Tuesday, February 24, 2015

Judge Takes Compounder's Disclosure Plan Under Advisement

By Walter F. Roche Jr

A federal bankruptcy judge has taken under advisement a disclosure statement filed by the bankruptcy trustee for the defunct drug compounding firm blamed in the deaths of 76 patients in a 2012 fungal meningitis outbreak.
Judge Henry Boroff heard arguments for and against the disclosure statement during a session Tuesday in Springfield, Mass.
The filing and accompanying documents outline part of a liquidation plan that would provide some $135 million to victims and creditors of the New England Compounding Center. Federal and state regulators have concluded that fungus tainted drugs shipped by NECC cause the deadly nationwide outbreak which sickened 778 patients in 20 states.
The disclosure statement filed by Paul D. Moore was challenged by the U.S. Trustee and other parties who questioned whether it foreclosed additional financial penalties being imposed on those responsible and their affiliated companies.
A federal grand jury has issued an indictment charging 14 owners and employees of NECC with violations of federal law. Two of those were charged with multiple counts of second degree murder.
Boroff did give his approval Tuesday to a settlement agreement between the trustee and the Ohio Board of Pharmacy.
Under the agreement NECC' will permanently surrender its license to sell drugs in the state. NECC and the  board also agreed to drop any claims against each other.
A similar agreement was reached earlier with the Tennessee Pharmacy Board, but Tennessee's agreement includes a possible $5 million claim by the state for the costs of its investigation. That claim, however, would not be considered ahead of those filed for victims. Both states had multiple victims in the outbreak.

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