In July 2016, a U.S. Food and Drug Administration (FDA) investigator arrived at Bangli Medical Products, in China’s Zhejiang province, to inspect a plant manufacturing lidocaine and capsaicin skin patches for treating pain. According to internal FDA emails, as she and her translator moved through the plant, requesting documents and taking photographs, the company’s general manager grew increasingly upset. He questioned whether they were really with the U.S. government, told them to destroy their photographs, and imprisoned them in a conference room for more than an hour. As relayed in the emails, it took intervention by the police and Chinese regulators to free them.
With an investigator taken hostage, it seemed clear to the FDA’s staff in China that Bangli Medical had refused an inspection, which was immediate grounds to block the plant’s drugs from import into the United States. Back at Maryland headquarters, however, senior FDA officials weighed in over email. One official sounded a note of caution about “declaring that we have ‘authority’ in the foreign arena.” Another concluded that, because the company manager who’d imprisoned the FDA investigator had not verbally refused the inspection, it did not appear he was making a “specified refusal.” Even in a hostage situation, the FDA was uncertain of its authority over drugs used by many Americans.
Given President Trump’s boasts about being tough on China, one might imagine our regulators would be in a hawkish state of vigilance: doing unannounced inspections of Chinese drug plants; blocking the import of any drug products made with dubious methods or subpar ingredients. Such actions might seem more essential to American interests than a careening battle over tariffs on steel and cell phones. After all, some 80 percent of the active ingredients in all U.S. drugs come from overseas, predominantly China, and their quality is often a matter of life and death.
The FDA insists that it has been vigilant in enforcing drug safety standards at all plants, whether in St. Louis or Shandong. Any drug manufacturer aiming to sell its products into the U.S. market must follow the elaborate architecture of regulations known as current good manufacturing practices, which require consistency and transparency at each manufacturing step. Yet in the decade I spent investigating the overseas manufacturing plants that supply low-cost drug products to the U.S. market, I found a glaring contradiction that persists today. Even as Chinese manufacturing plants are documented to skirt FDA regulations, manipulate test results, hold the FDA’s personnel hostage, and fail to investigate toxic impurities in their own drugs, the FDA has been hesitant to enforce its own rules.
If any market merits regulatory toughness, it’s China. In 2016, an investigation by China’s own regulator, now called the National Medical Products Administration, found that 80 percent of clinical trial data that Chinese companies submitted to regulators to gain approval for new drugs was fabricated. Yet the FDA, despite these evident perils, has relied on a credulous inspection system. It reviews data the companies submit, without routinely testing their drugs. It announces its overseas inspections weeks, and sometimes months, in advance. It allows the plants in question to arrange local travel and provide translators, and it has done little to stem the practice of drug companies throwing dinners for investigators. To inspect hundreds of drug plants, the agency relies on a depleted staff in China and a small cadre of U.S.-based investigators willing to travel overseas.
One such investigator, stationed in China, was Peter Baker. As detailed in an FDA inspection report, in March 2015, he arrived at the massive Zhejiang Hisun plant in Taizhou, some 230 miles south of Shanghai. The company was one of China’s largest exporters of drug ingredients to the United States. The FDA’s investigators had been at the Zhejiang Hisun plant more than a dozen times and had found little to concern them. But instead of requesting documentation, as his colleagues were wont to do, Baker looked directly in the computer systems of the plants he inspected. At the Zhejiang Hisun plant, he went to the quality control laboratory. Making use of the limited Mandarin that he learned in college, he searched through the Chinese symbols in the computer audit trails, the automated logs of the plant’s testing.
Doing this, as Baker noted in the inspection report, it took him about a day to figure out that the plant was secretly pretesting its drug samples and then masking the results, in part by turning off audit trails to leave no evidence of the tests. In the software’s metadata, he documented that he found evidence technicians had turned off the audit trail on February 6, 2014, and proceeded to run 80 secret tests. The audit trail was turned back on two days later, and the tests — now rigged and with the outcomes assured — were repeated.
On the third day of inspection, Baker noted he saw an analyst remove a thumb drive from a high-performance liquid chromatography machine and slip it into his lab coat. Baker asked him to hand over the thumb drive, but the man “began running and fled the laboratory premises,” Baker documented. Fifteen minutes later, a manager returned to offer Baker the thumb drive, but he had no idea whether it was the same one. Baker noted the incident as a refusal to share records — which was serious enough to get the plant’s drug ingredients blocked from the United States.
After Baker’s inspection, the FDA restricted the import of 30 of Zhejiang Hisun’s drug products. But 15 of those were in short supply in the United States, so the agency lifted the restriction on about half of the products, including crucial chemotherapy drugs for treating leukemia and breast and ovarian cancers. To Baker, that decision made no sense. According to regulations, the drugs weren’t good or safe enough. Shortages didn’t change that fact. As he observed to a colleague, “There are no consequences for companies that are shipping substandard product. It’s a win-lose situation— and [patients] are the losers.”
In May 2017, in Linhai, China, an FDA investigator inspected Zhejiang Huahai Pharmaceutical Co., the world’s largest manufacturer of the active ingredient for valsartan, a generic version of the blood pressure drug Diovan. He found evidence that the plant was failing to investigate clues of potential impurities in its own drugs. The investigator recommended the inspection be categorized as potential Official Action Indicated, which would have forced the manufacturing plant to urgently make changes or face further sanctions.
But the agency downgraded the recommended classification to Voluntary Action Indicated, which allowed the company to make non-urgent corrections. A September 2017 memo from an FDA official concluded that “the firm’s response is mostly adequate” and that the firm provided enough information to demonstrate that impurities were not impacting its products.
In fact, the plant’s valsartan had been impacted. Less than a year later, the company wound up in the middle of a worldwide quality scandal. In July 2018, European regulators announced a harrowing discovery: The active ingredient used in Zhejiang Huahai’s generic valsartan contained a cancer-causing toxin known as NDMA. As drug recalls ensued, the FDA tried to reassure consumers that the risk of developing cancer, even from daily exposure to the toxin, was extremely low. A second likely carcinogenic impurity was then detected in the ingredients.
With Congress beginning to probe the FDA’s foreign inspection program, it’s worth asking: What would the FDA getting tough on China actually look like? Almost certainly, it would mean ending the policy of pre-announced inspections, which allow drug makers to transform hazardous plants into stage sets of compliant facilities. It would mean doing everything possible to cultivate more investigators like Peter Baker, instead of those who request printouts of data from the comfort of a drug plant’s conference room.
Ideally, the FDA needs a specialized and highly trained foreign inspectorate that can make a years-long commitment to serve overseas. Their on-site judgements of a plant’s safety should be upheld by agency bureaucrats, rather than subject to company lobbying behind the scenes. But perhaps the best way to get tough on China is to make the country stand behind its products, and require every drug dispensed to carry the ingredients’ country of origin on the label.
Katherine Eban is an award-winning investigative journalist and the author of the recently published New York Times bestseller, “Bottle of Lies: The Inside Story of the Generic Drug Boom.”