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       Headlines - March 24, 2008
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R. Lewis Dark: Heparin, China, Reagents, and Your Lab

MANY OF YOU HAVE HEARD THE NEWS about the contaminant that was found in the heparin manufactured and sold by Baxter International, Inc. Authorities, responding last fall to reports of hundreds of bad reactions and 19 deaths to the drug, quickly focused on the Chinese companies that supplied the ingredients used by Baxter to manufacture heparin.

In recent days, the FDA announced that the contaminant was over-sulfated chondroitin sulfate. Chondroitin sulfate is "abundant and cheap," according to an FDA official quoted in The Wall Street Journal. Chondroitin is frequently sourced from animal cartilage and, when sulfate is added, the compound clumps together with heparin in a fashion that makes the contaminant challenging to identify in regular quality control testing.

Further, authorities now say that the contaminate was added early in the supply chain in China. Thus, it was already in the raw heparin that Scientific Protein Laboratories (SPL) purchased in China which it then processed into the active pharmaceutical ingredient that SPL sold to Baxter.

This latest episode of flawed or dangerous Chinese productsmaking theirway to the United States reminds us that manufacturing in many countries across the globe lacks the rigorous oversight and quality control standards that we take for granted in the United States and Europe. It also leads to this question: How many in vitro diagnostics (IVD) manufacturers and vendors are sourcing reagents, chemicals, and similar compounds fromcompanies in China? Is there a risk that poor quality reagents or other flawed products that American IVD suppliers could be purchasing in China might move undetected through distribution channels, eventually reaching clinical laboratories in this country?

This is a reasonable question for labs to ask their IVD suppliers. After all, just in the past year, we have seen pets die from contaminated pet food and the discovery of tainted toothpaste, seafood, vitamins, and food additives. The contamination of heparin, a prescription drug, is just the latest example. To my knowledge, no major IVD manufacturer has issued a press release declaring its status relative to its purchase in China of reagents, chemicals, and other compounds used in its products. That disclosure might be a smart, proactive business strategy by leading IVD manufacturers. Their laboratory customers deserve the right to know if,what, and howmuch of the products they buy and use contain components made in China.



Bostwick Labs Prepares For Public Stock Offering

Noted uropathologist David G. Bostwick, M.D. is pathology’s newest successful entrepreneur

CEO SUMMARY: In recent years, annual revenue at Bostwick Laboratories has skyrocketed, reaching $102.8 million in 2007. Now the company, known for its national uropathology expertise, has filed documents in preparation for an initial public stock offering (IPO). Bostwick Laboratories is the latest success story in anatomic pathology. It hopes to raise $100 million and is preparing to expand its diagnostic services into other anatomic pathology subspecialties.



Hospital Lab Takes CMS To Court in CLIA Case

California Hospital takes CMS to federal court to fight revocation of its lab's CLIA certification

CEO SUMMARY: A California hospital challenged CMS in federal court over the threatened loss of its lab’s CLIA certificate. CMS threatened to revoke the certificate in 2007 and stop paying the hospital's Medicare and Medi-Cal lab bills. In January, Victor Valley Community Hospital won a court injunction preventing CMS from revoking its CLIA certificate. Now the case is undergoing federal administrative review and CMS continues to press its case for revoking the lab’s CLIA certification.



Labs Should Prepare for Tighter CLIA Enforcement

CMS is stripping labs of their CLIA licenses for inadvertent violations of PT procedures

CEO SUMMARY: Lab directors and pathologists should take notice of disturbing newdevelopments in enforcement of CLIA regulations. During the past year, CMS officials have revoked the CLIA certification of several hospital laboratories for what are, essentially, inadvertent violations of proficiency testing (PT) procedures. Revocation of lab's CLIA certification lasts for one year, and also includes a sanction that prevents the lab director and the lab owner from operating or owning a laboratory for two years.



Ascendium Consulting Is New Firm In Lab Market

Demand by labs for strategic and operational consulting services encourages new company

CEO SUMMARY: Growing numbers of laboratories are taking steps to reengineer work flow, evaluate automation solutions, and improve the operational performance of their laboratory. This is fueling a demand for laboratory consulting services and Ascendium Consulting is this newest healthcare and lab consulting company in this marketplace. It became operational on January 1, 2008, as a result of Roche Diagnostics, Inc.’s decision to divest its Healthcare Solutions business unit.



Legal Update: Medicare Competitive Bid Lawsuit Heads toward a Judge’s Ruling



Digitization of Pathology Is Making Steady Progress

New technology and innovations contribute more capabilities to digitized pathology systems

CEO SUMMARY: Pathology digitization incorporates a greater scope of work-changing technologies than telepathology. It incorporates information technology, new diagnostic knowledge, and other engineering innovations to help pathologists move past glass and paper. Existing digital pathology systems are already helping pathologists reduce their travel from site to site by enabling them to view digitized images from a central location.


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