Pharmalot: So how much trouble is Baxter in? Turkewitz: Enough. Assuming the reports are true. Baxter sold a counterfeit drug, which is in violation of federal law. We lawyers like to call it 'negligence per se.' They had an obligation to verify the goods they sold are bona fide. But it appears that Baxter sold something different.
Pharmalot: The problem, however, appears to be a contaminated ingredient, which was made in a plant in China that's run by a supplier, not Baxter. How, if at all, might that alter the company's exposure? Turkewitz: They have an obligation to make sure the stuff they're selling is what they say it is. They're the ones selling the product. Now, if they have to turn around and make a claim against their supplier, that's their business. But they sold the product. The law imposes not only a positive duty to seek out and remedy violations, when they occur, but also implement measures to ensure violations don't occur. You can't just turn a blind eye.
Pharmalot: Baxter recently said it conducted an audit of the Chinese plant last fall, but insisted its review didn't signal the same problems later found by the FDA. How might that factor into the legal issues? Turkewitz: Well, they can claim they did an audit, but what kind of audit? Anyway, there's still negligence if they didn't find it.
Pharmalot: How much worse does the wave of bad news about safety issues and counterfeiting from China make it for Baxter? Turkewitz: I think it's impossible for anybody to say, with a straight face, that they're taken by surprise by what's happened. The dangers of counterfeiting, because of the vast sums of money at stake, are well known in the pharmaceutical industry. And one aspect of that problem is counterfeit ingredients in the production process as opposed to a counterfeit finished product that enters the supply chain in the US and is mixed in with a legitimate shipment or sold as a substitute. This is the issue with the production in China. It's called foreseeable risk. For Baxter, I don't know if (the sourcing) was a decision to save money or they had to look for another supplier. But whatever the reason they used this supplier, they can't excuse it. I can't think of any excuse (Baxter) can come up with that will hold water.
Pharmalot: So it sounds as if Baxter faces an extensive problem. But it's early in the game. Is there any way to assess this? Turkewitz: It's really very difficult to know that right now. And there are several questions that have to be answered if you want to determine who is in a position to proceed with a case. First, people who were exposed to the counterfeit may not know they received it. And another thing to remember is that (Heparin) is not used in healthy people. So you have to try to discount illness from the equation. The drug has already been destroyed by virtue of ingestion. So you have to prove injury came from the counterfeit and not underlying disease.
Pharmalot: Sounds like that's going to part of Baxter's argument, yes? Turkewitz: I suppose Baxter will fight every claim. And yes, they'll argue the patient wasn't affected. There's no other line of defense.