According to the latest proxy statement filed by Baxter International Inc., CEO Robert Parkinson was paid $8.6 million in 2009.
Though the bonus was more than $2.5 million and reflected the "company's strong financial performance" last year, it was lower than the prior year in part because "the company continues to address certain quality issues," the company said in the proxy statement.
According to an online story by Bruce Japsen:

Baxter has been dogged by quality issues with its Colleague infusion pumps and has yet to begin selling its blood thinner heparin again on the U.S. market due to manufacturing issues uncovered two years ago at a plant in China.

This is somewhat accurate.  While it is true that Baxter has been unable to get its heparin vial products back on the market, it was continuing to sell its premix products until recently, when they were withdrawn due to the inability of the premix to meet the new standards. 

A recent report online described problems Baxter has been having with its premix:

The drugmaker has since been grappling with a new problem, an updated test that gives potency readings for the drug that are 10% higher than an older version, according to Baxter spokeswoman Kellie Hotz.

“It's taking us a bit longer than anticipated to meet the requirements of the new test. We've been having some challenges, and we've been talking with the FDA on how we can achieve this new USP standard, to adjust the drug amount to get within the range that's required,” Hotz said.

Hotz clarified that the heparin currently being tested is a pre-mixed product, and is not the concentrated vial product that was at the center of the FDA's investigation last year. “That's not something we're producing anymore,” she said.

This ModernHealthcare article fails to articulate whether or not Baxter is continuing to try to get back on the market with its vial heparin.  The statement from Hotz seems to imply that Baxter has finally given up its efforts to requalify for the manufacture of heparin.

The Baxter 2010 Shareholder Proxy showed that the total value of the CEO's compensation, including stock options and pension, dropped slightly to $14.3 million from $14.8 million in 2008.  It also shows the compensation for each of the directors and confirms that General Counsel Susan Lichtenstein resigned.

Labels: Baxter, Heparin

Two separate Congressional Committees heard testimony this week from FDA officials.  In both hearings the specter of Baxter's contaminated heparin loomed large.  Sadly, two years later the FDA has done nothing to control scofflaws like Baxter Healthcare and SPL from acting responsibly to control supply chains and track their products.
Baxter sourced its heparin in China but failed to control or even understand its supply chain.  Nor did it keep track of where the specific lots of contaminated heparin ended up.
Both of these issues came before Congress this week.

The hearing in the House of Representatives was held before the House Committee on Energy and Commerce. The opening statement of Chairman Henry Waxman deserves wider attention:

  We cannot forget the lessons of the 2007 heparin contamination catastrophe which resulted in numerous severe allergic reactions and the deaths of at least 80 Americans. In that case, the active ingredient was manufactured in China. Thanks to the excellent work of the Subcommittee on Oversight and Investigations in 2008, we know that this is not a unique situation: the U.S. drug supply is increasingly sourced from abroad.
  In order to market a drug in the U.S., FDA must ensure that the drug meets our appropriately high safety standards. So when ingredients or finished drug products are manufactured abroad, FDA needs to expand its reach if the Agency is to meet its responsibilities.
   As heparin illustrated, FDA clearly needs more authorities and more resources to do a better job policing the safety of imported products. But what heparin also demonstrated is that we cannot expect FDA alone to do this job. We need to place a greater onus on all manufacturers to oversee the safety of their own products. ...

...
I hope FDA will tell us today about what the Agency believes it needs to protect us from another heparin disaster.

So what did the FDA state?  Joshua M. Sharfstein, M.D., Principal Deputy Commissioner for the FDA provided the agency's testimony.  While the FDA has opened more offices overseas and intends to institute a trace program to identify the location of prescription drugs, these steps appear to me to be more about helping big pharma make more money than patient safety.

Here is what the Pugh Prescription Project had to say about the hearing:

Two years after dozens of Americans lost their lives to contaminated heparin, we are still not able to protect U.S. consumers from many of the risks of pharmaceuticals manufactured in foreign factories. It is time for Congress to take action to better protect health. FDA must be given the tools it needs to protect our drug supply, which enters the home of nearly every American each day. Congress is right to focus on this important issue and today's drug safety hearing is a step in the right direction.

The FDA has received reports of 149 Americans who died after receiving heparin, all of whom suffered one or more symptoms associated with a known contaminant. The deaths occurred over a 17-month period in 2007 and 2008. Heparin, a blood thinner contaminated during manufacture in China, is an example of the movement of pharmaceutical manufacturing to the developing world and the increased risk that American consumers will be exposed to sub-standard and harmful drugs. A 2007 report by the U.S. Government Accountability Office estimated that 80 percent of the active ingredients in U.S. drugs are now made overseas, and that FDA has little ability to inspect foreign manufacturing sites. Health and Human Services Secretary Kathleen Sebelius and FDA Commissioner Margaret Hamburg have both said that the agency needs additional authority and resources to protect Americans.

The Senate hearing was before U.S. Senator Herb Kohl.  Senator Kohl held a hearing on the Food and Drug Administration (FDA) budget and heard testimony from FDA Commissioner Dr. Margaret Hamburg about the agency’s priorities for the next fiscal year. Kohl is the chairman of the Senate Agriculture Appropriations Subcommittee which has jurisdiction over funding for the FDA.
The FDA claimed it plans to provide increased protection for patient safety, increases are proposed to improve the safety of imports and high-risk products, expand partnerships with public and private entities, and to slightly increase FDA’s capacity to review generic drug applications.  The increased costs will come from taxpayers of course.
Why should taxpayers pay the addtional costs to inspect foreign based factories set up overseas by companies like Baxter and SPL who are trying to make more profits by flying under the regulatory radar and using cheap products?  I submit that the costs of inspecting these foreign operations ought to be born by the companies who import these drugs.  Simply impose a tax on imports to finance the costs of inspections overseas.  Taxpayers could continue to fund the costs of domestic inspections.  This would protect U.S. jobs and place the costs where they belong.

Similarly, the FDA and Congress should require each manufacturer to bear the cost of tracking the end use of each product it manufactures.  This is simply good safe distribution practice.  While we will be able to painstakingly prove that the contaminated heparin ultimately was distributed to each of the facilities where so many patients became ill and many died, for purposes of prompt recall and patient safety manufacturers like Baxter ought to be required to trace each lot to the end user.

Labels: Baxter, Baxter Heparin, contaminated heparin, FDA, foreign drugs, Heparin, Waxman.

Andy Zajac from the Chicago Tribune's Washington Bureau has an interesting blog out this week, entitled FDA: Questions of protocol, conflict.

Apparently when the FDA decides to make an announcement now, they call up a reporter. That is exactly what they did when they wanted to announce that Janet Woodcock was no longer handling the generic low molecular weight heparin dispute involving Momenta and Amphastar. The FDA is used to dealing like that. Their deals with Baxter involving life or death decisions are done behind closed doors and involve conference calls with Corporate lawyers and FDA officials from which the the public is locked out. The results of their "investigation" remain locked up in Rockville, MD.

Even though it knew its heparin was causing harm, Baxter, which had 50% of the market, continued to sell its contaminated wares, making profits in doing so while the FDA did nothing. How was it that fifty percent of this country relied on the heparin from one manufacturer that was made in a factory never inspected by the FDA, and not subject to purity standards?

In his latest blog Andrew Zajac points out that Amphastar was put to a higher purity standard than Janet Woodcock's friends at Momenta. And of course the purity standard was much higher than that required of Baxter, although when it finally inspected the Chinese facility the FDA shut it down for lack of a purity standard.

Meanwhile, apparently the New England Journal of Medicine has realized it has been conned as well. Ram Sasiskeharan, the Momenta Director and consultant to the contaminated API manufacturer, SPL, has now admitted, and the NEJM has disclosed, that he held a patent on the use of heparin modified by chondroitin sulfate, dermatan sulfate, and other "GAG" mixtures. The latest disclosure can be found here.

A fair reading of the patent makes it look awfully suspicious... but it was probably just a coincidence. SPL was selling mixtures of contaminated GAGs and Ram was claiming patent rights on how you could measure the affects of the GAGs on patients, including analphylactoid responses.

Also probably a coincidence that Baxter's consultant from RPI had published the recipe for OSCS in 1998. Of course both Ram and Dr. L told the FDA that it was something else entirely. Chitin. Chondroitin E. What would they know about NMR and CE? What would they know about sulfation of GAGs? What would they know about OSCS?

Zajac, like others, points out that the Heparin Contamination is still not resolved:

--The Chinese heparin crisis remains an open book. The source of the contaminant has never been identified, and the tainted drug, marketed by Baxter International, of Deerfield, Ill., has spawned at least 650 lawsuits which have yet to be tried. The crisis remains a powerful illustration of the FDA's inability to monitor an increasingly globalized drug ingredient supply chain.

When will the FDA publish its final report? If it does not intend to do so, it should at least release the results of its inspections and testing. Its failure to do so continues to protect powerful Big Pharma who continue to avoid responsibility while raking in the profits. Its failure to do so continues to permit and encourage Big Pharma to do as they please, the public be damned.

Is that a conflict of interest?

Labels: Baxter Heparin, contaminated heparin, FDA, Heparin, Zajac