misbranded and unapproved pharmaceutical products in the United States is increasing exponentially.” Pfizer makes Viagra, one of the drugs most often counterfeited.
companies feeding the market is not difficult. Orient Pacific International, the Milan registrant whose owner did not show up, advertised that it makes and exports pharmaceutical ingredients to “worldwide
famous medical companies.” The owner, Mr. Xu, is accused of selling counterfeit medicine to treat ailments like cancer,
mental illness and heart disease, according to United States Immigration and Customs Enforcement, or I.C.E.
Mr. Xu shipped
drugs to an Internet pharmacy, investigators say. But he also penetrated the highly regulated supply chain of legitimate distributors
in Europe, said David A. Faulconer, a customs official. Acting on tips from large drug companies,
federal officials devised a plan to stop him from doing the same in the United States.
a buyer, an investigator for the immigration and customs agency met Mr. Xu in Bangkok on March 6. Mr. Xu gave him “detailed suggestions for transshipment and smuggling techniques to evade
United States Customs detection,” federal records show.
bought multiple shipments of counterfeit drugs, Mr. Xu traveled to Houston “to consummate an agreement for widespread distribution of his counterfeit products in the United States,” according to an affidavit filed in federal court. Federal agents arrested
Mr. Xu, who has pleaded not guilty.
exhibiting in Milan, Honor International Pharmtech, was also the subject of a customs
investigation. In January, agents seized 3,041 fake Viagra pills sent by the company to a DHL shipping hub in Wilmington, Ohio, according to customs.
disguised as grape seed extract, was destined for an Internet pharmacy in Central America, said agents who requested anonymity because the investigation continues.
do make grape seed extract,” the company’s managing director, Nie An, said in a telephone interview. He denied
shipping counterfeit Viagra, but he acknowledged other indiscretions: making false advertising claims, using another company’s
import-export license and creating a fake corporate name.
don’t really have a factory,” Mr. Nie said, even though he advertised that he did. Honor International is just
a trading company, he said, adding, “As a trading company, saying you can manufacture attracts business. It was fake
found several other companies posing as manufacturers, thereby obscuring a drug’s provenance. In a recent joint statement,
chemical associations in the United States
and Europe cautioned that globalization has led to a rise in complexity in supply chains, “increasing
the potential for contamination, mislabeling or substitution.”
ingredients can pass through three or four trading companies, none of which check their quality. The ultimate manufacturer
may not realize the ingredients came from an uncertified chemical company.
Mr. Nie, for
example, said he markets Viagra’s main ingredient, sildenafil, through a partnership with a chemical company in a distant
region that he has never visited. “We met them at a trade fair,” he said. “This company didn’t even
have a booth at the fair. They were standing outside the entrance to the exhibition center, and they handed us a flier with
a menu of their products.”
He said he
was trying to the reach the factory, which has no Web site, to fill a Croatian company’s order.
main markets are in Latin America — Brazil, Argentina, Uruguay,” he said. “A little in Canada, a little in the United States. In Europe, we export to Germany, Russia, Italy.”
But Mr. Nie
faces an uncertain future. He said that Chinese investigators had recently visited his office, and that they knew about the
seizure in Ohio.
hardly the only drug that companies try to copy. The French drug maker Sanofi-Aventis grew weary of watching other companies sell knockoffs of its new diet drug, Acomplia, and alerted French
authorities that three Chinese companies were marketing their own version of the product at the 2006 pharmaceutical ingredient
trade show, held in Paris. Six Chinese
company officials were arrested.
One of those
arrested in Paris was Jin Lijie, managing director of the Wuxi Hexia Chemical Company.
Still, Wuxi Hexia showed up in Milan in 2007 selling a line of pharmaceutical ingredients.
declined to be interviewed in Milan, or at its offices in the boomtown of Wuxi. “We are all young college graduates and we are still learning about the market,” said an
employee named Du Yanqun.
Factories on the Yangtze
A good place
to find companies selling uncertified drug ingredients is Changzhou
in the Yangtze delta, where the raw materials for chemical production are readily available and easily transported by canals
there sent representatives to Milan, including the Changzhou Kangrui Chemical Company. It makes pharmaceutical
ingredients in an old converted steel plant. “I’m afraid it will leave you with a bad impression,” said
Zhou Ladi, a sales representative, as she gave a tour. She said Kangrui Chemical hopes to move into a new plant by early 2009.
long as we don’t export products that are under patent in other countries, the government encourages us to export,”
To help find
customers overseas, smaller factories enlist the services of people like Bian Jingya, export manager for a trading company
called the Changzhou Wejia Chemical Company.
Ms. Bian said
chemical companies are involved in all phases of drug manufacturing, including making finished products. Some, she said, “are
under patent in other countries.”
who was also in Milan, said the government should spell out more clearly what companies
may and may not do. “If you want to be regulated, they will regulate you,” she said. “If you don’t
want to be regulated, they don’t.”
drug agency does not oversee the making of pharmaceutical raw materials, called intermediates, which are the building blocks
for active pharmaceutical ingredients. “It is unrealistic for us to certify all factories that make intermediates and
regulate them like medicine products,” said Ms. Yan, the agency official. But if companies make active ingredients,
a more refined product, then they must be regulated by drug authorities, she said.
The Times pointed out that many uncertified chemical companies openly advertise active ingredients, Ms. Yan said that was
illegal. “If there are in fact chemical companies that are making drugs without certification then this is very serious,”
she said. “These companies are not qualified to make medicine. They make chemicals.”
managing director of the Changzhou Yabang Pharmaceutical Company, estimated that uncertified chemical companies make half
the active pharmaceutical ingredients sold in China. “The stuff produced by chemical plants is clearly counterfeit medicine, but they aren’t investigating,”
Mr. Wang said in an interview at his office. “This has been happening in a regulatory void.” He added that most
chemical company exports go to unregulated markets in Africa or South America. “That’s not to say these products don’t enter the United States through these other countries,” he said.
To find out
how well American consumers are being protected from unsafe imported drugs, investigators from the House Energy and Commerce
Committee recently accompanied F.D.A. officials on inspections of drug plants in China and India.
In a letter
to the F.D.A. commissioner, the committee said that the agency was unable to provide such basic information as the number
of firms exporting to the United States,
and that overseas F.D.A. inspectors lacked necessary logistical support. A House hearing on F.D.A. oversight of foreign drug
manufacturers is scheduled for Thursday.
alone has more than 700 firms making drug products for the U.S., yet the F.D.A. has resources to conduct only about 20 inspections
a year in China,” said Representative John D. Dingell, the Michigan Democrat who is the chairman of the House Energy and Commerce Committee. The F.D.A. said
it would answer the committee’s questions at the hearing.
Poisonings in Haiti
United States officials learned of problems with China’s chemical companies in the mid-1990s while investigating the fatal poisonings in Haiti. Chinese authorities took no action against the uncertified chemical company that
made the poison, diethylene glycol, or the giant state-owned trader, Sinochem International Chemicals, that exported it.
A decade later
another state-owned trading company, CNSC Fortune Way, exported
the diethylene glycol — also from an uncertified chemical company — that ended up in the deadly Panamanian cold
medicine in 2006.
have known for years that uncertified chemical companies are producing active pharmaceutical ingredients. In 2004 the Chinese
drug authority’s newspaper cited complaints that some licensed companies “affiliate” with unlicensed ones
to hide their illegal purchases, while others buy only a token amount from certified suppliers to pass inspection. “The
impact of chemical products on the bulk pharmaceutical market hints at a much larger problem: a huge hole in drug safety,”
the drug agency publication stated.
Panama poisonings, China is considering ways to corral the chemical industry. At Panama’s request, Michael O. Leavitt, the secretary of health and human services, has pressed the Chinese government to step up regulation
of chemical companies selling pharmaceutical ingredients.
Chinese health officials held their first high-level meeting in May, and hope to sign a memorandum of agreement in December.
“The Chinese have finally come to the realization that their regulatory system needs repair,” said William Steiger,
director of international affairs for Mr. Leavitt’s agency. But meaningful change will be difficult. Chinese authorities
may not have enough investigators to weed out the many small chemical companies that are making drug ingredients.
to close the regulatory gap must overcome one particularly thorny issue: some uncertified companies accused of selling counterfeit
drugs are owned by the government itself.
Overseas drugmaking goes unsupervised
FiercePharma October 31, 2007
Look no further for a couple of gaping holes in our drug-safety fabric. Chinese
regulators may be cracking down on some drug-safety violations, but plenty of chemicals companies aren't even being watched. Stateside, the FDA is struggling
to track foreign drug makers--and that not very successfully.
First, the Chinese chemicals firms. According to a New York Times investigation,they're
making pharmaceuticals ingredients, but many aren't certified or inspected by the government. They aren't required to meet
any drug-manufacturing standards. Some even make finished drugs without any supervision whatsoever. And dozens of them--including
known counterfeiters and poison-passers--came to a pharma trade show to sell drug makers on their products.
Next, the poor, underfunded FDA. According to a Congressional memo obtained by
the Wall Street Journal, the agency can't even keep track of how many foreign drug makers it should oversee. And those
it does know about are inspected only once every 8 to twelve years. Problems with foreign oversight were identified a decade
ago--but they're still uncorrected. This at a time when drug and ingredient imports are skyrocketing. Agency officials say
they do know who's importing drugs to the U.S. and that they focus inspections on products that pose the greatest risk. But
they admit funding is down, and so is staffing.
FDA in crisis? Then show them the money
Pony up, Congress. Stop whipping the FDA for its failures and fork over the cash necessary to fix the problem. That's what editorial writers at the Boston
Globe and New York Times said over the weekend. "Congress should boost FDA spending to whatever level it takes to restore public trust in the agency," the Globe contended.
We all know the stats by now: Though 80 percent of drugs sold in the U.S. are made
overseas, the number of import inspectors has dropped by a third, and only a handful of the thousands of foreign manufacturing plants are inspected each year. The FDA's
$2 billion budget has dropped by $400 million in inflation-adjusted dollars over the last 14 years. Meanwhile, more than 100
statutes over the last 20 years have handed the agency new duties. As the Times points out, informed observers are nearly unanimous: the FDA is in
crisis. Even Congressional Democrats and Republicans agree on this point.
The Bush administration has shown little appetite for the major increase
in funding the FDA needs. Recently, it established a working group on the safety of imports but it stipulated that any reform
proposals should be "within available resources.""The FDA desperately needs an infusion of
money and talent," notes the Times. In another
editorial--linked to coverage of a Chinese company that distributed tainted cancer drugs, paralyzing hundreds--the paper calls
on Congress and the White House to "move quickly" to strengthen the FDA. We'll see if the government takes heed.
Oh, woe is the FDA. The Government Accountability Office is set to release a new report
on the agency's terrifically inadequate inspection record overseas. According to the New York Times, which obtained a copy early,
the FDA is so understaffed that it would need at
least 27 years to inspect every foreign medical device plant and 13 years to check every foreign drug plant. Think that's
bad? Catching up on food inspections would take a mind-boggling 1,900 years. The attrition in personnel has been especially acute among inspectors of the exploding market in imported goods. While
80 percent of all drugs sold in the United States are made overseas, the number of import inspectors has plummeted, from 531
in 2003 to 380 in 2006. In 2007, the FDA inspected just 30 of several thousand foreign drug-making plants. It inspected just
100 of 190,000 foreign food plantsc
Most disturbing is the fact that the agency is farthest behind in--you guessed it--China,
that bastion of impure and unsafe exports. China has more drug and device plants than any other foreign nation, and FDA inspections
there are few, the Times notes.
Those resources are so insufficient
that a former associate commissioner of the FDA, William Hubbard, told the Globe last year that the FDA checked just 2 percent
of all food imports from China, a country with a record of shipping food contaminated by carcinogens, filth, and pesticides.
Congress should boost FDA spending to whatever level it takes to restore public trust in the agency. Right now, it is failing
in its mission to protect buyers of food and medicines.
The GAO will present this bad news at a hearing before the House Energy and Commerce Committee,
which has been dogging the FDA for months now. One witness set to testify said, "This is a fundamentally broken agency, and
it needs to be repaired." We advise the FDA to focus on the "repair" part of that sentence. Today will be painful, sure, but
it could lead to a sorely needed increase in funding. If the stars and politicians line up just right, that is.