VZCZCXRO1185
RR RUEHCN RUEHGH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHVC
DE RUEHGZ #0148/01 0710856
ZNR UUUUU ZZH
R 110856Z MAR 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6964
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEAUSA/DEPT OF HHS WASHDC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASH DC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHPH/CDC ATLANTA GA

UNCLAS SECTION 01 OF 02 GUANGZHOU 000148 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS CONSUMER PRODUCTS SAFETY COMMISSION RICH O'BRIEN/INTL 
PROGRAMS 
STATE PASS USTR CHINA OFFICE 
STATE PASS HOMELAND SECURITY COUNCIL 
STATE PASS IMPORT SAFETY WORKING GROUP 
HHS FOR OGHA - STEIGER, HICKEY 
HHS PASS TO FDA FOR LUMPKIN 
CDC/ATLANTA FOR OGHA BOUNT AND CCID 
 
E.O. 12958: N/A 
TAGS: ETRD EIND TBIO SOCI ECON PGOV PREL CH
SUBJECT: Shenzhen Heparin Maker Emphasizes Differences with 
Changzhou SPL 
 
REF: BEIJING 762 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly. Not for release outside U.S. government channels. Not 
for internet publication. 
 
¶1. (U) Summary:  Shenzhen Hepalink Pharmaceutical Co. - recently the 
focus of a Wall Street Journal article - clearly takes product 
safety very seriously and is anxious to reassure visitors about its 
quality assurance and supply control procedures. The only heparin 
producer in China to receive U.S. Food and Drug Administration (FDA) 
approval, and be certified by German and EU regulators in addition 
to China's State Food and Drug Administration (SFDA), the company 
buys crude heparin only from large suppliers approved by Chinese 
regulators.  It regularly inspects its suppliers (photographing all 
their processes), meticulously tracks the manufacturing process and 
maintains tight security at its state-of-the-art factory.  If there 
were to be any problems with its product, managers are confident 
that they would be able to track exactly where mistakes had 
occurred. 
 
The Attitude - Taking Safety Seriously 
-------------------------------------- 
 
¶2. (SBU) "We know our products have to do with life and death, and 
we take that responsibility very seriously," Shenzhen Hepalink 
Pharmaceutical Co. CEO Li Li told Congenoff during a March 7 visit 
to the firm's factory.  Li and his colleagues went to great lengths 
to show that their quality control measures and product tracking 
procedures would prevent the types of contamination that appeared in 
heparin produced by Baxter International Inc.  Shenzhen Hepalink, 
established in Chongqing in 1986 (and moved to Shenzhen in 1998), is 
the only heparin producer in China to gain approval from the U.S. 
FDA. The privately-owned company employs over 300 people at its 
Shenzhen headquarters.  Its quality assurance workers make up 31 
percent of total staff, more than any other category of employee. 
"If you plan to stay in business, you must be devoted to quality," 
Li said. 
 
¶3. (SBU) Although Hepalink has sold to Europe since 2000, it only 
entered the U.S. market in the fall of 2005, after gaining FDA 
approval. The company ships about 2,700 kg of product to the United 
States each year, accounting for about 10 percent of its total 
annual sales. 
 
The Oversight - Standing up to Scrutiny 
--------------------------------------- 
 
¶4. (SBU) In addition to U.S. FDA approval, Shenzhen Hepalink has 
also been certified by the German drug regulatory agency and the 
European Union Agency for the Evaluation of Medicinal Products.  It 
has scores of licenses from the Chinese government, including an 
SFDA drug-production license, a business license, and individual 
certifications to manufacture each of its products.  CEO Li 
emphasized that Chinese law makes it illegal for any company not 
registered and certified as a pharmaceutical company to produce or 
manufacture drugs.  He noted that since 2005, Shenzhen Hepalink has 
been inspected nine times by the food and drug administrations of 
various countries, been audited by customers 25 times, and passed an 
official inspection by the US FDA.  In 2007 the company passed an 
unannounced SFDA inspection.  Every year the company is inspected no 
less than eight additional times, for compliance with Chinese 
government Good Manufacturing Practice (GMP) standards.  Every one 
of the company's standard operating procedures (SOPs) meets U.S. FDA 
standards.  "This is the only way to guarantee quality," Li said. 
 
¶5. (SBU) In contrast, Li said, Baxter's supplier, Scientific Protein 
Laboratories (SPL), is registered in China as a chemical company, 
not a drug manufacturer.  This allowed SPL to sidestep many Chinese 
government regulations, including ones prohibiting the buying of 
crude heparin from unregulated workshops. 
 
The Supply Chain - Choosing Carefully 
 
GUANGZHOU 00000148  002 OF 002 
 
 
------------------------------------- 
 
¶6. (SBU) According Shenzhen Hepalink executives, the firm buys its 
raw materials, derived from pig intestines, only from 
slaughterhouses that have been approved by the Chinese SFDA.  As 
much as 70 percent of the China's crude heparin comes from small 
factories, some just family-owned workshops featuring a table and 
cooking pots in poor villages.  However, the suppliers Shenzhen 
Hepalink uses are larger, more established operations that employ 
hundreds of workers, meet all Chinese government legal regulations, 
and can track their goods through the entire production process. 
Shenzhen Hepalink audits each of the slaughterhouses that supply its 
raw ingredients.  Its staff visits each factory periodically, 
photographs each step in the process, and documents sanitary and 
working conditions. Each slaughterhouse's licenses and government 
registrations are checked to make sure they're current. 
 
The Manufacturing Process - Tracking Meticulously 
--------------------------------------------- ---- 
 
¶7. (SBU) Shenzhen Hepalink maintains careful tracking controls 
throughout the manufacturing process.  The firm's managers explained 
to us that suppliers are required to pack their crude heparin in a 
sealed container with the Shenzhen Hepalink locking seal before it 
is flown to the factory in Shenzhen for refining.  The refining 
process, which includes a tightly-controlled process to remove 
impurities, takes 30 days.  Each step is recorded and traceable -- 
the company has some 1,600 standard operating procedures (SOPs) and 
nearly 3,000 record sheets for the production process.  It holds an 
average of 50 training sessions per year for each employee on the 
tracking process and other quality control procedures. 
 
¶8. (SBU) Quality Assurance Vice President Li Tan explained to us 
that she knows exactly who has done what to the product at any time 
in the manufacturing process.  She signs off personally on every 
batch of the drug to be shipped to consumers.  Even during 
Congenoff's visit, every time we entered a room to observe a step of 
the process, one of the executives had to sign off on a record 
sheet. 
 
The Factory - State-of-the-Art Purity and Security 
--------------------------------------------- ----- 
 
¶9. (SBU) The Shenzhen Hepalink plant is a state-of-the-art facility 
with high-quality equipment from the United States, Europe and 
Japan.  CEO Li said the 10,000 square meter facility was designed 
from the start to meet the highest regulatory standards in the 
world.  It features laboratories that use infrared and ultraviolet 
light to check for impurities and solvent residue; a freezer vacuum 
from Japan; ultracentrifuges that remove impurities from the batches 
of heparin; and GPS tracking of its wastewater to make sure none 
enters the city water supply.  The entire factory is antiseptic: 
visitors must cover their mouths, hands, feet, hair, and bodies to 
tour the grounds.  The factory distills its own water and ionizes 
its own air, so that both of these ingredients are of the highest 
quality when used in the drug manufacturing process. 
 
¶10. (SBU) Many sections -- including the crude heparin storage area, 
some of the labs, and the finished product storage area -- are 
locked and guarded by a worker who signs in all visitors to ensure 
that every possible input in the process is recorded.  This 
requirement was strictly enforced during Congenoff's visit. The 
factory's compliance room is filled floor-to-ceiling with shelves of 
plastic binders full of these records, each representing a single 
batch of heparin manufactured here.  If anything ever did go wrong 
with their product, company officials are confident they could go 
back and find exactly where in the process the mistake happened and 
who was responsible. 
 
GOLDBERG