US Heparin production boosted by APP as Baxter and FDA still need to identify their problem with Chinese sourced drug component

It's an ill wind.

Schaumberg, IIlinois based APP Pharmaceuticals (formerly known as Abraxis Bioscience Inc. ) and Baxter each supplied roughly 50/50 o fthe heparin for the US market which is essential for haemodialysis. Now that Baxter have of heparin , APP have ramped up production to meet demand and have arranged new production lines at its Grand Island, N.Y., plant.

APP source the heparin product from several sources inspected and approved by both the FDA and the Chinese regulatory body SFDA.

APP shares rose 79 cents to $11.30 in trading on the Nasdaq on the news which was also affected by the University of Chicago Medical Center, announcing that it switched last month to APP product. A chain of 1,600 U.S. kidney-dialysis centers run by Fresenius Medical Care North America, a unit of Germany's Fresenius Medical Care AG, already have announced switching to buying exclusively from APP. Fresenius has 120,000 dialysis patients who get esential life saving treatments three times a week.

Shares of APP are still nearly 20 percent off a 52-week high of $15.25 the stock price hit in April of last year.

Baxter note that heparin makes up less than 1% of Baxter's corporate sales and are working with the FDA who are examining the Cherry Hill, N.J., Baxter facility and the Waunakee, Wis., plant of Baxter's supplier, Scientific Protein Laboratories LLC. Scientific Protein's Chinese joint venture, Changzhou SPL in Changzhou, China, is to be examined closely by a team that will include manufacturing experts and a Chinese-speaking chemist.

The FDA is still puzzling over the cause of the heparin reactions potentially tied to Baxter's version of heparin and they are also facing Congessional scrutiny about their failure to examine and approve Changzhou SPL which they claim was due to a mix up over similiar names of companies on their database.

Joseph Famulare, deputy director of the FDA drug center's office of compliance, said the name of the operation "that was sent to the office of compliance for evaluation was not the correct firm. It was another firm with a similar name," which had been inspected and found to be in compliance.

This problem has highlighted concern in the U.S. over the mounting number of foreign-sourced drug ingredients (unkown to many consumers) and the FDA's questionable ability to effectively monitor quality control.

Such Congressional concern might spill over into other practices outsourced to China - testing on animals, humans etc.,