Initial Ruling in Counterfeit Epogen Case Outlines Legal Liability

08/04/2004

On July 29, U.S. District Judge Sandra Feuerstein (Eastern District, N.Y.) issued a ruling in the Epogen counterfeit case (Fagan v. Amerisourcebergen) that could have important ramifications for pharmaceutical manufacturers whose drugs have been counterfeited, as well as their distributors and packagers.

This was not the first liability suit involving counterfeit drugs---patients who had suffered after taking fake Serostim and Taxol sued manufacturers and distributors, but those suits were settled out of court. "This is an important decision. Although it's not final, it represents the first time that the U.S. court has opined on questions of manufacturer and distributor liability posed by counterfeit drugs," says Colorado-based anticounterfeiting consultant Lew Kontnik (www.lewkontnik.com).

Filed in Eastern New York District Court two years ago, the suit charged Epogen's manufacturer, Amgen, Inc., as well as Epogen's distributors, wholesalers and packaging manufacturers with negligence for allowing counterfeit Epogen into the supply chain. The suit was brought by Timothy Fagan, then 16 years old, who received counterfeit Epogen following a liver transplant; he alleges that the counterfeit drugs delayed his recovery and caused him to suffer from anemia and painful side effects.

Fagan's suit charged negligence, naming not only Amgen, but the wholesale distributor Amerisource Bergen, CVS Procare Pharmacy, which distributed Epogen from Amerisource Bergen to patients by mail, as well as 100 other companies who manufactured, distributed or sold the drugs and the containers that the drugs were packaged and shipped in.

The ruling dismissed liability claims against Amgen. However, it states that Amerisource Bergen could be tried for negligence, since it had a "duty of care" to the patient, while DVS could be negligent for breaching the implied warranty indicated by dosage information on the product's label. It also held that CVS could demand indemnification for materials it had received from Amerisource Bergen.

The ruling is not final, and is open to appeal. However, Kontnik says, it clearly directs focus to distributors in the pharmaceutical supply chain.