Jury Rules Against Baxter In Contaminated Chinese Heparin Case - "The Cheap Stuff"

An Illinois jury on Thursday awarded $625,000 to the estate of a Chicago-area man who was administered a blood-thinning drug that contained a contaminated ingredient medical-products company Baxter International Inc. (BAX) manufactured in China.
It was the first of hundreds of pending lawsuits against Baxter to go to trial.
The cases are related to a 2008 finding by the Food and Drug Administration, which discovered a link between contaminated heparin marketed by Baxter to Chinese suppliers of the active ingredient used in heparin. In the U.S., the contaminated heparin was linked to dozens of deaths and hundreds of allergic reactions.
Plaintiffs contended 63-year-old Steve Johansen received low doses of contaminated heparin during dialysis and a bolus dose during a subsequent hospitalization at Palos Community Hospital in late 2007.
The active pharmaceutical ingredient in the contaminated heparin received by Mr. Johansen and other Americans was obtained from Baxter/SPL's Chinese supplier, Changzhou SPL (a joint venture with SPL).  This crude heparin was referred to in the companies' own internal records as "the cheap stuff."  Baxter and SPL knew that the plant had never been inspected by the U.S. FDA (which the FDA later attributed to clerical error) or Chinese regulatory officials.  When the Chinese plant was finally inspected by the FDA after the heparin contamination crisis, multiple violations were found resulting in an import ban.  Additional evidence also brought to light during the trial established that Baxter and SPL failed to establish and comport with quality/purity specifications, including an impurity profile, and failed to trace and control their supply chain.  At trial, the Court granted partial directed verdict in favor of Mr. Johansen holding that the product sold by Baxter and SPL was defective as a matter of law.

According to the verdict, the award of compensation was for pain and suffering and was found against Baxter and the Chinese supplier, Scientific Protein Laboratories LLC.
Baxter spokeswoman Deborah Spak said the company is taking responsibility for legitimate cases of harm related to the contamination seriously, adding that Baxter will "vigorously defend claims that are not consistent with the definition established by public health authorities."
Baxter's therapies treat serious medical problems such as cancer, immune disorders and trauma. The company is coming off a challenging year due to economic weakness, costs pegged to the U.S. health-care overhaul and some product-quality and regulatory challenges.