Pharmacy owners agree to $100 million settlement after meningitis outbreak

CNN
Tuesday, December 24, 2013 - 10:43am

A compounding pharmacy at the center of a fungal meningitis outbreak last year has agreed to a preliminary settlement that would create a $100 million fund for victims.

The fund will also be used to pay off creditors of the bankrupt New England Compounding Center, attorneys in the case said. A judge will have to approve the plan before it goes into effect.

The nationwide meningitis outbreak was linked to steroid injections distributed by the Massachusetts-based pharmacy. More than 700 illnesses and 64 deaths in 20 states were blamed on the injections, the Centers for Disease Control and Prevention said. But the CDC noted the deaths are from "all causes among persons who meet the case definition and

The pharmacy's owners said they deny any liability or wrongdoing, but want to play a major role in establishing a fund for those who died or suffered "as a result of this tragic outbreak," according to a statement announcing the settlement.

Paul Moore, a trustee of the bankrupt pharmacy, supported the preliminary settlement agreement.

"We are pleased that a significant amount of funds will become available for distribution to victims and their families as compensation for the deaths, injuries and suffering they endured as a result of this tragic meningitis outbreak," Moore said.

The settlement amount would be funded by cash from the pharmacy's owners as well as other sources, such as insurance, tax refunds and the sale of a related business.

Ripple effect

In February, Massachusetts health officials ordered 11 compounding pharmacies to completely or partially shut down after unannounced inspections in the wake of the fungal meningitis outbreak.

"Over the course of the unannounced inspections, partial or complete cease and desist orders were issued to 11 pharmacies for a range of violations," the health department said.

Following the outbreak, Massachusetts Gov. Deval Patrick's administration said it launched "a series of aggressive initiatives" aimed at preventing a recurrence.

Those include new regulations requiring sterile compounding pharmacies to report volume and distribution to the state for the first time and the hiring of additional inspectors.
 

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