A plant in China may be producing flawed ingredients for the big-selling Baxter International (NYSE:BAX) blood thinner Heparin. According to The Wall Street Journal, it is the same "blood-thinner that is under investigation after reports of hundreds of allergic reactions and four deaths among the drug's users."
While the FDA failed to inspect that facility, it is Baxter's responsibility to ensure the safety of its own products. The debacle is not unlike the one that plagued Mattel (NYSE: MAT) last year when it was importing toys from China that contained high levels of lead. In Baxter's case, however, it appears that people have lost lives.
Baxter and the FDA now probably face months of criticism, much of it coming from Congress, which is already concerned about the quality of China-made products.
Baxter also needs to worry about whether it will be viewed as having any liability in the cases where Heparin caused illness. It looks like a trial lawyer's dream.
Douglas A. McIntyre is an editor at 247wallst.com
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