Judge Approves Partial Fee Request, Defers Action on "Enhancement"

By Walter F. Roche Jr.

A federal bankruptcy judge has approved the undisputed portion of a multimillion dollar fee request in the case of the New England Compounding Center, but deferred action on the disputed $2.6 million balance.
In a brief order issued Wednesday U.S. Bankruptcy Judge Henry J. Boroff approved fees and expenses totaling $1.1 million for Paul D. Moore, the Boston attorney who acted as trustee in the case.
Moore had initially requested  $5.758 million, but later trimmed it to $3.75 million.
In his order Boroff said he was taking the remainder of the fee request under advisement.
Moore, in an email response to questions about the order, noted that "despite having spent most of my time on this case for more than three years, I, like the victims, was the last other than them, to get paid."
 "They (the victims) should understand that I have constantly reminded everyone of the need to distribute these funds as soon as possible," Moore added,  noting his efforts in amassing an estimated $200 million trust fund, most of which will go to victims."
In a two hour court session in October, Thomas Sobol, who represents victims of a deadly 2012 fungal meningitis outbreak, did not dispute the $1.1 million request, but argued that Moore was not entitled to an enhancement boosting the fee to $3.75 million.
NECC has been blamed for the 2012 outbreak which sickened 778 patients, killing 76 of them. Moore served as the trustee in the bankruptcy proceedings and now holds the title of post confirmation officer.
He is a partner with the firm of Duane Morris, which already has been paid $4.3 million under a separate Boroff order.
 Under a liquidation plan approved by Boroff most of the  $200 million trust fund is expected to go to victims  of the outbreak. The fund includes payments from the owners of NECC, insurance companies and other firms that provided services to NECC.
Moore said that prior to the deposits in the trust fund "(t)he victims had every right to consider themselves 'The Forgotten', which they have never been in my mind. "
Contact: wfrochejr999@gmail.com

Dispute Could Delay NECC Criminal Trials

By Walter F. Roche Jr.

A dispute between federal prosecutors and defense attorneys over hundreds of records seized from a defunct Massachusetts drug compounding firm could result in a delay in a scheduled criminal trial.
The dispute involves some 630 emails spread over 2.5 million pages which were seized by federal agents more than three years ago during a raid on the New England Compounding Center in Framingham, Mass.
Stephen Weymouth, the attorney for Glenn Chin, the former top pharmacist for NECC, said the dispute arose when prosecutors disclosed that they would not have time to completely review the 630 emails before the scheduled April 4 trial date. Instead, he said,  prosecutors  agreed not to use any of those documents at trial.
In criminal cases so-called filter teams, not connected with the investigation, review seized internal documents to determine whether they contain any privileged information, such as communications between defendants and their lawyers. Prosecutors would then be barred from using the privileged material.
Weymouth said that the agreement not to use the documents was not adequate because those same emails may include so-called exculpatory evidence favorable to defendants.
As an example, he said, there could be emails in which a defendant raised concerns about the quality of work from an independent company that was supposed to be testing NECC's products.
The dispute over the emails is scheduled to be aired at a Jan. 21 hearing before U.S. District Judge Richard G. Stearns.
Federal prosecutors did not respond to a request for comment.
"I don't know what the court is going to do," Weymouth said, adding that the dispute arose over the past four or five weeks.
Chin and NECC founder Barry Cadden are facing multiple charges including 25 counts of second degree murder.
Cadden, Chin and 12 other former owners and employees of NECC were named in a 2014 131-count indictment with charges ranging from second degree murder to racketeering and mail and wire fraud.
Cadden and Chin will be tried separately as will Douglas and Carla Conigliaro, who were part owners of the company.
All of the defendants have entered not guilty pleas.
NECC has been named as the source of fungus laden steroids that were shipped to medical facilities across the country. The outbreak sickened 778 patients, killing 76 of them.
Contact:wfrochejr999@gmail.com

Negotiations on Meningitis Liens Already Underway

By Walter F. Roche Jr.

The administrator for the $200 million trust fund benefiting victims of a 2012 fungal meningitis outbreak says she already has begun negotiations with the federal government and major insurers to resolve liens that otherwise could vastly deplete those funds.
Lynne F. Riley, the trust fund administrator, said today in an email response to questions, that she and her staff already have reviewed some 2,500 claims. That number far exceeds the 778 victims that have been cited by federal prosecutors in court filings.
"There are ongoing negotiations regarding the medical liens on victims' distributions, which must be resolved before a first interim distribution can be made," Riley wrote in the email.
She said that preliminary values had been set on some 2,500 claims and efforts were underway to resolve claims "with inaccurate calculations or other major defects before the first interim distribution."
Riley, a partner in the Boston law firm of Casner and Edwards, did not predict how much time would be needed to resolve the remaining issues.
She said the ongoing negotiations were with the federal government on Medicare and Medicaid claims "as well as several private providers that have asserted liens on many of the National Settlement Fund distributions.
Riley said she was not aware that four members of Congress, including U.S. Sen. Lamar Alexander, a Tennessee Republican, had recently written to U.S. Health and Human Services Secretary Sylvia Burwell asking her to exercise her legal authority to waive any liens on victims' distributions.
HHS and private insurers have been notifying victims that they intend to seek reimbursement for costs they incurred for the medical care provided to outbreak victims.
For victims who underwent extensive and recurrent hospitalization, those liens could literally wipe out any distribution from the trust fund.
The trust funds were amassed during the bankruptcy proceedings of the New England Compounding Center, the defunct Massachusetts firm blamed for the 2012 outbreak. The company shipped thousands of vials of contaminated steroids to health provider across the country. Of the 778 known victims, 76 died.
Contact:wfrochejr999@gmail.com


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Victims Await Word on Awards, Timing

By Walter F. Roche Jr

As 2015 comes to a close with no payments, victims of the 2012 fungal meningitis outbreak are still awaiting word on when they will be getting payments from a $200 plus million trust fund.
Interviews with victims and their attorneys show that predictions range from three to six months before any actual payments may be forthcoming.
In fact, victims and their attorneys don't even know with any certainty how much of an award they can expect.
The year is ending without any payments despite predictions by some that checks could go out before Dec. 31, 2015.
In one recent court session, Fredric Elllis, one lawyer for the victims, estimated that survivors of victims who died in the outbreak could expect payments ranging from $175,000 to $200,000, with that total being spread over two separate checks.
He stressed the figure was just an estimate.
Victims have been informed that the payments will be computed on a point system based on the severity of their illnesses. But how much each point will translate to in dollars and cents is still not known.
Dennis O'Brien, a Tennessee survivor of the outbreak, said he is hoping to get an idea of how much of a payment to expect within about a month.
He said he expects an initial payment in winter or early spring and the balance at a later date after figures are finalized.
Rosanna Bennington, a Minnesota victim, said she heard from her lawyers about three weeks ago.
 "The only thing that they had to say was that they did not expect us to get a settlement until some time in 2016, but they had no idea when," she wrote, adding "We have no idea what the point value is in relationship to dollars
Predictions from victims' attorneys on a payment timetable range from three to six months for an initial payment.
"The latest information we have heard is distributions will start in the first half of 2016," Nashville attorney Mark Chalos wrote in an email response to questions.
Another attorney expressed hope that initial payments could come in the first quarter of 2016, while yet another said he was hopeful for more definitive information over the coming week.
Requests for information from Lynne F. Riley, the attorney overseeing the trust fund were unsuccessful.
Paul D. Moore, the former trustee in the bankruptcy of the New England Compounding Center, recently reported that all approved payments to other creditors had been paid.
Another uncertainty for victims is the amount of any award that could be claimed by health insurance carriers that covered the cost of their care.
Recently four U.S. Senate members wrote to U.S. Health and Human Services Secretary Sylvia Burwell, asking her to waive any claims for reimbursement for Medicare recipients. Thus far there has been no reply. A waiver would affect the majority of the outbreak victims.
NECC has been named as the source for thousands of vials of fungus tainted steroids injected into the spines and joints of unsuspecting patients.
Federal court records show 778 patients  were sickened in the outbreak with 76 dying.
Meanwhile victims like Bennington are still suffering from the after effects of their illnesses.
"I am disabled from this event and my back issues," Bennington wrote. "I am struggling to get by day by day. We the victims of this event are financially crippled."
Contact:wfrochejr999@gmail.com

U.S. Attorney Seeks to Block Meningitis Depositions

By Walter F. Roche Jr.

Citing the possibility it could jeopardize a pending criminal case, the U.S. Attorney in Boston, Mass. is asking a judge to delay depositions of a former employee of the firm blamed for a fatal meningitis outbreak.
In a filing made last week U.S. Attorney Carmen Ortiz said that depositions, which are being sought in pending civil cases, should be delayed until after the criminal trial of a key defendant, Barry Cadden, who is facing 25 counts of second degree murder.
Cadden was the top pharmacist and part owner of the New England Compounding Center, the  defunct Framingham, Mass. firm blamed for a 2012 fungal meningitis outbreak that sickened 778 patients across the country. Seventy-six of those patients died.
Prosecutors contend that scheduled depositions of former NECC salesman John Notarianni and Joseph Connolly could result in Cadden and his attorneys gaining access to information in the upcoming criminal case. Cadden and 13 other defendants are scheduled to go on trial next Spring.
According to the filing, prosecutors also filed a sealed memorandum backing its argument for blocking the depositions, at least temporarily.
The prosecutors described Connolly and Notarianni as "potential important witnesses" in the criminal case. Notarianni was an NECC salesman who handled the NECC account, records in the civil cases show. Connolly's role has not been disclosed.
Scott Connolly, a former NECC pharmacist, is one of the defendants in the criminal case along with Cadden and a dozen other owners and employees.
"Depositions of witnesses about important issues in the criminal case, including NECC's clean room practices and Medical Sales Management sales tactics ... could potentially harm the criminal case," the filing states.
Prosecutors charged that Cadden already "has publicly confirmed his efforts to use the discovery process to circumvent the criminal discovery process. The court should not allow a criminal defendant to abuse the civil process in this way."
The brief states that prosecutors expect lawyers for the Saint Thomas Outpatient Neurosurgical Center and related parties to question the two witnesses "on the same topics that the government intends to elicit from them at trial."
The Saint Thomas clinic is a defendant in dozens of the civil suits brought by victims of the outbreak who were injected with fungus laden NECC steroids in 2012.
Under a recently disclosed schedule, those cases, which have been merged in U.S. District Court in Boston, Mass., will not go to trial until next Spring, about the same time set for the criminal case.
Contact:wfrochejr999@gmail.com

HHS Asked to Waive Millions in Liens on Outbreak Victims

By Walter F. Roche Jr.

In a move that could save millions of dollars intended for victims of the 2012 fungal meningitis outbreak, four members of Congress have asked a top federal official to waive the recovery of money paid by the federal government to pay for many of the victims' treatments.
In a three-page letter to Health and Human Services Secretary Sylvia Burwell, the four asked her to officially waive any government claim to a $200 million trust fund set up to compensate victims of the 2012 fatal outbreak.
The letter asks Burwell to "use your statutory authority to waive all Medicare liens that could attach to a victims' compensation fund to benefit  victims of the New England Compounding Center tragedy."
Signers of the letter include Tennessee Republican Lamar Alexander and Massachusetts Democrat Elizabeth Warren.
The 2012 outbreak sickened 778 patients across the country, killing 76 of them.
Citing "the unique circumstances of this case," the four legislators, two from each party, wrote that "Many victims who received tainted doses have suffered through terrible side effects caused by the infection and the powerful drugs that save their lives."
The plea comes as more and more victims have been put on notice by the federal government and private insurers that they plan to attach liens to any awards stemming from current court litigation in order to recoup payments they made for the victims' care and recovery.
In an email response to questions recently,  a spokesman for the Centers for Medicare and Medicaid Services stated that the agency was required by law to seek recovery under a legal process called subrogation.
But in their letter, the four senators cited a specific provision in federal law that gives the HHS secretary the power to waive the recovery efforts.
They also noted that NECC was able to evade state and federal requirements because of a "regulatory gap."
Stating that federal government was "partially responsible" for the suffering of the victims, the letter concluded that a decision by the federal government "to attach Medicare liens to the NECC victims' compensation fund will result in continued hardship for NECC victims and their families."
In addition to Alexander and Warren the letter was signed by U.S. Senators Pat Roberts and Al Franken. Franken from Minnesota is a Democrat while Roberts is a Kansas Republican.

Meningitis Lawyers Give Opposiite Liability Arguments

By Walter F. Roche Jr.

With the fate of the claims of dozens of victims in the balance, opposing lawyers Thursday gave a federal judge totally opposite interpretations of Tennessee laws on health care and product liability.
Appearing before U.S. District Judge Rya Zobel, George Nolan, a Nashville attorney representing victims of the 2012 fungal meningitis outbreak, said it was absolutely undisputed that a Nashville clinic did seek and obtain compensation for vials of a steroid that sickened and killed unsuspecting patients.
C.J. Gideon, the lawyer for the Nashville and other Tennessee clinics, said Nolen was wrong and Tennessee's unique product liability does not apply to claims by victims and their survivors.
There was no bill for the steroid, Gideon said, adding that the invoices from the Saint Thomas Outpatient Neurosurgery Center, were for a complete medical service.
It was, he said, "a fixed one time fee for the entire process."
Gideon said that as a result, all of the claims fall under Tennessee's health liability law.
The question of which law applies is critical to the outcome of the dozens of pending cases.
If Zobel adopts the position of the clinics, any award to victims will be limited by the state's health care liability law, which sets strict limits on the amount victims can recover. Those caps don't apply to the product liability law.
Nolan, who spokes first in the 80-minute session, said that there are claims that fall under the health care law, but the product liability claims are separate.
"Some of our claims do fall under the health care liability law. No question about it," Nolan said."
But, he added "there is no question money changed hands. A sale has occurred," he said citing deposition testimony from the clinic manager, Debra Schamberg.
Gideon said that a recent Tennessee Supreme Court decision bolstered the clinic argument and he added that under Tennessee law, when there is a conflict between two statutes, the new law should be applied. The health care law went into effect long after the product liability law, he said.
"This is clearly a transaction involving medical services," Gideon said.
Nolan cited a provision of the product liability law that provides that when the manufacturer of a defective product is bankrupt, the seller becomes liable. He also cited another Tennessee Supreme Court case, which, he said, backs the plaintiffs' argument.
The New England Compounding Center, which produced the fungus tainted steroids, filed for bankruptcy on Dec. 21, 2012, a few months after the deadly outbreak became public. That, Nolan said, triggered the product liability law.
Federal court records show 778 patients from across the country were sickened in the outbreak and 76 of them died. In Tennessee 153 patients were sickened and 16 of them died.
The two sides also argued over what so-called bellwether cases will be heard first. Lawyers for Saint Thomas charged that the plaintiffs were maneuvering to eliminate cases with little or no liklihood of  substantial awards.
"It's simply not fair," said Marcy Greer, one of the clinic lawyers.
Gerard Stranch, a Nashville lawyer for victims, said the issue was "much ado about nothing."
Zobel took both issues under advisement.
Contact: wfrochejr999@gmail.com

Bankruptcy Judge Gets Status Report on NECC

By Walter F. Roche Jr.

A federal bankruptcy judge got a year end status report on claims filed in the case of the New England Compounding Center including an agreement for a Nashville clinic to drop its $1.17 billion claim.
The report from Paul D. Moore, who served as trustee in the case, was delivered in a Springfield. Mass. courtroom with most of the participating lawyers testifying by phone.
Bankruptcy Judge Henry J. Boroff agreed to delay till Jan. 6 a separate hearing on disputed claims filed by the Inspira Health Network and a group of insurers, including Lexington Insurance.
Moore's report listed only two claims on which he did not register objections: a $13,760 claim by American Express Travel Services and a $1,858.35 claim by Liquidity Solutions.
The report listed 11 claims that are to be eliminated because of subsequent claims that superceded the original claims and 32 claims that were either waived or released.
The Saint Thomas Outpatient Neurosurgical Center waived its claim for $1.17 billion when it agreed to the liquidation plan earlier approved by Boroff.
Also waived were claims by the parent company and affiliates of Saint Thomas.
Moore's report also listed 23 claims which were filed without sufficient documentation.
In an email following the hearing Moore said that he had paid all of the approved or allowed claims, but payments to victims are being handled by a court appointed person overseeing the trust in which the $200 million has been placed.
 The liquidation plan approved by Boroff could provide some $200 million or more to victims of the 2012 fungal meningitis outbreak, which state and federal regulators have concluded was caused by fungus tainted steroids injected into the spines and other joints of patients across the country.
The outbreak sickened 778 patients, killing 76 of them.
The lawyer for Moore told Boroff that negotiations were ongoing with a couple other claimants.
The hearing on the Inspira and related cases is set for 11:30 a.m. on Jan. 6. Inspira entered into a $16 million settlement of suits filed by patients who had been injected with fungus laden steroids from NECC.
Contact: wfrochejr999@gmail.com
 

Nashville Clinic Seeks Hold on Product Liability Claims

By Walter F. Roche Jr.

The Nashville, Tenn. clinic where patients were injected with fungus tainted steroids is asking a federal judge to put on hold claims that the clinic is liable for millions of dollars in damages under state product liability statutes.
The attorneys for Saint Thomas Outpatient Neurosurgical Center filed a motion in U.S. District Court in Boston, Mass. seeking a hold on the claims until the Tennessee Supreme Court acts on a related but separate case that hinges on the applicability of Tennessee's product liability law.
In the motion Saint Thomas clinic lawyers said waiting for the Tennessee court to issue a decision "is the most prudent course at this point in the litigation."
Lawyers for victims of the outbreak labeled the filing another stall tactic.
"This is yet another attempt in a long series of attempts by Saint Thomas to delay their patients' day in court. Saint Thomas knows it did wrong and caused harm. Saint Thomas is trying desperately to avoid being held  accountable," said Nashville attorney Mark Chalos, who represents victims.
The request to the state court to answer the product liability issue stems from a case filed in Nashville by the insurance company that covered a Crossville clinic, the Specialty Surgery Center, where other patients were injected with fungus laden steroids from the same defunct drug compounder.
"This precise question of Tennessee law remains unresolved with no specific authoritative Tennessee decision for this court to follow," clinic lawyers stated in court filings.
Nonetheless the clinic lawyers added that if the judge in the Boston cases were to continue the claims without a delay, the conclusion should be that the "claims fail as a matter of law in this factual context."
Lawyers for plaintiffs have argued in state and federal court that the law does apply because of a provision that the sellers of a defective product can be held liable if the manufacturer is bankrupt. The New England Compounding Center, the manufacturer of the steroids, filed for bankruptcy in late 2012. 
The 19-page clinic filing is but the latest development in hundreds of civil suits stemming from the 2012 fungal meningitis outbreak cause by steroids shipped from the New England Compounding Center, the now shuttered Framingham, Mass. drug firm. The outbreak sickened 778 patients, killing 76 of them.
The cases have been consolidated before U.S. District Judge Rya Zobel, who now must decide whether to continue to with product liability claims or put them on hold.
Leaving the questions on Tennessee law to Tennessee courts, the filing concludes "provides the most direct and feasible means of clarifying unsettled areas of state law."

Clinic Seeks to Block Saint Thomas' Consultant's Subpoena

By Walter F. Roche Jr.

A Nashville clinic where dozens of patients were injected with fungus tainted steroids is asking a federal judge to block a subpoena seeking records of a key consultant.
Lawyers for the Saint Thomas Outpatient Neurosurgical Center are asking a federal judge to issue a protective order effectively blocking or limiting a subpoena issued to Michael O'Neal, a pharmacist and consultant who has worked for the clinic for nearly a decade.
In multiple filings in U.S. District Court in Boston, Mass., the Saint Thomas lawyers argued that a Tennessee law, specifically protects from disclosure the information sought by victims of a 2012 fungal meningitis outbreak.
Lawyers for victims contend the records are essential in gathering information on how and why the Nashville clinic came to purchase the tainted drugs and inject them in unsuspecting patients.
The filings come in a group of cases filed in behalf of victims of the 2012 outbreak caused, according to state and federal regulators, by fungus tainted vials of methylprednisolone acetate from the defunct New England Compounding Center.
The outbreak sickened 778 patients, killing 76 of them. Most of Tennessee's 153 known victims were treated at the Saint Thomas outpatient clinic. Sixteen of those patients died.
In the filings Saint Thomas' lawyers, from the firm of Gideon and Cooper, noted that a Nashville judge already has ruled in a related case that the records are covered by the Tennessee Patient Safety and Quality Improvement Act of 2011.
In an affidavit, also filed with the court, O'Neal stated that his role was to conduct monthly inspections at the Nashville outpatient clinic and to provide advice to the facility director.
According to his filing he first went to work as a consultant to the clinic in 2000. He said his contract was revised in 2007.
Both O'Neal and Debra Schamberg, the facility director at the time of the outbreak, stated in separate filings, that his duties were expressly related to quality control and patient safety as they related to pharmaceuticals.
Saint Thomas lawyers stated that were the federal court not to block the subpoena it "will render the Tennessee law ineffective" along with the ruling by Nashville Circuit Court Judge Joseph Binkley.
Binkley's order, the clinic filing contends, "barred the discovery of O'Neal's reports and communications" with the clinic.
"If allowed the," the motion states, it "would let the genie out of the bottle and there is no way that genie could be put back in."
The brief states that both state and federal statutes were drafted to encourage health providers to thoroughly review quality control matters without fear that those efforts could late be used as evidence against them.
"Confidentiality in these functions is essential," the filing states.
Saint Thomas' lawyers also argued that the subpoena was "sweeping and indiscriminate" and covered documents dating back long before the outbreak.
Contact: wfrochejr999@gmail.com

Nashville Nursing Home Closing Voluntarily

By Walter F. Roche Jr.

A Nashville nursing home is closing its doors voluntarily, while the state has put a freeze on any new admissions at a Greene County facility recently cited for multiple violations.
Closing by Dec. 15 is the Belcourt Terrace Nursing Home in Nashville, Tenn. which is licensed for 49 beds, but recently had only 23 residents.
Woody McMillin, a spokesman for the state Health Department said the closure was voluntary and the Belcourt staff were assisting patients and their families with finding other placement.
The facility is owned by an Ohio firm AHF/Central State Services. Company officials did not respond to a request for comment.
In a legal notice the home said it would be placing the state license on inactive status and would be withdrawing from the Medicare and Medicaid programs.
The home has a history of rules violations but recently received clearance on a long list of corrective actions.
The facility had been cited earlier this year for patients having developed bed sores and leaving patients in bed for extended periods of time during the day.
In Greene County state Health Commissioner John Dreyzehner has imposed a freeze on any new admissions to John M. Reed Health and Rehabilitation. He also fined the home $4,000 citing multiple violations of state and federal requirements.
The 63-bed nursing home in Limestone was inspected on Nov. 5 and cited for failure to provide basic services and failing to maintain proper medical records.
Dreyzehner also named an independent monitor to oversee the operation of the home.

Florida Firm Recalling Compounded Drug

FDA Announces Glades Drugs' Nationwide Voluntary Recall Of Compounded Multivitamins Containing High Amounts Of Vitamin D3 (Cholecalciferol)

FDA Press Release

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For Immediate Release

November 25, 2015

Contact

Consumers

Faith Washington, Pharmacist
 (866) 597-3296

Firm Press Release

The U.S. Food and Drug Administration is alerting health care professionals and patients of a voluntary recall of compounded multivitamin capsules containing high amounts of Vitamin D3 (Cholecalciferol), distributed nationwide by Glades Drugs in Pahokee, Florida. FDA has received reports of several adverse events potentially associated with these compounded capsules made by Glades Drugs.
Consumption of this product may result in vitamin D toxicity, which may be severe and may lead to life-threatening outcomes if left untreated. Patients suffering adverse effects from high Vitamin D levels (Cholecalciferol) may not initially show symptoms. Therefore, patients who have received these compounded capsules should stop taking this medication and immediately seek medical attention.
Symptoms of short-term vitamin D toxicity are due to high calcium levels (also known as hypercalcemia) and include confusion, increased urination, increased thirst, loss of appetite, vomiting, and muscle weakness. Acute hypercalcemia may intensify tendencies for heart arrhythmias and seizures and may increase the effects of certain heart drugs. Long-term toxicity may cause kidney failure, increase in calcium deposits in the blood and soft tissue, bone demineralization and pain. Patients with conditions such as liver disease or chronic kidney failure may be at increased risk for developing vitamin D toxicity.
Health care providers should quarantine and return any products subject to this recall to the company at: Glades Drugs, 109 S. Lake Ave., Pahokee, FL 33476. Glades Drugs sent recall letters to patients, attempted to contact them by phone, and called prescribing physicians.
FDA encourages health care professionals and patients to report adverse reactions to the FDA’s MedWatch Adverse Event Reporting program:

Saint Thomas CEO Drew Top Salary

By Walter F. Roche Jr.

The former CEO at Nashville's Saint Thomas health care companies drew the largest salary for the second year in a row, according to tax returns for the organizations.
The tax return, known as a 990, showed Michael Schatzlein, drew salary, bonuses and other benefits totaling just under $2 million. He also drew a supplemental retirement payment valued at $179,379.
Schatzlein moved on to an executive post at Saint Thomas' parent company, Ascension Health, in July of last year.
Schatzlein's successor, Karen Springer, drew pay and benefits totaling $588,581 in the year before her promotion.
In the prior fiscal year Schatzlein earned salary, benefits and bonuses totaling just over $2 million.
The tax return covers the fiscal year ending June 30, 2014.
Other top earners at Saint Thomas include physicians James Baker 2nd, Joseph Boyd and Vafa Mansouri, all of whom collected salaries and benefits for more than $1 million.
Former executive vice president Wesley Littrell was paid $570,266, including a $480,256 severance payment. He also got $71,292 in supplemental retirement payments.
Former executive vice president Alan Strauss collected $745,241 in salary and benefits plus $8,236 in supplemental retirement.
Others topping $1 million in salary and benefits, according to the return, were physicians Mark Koenig and Stephen Fahrig.
The returns show revenue for the fiscal year dropped from $462.3 million to $434 million at Saint Thomas West and from $421.2 million to $407.8 million at Saint Thomas Midtown.
Revenues at Saint Thomas Rutherford were $249 million, down from $252  million the year before.

First New York Outbreak Victim Steps Forward

By Walter F. Roche Jr.

A New York woman has been given until Dec. 1 to file proof that she was one of the victims of the 2012 fungal meningitis outbreak.
U.S. Bankruptcy Judge Henry J. Boroff Monday approved the request by the attorney for Lilliana Balanta to allow her to file a claim even though the deadline has long since passed.
Balanta is apparently the first and only victim from New York. The official count by federal officials includes no New York cases.
According to the petition, Balanta was injected with a steroid from the New England Compounding Center on Aug. 16, 2012 at the New York Spine and Sport Rehabilitation facility in the Bronx.
The petition states that she immediately experienced "severe pain at the injection site, skin infection
at the injection site, headaches, nausea, dizziness and vomiting."
A subsequent test showed no evidence of fungal meningitis.
Balanta's doctor informed her by letter in late October that she may have been injected with a drug produced by NECC, according to the filing.
Balanta "became emotionally distressed because she had been suffering many of the symptoms listed," her petition states.
Her lawyer, Devon Wilt, said in the petition that he did not learn about the filing deadline until after he had filed a lawsuit against NECC and related parties in early July of this year.
Balanta's is one of a handful of claims to be allowed after the deadline.
Victims who can prove they were victims of the outbreak will share in some $200 million amassed by NECC's bankruptcy trustee.
Over all some 778 patients across the country were sickened in the outbreak and 76 of them died.
Two of NECC's top officials have been charged with more than two dozen counts of second degree murder and they are scheduled to go on trial in April of next year.
State and federal regulators have concluded that NECC shipped thousands of vials of fungus laden steroids to health facilities in more than 20 states.
Contact: wfrochejr999@gmail.com

Efforts Underway to Protect Awards to Outbreak Victims

By Walter F. Roche Jr.

Hundreds of victims of the 2012 deadly fungal meningitis outbreak have been put on notice that insurance companies and the federal government will be seeking a share of any cash awards they win from a related $200 million bankruptcy settlement.
The lien notices, in fact, have sparked a wave of anger and outrage.
Behind the scenes, however, efforts are underway to at least ease the impact of those so-called subrogation claims.
Frederic Ellis, a Boston attorney who represents victims of the outbreak, said in an interview on Monday that negotiations have been initiated with the federal agency, the Centers for Medicare and Medicaid Services, to reduce the amount of claims.
"We're trying to negotiate a settlement," Ellis said, adding that agreements for a reduced payment are common in mass tort claim cases. "We do it all the time."
"This is common in these kinds of cases," Ellis said citing a settlement reached in a case involving faulty transvaginal mesh.
He said the hope is to reach a settlement based on the type of injury suffered by victims. A similar method, utilizing a point system, has been established to determine the awards in  the bankruptcy of the New England Compounding Center, the defunct Massachusetts drug firm blamed for the outbreak.
"We're trying to simplify things and avoid extra administrative costs," Ellis said. "We're trying to come up with a formula."
He said that since the majority of victims were elderly and on Medicare, the initial negotiations are with CMS. Once an agreement is reached there, Ellis said they will turn to major insurance carriers to attempt parallel agreements.
In a court session last week in Boston Ellis disclosed that the anticipated awards for the most severe cases, those resulting in death, were expected to be in the range of $175,000 to $200,000.
He stressed that those figures were just an estimate and could change depending upon some yet to be determined factors, such as tax refunds that the former NECC owners have agreed to give up.
Ellis said in the interview that letters informing victims of expected awards from the bankruptcy could go out before the end of the year, while actual checks would be issued by early Spring.
He said the first payments will be "interim awards," set at some where between 50 and 70 percent of the anticipated final award.
The 2012 outbreak sickened 778 patients across the country, killing 76 of them. State and federal regulators concluded thousands of fungus riddled vials of methylprednisolone acetate from NECC were the cause.
Contact:wfrochejr999@gmail.com

Court Gets First Estimate of Meningitis Awards to Victims

By Walter F. Roche Jr.

A Boston attorney told a federal judge that victims of the 2012 fungal meningitis outbreak should not be expecting large awards from the bankruptcy case of the firm blamed for the fatal outbreak.
Fredric Ellis, one of the attorneys representing victims, estimated that the highest awards would range from $175,000 to $200,000 and those amounts could be offset by liens filed by insurance companies and other parties that paid for victims' medical care. Lesser amounts would go to those suffering lesser injuries.
"They're not going to be large sums," Ellis told U.S. District Judge Rya Zobel in her Boston courtroom.
The disclosure is the first time an actual dollar amount has been publicly disclosed.
Ellis said that claims could be processed by the end of the year but actual payments could come in March of next year.
The estimate came in a monthly status conference before Zobel on over 100 civil cases filed in the wake of the outbreak which sickened 778 patients in over 20 states, killing 78 of them.
The suits pending before Zobel are separate from the bankruptcy case of the New England Compounding Center, the defunct firm that shipped fungus laden steroid to health facilities across the country.
Suits before Zobel are against other parties including the medical facilities where patients were injected in the spine and joints with preservative free methylprednisolone acetate.
Much of the more than hour long hearing was focused on whether the case of a Nashville man, Wayne Reed, should be among the first to go to trial.
George Nolan, Reed's attorney, recounted how his client, who suffered from Lou Gehrig's Disease, lost his wife and sole caretaker in the outbreak. She died after being injected in the neck at the Saint Thomas Outpatient Neurosurgical Center with NECC steroids, Nolan said.
He said that because of his illness, Reed is gradually losing the ability to speak and eventually he won't be able to testify.
Marcy Greer, representing Saint Thomas, said that under rules set up by the court, the defendants already had moved to strike the Reed case from the list of so-called bellwether or representative cases.
"It's an incredibly sympathetic case," Greer said, adding that it was not representative of most cases.
"It's going to derail the process," she said. "We've really got to get representative cases.
Gerard Stranch, a Nashville lawyer representing victims, said that the clinics had submitted a list of representative cases that could later be dismissed without ever getting to trial.
Greer denied that charge and said the effort was to pick cases that "move towards the middle. We did not put cases in that would be eliminated."
Stranch urged a new process for selecting bellwether cases which would put the final decision in the judge's hands.
Zobel took the matter under advisement.
Kristen Johnson informed the judge that a $10.5 million settlement had been reached in a class action suit against Michigan Pain Specialists, a Michigan clinic.
In a second case, another Michigan clinic, Neuromuscular and Rehabilitation Associates, was cleared of malpractice charges in connection with the outbreak.

Lawyers Differ on Impact of Michigan Meningitis Verdict

By Walter F. Roche Jr.

Lawyers for Tennessee victims of the 2012 fungal meningitis outbreak say a verdict in a Michigan case clearing physicians there of malpractice claims, differs in several ways from the cases filed for their clients, but clinic attorneys say the jury got it right.
A Michigan jury Thursday cleared three physicians of malpractice charges brought in behalf of some 170 victims of the fatal 2012 outbreak blamed on fungus tainted steroids injected into the spines and joints of unsuspecting patients.
Mark Chalos, a Nashville lawyer representing Tennessee victims, said that the facts in the Michigan case do not parallel the claims in his and other Tennessee cases.
But Chris Tardio, one of those representing Tennessee clinics, said there are parallels.
"The plaintiffs' lawyer in Michigan tried the same allegations made against the health care providers in Tennessee," said Tardio. "The jury reached the correct decision that physicians and nurses are not responsible for misconduct by a company that promised its products were sterile."
Stressing that he had not yet had time to fully analyze the verdict, Chalos said, "It is clear the conduct of the Michigan clinics and the claims brought under Michigan law are substantively different from the circumstances in Tennessee."
In most of the Tennessee cases, the suits have been filed against the Saint Thomas Outpatient Neurosurgical Center, the Nashville facility where they were given injections of methylprednisolone acetate.
"Most importantly," Chalos continued, "St. Thomas's conduct, including participating  in the fraud by submitting fake names to obtain drugs and violating patient safety rules, was far riskier and more outrageous than what the Michigan clinic was alleged to have done."
Gerard Stranch, another attorney representing Tennessee victims, expressed a similar opinion.
"Given the significant differences in law and claims asserted, along with the more culpable conduct of the Tennessee defendants, this verdict has no precedential value to the Tennessee plaintiffs or defendants," Stranch said.
The Tennessee plaintiffs' lawyers have argued that because of Tennessee's unique product liability law, claims can be made against St. Thomas and two other Tennessee clinics. The law, they contend, allows plaintiffs to file claims against the seller of a defective product in cases where the original source of the product is bankrupt.

The steroids were produced by the New England Compounding Center, a Massachusetts firm which filed for bankruptcy in late 2012.
Lawyers for the Tennessee clinics, however have disputed the claim that their clients can be considered sellers.
The 2012 outbreak sickened 778 patients across the country killing 76 of them.
The Tennessee cases are among hundreds that have been consolidated before a federal judge in Boston. U.S. District Judge Rya Zobel has set a tentative trial date of next spring for the first of those Tennessee cases.

Michigan Record Eagle Press Report

By MICHELLE MERLIN mmerlin@record-eagle.com | Posted 3 hours ago
TRAVERSE CITY — Jurors took less than three hours to decide Traverse City doctors who injected patients with a tainted steroid did not act negligently when they did so.
Jurors in 13th Circuit Court on Thursday ruled in a class-action lawsuit filed on behalf of about 170 local Michiganders who received the injections from Neuromuscular & Rehabilitation Associates of Northern Michigan. Three representative patients had to undergo anti-fungal treatment and were hospitalized multiple times after they were injected with the steroid.
The drug came from the New England Compounding Center, a Massachusetts-based compounding pharmacy that sent the steroid compounds across the country in 2012. Tainted batches of the company's compounds caused an outbreak of fungal meningitis and other infections in at least 20 states that killed more than 60 people.
Tim Dardas, an attorney who represented the doctors, said this was the first case against physicians to go to trial that was related to the NECC steroid recall.
"(The physicians) did what was reasonable, they did what was appropriate, and they did what was in the best interest of their patients," Dardas said.
Robert Sickels, an attorney speaking on behalf of the patients, said during closing arguments the physicians at the practice were to blame for ordering the steroids in bulk from a compounding pharmacy, instead of an FDA-regulated manufacturer. He also said they should have informed their patients they were injecting a preservative-free medicine from a compounding pharmacy into their bodies.
"Had they bought from a manufacturer, none of this would have happened, none of it," Sickels said.
Compounding pharmacies are supposed to produce drugs based on individual prescriptions, not in bulk, he told jurors Thursday.
Sickels asked jurors to award three class representatives between $200,000 and $440,000 for pain and suffering and several thousand more dollars to pay back insurance companies for the patients' medical expenses.
Randy Juip, the attorney for the defendants, said the doctors used the medication for eight years without incident and reasonably relied on regulatory agencies to let them know if something was amiss.
"It would be impossible, impossible to practice medicine if the standard of care required that you investigate the background, investigate the regulatory history, and doubt the reliability of your suppliers,"Juip said.
The jury did not find that the three doctors — Richard Ball, James MacKenzie and Stephen Andriese — acted with negligence that caused injury to their patients.
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NECC Owners Retain Pricey Real Estate

By Walter F. Roche Jr.

Even after paying out some $47.5 million to settle a bankruptcy case, land records show the owners of the defunct New England Compounding Center continue to hold onto millions of dollars worth of real estate.
They have done so in the wake of one of the worst outbreaks in U.S. history, an outbreak triggered by the shipment of fungus infested drugs from NECC that were injected into the bodies of hundreds of unsuspecting patients, killing 76 of the 778 who were sickened.
Douglas Conigliaro and his wife Carla, for instance, own homes in Dedham, Mass, Florida and Boston's Beacon Hill. Carla was the majority owner of NECC. Douglas headed a sister marketing firm. They paid $4.1 million for the condo in Boston. The Winter Park, Fla. home was purchased for $1.2 million.
Last year Gregory Conigliaro sold his interest in a Cape Cod property and a Southborough home to his wife, who still owns them. The properties are valued at $2.6 million.  Gregory Conigliaro was also an NECC owner.
Barry Cadden, an NECC owner and founder, still owns his $1.7 million home in Wrentham, Mass.
Douglas, Carla and Gregory Conigliaro and Barry Cadden are under indictment with charges ranging from second degree murder to racketeering and mail fraud.
Cadden, the chief pharmacist, has been charged with 26 counts of second degree murder. Carla and Douglas Conigliaro are charged with evading federal law by making a series of bank withdrawals just under a federal reporting limit.
The two are also charged with withdrawing money from bank accounts that were under a court ordered freeze.
Gregory Conigliaro has been charged with conspiracy to defraud the U.S. Food and Drug Administration.
Though some of the real estate holdings were under a freeze imposed in the NECC  bankruptcy, that was lifted late last year by U.S. Bankruptcy Judge Henry Boroff.
Federal prosecutors did seize assets from the Cadden and the Conigliaros valued at a little over $18 million in May. Those assets included several bank accounts, a boat and a car.
Cadden, court and land records show, used his Wrentham home as collateral for $500,000 bail after his arrest in December of last year.
As part of the settlement in the bankruptcy case, the Caddens and Conigliaros agreed to pay $47.5 million into a trust fund which will be used to pay victims of the 2012 outbreak.
Douglas and Carla Conigliaro were hit with a tax lien on their Boston condo last month, but the couple came up with the $13,743.03 tax payment by the end of the month. Boston assessment records put the current value of the condo at $4,549,400.
Contact: wfrochejr999@gmail.com

CDC Warns of Recurring Fungal Meningitis

By Walter F. Roche Jr.

Two new victims of the 2012 fungal meningitis outbreak have been identified by federal health officials and in one of those cases the victim was not diagnosed with the disease until 26 months after bring injected with a fungus tainted steroid.
The two new cases, both in Virginia, were included in a study released this week by the U.S. Centers for Disease Control and Prevention. The study warned health care providers to be on the lookout for symptoms even though the outbreak became public in 2012.
"It is unclear whether this late onset case of meningitis is directly attributable to the contaminated steroid injection or arose from an unrelated etiology," the study state.
The victim, whose diagnosis came 26 months after injection, did not have a prior bout with fungal meningitis.
The new cases boosted the official CDC victim count to 753, but the study contains no explanation for an even higher victim case count from federal prosecutors.
In a pending criminal case stemming from the outbreak, federal agents stated that there were 778 victims and 76 of them died. According to the CDC count there were only 64 deaths.
Kate Fowlie, a CDC spokeswoman, said the CDC tally includes those cases which met the agency's specific criteria for inclusion in the outbreak.
"We do not have information about the court case filings or those numbers," Fowlie said in an email response to questions.
The study also focused on relapses and in one case a relapse was reported some 21 months after the victim had stopped anti-fungal treatment. According to the study eight relapse cases have been reported.
One know relapse cases was Joan Peay of Nashville, Tenn. who was hospitalized in 2013 when fungal meningitis struck her for the second time.
CDC officials said that the newly reported case demonstrates the need for physicians to continuously monitor the health of known victims. 
The study could not determine whether those victims who resumed steroid injections are more likely to suffer a recurrence.
"Among patients who received contaminated MPA injections, it is not known whether resuming additional steroid injections increases the risk for developing either a de novo fungal infection or a relapse of infection," the study states.
The study is an interim report on a federally funded study based at the University of Alabama Birmingham and headed by Dr. Peter Pappas. Under the study, researchers are following the health history of outbreak victims and detailing their recoveries.
Fowlie said the study is expected to be completed in late 2016.
The 2012 outbreak, according to state and federal regulators, was the result of fungus tainted methylprednisolone acetate being injected into the spines and joints of unsuspecting patients.
Fourteen owners and former employees of the New England Compounding Center are under indictment for charges ranging from second degree murder to mail fraud as a result of a grand jury probe of the outbreak.
The firm filed for bankruptcy in late 2012 and a court approved liquidation plan includes $200 million to pay victims and creditors.

Notes from the Field: Update on Multistate Outbreak of Fungal Infections Associated with Contaminated Methylprednisolone Injections, 2012–2014

Weekly

October 30, 2015 / 64(42);1200-1

Orion Z. McCotter, MPH1; Rachel M. Smith, MD1; Mathew Westercamp, PhD1; Thomas M. Kerkering, MD2; Anurag N. Malani, MD3; Robert Latham, MD4; Sheree L. Peglow, MD5; Rajal K. Mody, MD1; Peter G. Pappas, MD6; Tom M. Chiller, MD1

During September 2012, CDC, in collaboration with state and local health departments and the Food and Drug Administration (FDA), investigated a multistate outbreak of fungal meningitis and other infections caused by injections of contaminated methylprednisolone acetate solution (MPA) (1). After this unprecedented outbreak, scientists in the CDC Mycotic Diseases Branch, along with infectious diseases specialists who cared for patients from the outbreak, clinical experts, and public health officials from affected states, have continued to monitor the recovery of affected patients. A long-term follow-up study involving these patients was initiated and is being conducted by the Mycoses Study Group Education and Research Consortium (MSGERC). This update summarizes subsequent information about the current state of the outbreak.
By October 23, 2013, the date of the final update to the outbreak website,* 751 patients had been reported. Among all outbreak-related cases, 31% of patients had meningitis only, 20% had meningitis and parameningeal infections, 43% had parameningeal infections only, and 4% had peripheral joint infections. Two additional cases have subsequently been identified, bringing the total to 753 cases. The first of these two cases occurred in 2013, but was only identified retrospectively. The final reported patient developed clinical meningitis (cerebrospinal fluid [CSF] white blood cell count >500/µL) in November 2014, 26 months after receiving a contaminated MPA injection, thereby meeting the CDC probable case definition. The patient's CSF was negative when cultured for various bacteria, viruses, and fungi. Additionally, CSF specimens were negative when tested for Exserohilum DNA (the predominant pathogen identified during the outbreak) by polymerase chain reaction. However, the level of 1,3-β-D-glucan (BDG), a fungal marker, was elevated (>600 pg/ml), and decreased (to 57 pg/ml) after antifungal treatment. Testing the CSF of patients affected by this outbreak indicated that BDG might be a sensitive and specific marker for fungal meningitis associated with this outbreak and that BDG levels might correlate with clinical response (2,3). It is unclear whether this late onset case of meningitis is directly attributable to the contaminated steroid injection or arose from an unrelated etiology.
As part of the MSGERC long-term follow-up study, clinical data for patients involved in the outbreak are being collected by the infectious disease physicians who cared for them. Preliminary data indicate that most patients received antifungal treatment for at least 6 months after diagnosis. By 12 months after the initial diagnosis, 192 (42%) of 455 patients followed by the study were considered cured (defined as no radiologic or laboratory evidence of fungal infection, resolved or improved signs and symptoms, and not having received antifungal treatment for at least 3 months), 185 (41%) were no longer receiving antifungals but did not yet meet the definition of cured, 32 (7%) were still receiving antifungal treatment, 35 (8%) had died (24 deaths were attributable to outbreak-associated infections), and 11 (2%) had incomplete follow-up data.
To date, CDC has received eight reports of relapse of fungal infection after antifungal treatment, accounting for 1% of these 753 patients. Among six relapsed patients for whom the interval from initial cessation of antifungal therapy to relapse date was known, the median time to relapse was 90 days (range = 20–662 days); however, a recently identified relapse that occurred 21 months after cessation of therapy highlights the need for continued vigilance by providers and patients involved in this outbreak.
Among patients who received contaminated MPA injections, it is not known whether resuming additional steroid injections increases the risk for developing either a de novo fungal infection or a relapse of infection. Some patients have had surgical procedures to correct underlying musculoskeletal problems, and a limited number of patients had surgical placement of orthopedic hardware, with no reports of complications attributable to the infection.
Clinicians and patients should remain watchful for symptoms of infection† in patients exposed to contaminated MPA, because fungal infections can develop slowly and are difficult to eradicate. A detailed review of patient care and outcomes is underway as part of the MSGERC long-term follow-up study.

Acknowledgments

Official Seeks to Disallow NECC Claims Worth $2 Billion +

By Walter F. Roche Jr.

A key official in the bankruptcy of the company blamed for a fatal 2012 fungal meningitis outbreak is asking a judge to disallow dozens of claims totaling well over $2 billion.
In a motion filed this week in U.S. Bankruptcy Court in Massachusetts, Paul D. Moore, the former trustee in the bankruptcy of the New England Compounding Center, said that some of those claims were duplicates, while others were superseded or amended by subsequent claims.
Still others were filed after a court deadline and some lacked the necessary documentation. Some have already been satisfied. Overall his motion calls for some 80 claims to be formally denied.
Moore, whose current title is post confirmation officer, wrote that if the claims were not denied, some of the claimants would get double payments.
The outbreak was caused by fungus tainted steroids shipped by NECC to health clinics, physicians and hospitals around the country. Seventy-six patients died, most from fungal meningitis. More than 750 were sickened
Many of the claims which Moore's motion would deny were made by health care providers, seeking to recoup expected claims from their patients sickened by the preservative free methylprednisolone acetate.
The largest single claim listed in the motion was for $1.17 billion submitted by the Saint Thomas Outpatient Neurosurgical Center in Nashville, Tenn. That claim was listed in the category of satisfied or released claims.
 On the same list was the Specialty Surgery Center of Crossville, Tenn. which had submitted a claim of $240 million.
Only one, a claim filed by the Toledo Clinic, was listed in the duplicate claim category.
The Tennessee Health Department and the Tennesssee Pharmacy Board submitted claims of $10 million apiece to cover the cost of the investigation of the outbreak. By agreement the claims were reduced to $5 million, but state officials concede it is unlikely the money will ever be recovered.
Some $200 million has been amassed in the bankruptcy and the vast majority of that money is expected to be paid to victims of the outbreak or to the survivors of those who died.
Contact:wfrochejr999@gmail.com

Cases Severed in Meningitis Criminal Cases

By Walter F. Roche Jr.

The cases of two of the defendants in the criminal investigation of the New England Compounding Center have been split off from the remaining 12 and they will be tried separately.
U.S. District Judge Richard G. Stearns Wednesday granted the motion filed by the attorney for Carla and Douglas Conigliaro for the two to be tried separately.
A third defendant, Kathy Chin, also has filed a motion for a separate trial but that motion has yet to be acted on.
The three were among 14 owners and former employees of NECC indicted late last year on charges ranging from mail fraud to second degree murder as a result of the grand jury probe of the deadly 2012 fungal meningitis outbreak that killed some 76 patients across the country.
At a recent hearing in Boston, Mass. Stearns also indicated that he may split off two other cases. Those are the charges against Barry Cadden, an owner of NECC, and Glenn Chin, NECC's chief pharmacist and Kathy Chin's husband. The two are facing 25 counts of second degree murder, among other lesser charges.
David Meier, the lawyer for Douglas and Carla Conigliaro, said his clients' cases are now "formally and legally separated from the other 12 NECC defendants." 

The two are charged with making a series of illegal withdrawals from bank accounts that were frozen under a court order.
NECC shipped fungus tainted spinal steroids to health care providers across the country who then injected the drugs into the spines and joints of unsuspecting patients.

TX Firm Voluntarily Recalling Sterile Compounded Drugs

By Walter F. Roche Jr.

A Texas firm that compounds drugs for sterile use has announced a voluntary recall of its sterile drugs, according to the U.S. Food and Drug Administration.
Downing Labs, LLC of Farmers Branch, Tex. issued the recall notice this week, stating that it was doing so out of an excess of caution. The company also stated that no adverse effects had been reported from the use of its products.
The statement did not provide the names of the drugs being recalled or the states to which they were distributed. It did say the drugs were distributed between April 20, 2015 and Sept. 15, 2015 throughout the United States and the United Kingdom.
Here is the announcement:

For Immediate Release

October 20, 2015

Contact

Consumers

Name
  pharmacist@downinglabs.com
 800-914-7435

Media

David Ball, Ball Consulting Group, LLC
  david@ballcg.com
 617-243-9950

Firm Press Release

FOR IMMEDIATE RELEASE – October 20, 2015 – Farmers Branch, TX – Downing Labs, LLC ("Downing Labs") is voluntarily recalling all lots of sterile products compounded and packaged by Downing Labs and that remain within expiry due to concerns over sterility assurance. The products were distributed nationwide and in the UK to patients and providers between April 20, 2015 and September 15, 2015. The recall does not pertain to any non-sterile compounded medications prepared by Downing Labs.
If there is a contamination in products intended to be sterile, patients are at risk of serious infections which may be life threatening. There have been no consumer complaints or reports of any issues with the recalled products to date. Downing Labs takes this measure voluntarily and solely out of an abundance of caution because Downing Labs takes the utmost care to ensure patient safety. Thus, Downing Labs is asking all patients and providers that received sterile compounded products from Downing Labs between April 20, 2015 and September 15, 2015 that remain within expiry to take the following actions:

1. Discontinue use of the products;
2. Set aside any unused product until further instructions are received on how to return the product; and
3. Contact Downing Labs at 800-914-7435 from the hours of 8:30AM-5:00PM central time Monday-Friday, or e-mail at pharmacist@downinglabs.com to discuss the return of any unused sterile compounded products. Customers should contact their physician or healthcare provider if they have experienced any problems that may be related to taking or using this drug product. Providers who have dispensed any sterile product distributed by Downing Labs to a patient(s) for use outside of the provider's office should contact the patient(s) to whom product was dispensed and advise the patient(s) of this recall.
   Adverse reactions or quality problems experienced with the use of these products may be reported to the FDA's MedWatch Adverse Event Reporting program either online, by regular mail or by fax.
   
   • Complete and submit the report Online: www.fda.gov/medwatch/report.htm
   • Regular Mail or Fax: Download form www.fda.gov/MedWatch/getforms.htm or call 1-800-332- 1088 to request a reporting form, then complete and return to the address on the pre-addressed form, or submit by fax to 1-800-FDA-0178
   This recall is being conducted with the knowledge of the FDA.
   Again, no consumer complaints have been received. Downing Labs’ primary concern is your safety and thus Downing Labs is taking this action out of an abundance of caution. Thank you for your continued support.

###

Attorneys Withdraw $2.1 million NECC Claim

By Walter F. Roche Jr.

A $2.1 million claim in the bankruptcy case of the New England Compounding Center has been withdrawn and a hearing scheduled for next month is expected to be canceled.
In a filing today in U.S. Bankruptcy Court in Massachusetts, attorneys for creditors in the NECC withdrew their claim for attorneys fees and expenses but left the door open to pursue the claims at a later date.
The creditors' attorneys had originally filed a request for $3.05 million, but later reduced the request to $2.1 million when Florida attorney Melvin Wright slashed his request from $1.35 million to $411,780.59.
In the filing today, the attorneys cited the potential cost of the Nov. 10 hearing.
"After conferring with other parties-in-interest and considering the potential costs associated with further pursuit of the omnibus application, the parties have determined that withdrawal of the omnibus application is in the best interest of the parties and the estate," the filing states.
The motion notes that the withdawal is "without prejudice to the collective and individual rights of the parties to pursue their claims in an alternative forum, including but not limited to" related civil cases now pending before U.S. District Judge Rya Zobel.
Bankruptcy Judge Henry J. Boroff, meanwhile, is still considering a trimmed down $3.75 million request from Paul D. Moore, the attorney who served as trustee in the bankruptcy. Moore initially requested $5.75 million.
Attorneys for plaintiffs have asked Boroff to further reduce Moore's fee request.
NECC is the company blamed for a 2012 fungal meningitis outbreak which sickened 778 patients across the country, killing 76 of them.
NECC filed for bankruptcy on Dec. 21, 2012. Some $200 million is expected to be available for creditors and victims of NECC.

Nashville Meningitis Cases Argued

By Walter F. Roche Jr.

Two Nashville attorneys sparred briefly over Tennessee's product liability law Wednesday in a Boston hearing on hundreds of cases stemming from the 2012 fatal fungal meningitis outbreak.
George Nolan, who represents several Tennessee victims, spoke in defense of a motion he filed to have the Judge Rya Zobel declare that the Saint Thomas Outpatient Neurosurgical Center meets the definition of a seller under Tennessee's unique product liability law.
Noting that the motion has not yet been fully briefed, Nolan said he had filed the motion prior to a related recent ruling by Zobel.
Attorneys for Tennessee victims contend that under Tennessee law health care firms like Saint Thomas can be held liable when the original seller of a defective product has been declared bankrupt. The Saint Thomas clinic purchased the steroid blamed for the outbreak from the New England Compounding Center, which filed for bankruptcy nearly three years ago.
Nolan's position was immediately challenged by Chris Tardio, the clinic's attorney.
Tardio, noted that the same issue could land before the Tennessee Supreme Court due to other legal proceedings.
In any case Tardio said he would need an extension beyond the normal 30 days to respond to Nolan's submission. He cited "mounds of discovery" that are still needed.
Clinic attorneys have vigorously disputed the claim that their clients can be held liable under the products liability law.
Zobel also heard arguments on cases in Maryland, New Hampshire and Virginia, including the case of a Virginia man who died on July 14, 2014, some two years after the outbreak became public.
Kristen Johnson, also a plaintiffs' attorney, told Zobel that plans were finally proceeding to vacate the former office of NECC in Framingham, Mass. She said that furniture and equipment would be auctioned off.
Zobel said she would consider proposals to further fill out the schedule for so-called bellweather cases which are set to get underway next Spring.
Zobel also was informed that a settlement had been reached with one of the insurance companies involved in the case. The details were not disclosed.
Meanwhile in the related bankruptcy case arguments are continuing over the $3.75 million fee request for Paul D. Moore, who served as trustee for NECC.
Lawyers for Moore filed a brief contending that a recent ruling by Zobel regarding the bellweather cases bolstered the contention that Moore's fee request was justified.
Her decision "demonstrates that the personal injury plaintiffs continue to benefit from the Chapter 11 case. The plaintiffs will benefit from speedy trials which will take place next spring," the brief states.
In a responding brief by plaintiff's attorney Thomas Sobel argued that Moore "played no role whatsoever" in  establishing the bellweather case process.
"Much of the work most critical to resolving these cases has always depended on the litigation efforts of parties other than Mr. Moore," Sobel wrote, adding that "in light of the limited amount available to tort victims, Paul Moore should not be requesting" an enhanced fee.
Contact: wfrochejr999@gmail.com

Little Agreement on First Meningitis Trials

By Walter F. Roche Jr.

With a firm trial schedule now in place, Tennessee plaintiffs and defendants in the suits stemming from the 2012 fungal meningitis outbreak remain far apart on which cases should be tried first.
Latest filings in U.S. District Court in Boston, show only one case is on both proposed lists submitted by attorneys for victims and the Saint Thomas Outpatient Neurosurgical Center.
U.S. District Court Judge Rya Zobel recently issued a ruling setting the timetable for the first Tennessee cases to be heard in her courtroom beginning next Spring.
The suits stem from the outbreak triggered by fungus tainted methylprednisolone acetate injected into the spines and joints of unsuspecting patients. The outbreak killed 76 patients across the country including 16 from Tennessee.
Zobel has asked the opposing lawyers to try to reach agreement on so-called bellwether cases (See Below) that will, hopefully, serve as templates for the hundreds of other cases stemming from the outbreak.
The opposing attorneys filed the cases under similar categories established in a related bankruptcy case. The categories are based on the severity of the victims' illness.
Victim Fredia Berry's name is the only one to appear on both lists, records show. She was injected with the the steroid at the Saint Thomas outpatient center on Aug. 24 and Sept. 7 of 2012. According the filings she subsequently underwent three lumbar punctures to determine whether she had contracted fungal meningitis.
The list submitted by Saint Thomas lawyers include Reba Temple, who was the ninth known victim of the outbreak. The former Hickman County Health Department official died three years ago.
Others on the defense list include Denis Brock, who suffered fungal meningitis and an additional infection, and Reba Skelton, who also suffered fungal meningitis.
The plaintiffs' list includes Diane Reed of Nashville, whose death left her severely handicapped husband without a caretaker and Thomas Rybinski of Smyrna, an autoworker, who died Sept. 29, 2012.
Also on the plaintiff list is Major Adam Ziegler who was injected on Sept. 11, 2012 and suffered a spinal or paraspinal infection.

 DEFENSE LIST

Reba Temple (Death)
Denis Brock (Meningitis plus infection)
Phillip and Maria Tyree (Meningitis plus infection)
Mae Parman (Meningitis only)
Reba Skelton (Meningitis only)
Fredia Berry (Local infection only)
Ashley Kinsey (No disease)
Donna Branham (No disease)

PLAINTIFF LIST

Diane Reed (Death)
Thomas Rybinski (Death)
Adam Ziegler (Local infection)
Lewis Sharer (Meningitis plus infection)
Jane Wray (Meningitis)
Anna Sullivan (Meningitis plus infection)
Fredia Berry (Lumbar punctures)
Basil McElwee (Meningitis)

A “bellwether” is a sheep that leads a flock, around whose neck a bell is hung. In a bellwether trial procedure, a random sample of cases large enough to yield reliable results is tried to a jury. A judge, jury, or participating lawyers use the resulting verdicts as a basis for resolving the remaining cases.
Bellwether Trials, Alexander D. Lahav, George Washington Law Review, April 2008, Vol. 76, No. 3 at 576, 577.

Key Tennessee Cases in Meningitis Outbreak to be Held in Boston

By Walter F. Roche Jr.

A federal judge in Boston has ruled that key Tennessee cases stemming from a deadly 2012 fungal meningitis outbreak will be held in Boston, with a Spring 2016 start up likely.
U.S. District Judge Rya Zobel issued the decision in a detailed 26-page filing Thursday.
Defendants in the cases, three Tennessee clinics, had argued against the cases being held in Boston, while plaintiffs, victims of the outbreak, had urged her to retain jurisdiction.
Under Zobel's ruling four so-called  bellwether cases, which have yet to be finalized, will be heard in her Boston courtroom.
Attorneys for Tennessee victims of the outbreak said the decision means that the cases will be heard sooner than if they were transferred back to Tennessee.
 "The families are pleased that the cases are moving towards trial," said Nashville attorney Mark Chalos, who represents several victims.
"It has been a long, difficult road. Defendants have made numerous attempts to derail the cases and to avoid accountability. Getting the location and date for trials is an important step."
The decision marks the latest development in the hundreds of suits filed in the wake of the 2012 fungal meningitis outbreak which have been merged before Zobel. The outbreak, caused by fungus laden steroids shipped from the now defunct New England Compounding Center, sickened 778 patients across the country, killing 76 of them.
In Tennessee 153 patients were sickened, 16 of whom died.
"The time has come to settle the question," Zobel wrote in her decision referring to the debate over how and where the cases should proceed.
Concluding that the cases filed by Tennessee victims were the "most advanced," Zobel moved them to the head of the line.
Attorneys for the clinics, including the Saint Thomas Outpatient Neurosurgical Center in Nashville, and the lawyers representing Tennessee victims are in the process of trying to agree on exactly which cases will come first.
In her decision Zobel rejected arguments for the clinics that because the bankruptcy plan for NECC has been confirmed, she no longer has jurisdiction over the related civil cases brought in behalf of victims.
Zobel, however, said that the civil cases are still related to the bankruptcy and how they are handled could have an impact on the bankruptcy plan and the amounts available to victims.
 That is so, she concluded, because the defendants in Tennessee and New Jersey are seeking to have any claims against them be reduced under comparative fault statutes.
The costs of determining the comparative fault claims "will directly affect the administration of the bankruptcy and the supply of funds available to NECC's future judgment creditors," Zobel wrote.
"Abstention in these cases," she added, "is neither required or appropriate."
"That a single event (confirmation of the plan) in the bankruptcy could lead to this result - the near evisceration of the multi-district litigation and the loss of many of the plaintiffs' claims - is absurd," Zobel added.
She also noted that sending all the pending cases back to their home districts would lead to still more expenses and delays.
"This court is intimately familiar with the now 2,200 plus filings in the multi-district litigation," she wrote, adding that sending the cases to another district court at this point "would be asking it to undertake a salmon run to nowhere."
Zobel stated, albeit in a footnote, that she intends to stick strictly to a schedule already set for the collection of evidence and other pretrial matters.
She wrote that she would consider requests from victims from other states to follow the procedure now in place for Tennessee claimants.
Contact: wfrochejr999@gmail.com

Judge Defers Action on Disputed Meningitis Fee Request

By Walter F. Roche Jr.

After nearly two hours of arguments, a federal judge has deferred action on a disputed $3.75 million fee request in the bankruptcy of the firm blamed for a nationwide outbreak of fungal meningitis.
U.S. Bankruptcy Judge Henry J. Boroff said he would take the pay issue under advisement in the fee requested by Paul D. Moore for his work in the bankruptcy of the New England Compounding Center.
Moore originally requested a fee of $5.758 million but later reduced it to $3.7 million under an agreement with the U.S. Trustee. Thomas Sobol, representing victims of the outbreak, argued Tuesday that it should be reduced further to $1.3 million
"This case is one in which there has to be some sacrifice," Sobol said. "It is not the case for an enhancement."
Stating that he has "an enormous amount of respect for Mr. Moore," he added, "The victims should not be paying an enhancement."
Moore's attorney, Michael Lastowski, referred to the case as a "resounding success," and gave a detailed history of the litigation from the time the bankruptcy was filed on Dec. 21, 2012.
Stating that "prospects looked bleak" for any substantial recovery, he said at the onset even basic information was scant.
He said the case was "very sophisticated" and Moore achieved an extraordinary result. He also noted that some 8 per cent of the total recovered could go to plaintiff and other creditors' lawyers who took lead roles in the case.
Sobol, however, said the comparison with the so-called common benefit fund was not fair as it would be shared by some two dozen lawyers.
"No one will be paid more than their lodestar," he said referring to a method of computing a lawyer's individual fee.
Earlier in the session Boroff did approve several other fee requests, including two which were adjusted downward slightly.
Among those approved was a fee of some $4.3 million for Duane Morris, Moore's law firm.
Sobol noted that that amount included $1.2  million for work done by Moore.
wfrochejr999@gmail.com

Drug Compounder Licensed in Tennessee and Indiana Cited by FDA

 A California drug compounding pharmacy has been cited by the U.S. Food and Drug Administration for unsanitary conditions in a facility producing sterile drugs.
Cited by the FDA today was Park Compounding, also known as Chen Shwezin located in California. Records show Park Compounding is currently licensed in Tennessee and Indiana.
The FDA notice called on health care providers to halt the use of any unused sterile drugs shipped by the firm.
According to the FDA, Park Compounding agreed to halt the production of sterile drugs but refused to order a recall of its shipped products.
The FDA reported finding poor sterile production practices at the company facilities. The agency reported that it has not received any notices of adverse effects by patients treated with sterile drugs from the company.
The report from an FDA inspection completed in September cited a lack of pest control, brownish staining on floors, walls and other surfaces, peeling paint and failure to conduct required environmental monitoring.
FDA records show Park did recall a lot of testosterone in 2013 after questions were raised about the validity of its sterilization testing.

Drug Products Intended to be Sterile by Chen Shwezin Inc., dba Park Compounding Pharmacy: FDA Statement - Lack of Sterility Assurance

AUDIENCE: Pharmacy, Compounding, Nursing, Risk Manager
ISSUE: During FDA’s recent inspection of Park Compounding Pharmacy’s facility, FDA investigators observed insanitary conditions, including poor sterile production practices, which raise concerns about the company’s ability to assure the sterility of drug products that it produced. The FDA is alerting health care professionals and patients not to use drug products intended to be sterile made and distributed by Chen Shwezin Inc., doing business as Park Compounding Pharmacy, in Westlake Village, Calif.
BACKGROUND: On September 29, 2015, FDA recommended that Park Compounding Pharmacy cease sterile operations until adequate corrections are made at its facility, and recall all of its non-expired sterile drug products. On September 30, 2015, Park Compounding Pharmacy informed FDA that it has agreed to cease sterile operations, but the company has refused to recall its products.
To date, FDA is not aware of any adverse events associated with the use of products from Park Compounding Pharmacy. Patients who have received drug products produced by Park Compounding Pharmacy and have concerns should contact their health care professional.
RECOMMENDATION: Health care professionals should immediately check their medical supplies, quarantine any sterile drug products from Park Compounding Pharmacy, and not administer them to patients.
Healthcare professionals and patients are encouraged to report adverse events or side effects related to the use of these products to the FDA's MedWatch Safety Information and Adverse Event Reporting Program:

• Complete and submit the report Online: www.fda.gov/MedWatch/report
• Download form or call 1-800-332-1088 to request a reporting form, then complete and return to the address on the pre-addressed form, or submit by fax to 1-800-FDA-0178

https://bay179.mail.live.com/?tid=cmFvjQ9ipq5RGfagAjfePtpA2&fid=flinbox

NECC Trustee Defends $3.75 Million Fee Request

By Walter F. Roche Jr.

The attorney who served as trustee of the New England Compounding Center has issued a strongly worded 25-page response to charges that his trimmed down $3.8 million fee request is excessive.
In a response filed Friday in U.S. Bankruptcy Court in Massachusetts, attorneys for Paul D. Moore cited his "extraordinary success" in amassing some $200 million for victims and creditors of the company blamed for a nationwide fungal meningitis outbreak.
The filing comes just prior to a scheduled hearing on legal and other fee requests submitted in the 30-month old case. The session is set for Tuesday at 11 a.m. before U.S. Bankruptcy Judge Henry J. Boroff.
Moore was responding to a motion filed by the plaintiffs' steering committee (PSC), composed of lawyers for victims of the 2012 outbreak that killed 76 patients across the country. The PSC, in a highly critical filing, charged that Moore was seeking excessive compensation that would equate to an hourly fee of $2,162.
Moore disputed that calculation stating that the actual hourly figure was $967.07.
"It defies logic to suggest that a contingent fee of 1.9 percent is unreasonable under the circumstances of this case," the brief states.
Moore's lawyers also disputed the PSC's claim that he was trying to take credit for negotiations that involved several other parties.
Noting that settlement details were confidential, Moore's attorneys focused on his role in negotiating settlements with the NECC shareholders and other insiders.
That agreement, the brief states, was "a critical achievement that created the momentum that led to the other settlements."
Moore also defended requesting separate fees for his role as trustee and a member of the legal team from his law firm, Duane Morris, that served as counsel in the case. The law firm has requested payments of $4.3 million.
"Snide suggestions of impropriety are wholly unsupported," Moore's lawyers wrote.
They also noted that Moore, under an agreement with the U.S. Trustee, reduced his original fee request from $5.75 million to $3.75 million. The PSC has asked that his fee be cut further to $1.43 million.
 Moore's attorneys also pointed to much higher legal fees that could be paid from a fund set aside from the total settlement to pay plaintiff lawyers who played lead roles in the case. That common fund fee, they noted, could, if approved, total 8 percent of the anticipated $200 million with billing for some 31,000 hours.
The (Moore) request, the filing states, "will not result in a windfall. Instead he (Moore) is seeking a reasonable commission."
Contact: wfrochejr999@gmail.com

Deadline Looms For Meningitis Outbreak Victims

By Walter F. Roche Jr.












Victims of the 2012 fungal meningitis outbreak have only till Friday to submit detailed data to back up their claims to some $200 million in a trust fund amassed in a lengthy bankruptcy case.
The deadline, which was set by U.S. Bankruptcy Judge Henry J. Boroff, requires those claims to actually be in the hands of court officials by the Friday deadline.
The claimants are victims of the 2012 fungal meningitis outbreak which sickened 778 patients across the country, killing 76 of them. Some $50 million in the trust fund money came from the owners of the defunct New England Compounding Center, the Massachusetts firm blamed by regulators for the outbreak.
Several attorneys representing victims of the outbreak who were contacted this week reported that all the paperwork for their clients had been submitted.
But some of the victims also have filed for extensions on the Friday deadline. They include a North Carolina woman, Carolyn Wilson, who doesn't have an attorney.
She, like several other so-called pro-se claimants, have been getting an assist from two Boston University Law School students, who were recruited for the task by one of their professors, Kevin Outterson.
Lewis Osterman, who has just begun his second year at the law school, said he and a colleague, Kristen Rogerson, spent the summer assisting some two dozen victims in putting together the needed paperwork.
Among the items required, he noted, are medical records showing that the victim does indeed fall into one of the authorized categories.
Under a plan approved by the court, victims will be awarded points based upon a variety of factors including the severity of the illness they suffered after being injected with fungus infused steroids shipped from NECC.
Osterman said most of the victims he assisted were in "Category Six." Victims in that category were injected with the tainted steroid but did not suffer spinal meningitis. They did, however, suffer some ill effects such as headaches and dizziness.
He said a smaller number fell into "Category 7." Those victims did get injected with the fungus laden steroid but had no ill effects.
Osterman said that while he knows what category the victims he assisted fall into, he doesn't know how much, if anything, they will get from the trust fund.
"No one knows," he said. "It's really hard to say."
Osterman, a Colorado resident, said the victim from North Carolina also needed assistance signing a waiver under the federal Health Insurance Portability and Accountability Act, known as HIPAA.
He said that while the forms and process were quite complicated, many of those victims he dealt with, had done everything correctly.
"They just needed a reassurance that everything was okay," he said.
Contact: wfrochejr999@gmail.com

Recall of Sterile Compounded Drugs

Recall -- Firm Press Release

FDA posts press releases and other notices of recalls and market withdrawals from the firms involved as a service to consumers, the media, and other interested parties. FDA does not endorse either the product or the company.

 

US Compounding, Inc. Issues Voluntary Nationwide Recall of All Sterile Compounded Products

Contact:
Consumer:
800-718-3588 x254
501-327-1222 x254
FOR IMMEDIATE RELEASE – September 21, 2015 – Conway, AK – US Compounding, Inc. ("USC") is voluntarily recalling all lots of sterile products aseptically compounded and packaged by USC and that remain within expiry due to the Food and Drug Administration's ("FDA")_ concern over a lack of sterility assurance. The sterile products were distributed nationwide to patients, providers, hospitals, or clinics between March 14, 2015 and September 9, 2015. The recall does not pertain to any non-sterile compounded medications prepared by USC.
If the sterility of a compounded preparation intended to be sterile is compromised, patients may be at risk. As USC takes the utmost care to ensure patient safety and out of an abundance of caution, then, USC is asking all patients and providers that received sterile compounded products from USC between March 14, 2015 and September 9, 2015, and that remain within expiry, to take the following actions:

1. Discontinue use of the products;
2. Quarantine any unused product until further instructions are received on how to return the product; and
3. Contact USC at 800-718-3588 x254 or 501-327-1222 x254 from the hours of 8:30AM-5:00PM central time Monday-Friday, or e-mail at questions@uscompounding.com to discuss the return of any unused sterile compounded products.

Customers with questions regarding this recall can contact USC at 800-718-3588 x254 or 501-327-1222 x254 from the hours of 8:30AM-5:00PM central time Monday-Friday, or e-mail at questions@uscompounding.com. Customers should contact their physician or healthcare provider if they have experienced any problems that may be related to taking or using this drug product. Providers who have dispensed any sterile product distributed by USC to a patient(s) for use outside of the provider's office should contact the patient(s) to whom product was dispensed and advise the patient(s) of this recall.
Adverse reactions or quality problems experienced with the use of these products may be reported to the FDA's MedWatch Adverse Event Reporting program either online, by regular mail or by fax.

• Complete and submit the report Online: www.fda.gov/medwatch/report.htm
• Regular Mail or Fax: Download form www.fda.gov/MedWatch/getforms.htm or call 1-800-332-1088 to request a reporting form, then complete and return to the address on the pre-addressed form, or submit by fax to 1-800-FDA-0178

This recall is being conducted with the knowledge of and at the request of the FDA.
Again, USC's primary concern is your safety and USC is taking this action out of an abundance of caution. Thank you for your support.
List of products recalled

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