Page 47 - Bioterrorism

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“It seems to us that it's an intentional act upstream in the supply chain“ said David Strunce, the
chief executive officer of Waunakee, Wisconsin-based Scientific Protein, during the hearing. “We
don't know specifically where.“

The drug's main ingredient was contaminated before reaching the Chinese factory of Baxter's
supplier, Scientific Protein Laboratories, executives of both companies testified at a U.S. House
hearing today.

The Food and Drug Administration suspects the contamination was deliberate, though there isn't
proof, according to the agency.

Baxter recalled heparin, used to prevent blood clots, in January of this year after reports of
harmful side effects. Since January 2007, 81 people have died after allergic reactions, the FDA
said on April 21. Tainted heparin made by other drugmakers has been found in more than a dozen
countries since Baxter's recall, and regulators have said they don't know how it was introduced.

Some samples of Baxter's heparin were found contaminated with a cheaper substance known as
over-sulfated chondroitin sulfate, according to the company and the FDA.

In a class-action lawsuit filed filed January 5th 2009 by Joyce Ann Osteen at the St. Clair County
Circuit Court for compensation for scores of patients harmed by tainted heparin, the claim is made
that Baxter altered the profile of the drug, in an attempt to reduce costs.

The lawsuit accuses Baxter of using a more dangerous and unapproved ingredient, OSCS to
dilute, or to substitute for the more costly, natural ingredient in heparin to "reap greater profits as a
result of utilizing cheap component parts."

About 3500 pig intestines are required to produce 2.2 pounds of raw heparin. While the suit did
not quantify heparin mass relative to value, it was alleged that it costs Baxter $900 to produce
heparin the old-fashioned way.

It is alleged, Baxter found a way to make that same amount of heparin for just $9. And the heparin
mimic OSCS, according to the lawsuit, was the key.

The lawsuit notes that OSCS is not found in nature, and is not approved in the United States.

"Un-approved APIs significantly increases the likelihood that exposed patients will experience
adverse side effects and reactions that can result from the un-approved doses," the suit states. "In
other words, an unapproved API enhances the risk and danger."

As of April 8, there have been 103 reported deaths in patients who received tainted heparin since
January 1st of 2007, the suit states. Of those deaths, 91 were reported after January 1st of last
year.

"On or about July 30th, 2008 the (US Food and Drug Administration) conclusively linked the
deaths of patients infused with heparin to specific lots made by Baxter," the suit states. "The
specific lots of Baxter product tested positive for OSCS."

Heparin crude lots received in August 2006 are said to have included material from an
unacceptable workshop vendor, according to the suit. Raw material inventory records were
incomplete, the control of material flow in the processing area was found to be inadequate, and a
collection of outer foil bags containing heparin sodium were unlabeled. There was also no report
or data to verify that the leachable for certain bags used for heparin sodium had been evaluated,
according to the complaint.