I agree the FDA has some major issues it needs to fix, I will be the first to admit it and I am in pharmaceutical industry.
That being said part of the problem with heparin and many other drugs that make little to no profit is that US companies WONT touch them because they dont make enough thus the smaller, generic, and overseas companies fill this niche. These types of companies are often making the things, like heparin, that are easy to make and have been around forever or are making generics quickly once coming off patent. This is one more reason why you shouldnt import drugs from overseas and we do need to pay the high prices. If they can so badly screw up heparin what can they do to a complex formulation?
THe way alot inspecting works is when something is new ie either a product a process a company etc then there are lots testing inspections etc. Once something is established and has been run for years and no problems etc all testing is fine then testing can be scaled back. Or once a supplier has proven their product is good and it has been testing fine for years the company that is buying the suppliers product (ie baxter) can accept it on a COA (certificate of analysis) so if the foreign company is sending over a paper stating yes we tested and it met all criteria then baxter can accept it because they ahve been a certified supplier and baxter would never know the heparin they were using was tainted. I dont know that this is what happened at all I am just saying that it doesnt necessarily have anythign to do with FDA or theoretically baxter, they may have done numerous inspections, testing, etc etc etc and done everythign correct but if the chinese company has done something either really dumb or just absolutely negligent and or falsified documents no system in the world would be able to detect everything. THere are just so many ways around this its not a simple issue.
Additionally the FDA is massively underfunded and thus they only get to inspect a small portion of what they should be (the documents site etc). Again, I am not defending them and this sort of incident is reprehensible wher I am from we have such stringent regulations these things amaze me. However, the answer is not as simple as we pay too much for too little. If you test alot of the 'cheap' drugs that are being sent in from oversease (much illegally)it is often tainted, lower purity, not stored properly all sorts problems. Us paying less is, unfortunately, not the answer.
ps there is massive overhauls going on internally in the FDA and while their budget was expanded 2008 it was not nearly significant enough nor in all the right places