U.S. Officials Pushed Products Deemed Unsafe by China

Reuters

When it comes to protecting consumers, American politicians in China don't always practice what they preach, unpublished U.S. diplomatic cables show.

In 2007, two U.S. Congressmen privately admonished a Chinese official about the sudden spike in potentially harmful Made-in-China products being shipped around the world, according to a cable from the U.S. embassy in Beijing obtained by WikiLeaks and provided to Reuters by a third party.

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At the time, China was under fire from the United States and other nations for a host of toxic exports -- everything from lead paint in toys to poisonous chemical substitutes for ingredients in medicine and pet food. In August of that year, Mattel (NASDAQ:MAT) alone was compelled to recall 20 million toys that had been manufactured in China.

Two years later, the cables show, the same U.S. Congressmen -- Mark Kirk, then a House Republican from Illinois, and Rick Larsen, a Democrat from Washington -- returned to Beijing, only this time they had an entirely different message. Kirk and Larsen asked Chinese officials to look the other way as an American company failed to meet regulations restricting the use of a toxic chemical in medical equipment sold to Chinese hospitals.

The company, Baxter Healthcare, was making blood bags for intravenous delivery using polyvinyl chloride (PVC), a plastic softener that has been banned in some other parts of the world. A chemical found in PVC has been shown to build up in humans, causing developmental defects in children, among other things. The European Union banned the chemical in question -- commonly known as DEHP -- from all household products this year.

According to the diplomatic cables, China was seeking to do the same for its hospitals. Its regulators had already stipulated that new IV bags must be manufactured without PVCs.

On behalf of Baxter, however, the two Congressmen pressed the Chinese commerce minister to buy time for the company, which was the third largest contributor to Kirk's 2008 reelection campaign. In 2010 he was elected a senator, filling the vacant Illinois seat left by President Barack Obama.

While the United States is a recognized leader in consumer safety standards, some experts fear that an inconsistent diplomatic message could jeopardize its ability to insist others abide by the same beliefs.

"If we want to really focus on the issue, we've got to be consistent," said Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations in New York, who is the founding editor of Global Health Governance, a journal dealing with international health security issues. "You don't want to leave a credibility gap for the Chinese to criticize."

HEALTH HAZARDS

Based in Deerfield, Illinois, Baxter International (NYSE:BAX) is a medical equipment maker best known for making vaccines and IV solutions, with annual revenue of $12.84 billion in 2010. The company has long denied that DEHP is harmful, though it has been making an alternative line of IV equipment free of the chemical in the United States for some time. While there is no outright ban on the use of PVCs in the United States, some major hospital companies have voluntarily halted their use.

For its part, the Chinese government has had restrictions in place on DEHP for over 20 years.

"DEHP has a number of known health hazards," Tin-Lap Lee, associate professor at the Chinese University of Hong Kong's School of Medical Sciences, told Reuters in an interview. "It's classified as carcinogen and may cause reproductive and developmental effects."

The first time China regulated DEHP content in plastics was in 1988. The government updated its regulations in 1995 and 2004, and today at least three regulations govern its use there. They specify safe levels of the chemical for medical products such as blood storage bags, blood transfusion materials and blood tubes, all of which are commonly made of PVC. These restrictions state that contaminants in these products must not exceed certain limits.

A spokeswoman for Baxter International declined to specify how many IV bags Baxter sells in China, but said the company was "the leading manufacturer of flexible, closed-system IV solutions in China, serving the country's leading hospitals."

She said a new product Baxter is working on "meets the regulations" in China, and that "pending regulatory approvals, we are preparing for full commercial launch later this year." She added that the old IV bags would no longer be sold once the new line was introduced.

Asked if Baxter is currently selling IV bags that don't meet regulatory requirements, she replied: "We are still working through the details of the transition with authorities and hospitals to ensure there is no disruption to supply of vital products to hospitals."

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