Stahl she is the fifth richest selfmade billionaire woman in the world. Shes pointing out her building. With her partner husband, she has built more of beijing than almost any emperor in chinas history. China produced more selfmade billionaires than any other country in the world. Stahl while xins fortune has been made on office buildings, china may be sitting on a residential and Retail Real Estate bubble. Where is the proof . We found what are known as ghost cities. Look at these brand new towers with no residents, desolate condos and vacant subdivisions uninhabited for miles and miles and miles. Tonight, two stories that provide a rare window into china. Im steve kroft. Im leslie stahl. Im morley safer. Im bob simon. Im lara logan. Im scott pelley. Those stories tonight on 60 minutes. [ male announcer ] its time. Time to have new experiences with a familiar keyboard. To update our status without opening an app. To have all our messages in one place. To browse. And share. Faster than ever. Its time to do everything better than before. The new blackberry q10. Its time. New kelloggs raisin bran® with omega 3 from flax seeds. Plus plump juicy raisins. Flax seed . Who are you . I still got it. [ male announcer ] invest in your heart health with kelloggs raisin bran® cereals. [ male announcer ] invest in your heart health im gonna have to ask you to power down your little word game. I think your friends will understand. Oh. No, its actually my geico app. See . I just uh paid my bill. Did you really . From the plane . Yeah, i can manage my policy, get roadside assistance, pretty much access geico 24 7. Sounds a little too good to be true sir. Ill believe that when pigs fly. Ok, did she seriously just say that . Geico. Just a click away with our free mobile app. Pelley last fall, 17,000 vials of a steroid were shipped to clinics and hospitals in 23 states. The drug had to be sterile because patients would have it injected into their joints or into their spines to relieve chronic pain. What happened next is the worst pharmaceutical disaster in decades. The steroid was contaminated with fungus. More than 50 people have died, and around 700 are being treated for persistent fungal infections. The tragedy has exposed a failure in drug safety. And, in a moment, you will hear the commissioner of the f. D. A. Acknowledge that she can no longer guarantee the safety of many highrisk drugs. The steroid was produced by new England Compounding Center, and in the six months since the first deaths, no one at new england compounding had ever revealed what happened. But they did when we first aired this story last march. As for the victims, this has been an unrelenting horror after just one injection of lethal medicine. Julie otto ive been in the hospital seven times, total of 75 days. Ive missed thanksgiving and christmas and my sons birthday. Pelley julie otto is one of 13 injured patients who met us at st. Joseph Mercy Hospital outside detroit. Willard mazure im on 60 milligrams of morphine a day with no cure in sight. There is no cure in sight for me. Pelley Willard Mazures morphine is to kill the pain from the fungal infection. We asked the patients to sit down in the first two rows, and many of them brought family to the auditorium. Michigan is a hotspot for the toxic steroid, one of 23 states that received the drug from massachusetts. St. Joseph mercy has treated 189 patients, all of whom endure brutal antifungal drugs. Mazure the medicine is just unbearable. You know, they talk about cancer treatments, and im sure theyre unbearable, too. But this is some unbearable stuff. Pelley this is the fungus. It is a sample that has been grown from the spinal fluid of a patient. The fungus is a form of mold that attacks bone and nerves. The patients who had it injected in the spine have an infection called meningitis, which can also reach the brain. Have the doctors told any of you that the fungus is gone and you never have to worry about it again . No. Absolutely not. No. Pelley the steroid, methylprednisolone acetate, made by new England Compounding Center, known as n. E. C. C. , came from this Industrial Park near boston, which houses the pharmacy and an outfit that recycles construction debris, both owned by the family of barry cadden, a pharmacist and president of n. E. C. C. Caddens new England Compounding Center was whats known as a compounding pharmacy. By law, compounding pharmacies are not allowed to manufacture pharmaceuticals for the mass market. That would require the oversight of the f. D. A. Instead, states license compounding pharmacies to make drugs for individuals. For example, a doctor might order a liquid form of a medication for a patient who cant swallow a pill. Compounding pharmacies are bound by one rule they must have a prescription for each individual patient. But n. E. C. C. Was shipping tens of thousands of vials from its lab called clean room one. Investigators shot video inside n. E. C. C. This is the first time the public has seen it. And this is the first interview with a technician from clean room one. Joe connolly the underlying factor is that the company got greedy and overextended, and we got sloppy and something happened. Pelley joe connolly started in clean room one in 2009. He remembers, in 2011, a salesman came by with a boast and a warning. Connolly he was walking through and says, oh, i got. I got a bunch of stuff coming for you guys. You guys are going to be busy. Youre going to. Im going to keep you guys moving. And that just meant compound it, process it, get it out the door. Pelley connolly says, over months, the lab was overwhelmed with orders. Output of drugs that he made increased by a factor of 1,000. Connolly we became a manufacturer overnight. So we were basically trying to have the best of both worlds it was trying to manufacture without the oversight of a manufacturer. And it was just. We all got overtaxed and everything. Pelley which made it harder, he says, to follow the strict procedures that kept drug preparation sterile. They would occasionally find mold in the clean room . Connolly occasionally, yes. Pelley how often . Connolly i would say maybe a dozen times in three years we would find it. Pelley he told us they would clean up and keep moving. But a month before the first steroid death, he says he warned his supervisor. Connolly somethings going to happen, somethings going to get missed, and were going to get shut down. Pelley what did you mean by that . Connolly we were going to hurt a patient we were just thinking hurt a patient. We werent compounding anymore, we were manufacturing. Pelley when you went to your supervisor and told him that, he said what . Connolly thats verbatim. laughs he shrugged. That was his response for a lot of our questions or comments or concerns was a shrug. Pelley meaning . Connolly just do it. Hed. Either he didnt care or he was powerless to change it. Pelley n. E. C. C. Was growing explosively, and so was the compounding industry. It started in 1998, when congress exempted compounding pharmacies from the oversight of the food and drug administration. The theory was, mixing drugs one prescription at a time shouldnt require federal inspection. The law passed, over the strong objections of thenf. D. A. Commissioner david kessler. You, as f. D. A. Commissioner, testified before them and you said, dont do this. David kessler if youre not going to have oversight, one day, people are going to die. Pelley that days arrived. Kessler this should not happen in 2013 maybe at the turn of the previous century, where we didnt have institutions like the f. D. A. There is no reason why people had to die. Pelley without f. D. A. Supervision, compounding took off. State Health Departments are responsible for regulating what is now nearly a 2 billion industry. Dr. Margaret hamburg is f. D. A. Commissioner now, and she told us, because of the 1998 law, she doesnt know how many compounders there are or what theyre making. You know, i can just hear the folks at home saying, wait a minute. I thought every pharmaceutical drug in this country was approved by the f. D. A. And you seem to be telling me in this interview that thats not the case . Dr. Margaret hamburg well, compounded drugs are not f. D. A. Approved. Pelley so if a patient goes into a clinic, and the doctor or the nurse pulls out a vial of something, that patient has no way to know whether that drug has been approved by the f. D. A. Or not . Hamburg well, i think thats right under the current system. And what i think emerged in the meningitis outbreak was that many patients and their Health Care Providers didnt realize that they, in fact, were using a compounded product. Pelley as commissioner of the f. D. A. Then, you cant tell us sitting here now that every drug being used in the United States is safe and effective . Hamburg no, i really cannot. Pelley it was up to the massachusetts board of pharmacy to inspect n. E. C. C. Records show occasional problems with sterility. But the pharmacy passed a board inspection in 2011. Still, there is no indication that the state fully realized how big and dangerous n. E. C. C. Had become. This is an n. E. C. C. Salesman, speaking for the first time. And we were surprised when he told us how many hospitals and clinics were clients. Close to 3,000, id say. Pelley 3,000 clients, all across the country . Yeah. Pelley the salesman asked us to disguise him and not use his name. He fears the connection to n. E. C. C. Will ruin his career. He left n. E. C. C. A year before the steroid disaster. He says he was replaced by a competing salesman. He told us that many of n. E. C. C. s clients were in on the fraud at the heart of the companys growth. The law required n. E. C. C. To have a name on a prescription, so clinics provided names any names. Bart simpson, Homer Simpson that we. Those ones did raise red flags, and we told to call our client back, and say, hey, give us different names. The followup names would be like a john doe, jane doe, bill doe, you know, jane smith, bill smith, et cetera. Pelley these werent real people . As far as i know. I mean, how many jane does and john does do you know . I mean. Pelley and when you got the prescriptions with Bart Simpsons name and Homer Simpsons name, you went back to that client and said what . Can you please, you know, give us legitimate names or people that you know . Sometimes, theyd take a phone directory within their office, and scribble out their extensions and fax it over to us. Pelley its obvious what was going on, and it was obvious to them. Yeah. Pelley . That this wasnt above board . Right, i mean, if youre in your position, if youre a buyer, and your job is to save money, and youre going to get a brand name for 40, and we offer you a 20 vial for the same drug, same size, same everything, what are you going to do . Youre going to go and get two for the price of one, using us. So, they. Most of them knew that. I mean, some of them wouldnt do business with us. The ones that we didnt have as clients are the ones that knew, hey, you guys cant be doing this. Youre not doing it right. And wed run into that a lot. But wed move on to the next one. Theres more big fish out there. Pelley big fish kept a big sales team busy. But the salesman told us barry cadden, the president , hid that fact during state inspections. So, barry would notify the managers of the sales team, hey, dont let the sales team either come in today, or if theyre already in the building, dont let them leave. If the f. D. A. Went upstairs, or the board of pharmacy went up there and saw 30 sales reps making phone calls, 100 calls a day, theyd wonder what was going on, and why are you so big when youre supposed to be a mom and pop specialty pharmacy, and youre not . Pelley that sales force sold methylprednisolone to a pain clinic in michigan, which treated george carys wife and anita baxters mother. Lillian cary and Karina Baxter were among the first to die. Weve pulled together pictures of about half of those who died. Death often comes when the fungus reaches the brain. George cary by the time the hospital determined that she had suffered a stroke, it was too late. Anita baxter same here. Cary she died five days later. Pelley lillian cary died before doctors figured out what was happening. So, while she was in the hospital, her husband george decided to do something about a nagging pain in his back. He went to the same clinic she had, and now the fungus is in him, too. What has the treatment been like . Cary youre not able to function. Youre not able to concentrate. You. You. The staff called us the walking zombies. Pelley on september 26, after patients started dying, state officials came to inspect n. E. C. C. What happened that day . Connolly we were told that were being inspected, so, everybody stop what youre doing, start cleaning. Pelley so you started cleaning the clean room . Connolly yeah. Pelley now, at this point, there is a federal investigation under way. Connolly i did. We didnt know that. Pelley you didnt know that, but the company knew that. Connolly i would assume, yeah. Pelley a prosecutor investigating this case might consider that to be obstruction of justice. Connolly i would very much agree. Pelley the evidence was getting cleaned up. Connolly it seemed like it. Pelley despite the cleanup, the f. D. A. Tested 50 leftover vials of methylprednisolone, and all were contaminated. They noted that the intake for n. E. C. C. s ventilation was 100 feet from the recycling plant. Barry cadden, new england compoundings founder, was subpoenaed by congress. Barry cadden i respectfully decline to answer on the basis of my Constitutional Rights and privileges, including the fifth amendment to the United States constitution. Pelley i wonder what you would say to him today. Id hope itd be through bars. Whatever i said to him, i hope itd be through bars. Pelley after this interview, Willard Mazure lost feeling in both legs. He went back to the hospital, and so did george cary. Margaret hamburg, commissioner of the f. D. A. , now wants congress to return authority over compounding pharmacies to her agency. Hamburg we need clear, strong, consistent federal standards that will be applied across the board, all 50 states. We need to be able to go in and inspect these facilities and get access to all of the information that we need. Pelley what are the chances of this happening again . Hamburg im sad to say that if we do not put in place the comprehensive legislation that really defines roles and responsibilities, we will have other similar problems. Pelley barry cadden and others are targets of a criminal investigation. Cadden declined to be interviewed. His lawyer told us that cadden is saddened by all of this, but does not know how the drug was contaminated. N. E. C. C. Has gone into bankruptcy, and we noticed in the court papers that cadden and his partners withdrew 16 million from the company over the last year, some of it as people were beginning to die. Cbs money watch update, sponsored by . Glor good evening. Retail Sales Numbers for july are out tuesday. A closely watched number says Consumer Spending accounts for 70 of economic growth. The price of gas dropped 6 cents last week. And tomorrow on cbs this morning, money magazine reveals the 2013 list of best places to live. Im jeff glor, cbs news. Oh, oh, i know a place before they earned enough cash back from bank of america to help take the show on the road. Before they earned 1 back on all purchases everywhere, every time and 2 back at the grocery store. Even before earning 3 back on gas, with no hoops to jump through. Red meg got a bankamericard cash rewards credit card and got the band back together. Thats the sweet sound of rewarding connections. Apply online or at a bank of america near you. So you want to drive more safely . Of smart. Stop eating. Take deep breaths. Avoid bad weather. [ whispers ] get eight hours. [ shouts over music ] turn it down and, of course, talk to farmers. Hi. Hi. We are farmers bum pa dum, bum bum bum bum like dishes that dont fit in the top rack of the dishwasher. Come into sears, ill tell you about our one hand adjuster. On our exclusive kenmore elite dishwasher. Its amazing whatll happen when. Tall things have the right space. Also amazing, jd power ranks. Kenmore elite highest in customer satisfaction. One Appliance Store helps more people. Find savings and solutions than any other. This is sears. Stahl no one symbolizes chinas rapid 30year rise from the backwaters of communism to the second largest economy in the world better than Real Estate Developer zhang xin. Whats interesting about her is that, while we think of china as being uncreative, repressive, and as far as you can get from the American Dream, she breaks every one of those stereotypes. As we first reported in march, shes a mogul who got her start not in china, but on wall street. But she missed the great wall, so she went back home and made it big. The mogul, zhang xin, is the fifth richest selfmade billionaire woman in the world. Zhang xin this is us, the one outside, that one is us. Stahl shes pointing out her buildings. With her partner husband, she has built more of beijing than almost any emperor in chinas history. How many buildings have you and your husband built . Xin oh, a lot. Stahl you cant even count them, right . Xin yeah. Stahl wherever you look, you see the company logo, soho china, on one cuttingedge skyscraper after the next. As a developer, xin pays special attention to design, which is why shes been called the steve jobs of the architecture world. Her buildings are fluid and futuristic and daring, and would be at home in new york or london, an expression of chinas emergence into the modern world. Im wondering, when you see these buildings, if it ever strikes you, you are designing beijing. Its a huge responsibility. Xin i feel that. I really feel that. Stahl do you feel it on your shoulders . Xin i feel that. I feel these buildings are forming the face of our city. Stahl and you build huge buildings and huge projects. Xin thats china, you know . China if you think about what is the character of china, its enormous scale. Its bigness. Everything. Stahl she took us to the site of her newest project. Do you love to come out . Xin i love coming out here. Stahl . Thats so huge, its swarming with thousands of workers. These kinds of projects are one reason for chinas explosive economic growth. Recently, though, thereve been fears of overbuilding and a real estate bubble. Xin told us thats why she keeps her focus narrow onl