Christopher Padilla, the under secretary of commerce for international trade, told a group of businessmen that the United States was concerned that Chinese regulators did not have the authority to monitor both pharmaceuticals and bulk chemicals and that China did not have the ability or will to regulate its economy properly, allowing the export of a chemical that tainted the blood-thinning agent heparin which is linked to the deaths of dozens and the illnesses of hundreds. The Chinese manufacturer of heparin did not register with that country’s State Food & Drug Administration (SFDA) as a maker of active pharmaceutical products.
“This is a loophole that must be closed,” Padilla said, adding that the Chinese SFDA does not have the authority to simultaneously regulate pharmaceutical makers of active pharmaceutical ingredients and makers of bulk chemicals which may be used in pharmaceuticals but not considered of medicinal use. “The rapid growth of China’s economy has clearly outstripped the ability and the will of the government to effectively police that economy,” Padilla said. Padilla, who is leading a group of healthcare executives to China, also said effective monitoring was a part of larger healthcare reforms that mainland authorities were handling.
This week, U.S. researchers from the Massachusetts Institute of Technology (MIT) identified a chemical contaminating the blood-thinner heparin from China, revealing how it could cause a sometimes-fatal allergic reaction. The tainted heparin was used by at least 81 U.S. patients who later died, forcing heparin maker Baxter International to recall the drug and causing diplomatic strain between the U.S. and China.
Healthcare services and products are one of the United States’ fastest growing exports to China; reforms could include anything from basic state-funded health insurance to enhancements in how it provides healthcare and primary care and regulates hospitals, according to Padilla. “I have a new-found respect for the enormity of the challenge that China faces in the healthcare reform effort,” he said.
Disputes between patients and hospitals are common in China, where market reforms of the 1980s ended lifelong healthcare and inadequate monitoring has lead to overcharging, bogus treatments, and corruption. For instance, earlier this year, one of China’s largest state-owned pharmaceutical company’s—exporter to dozens of countries, including the U.S.—was at the center of a nationwide drug scandal after nearly 200 Chinese cancer patients were paralyzed or harmed by contaminated leukemia drugs. Chinese drug regulators accused the manufacturer—Shanghai Hualian—of a cover-up and closed the factory that produced them. In December, China’s Food and Drug Administration said that Shanghai police began a criminal investigation. And, in China’s harshest action, thus far, the country’s former top drug regulator was executed for accepting millions of dollars in bribes to approve substandard medicines, including an antibiotic that killed at least 10 people.
China could unveil its health service plan this year. It is expected that the plan will institute universal medical coverage paid for by insurance rather than general taxation. “It won’t happen this year,” said Rachel Lee, a principal for The Boston Consulting Group based in Shanghai. “Foreign investors are very interested in China, but the problems are also very large,” she said.
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