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Chitosan is derived and manufactured from the exoskeleton of crustaceans (such as crabs and shrimp) and cell walls of fungi.

Chitosan's properties allow it to rapidly clot blood, and is used in the United States and Europe for use in bandages and other hemostatic agents. Chitosan hemostatic products have been shown in testing by the U.S. Marine Corps to quickly stop bleeding and to reduce blood loss, and result in 100% survival of otherwise lethal arterial wounds in swine. Chitosan hemostatic products reduce blood loss in comparison to gauze dressings and increase patient survival. Chitosan hemostatic products have been sold to the U.S. Army and are currently used by the UK military. Chitosan is hypoallergenic and has natural antibacterial properties, which further support its use in field bandages. Chitosan's hemostatic properties also allow it to reduce pain by blocking nerve endings.

Chitosan hemostatic agents are often chitosan salts made from mixing chitosan with an organic acid (such as succinic or lactic acid). The hemostatic agent works by an interaction between the cell membrane of erythrocytes (negative charge) and the protonated chitosan (positive charge) leading to involvement of platelets and rapid thrombus formation. The chitosan salts can be mixed with other materials to make them more absorbent. The chitosan salts are biocompatible and biodegradable making them useful as absorbable hemostats.

Chitosan's properties also allow it to be used in transdermal drug delivery; it is muco-adhesive in nature, reactive (so it can be produced in many different forms), and most importantly, has a positive charge under acidic conditions. This positive charge comes from protonation of its free amino groups. Lack of a positive charge means chitosan is insoluble in neutral and basic environments. However, in acidic environments, protonation of the amino groups leads to an increase in solubility. The implications of this are very important to biomedical applications.