Heparin - APP doubles prices, triples production - the fascinating life of Dr Soon-Shiong and cures for cancer and diabetes
Recalls of heparin around the world and a tainted Chinese supply of its raw ingredient are triggering a spike in prices of the blood thinner to hospitals and dialysis centers amid tight supplies.
Direct consumers are unlikely to feel the impact because heparin is cheap, costing $1 dollar per vial by most estimates. The drug is administered during dialysis and heart surgeries and therefore would be a fraction of the overall procedure's cost, hospitals say.
APP Pharmaceuticals Inc. (previously known as Abraxis BioScience ) said it will increase the price of heparin in what (they claim) amounts to 6 cents per 1000 units of heparin, or about "48 cents per dialysis treatment," the company said. APP would not disclose specific prices or future increases saying they are "proprietary" and vary by dosage and customer.
Following the withdrawal of supplies of heparin from the US market due to contamination of their Chinese supplies with low cost oversulfated chondroitin sulfate.
Subsequently APP Pharmaceuticals Inc. (NASDAQ : APPX) have become the principal US supplier.
Heparin is a blood thinning agent required prior to dialysis and heart surgery and is a relatively low cost drug. It is also used to thin blood in the tiny catheters required when dealing with premature baies in IC units.
APP have now increased prices (without discolosing what they say are proprietary pricing structures) which they say amounts to about 50 cents per dialysis procedure. According to the Stanford and Fresenius Research report of May 2, 2008, the reimbursement for managed care dialysis treatment is approximately $614, with an average reimbursement per dialysis treatment of $325, taking into consideration the Medicare reimbursement rate of $237 per dialysis treatment. APP Press release.
The U.S. Food and Drug Administration has so far identified more than 80 deaths and more than 1,000 adverse events associated with patients in the U.S. Contaminated heparin has now been identified in the U.S. and 10 other countries and at least a dozen Chinese sources.
APP said it had been absorbing huge increases in raw materials costs last year. Now they need to raise prices this year due to increasing security of its supply chain, additional testing required by the FDA and hiring additional staff to handle new security procedures. APP say they have had to triple production to meet domestic US demand.
USA Today report that 2 major dialysis centres using APP product have seen heparin prices double since mid April. Angela Newman, vice president of Brentwood, Tennessee based Renal Advantage's 90 dialysis centers, says price have risen twice and spokeswoman Stephanie Horn of DaVita with 1,300 dialysis centers, says they have seen a similar jump in prices.
Renal Advantage can't pass increased heparin costs on because most dialysis patients are treated under government-based Medicare and heparin is included in the base rate it pays for treatments, Newman says. While she says she's glad APP stepped up production, the 100% jump is "a little extreme."
The same article also quotes APP Chairman Patrick Soon-Shiong that APP's China-sourced heparin for the USA has tested clean, thanks to a tightly controlled supply chain. Adding that Soon-Shiong says APP, a generic-drug maker, had heparin sales of about $40 million last year and revenue of $647 million. He owns more than 80% of APP's shares. They closed Thursday at $11.81, down 11%. APP said 2008 profit may be flat vs. last year. Mr SS is a man with a fascinating history in the supply of pharmaceuticals courced in China SEE FOOTNOTE
APP issued a Press release on Thursday which says ""Because of the steps that we have been taking since early 2000 to ensure a safe, traceable supply chain and are continuing to take with regard to the production of heparin, we have been able to provide a product of the highest quality standards," said Patrick Soon-Shiong, M.D., chairman of APP Pharmaceuticals. "
U.S. Health and Human Services secretary Mike Leavitt said this week that , "We have put in place processes that we believe can ensure the safety of the heparin supply within the United States," but added, "We believe the system that we have for ensuring safety is a good one but completely inadequate for the future,"
He also acknowledged that the heparin scare had seen the need to change supervsory procedures."What you'll see from the United States is a substantial change in our strategy," he added, noting Washington's plans to station Food and Drug Administration inspectors in China and other countries.
Meanwhile inquisitive members of Congress are still bering blocked by the FDA who continue withholding a list of Chinese heparin suppliers requested by congressional investigators looking into problems with hepqrin. The FDA say that confidentiality agreements prevent release of the companies' names.
Members of Congress also are concerned that Chinese heparin manufacturers and their raw-material suppliers didn't fully cooperate with an FDA inspection team in February, after the problems of contaminated heparin became known.
"The FDA thinks they have it under control, but they really don't," said the congressman leading the investigation, Rep. Bart Stupak (D., Mich.). The FDA's reluctance to release the Chinese companies' names is a red flag, he said. "If I was the FDA director, I'd shut down every drug coming in from China" until they were deemed safe, he said. (WSJ10/5/08)
FOOTNOTE on the interesting career of Mr Soon Shiong
Patrick Soon Shiong was born in South Africa, his parents fled China during WWII.
Online Journal April 20th 2007. Did Abraxis BioScience instruct AstraZeneca to use illegal marketing in their quest to increase sales? By Peter Rost, M.D.
"In a February 2007 press release, Abraxis BioScience (AKA APP Paharmaceuticals) reported record revenue of $765 million in 2006 versus $521 million for 2005. They made that money selling a new version of an old cancer drug at $4,200 per dose.
That new drug is called Abraxane and it has pushed Abraxis BioScience stock from $5 in 2002 to $27 in 2007. The lofty stock price has made Abraxis CEO and Chairman, Dr. Patrick Soon-Shiong a billionaire; Dr. Soon-Shiong owns 84 percent of the stock, today worth about $3.8 billion. "
Peter Rost, M.D., is a former Vice President of Pfizer. He is the author of “The Whistleblower, Confessions of a Healthcare Hitman.” He also writes the daily Dr. Peter Rost blog. See also Counterpoint article on the ethically confused billionaire by same author.
Feb 22nd 2008 Pathophilia APP's Soon-Shiong: No Stranger to Suspect Chinese Suppliers
In VIVO Blog Thursday, February 21, 2008
Heparin Investigation Takes an Ugly Turn for Baxter, Industry
...."Soon-Shiong has been in the news before. APP was the subject of a front page story in the New York Times in 2002 because of its relationship with the group purchasing organization Premier; that was during a time when Congress was looking into GPO practices following allegations by small device manufacturers that they were being shut out of the market.
Before that, Soon-Shiong played a part in the controversy surrounding generic launches of Bristol-Myers Squibb's paclitaxel (Taxol). APP asserted that a patent it held on a cremaphor free formulation of paclitaxel should block generics of the Bristol product. The issue briefly delayed generic launches and prompted a Federal Trade Commission inquiry. (Bristol ultimately settled a series of antitrust claims regarding its patent defense strategies for several brands; APP was never charged.)
One last thing: APP also has first-hand experience with the challenges of global supply chain management. The company acquired its injectable generic product line from Fujisawa USA in the 1990s. Shortly after the acquisition, APP had to recall injectable gentamicin due to endotoxin contamination. The culprit? A Chinese raw material supplier.
Soon-Shiong should make an interesting witness..."
Diabetes health Dr. Soon-Shiong Sued by Mylan Laboratories - Melissa Sattley1 August 1998
"Mylan Laboratories Inc. (3rd largest generic drug supplier in the world now called Mylan Inc.) has filed suit in a Los Angeles court against Patrick Soon-Shiong, MD, the well publicized islet cell transplant researcher at VivoRX.
Mylan claimed that Soon-Shiong diverted some of the US$46 million it had invested for islet cell transplant research into other non-diabetes related companies which directly profited Soon-Shiong. "
(In early 1999 the case went to an arbitrator, who examined 17,000 pages of documents--and cleared Soon-Shiong of any wrongdoing but the litigation simmered for more than a year until Soon Shiong agreed to pay US$32 million for the balance of Mylan's American Bioscience shares .)
Islet Foundation May 1998 Can Dr. Soon-Shiong Perform Miracles?by Scott. M. King.
"Soon-Shiong performed the first whole pancreas transplant in 1987 at UCLA." ..."After hearing Dr. Soon-Shiong's glowing report of his work, some in the audience in Palm Springs wondered if it was a giant hoax. However, if Soon-Shiong is right, it could be a real cure for diabetes. "
"Is there any truth behind Dr. Soon-Shiong's dramatic claims of expanding human islets? Sadly, I can find no one who believes it."
Forbes 10th June 2003 , has an interesting article on Dr Soon Shiong and his apparent breakthrough on cancer treatment.
Keep an eye open for more interesting information about this very interesting man and his very interesting career. Meanwhile the results of Dr Soon-Shiong's 2 "transplants" of islet cells are .. the first, Steven Craig died at the age of 43 in 1998 , he took his own life.The second Clarissa Hooper. said that this procedure was not effective for her. She subsequently had both legs amputated, and a kidney transplant. She passed away in Livingston, Montana at the age of 47 on January 16, 2006 from heart failure.
How very odd that none of this has appeared in the mainstream press.