RUTHFULLY YOURS

By ROGER BATE

Beginning in 2007, tainted heparin (a blood thinner) imported from China was linked to the deaths of 149 American patients. It was a stark example of a growing problem.

China is now the largest supplier of pharmaceutical chemicals—hundreds of tons annually—to the world. And pharmaceutical companies that buy these chemicals do test them. When Illinois-based Baxter Healthcare sourced cheap heparin from China in 2007, for example, it carried out all legally required tests. But the tests it used at the time were unable to detect the contaminant that caused fatal allergic reactions, and the dangerous drug slipped through.To be sure, the heparin episode was rare; very few problems elude Western companies or the larger of the Indian generics producers. Testing is not nearly as reliable at the smaller companies in India and in emerging markets, and questionable pharmaceuticals have proliferated across the developing world, sometimes with lethal consequences. But even for Western firms, risks do remain, primarily from small, hard-to-detect flaws, such as trace impurities caused by unhygienic practices.

Generics of Neoral, the drug used to decrease the risk of kidney transplant rejection in the United Kingdom, provide an example of the problems that can arise in drug manufacturing. Because of its price (about $250 a month), health administrators tend to favor generic copies. Unfortunately, not all copies of Neoral are exactly equivalent. On average, the copies increase the likelihood of rejection by 10%. As Atholl Johnston, professor of clinical pharmacology at Barts Hospital and the London School of Medicine, recently explained to me, “That’s 200 people losing kidneys in the U.K. every year.”

Five clinical studies published in the U.S. and abroad show that copycat versions of imatinib mesylate, a leukemia drug, lead to a higher risk of fatality. French researchers found that the composition of 21 of 30 different copies of the chemotherapy drug Taxotere were outside of approved specifications.

And for the past four years, a group of researchers working with me has sampled over 2,000 products from emerging markets. About 5% were substandard—either due to suspect or under-dosed ingredients, or to inappropriate formulations that made the correct ingredients insoluble. (The detailed results have just been published in the British journal Pharmacologia.)

The potential for a large-scale catastrophe in this country is growing. In 2002, the U.S. imported $331 million of pharmaceutical chemicals from China; by 2010, it was $1.74 billion and rising.

By law, Western pharmaceutical firms must buy chemicals solely from certified manufacturing plants. But there are many steps in the production of these chemicals. If certification occurs only at the last stage, it doesn’t mean the chemicals are good.

Several pharmaceutical industry experts in China privately indicate that up to 25% of ingredients purchased in China by Western companies come from unknown sources. This is very worrying, because if any of these chemicals were substandard, the products made with them could fail to help patients recover from their illnesses, or even could be lethal.

Lower-quality products also mean more recalls, which can lead to dangerous shortages. The number of times when a desired life-saving drug was unavailable in U.S. hospitals and clinics tripled between 2006 and 2010, to a record 211 cases, according to the University of Utah Drug Information Service. In the first quarter of 2011, 89 incidents were reported.

In China, poor oversight, weak regulation and occasional gross negligence are likely to persist in compromising drug quality. The Chinese drug regulator has an overwhelming task in overseeing a rapidly expanding and already vast industry. The Food and Drug Administration has established an office in China and is increasing investigations of the plants that export to the U.S., but it is woefully understaffed. At best, it can assess each site only once every 13 years.

There are no simple solutions to this problem. With health-care costs escalating, the idea that we should pay even more for drugs by boycotting Chinese suppliers is a tough sell. The FDA must continue to pressure Chinese authorities to test what is on the market and remove any substandard products found. And all companies must provide certification for the entire supply chain of chemicals they buy—not just the final stage of production.

Mr. Bate is a fellow at the American Enterprise Institute.

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