(Adds Baxter comments, paragraphs 4, 16-18)

By Susan Heavey and Lisa Richwine

WASHINGTON, April 21 (Reuters) - U.S. health officials said Monday they had new evidence linking a contaminant to deaths and allergic reactions in patients who took the blood-thinner heparin, rejecting assertions by Chinese officials that the chemical was not to blame.

The U.S. Food and Drug Administration said new data from animal and other studies showed the contaminant -- over-sulfated chondroitin sulfate -- could trigger side effects like those now reported in the deaths of 81 heparin patients.

"That doesn't tell us everything, or the whole story, but it establishes a link," said Janet Woodcock, director of the FDA's Center for Drug Evaluation and Research.

Baxter International Inc <BAX.N> in February recalled most of its heparin products, made with ingredients from China. The company said there were five deaths in which a reaction from the company's brand of heparin may have contributed.

It was the latest in a string of recalls involving China, ranging from contaminated pet food to excessive lead in paint that saw millions of toys swept from stores last year.

But Chinese officials said on Monday they had tested batches of heparin used by patient who reported health problems and only some of these batches contained the contaminant.

"The over-sulfated chondroitin can therefore not be the suspected root cause of heparin ADE (adverse events)," said Jin Shaohong, deputy director-general of the China National Institute for the Control of Pharmaceutical and Biological Products.

Speaking to reporters at the Chinese Embassy in Washington, Jin said he and other officials planned to visit Baxter's plant in New Jersey and expected Baxter's cooperation.

FDA officials said they had tested the heparin in question and did find the contaminant, and that 10 other countries had also detected over-sulfated chondroitin sulfate in samples of heparin made with Chinese ingredients.

"If you look at the supply chain of all the contaminated products found around the world, the one thing they have in common is China," Deborah Autor, head of compliance for the FDA's drugs division, told a conference call with reporters.

Allergic reactions, or low blood pressure, have also been reported after patients received heparin, including Baxter's product. The drug is used in kidney dialysis and various surgeries to prevent blood clots.

The agency added that the heparin currently sold in the United States was being tested and was safe.

Only Germany and the United States have seen a recent increase in heparin reactions, FDA officials said.

Chinese officials said other contaminants, problems with the device used to inject the drug, or health factors with the patients who used the drug, could be to blame.

Li Xuewang of Huazhong University of Science and Technology's Union Hospital, complained of a lack of details from the FDA. He said Chinese investigators needed more information on the patients involved.

Baxter said its own testing also showed over-sulfated chondroitin sulfate could cause the type of reactions reported in heparin patients.

"That means that the contaminant ... is likely the cause of the increased adverse reactions to the heparin," Baxter said.

Heparin is made from pig intestines and often collected from small, mostly unregulated farms in China. Baxter maintains the contamination occurred before the product reached Baxter or its raw ingredient supplier.

Shares of Baxter closed down 33 cents, or 0.5 percent, to $60.95 per share on the New York Stock Exchange.

The FDA on Monday warned Baxter's Chinese supplier of raw heparin for failing to ensure its manufacturing process can remove impurities.

"Your firm failed to establish appropriate specifications for identified and unidentified impurities for the heparin... your firm also failed to perform adequate tested to detect impurities," the FDA said in a letter to Changzhou SPL Co Ltd.

Changzhou SPL spokesman Alexander Shaine said the FDA's letter did not reflect the company's actual manufacturing processes but said it would cooperate with the agency. (Editing by Tim Dobbyn)

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