Resident Fellow  Roger Bate

Chinese and U.S. officials are currently trading barbs over whether a contaminant in a batch of a blood-thinning drug is the cause of death of 81 Americans. The furor over the drug, heparin, is just the latest in a growing string of medical problems traced back to Chinese food and pharmaceutical exports. This newest case illustrates just how hard it will be for Beijing to solve these quality problems, even now that the extent of the problem is much clearer.

The heparin case involves exports from a company called Scientific Protein Laboratories LLC, based in Changzhou, China. Raw heparin is normally sourced from the intestines of pigs, but the U.S. Food and Drug Administration has found a contaminant that comes from pig cartilage. The contaminant--oversulfated-chondroitin sulfate--is much more plentiful in the animal, but isn't approved for medical use because it can cause severe allergic reactions in humans. The FDA believes the heparin was contaminated with the cartilage byproduct, and that the resulting allergic reactions are responsible for the deaths. (The Chinese acknowledge the contamination but contest the link between the contaminant and the fatal allergic reaction.) The FDA also found inadequate record-keeping on-site at the factory.

The pattern is familiar from cases of melamine-contaminated pet food, toothpaste and cough syrup. Yet despite the reputational black eye China suffered as a result of those scandals more than a year ago, the heparin contamination still happened. Why didn't Beijing stop it?

Because Beijing can't--at least not yet. China is a vast country with 31 provinces and 333 districts. Harmonizing--not to mention enforcing--drug quality control across them is therefore difficult, especially since there are over 6,000 manufacturers of western drugs and more than 2,000 traditional Chinese drug makers.

Chinese officials are fully aware of the challenges this situation presents; indeed, they have been for some time. In early April, before the heparin case captured the public's attention, I spoke with Jin Shaohong, director of China's National Institute for the Control of Pharmaceutical and Biological Products. According to him, "14% of the many thousands of drug samples tested in 1998 were of low quality." Degraded antibiotics like amoxicillin were prevalent.

Since 1998, postmarketing quality surveillance has been improving and poor-quality producers are being shut down. Of the more than 40,000 lots tested in Anhui and Guangxi provinces in the past 18 months, between 3% and 10% were substandard. That's an improvement from a decade ago, but this situation would still be intolerable in America, where far less than 1% of drugs are considered substandard by FDA--and much of that enters the market through Internet sales, not through the traditional supply chain.

Beijing has made significant progress in such testing. The most innovative programs involve mobile labs, which rely on simple testing to establish substandard drugs in the marketplace. These labs, housed in small trucks, can test over 800 different drug preparations. The Chinese government spent $70 million on 400 mobile labs between March 2006 and September 2007. As of last month, 374 labs have been allocated to 29 provinces, covering 80% of China's rural areas. In addition, 760 technicians have been trained to use the labs.

But the testing regime can be only part of the solution. As Dr. Jin reminded me, "criminals are very smart and chemically competent." The heparin incident confirms this: The contaminant was so similar to real heparin that it passed standard tests.

So Beijing also needs to make drug makers "internalize" quality-management best practices. Efforts to do this are also underway. Article 9 of the 1984 Drug Administration Law already mandates that manufacturers adhere to "good manufacturing practice," or GMP, a set of quality-control principles that form the basis of Western drug-manufacturer regulation. But as always, enforcement has been the problem. Even where Beijing has issued clear guidelines for how its inspectors will measure GMP, there are too few inspectors to examine all suspicious manufacturing sites and those inspectors are rarely exacting when they find poor performance.

To help remedy this, Zheng Qiang of Peking University has started a new program to improve understanding of, and adherence to, best practices on the part of manufacturers themselves. His inaugural class of 25 students (21 on sabbatical from Chinese pharmaceutical companies) started their master's degree program in best practices in March 2007 at Peking University's new Institute for Pharmaceutical Excellence.

But that's a drop in the bucket compared to China's drug manufacturing sector, which employs tens of thousands of workers. And this kind of training takes time. Western quality-control experts note that it's taken decades for such "habits of excellence" to become second nature to U.S. drug manufacturers themselves. Until a similar transformation takes place in China, quality-control problems like the melamine and heparin cases will be almost inevitable.

Nonetheless, there are many quality drug makers in China even today, and American consumers benefit from those manufacturers' products. The key to ensuring that all Chinese products are of high quality is more governmental and private-sector engagement, not less. Rather than demonize China's insufficient oversight as many protectionists do, the U.S. must continue its regulatory cooperation with China. If the heparin episode teaches anything, it's that neither country can afford to do otherwise.

Roger Bate is a resident fellow at AEI.