Friday, January 23, 2015

IG Finds Lack of Oversight in Hospital Use of Drug Compounders

By Walter F. Roche Jr.

More than two years after a nationwide outbreak of deadly fungal meningitis caused by a Massachusetts drug compounding firm, a federal audit has concluded federal regulators have not yet taken necessary steps to ensure adequate regulation of the industry.
In a 23-page report issued this week, the Inspector General for the Department of Health and Human Services found that surveyors, in most cases, don't even check to determine if drug compounding firms serving hospitals have registered with the U.S. Food and Drug Administration.
The report concludes that despite the outbreak which killed more than 64 patients across the country, agencies conducting hospital surveys have no plans to tight.en oversight. (A recent court filing states that the number of deaths has increased to 76)
"Despite outsourced compound injections' being responsible for the 2012 fungal meningitis outbreak, none of the oversight entities plan to change how their oversight addresses hospital contracts with standalone compounding pharmacies," the report states.
The 2012 outbreak has been blamed on the now defunct New England Compounding Center, a for-profit privately owned firm which supplied drugs that were supposed to be sterile to hundreds of hospitals and clinics from Massachusetts to California. Methylprednisolone acetate shipped by NECC was laden with fungus, sickening more than 750 patients. (778, according to a recent court filing)
The IG report focuses on those hospitals, some 80 per cent of those participating in the Medicare program, which contract with private firms to supply compounded drugs.
Officials of the Center for Medicare and Medicaid Services (CMS) did not dispute the findings and concurred with two recommended changes.
The report found that only one of five agencies conducting surveys for CMS reported that it always reviewed hospital contracts with so-called standalone pharmacies.
The report noted that such contract reviews could include determinations of whether the agreements included safety provisions such as appropriate recall, storage and testing requirements.
In another apparent lapse, the report found that surveyors for three of five review agencies did not check to determine whether the standalone pharmacies utilized by hospitals were registered with the FDA under the provisions of a new federal law enacted in the wake of the fungal meningitis outbreak.
 "Because most hospitals do not inspect the standalone pharmacies with which they contract, a satisfactory FDA inspection might be the only indicator of the conditions at a standalone pharmacy."
Other issues raised in the report include the training of surveyors in compounding pharmacy standards and in their ability to analyze supporting documents on hospital practices.
The IG recommended increased training for hospital surveyors and changing Medicare agreements with hospitals to cover standards for contracting with standalone compounding pharmacies.

Thursday, January 8, 2015

Man Indicted in Drug Compounding Case Admitted Diverting Anti-fungal Drugs

By Walter F. Roche Jr.

One of the the 14 people indicted in the aftermath of a nationwide fungal meningitis outbreak gave up his pharmacy technician's license after admitting to stealing or diverting antifungal drugs from a former employer.
Records of the Massachusetts Board of Pharmacy show that Scott M. Connolly gave up his license in 2008 after getting caught sending 30 fluconazole tablets to an unidentified address in Missouri.
According to those records a contrite Connolly later wrote to the state agency calling his action "an extremely terrible error in judgment."
The drugs, valued at $432.14, are used to treat fungal infections, the same type of infection suffered by the victims of the 2012 outbreak.
According to the 131-count indictment made public last month, Connolly was working as a pharmacy technician for the New England Compounding Center, even though he had no license. The grand jury charged that Connolly used the username and password of his boss, Barry Cadden, to hide his role at NECC.
Prosecutors say that dozens of patients died and hundreds were sickened due to fungus infested sterile drugs shipped from NECC to health providers in more than 20 states.
Connolly was charged with racketeering and conspiracy for his role in one of NECC's clean rooms, the source of some of the contaminated or untested drugs.
Connolly, acting in violation of Massachsuetts' law, oversaw the preparation of a drug called cardioplegia, a drug used to temporarily stop the heart from beating during surgical procedures, the indictment charges. Two pending civil suits charge that NECC's cardioplegia was responsible for the deaths of two youths under treatment at a Las Vegas hospital.
The indictment lists cardioplegia doses shipped to hospitals in nine states, including Nevada, Florida and Massachusetts.
Connolly and the 13 others named in the 73-page indictment have entered not guilty pleas. Those include Cadden, who was a founder of NECC.
The records show a year after surrendering his license, Connolly wrote the panel to plead for reconsideration of his case.
"I know that what I did was wrong and can assure you it will never happen again," he wrote in a 2009 letter.
In the letter he told state regulators he was working for Ameridose, a sister company to NECC. He said he was involved in invoicing but wanted to return to a pharmacist technician's role.
The files indicate that the diversion came to light when the drugs were returned to his then employer, Bioscrip, because there was no one at the address to sign for them and the drugs were sent back to the company. Bioscrip then terminated Connolly and reported him to the state.
The files indicate the Connolly's plea for reconsideration was denied.
According to the indictment, despite the board's turndown, he went to work in the NECC cleanroom as a pharmacy technician.

Wednesday, January 7, 2015

Meningitis Outbreak Death Toll Jumps to 76

By Walter F. Roche Jr.

The death toll in a 2012 fungal meningitis outbreak jumped by 12 to a total of 76, according to a massive filing in the criminal case against those blamed for the outbreak.
The new death toll numbers were included in an affidavit filed by federal agents to justify the seizure of additional assets from the owners of the New England Compounding Center, the now defunct firm blamed for the outbreak.
According to the filing, the number of victims of the outbreak continued to climb even after officials from the U.S. Centers for Disease Control and Prevention stopped updating the case count.
According to the affidavit the number of patients sickened also continued upward reaching 778, 27 higher than the last CDC count of 751.
"The CDC stopped updating its official count as of Oct. 31, 2013," Joseph Ridgley, a special agent for the U.S. Food and Drug Administration, wrote in one court filed affidavit.
"This investigation, however, revealed that the total number of infected patients increased and is approximately 778, of which 76 have died," he continued.
The new numbers were included in filings made by federal officials to justify the seizure of $18.3 million in assets held by NECC founder and stockholder Barry Cadden and co-owners Lisa and Douglas Conigliaro.
All three were named in a 131-count indictment handed up by a federal grand jury in Boston last month.
The three and 11 others - all owners or employees of NECC- were indicted on charges ranging from second degree murder to mail fraud. They all have entered not guilty pleas. No trial date has been set.
The affidavits totaling 128-pages, which were unsealed this week, detail how Cadden and the Conigliaros paid themselves millions of dollars which had been paid to NECC to provide a fungus tainted spinal steroid injected into the spines and joints of unsuspecting victims.
The 25 counts of second degree murder were lodged against Cadden, who was the chief pharmacist for NECC, and Glenn Chin, a supervisory pharmacist for the Framingham, Mass drug compounding firm.
Under the seizure order assets totaling $1.5 million were seized from Cadden while $16.8 million was seized from Douglas and Lisa Conigliaro.
The Conigliaros were charged in the indictment with violating a bankruptcy court order that had placed a freeze on the $16.8 million.
The owners of NECC already had agreed to contribute nearly $50 million to a $136 million fund to compensate victims of the outbreak. It was not immediately clear how much if any of the additional $18.3 million would be allotted to the victims' fund.
The victims' fund was created as part of the proposed settlement of NECC's bankruptcy case and is subject to approval by U.S. Bankruptcy Judge Henry Boroff.

Tuesday, January 6, 2015

Feds Seize $18.3 Million from Drug Compounders

By Walter F. Roche Jr.

Federal officials have seized some $18.3 million in additional assets from the owners of a defunct Massachusetts drug compounding company blamed in the deaths of 64 patients.
Seizure orders, which were unsealed Tuesday, show that the funds were taken from the bank and investment accounts of members of the Cadden and Conigliaro families, owners of the defunct New England Compounding Center.
The funds are in addition to nearly $50 million from the two families under a settlement for a pending bankruptcy case. Overall some $136 million is expected to be available for victims of the 2012 fungal meningitis outbreak which sickened or killed 751 patients.
According to Boston U.S. Attorney Carmen Ortiz the seizures included $1.5 million from three accounts held by Barry J. Cadden, who  was indicted recently on charges of second degree murder in the deaths of 25 of the 64 victims.
Funds totaling $16.8 million held by Carla Conigliaro and her husband Douglas also were frozen.
In the recent indictment Carla and Douglas Conigliaro were charged with violating a bankruptcy court order freezing their assets.
The court records unsealed Tuesday charge that the Conigliaros transferred millions of dollars the same week NECC surrendered its state license and shortly before the company filed for bankruptcy.
The Conigliaros and Cadden were among 14 indicted by a federal grand jury in December following a more than two year investigation of the 2012 outbreak, which has been blamed on fungus tainted spinal steroids shipped by NECC to health care providers across the country.