In re New England Compounding Pharmacy, Inc. Products Liability Litigation Lawsuit

In re New England Compounding Pharmacy, Inc. Products Liability Litigation

The company and the product

The New England Compounding Center (NECC) was a pharmacy in Framingham, Massachusetts, licensed as a compounding pharmacy. The traditional role of a compounding pharmacy is to prepare individualized formulations for specific patients whose needs cannot be met by commercially available drugs. NECC, however, came to operate more like a drug manufacturer: it produced vials of injectable medications in large batches for broad distribution to hospitals and clinics across the country, including preservative-free methylprednisolone acetate, a steroid commonly used for epidural and joint injections to treat pain.

The 2012 outbreak

In September 2012, the Centers for Disease Control and Prevention, working with state and local health departments and the FDA, began investigating a multistate outbreak of fungal meningitis and other infections among patients who had received contaminated steroid injections. The CDC traced the outbreak to fungal contamination in three lots of NECC's methylprednisolone. Doses from those lots had been distributed to medical facilities in 23 states, and roughly 14,000 patients had received injections from them between late May and late September 2012. The predominant pathogen was Exserohilum rostratum, an uncommon "black mold" rarely associated with human disease. Infections ranged from meningitis to joint infections, spinal abscesses, and arachnoiditis, and the final tally — disclosed when the litigation closed — was 798 people sickened and 64 deaths.

Investigators found that NECC had shipped product before sterility testing was complete and had been operating in violation of its state license. In October 2012, Massachusetts authorities recalled all of the company's drugs, NECC suspended operations and surrendered its licenses, and the state board of pharmacy revoked the company's and its principal pharmacists' licenses. On December 21, 2012, the company filed for Chapter 11 bankruptcy protection.

The litigation

Lawsuits against NECC began arriving in federal court in the fall of 2012, and more than 400 had been filed by mid-December. Plaintiffs first asked the Judicial Panel on Multidistrict Litigation for consolidated proceedings, and the parties disagreed over venue — plaintiffs initially pointed to Minnesota, while NECC asked that the case be handled in Massachusetts. United States District Judge F. Dennis Saylor IV, in the District of Massachusetts, ruled that the meningitis suits pending in his district would be consolidated and allowed to move forward, and the federal cases were centralized there as MDL 2419; the initial transfer into the MDL is recorded as February 12, 2013.

Criminal proceedings ran in parallel. In December 2014, federal prosecutors unsealed a 131-count indictment charging 14 former NECC employees, including president Barry Cadden and pharmacist Glenn Chin, alleging that from 2006 to 2012 the company knowingly shipped drugs that were mislabeled, unsanitary, or contaminated. The most serious counts, under the racketeering statute, included murder allegations against Cadden and Chin. Per Reuters coverage of the case (https://www.reuters.com/world/us/pharmacy-exec-deadly-us-meningitis-outbreak-gets-stiffer-14-12-year-prison-term-2021-07-07/), Cadden was convicted on racketeering charges in 2017 but acquitted of the murder counts, and his sentence was later increased to 14 and a half years; Chin was likewise convicted of racketeering and mail-fraud charges in 2017. Other defendants, including the company's sales director and its majority owner, entered guilty pleas on related counts. Both Cadden and Chin were later sentenced in Michigan state court on manslaughter charges.

Outcome and aftermath

In 2015, a global settlement plan approved within NECC's Chapter 11 bankruptcy case resolved the mass-tort claims, setting aside funds for the victims and their families; by 2019 the settlement program had made payments to nearly 2,000 claimants, with additional claims still pending. The MDL is recorded as terminated, and the litigation was resolved in 2015. The outbreak also produced regulatory change: the Drug Quality and Security Act, enacted in November 2013, gave the FDA broader authority to register and inspect certain non-traditional compounding facilities, closing part of the gap between state pharmacy oversight and federal manufacturing regulation.