Legal counsel of TAHG appealed to the court to waive responsibilities of the hospital in this fake drug case on the ground that it is a non-profit organization and not a distributor of drugs. Instead, it is claimed that TAHG is a very special user of drug products. TAHG believes that the lower court made mistakes in law applications and confused the responsibilities of the hospital and other defendants who are the manufacturer and distributors of the fake drug.

TAHG also charged that the lower court made mistakes in its legal proceedings. The court started the case as a “bodily damage” lawsuit, but changed it to a “medical accidental damage” case when it went on trial in August 2007, and then changed it again to a “product quality damage” case when the ruling of the lawsuit was delivered.

Another defendant, Guangdong Health Care Goods Co., argued that there were multiple causes for deaths of the victims and the fake drug was only one of them. Therefore the liabilities should be clarified to reflect the actual share of the responsibility of the fake drug.

However, Chen Beiyuan, one for the legal counsels of the defendants disagreed with the notion TAHG is a non-profit organization on the basis that the hospital generates revenues and profits from drug sales. As a seller or distributor of drugs, TAHG should therefore be held responsible. He also suggested that any “not guilty” ruling for TAHG in this case will result in a widespread increase of fake drug use in Chinese hospitals.

China is new to the drug product liability lawsuits. There are many ambiguities in its existing laws and regulations and little precedence in their applications in this area. The final ruling of this case will have far reaching impacts on the law applications of similar cases and legal liabilities of pharmaceutical manufacturers, distributors and hospitals in drug quality related lawsuits.  

In addition to legal considerations, there is much political and public pressure on the ruling of this case. The Ministry of Health is in general against the idea of holding hospitals liable in such cases, while other government agencies and the public has the interest to see the hospitals pay a price in such cases so as to force hospitals crackdown fake drugs harder and strengthen inspections of drug purchasing and inventory.