Compounding Center to Pay $200 Million for Meningitis Outbreak

A bankruptcy reorganization plan approved by US Bankruptcy Court Judge Henry Boroff on May 19, 2015 will result in New England Compounding Center paying $200 million to victims and creditors involved in the 2012 meningitis outbreak that left 64 people dead. The drug responsible for the deaths, a steroid used to treat back pain that was contaminated with fungal meningitis, was also linked to 750 people who were sickened, according to Reuters. The Massachusetts pharmacy filed for Chapter 11 bankruptcy in December 2012, seven months after the meningitis outbreak began.

The company’s chief pharmacist is one of two people implicated in the outbreak and charged with second-degree murder. Of the $200 million, $18 million will be seized from the chief pharmacist and the company’s founders. In December 2014, 14 people were indicted for the outbreak, including charges of “racketeering, mail fraud, conspiracy, contempt, structuring, and violations of the Food, Drug, and Cosmetic Act,” according to an article from Modern Healthcare. Since the outbreak, FDA has tightened its role in inspecting compounding facilities following a November 2012 statement from former FDA commissioner, Margaret Hamburg.

Sources: Reuters