Compounding pharmacy sets up fund for meningitis victims

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New information in the continuing saga of the recent meningitis outbreak throughout the nation shows that the source pharmacy is planning to file bankruptcy. The firm is also working to establish a fund for victims who received the contaminated medication that led to the development of the fatal disease. More than 130 products liability lawsuits have currently been filed against the firm, and nearly 300 other patients have claimed injury from the tainted medication.

The Massachusetts compounding pharmacy is accused of failing to follow proper procedures when blending medications for steroid shots. The injections, used by physicians and other healthcare professionals, were designed for use in patients’ spinal areas. An investigation revealed that the product was contaminated with a dangerous fungus, which caused a massive outbreak of meningitis among injection recipients.

So far, the shots have contributed to 39 deaths and at least 600 cases of the illness.

The company, New England Compounding Center (NECC), is working with a certified accountant to establish the compensation fund for victims involved in the meningitis outbreak. NECC leaders are taking initiative by establishing the fund, which can be used for settlements without involving expensive court proceedings.

Inspectors report that NECC may not possess adequate assets to fairly compensate all victims associated with the outbreak, but it appears that other companies may also be liable. The names of those potential defendants have not been released, but they ostensibly consist of medication and equipment distributors. Investigators continue to search for additional responsible parties who can provide compensation to the victims.

NECC was charged with violating its state license, which permitted employees to mix medications only for individual patients. Instead, according to the charges, the firm was selling wholesale compounded medications for widespread distribution.

Although the company is seeking to provide restitution for its patients, payouts may be complicated by the fact that the firm is declaring bankruptcy. Officials have not yet disclosed whether creditors or patients will be prioritized during the asset distribution process.

Source: Boston.com, “Mass. firm in meningitis case eyes bankruptcy help,” Jay Lindsay, Dec. 21, 2012.