According to a press release issued by the U.S. Department of Justice, a 131-count criminal indictment was unsealed on December 17, 2014 in connection with the 2012 nationwide fungal meningitis outbreak traced back to the New England Compounding Center (“NECC”). The owner/head pharmacist and the supervisory pharmacist of NECC were charged with 25 acts of second-degree murder in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee, and Virginia. Twelve others associated with NECC (including six other pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, two of NECC’s owners, and one other individual) were charged with additional crimes, including racketeering, mail fraud, conspiracy, contempt, structuring, and violations of the Food, Drug and Cosmetic Act.
The fungal meningitis outbreak in 2012 was caused by contaminated vials of preservative-free methylprednisolone acetate (“MPA”) manufactured by NECC, which resulted in 751 patients in 20 states being diagnosed with a fungal infection after receiving injections of NECC’s MPA (64 of those patients in 9 states reportedly died as a result). NECC voluntarily recalled three lots of MPA in September 2012. NECC filed for Chapter 11 bankruptcy protection in response to mounting claims against it, and NECC agreed in late 2013 to create a $100 million fund to compensate victims.
According to the indictment, the two charged with second-degree murder knew that NECC was making MPA in a manner and in an environment in which they could not assure that the drug was sterile. Despite such knowledge, the indictment charges that the two directed and authorized the shipping of MPA to NECC customers nationwide, knowing that physicians would inject NECC’s MPA into their patients and that if the MPA was not in fact sterile, it could kill the patients receiving the contaminated injections.
The indictment further alleges that NECC’s other pharmacists knowingly made and sold numerous drugs in a similar unsafe manner and in insanitary conditions, including the failure to properly sterilize NECC’s drugs, the failure to properly test NECC’s drugs for sterility, and the failure to wait for test results before sending the drugs to customers, and that NECC lacked proper cleaning and failed to take any action when its own environmental monitoring repeatedly detected mold and bacteria within its clean rooms throughout 2012.
The indictment alleges that NECC repeatedly took steps to shield its operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions when in fact it routinely dispensed drugs in bulk without valid prescriptions, going so far as to use fictional and celebrity names on fake prescriptions to dispense drugs.
The indictment further alleges that NECC’s majority stockholder, and her husband, transferred approximately $33.3 million to eight different bank accounts opened after the NECC bankruptcy filing, despite the bankruptcy court’s order that shareholders not transfer assets.
In announcing the indictment, U.S. Attorney General Eric Holder said, “As alleged in the indictment, these employees knew they were producing their medication in an unsafe manner and in insanitary conditions, and authorized it to be shipped out anyway, with fatal results.”
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