Checks Mailed for 1,852 Outbreak Victims

By Walter F. Roche Jr

Only four new claims from a fungal meningitis outbreak have been partially or fully approved over the past two months, according to a report filed today in U.S. District Court in Boston, Mass.
The report from Lynne F. Riley, the court appointed overseer of outbreak settlement funds, shows claims for 2.022 victims of the 2012 outbreak have been fully or partially approved. That's an increase of four from a prior report from Riley filed in late March.
The new report shows that $81.9 million in benefit checks have been issued, compared to $77.7 million cited in the March report.
Riley is overseeing the distribution of funds secured during the bankruptcy of the New England Compounding Center, the company that shipped fungus riddled steroids to health facilities across the country. Some 778 patients were sickened in the outbreak, while 76 died, most from fungal meningitis.
According to Riley's report, the checks issued thus far represent about half of what most victims can expect to finally receive from a national settlement fund.
The checks have generally been issued to attorneys representing the victims or their survivors and not directly to the actual victims.
Of the 1,852 checks issued, Riley said 209 were from separate funds established to settle claims against clinics where victims were injected with the contaminated methylprednisolone acetate purchased from NECC.
Riley reported that a total of 2,353 claims were filed and 289 have been "fully denied."
She said 14 claims that have been fully or partially denied could still be appealed.
Riley said the exact amount of second payments to victims from the national settlement fund will be calculated after all the first payments have been made and all appeals resolved.
"The tort trustee estimates that second payments will be issued this summer," the report concludes.
The report was filed with U.S. District Judge Rya Zobel, who has been presiding over hundreds of individual suits filed in federal courts across the country.
A formal status conference before Zobel had been scheduled for this week but was canceled at the request of attorneys representing plaintiffs in the case. The next status conference is scheduled for July 20.
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Outbreak Victims' Survivors to Share $437,752

By Walter F. Roche Jr.

The two daughters of a Virginia victim of the 2012 fungal meningitis outbreak will share some $437,752 under a proposed settlement agreement filed in U.S. District Court in Boston, Mass.
According to the proposal before U.S. District Court Judge Rya W. Zobel, the settlement in the case totals some $979,345 with payments coming from the Virginia clinic where the victim was injected with fungus laden steroid and from the bankruptcy of the company that produced the tainted drugs, the New England Compounding Center.
The filing states that $836,432 will be paid by the Insight Health and other Virginia defendants, while $142,913 will be paid from a trust fund set up under the NECC bankruptcy.
From that total 40 per cent or $391,738 will go to the victim's law firm, Crandall and Katt, and $23,059 will cover costs associated with the litigation.
An additional $126,794 will go to repay the state Medicaid program and a health care provider for the victim.
The two daughters agreed to split the $437,752 remaining on a 50-50 basis. Any additional settlement payments will be split the same way, the agreement states.
Insight Health filed a motion in support of the agreement which is now subject to Zobel's approval.
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Cadden Renews Acquittal Request

By Walter F. Roche Jr.

Citing a recent appeals court ruling and repeating charges that prosecutors engaged in widespread misconduct, Barry Cadden, the prime defendant in the probe of a deadly fungal meningitis outbreak, has renewed his motion for acquittal on all remaining charges.
In a 34-page filing today, Cadden's lawyers said a ruling in a recent circuit court of appeals mandates that he be acquitted on several charges. In addition the motion charges that prosecutors presented evidence they knew or should have known was "distorted or misleading."
Cadden was convicted in late March following a 10-week trial on racketeering, conspiracy and mail fraud charges. The 12-member jury acquitted Cadden on 25 counts of second degree murder.
In the latest filing Cadden is asking U.S. District Judge Richard G. Stearns to clear him of those 57 remaining counts.
Cadden was one of 14 persons connected to the New England Compounding Center to be charged following a two-year grand jury probe of a deadly fungal meningitis outbreak that sickened 758 patients across the country. Seventy-six of those patients died.
The brief filed today cites a ruling issued by the 1st Circuit Court of Appeals earlier this month setting a new standard in fraud cases like Cadden's.
The ruling "should sound the death knell" for Cadden's mail fraud convictions," the brief states, adding that prosecutors failed to present sufficient evidence that Cadden obtained money by means of alleged fraud.
"The record is barren of such evidence," the filing states, referring specifically to drugs shipped to a Las Vegas hospital and other health facilities.
Noting that only one witness from the Nevada hospital presented limited testimony, the brief states, "It is far too slender a reed on which to base a finding that there were any misrepresentations." 
On other counts, the brief states that the government presented no "decision-making witnesses" to show that there were any misrepresentations.
Cadden's lawyers also state that prosecutors misstated the jury's verdict for acquittal on the second degree murder counts.  Prosecutors had noted that voting sheets filled out by jurors showed that a majority supported the second degree murder charges in the majority of cases. A unanimous vote was required for a conviction.
"Cadden walked out of the courtroom having been duly acquitted on 25 of 25 injudiciously brought murder charges," the brief states. Noting that Cadden had conceded that drugs from NECC caused the 25 deaths, the brief states that the government nonetheless presented "extraneous and irrelevant and repetitive testimony about the causes and means of death."
Charging that the death testimony was intended to inflame the jury, the brief says the government chose to "go after the emotional jugular."
Contending that prosecutors engaged in an "overarching pattern of misconduct," the filing states that they "surreptitiously" provided jurors with a binder of test results including only government evidence and omitting rebuttal evidence presented during the trial.
"Jurors likely believed this binder contained all the evidence," the filing continues, adding, "the government was not truthful about the binder."
Charging that the government misled the court and Cadden about whether the binder was provided to jurors, the filing concludes, "This is textbook misconduct."
The filing also repeats charges that a slide show presented to jurors during closing arguments "grossly overstated the scope of the outbreak."
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NECC June Hearing Canceled

A June 1 federal court hearing on the status of payments to victims of the 2012 fungal meningitis outbreak has been canceled.
U.S. District Judge Rya Zobel issued a brief order granting a motion to cancel the scheduled session due to scheduling and other issues. The next hearing will now be held on July 20 in Zobel's Boston, Mass. courtroom.
The cancellation was requested by a committee representing victims of the deadly outbreak. There was no opposition to the request.
Despite the cancellation reports are expected to be filed on the progress of payments being made to victims from a trust fund established under the bankruptcy of the New England Compounding Center, the now defunct company blamed for the outbreak.

Attorneys Seek to Cancel Meningitis Court Session

By Walter F. Roche Jr.

The lead attorneys for victims of a deadly 2012 fungal meningitis outbreak are moving to cancel a hearing scheduled for next week on the status of suits and resolved claims in hundreds of separate suits merged before a federal judge in Boston, Mass.
In a four-page filing today, Kristen A. Johnson asked U.S. District Judge Rya Zobel to cancel the scheduled June 1 session.
Johnson stated that several pending issues won't be resolved before that date,  They include whether suits against a Maryland pain clinic will be sent to Maryland courts or remain in federal court and whether some Tennessee clinic cases will go back to their home state.
In addition she said a mediation session that could lead to a resolution of some Tennessee cases has yet to take place.
"Further scheduling conflicts have arisen that make it difficult for an attorney from Hagens Sobol and Shapiro LLC to participate in person," Johnson, a partner in that firm, wrote.
If the motion is approved the next status conference will not take place until July 20.
According to the motion despite the anticipated cancellation, reports will be filed on or before June 1 by the  Plaintiffs' Steering Committee.
She wrote that the PSC report "will address what the court needs to do now (and later) to wind down the multi-district litigation."
She added that the trustee would be reporting on the status of the first round of payments to outbreak victims and the "anticipated timing for the second round payments."
The motion states that no objections to the proposed cancellation were filed by interested parties.
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TN Clinics Seek Cadden, Ronzio, FDA Testimony

By Walter F. Roche Jr.

Charging that the testimony is critical to their defense, Tennessee clinics being sued in the fungal meningitis outbreak are asking a judge to either clarify or amend a prior order delaying depositions of defendants and witnesses in a parallel criminal case.
In a 17-page motion filed this week, the attorney for the clinics said that there was no longer any justification for delaying the depositions of Barry Cadden, Rob Ronzio and two others, along with officials of the U.S. Food and Drug Administration.
Citing the recent completion of the criminal trial of Cadden, the motion states that the time has now come for the depositions to proceed.
"The justification for staying these depositions are largely if not completely wiped out at this juncture," the filing by Chris Tardio states.
The motion was filed in behalf of Tennessee clinics in Crossville and Oak Ridge where patients were injected with fungus laden steroids shipped by NECC to health care providers in some 20 states. The 2012 outbreak sickened 778 patients and killed 76 of them.
Noting that Cadden was convicted by a jury on March 22 and Ronzio already has entered a guilty plea, the filing argues that key testimony is needed for the clinics to assert their claim that NECC was responsible for the deadly 2012 fungal meningitis outbreak.
In addition, the motion states that depositions from FDA agents are needed to show that the government agency acted recklessly by not taking action against NECC.
Stating that the FDA's involvement with NECC "spanned 10 eventful years," the motion adds, "There is no dispute that the FDA exercised some regulatory oversight of NECC."
As for Cadden and Ronzio, the clinic's lawyer acknowledged both are likely to invoke their constitutional right against self incrimination. Nonetheless the jurors in the civil case will be able to draw their own conclusions from their refusals to answer questions, the filing states.
In addition to Ronzio and Cadden, the clinics are asking U.S. District Judge Rya Zobel to allow the depositions of a former NECC employee, Joe Connolly and a salesman for NECC's sales arm, John Notarianni.
 Connolly was a key prosecution witness in Cadden's trial, detailing how NECC's operations disregarded concerns about safety and sterility and falsified records to make it appears drugs had been properly tested when they weren't.
Though Notarianni did not testify at the Cadden trial, the motion states that the former salesman has agreed to testify "substantively" about the assurances the NECC sales force gave to customers about the company's quality assurance.
Stating that "circumstances have changed," the motion concludes that delaying the depositions is no longer justified.
Though Cadden's trial ended with a conviction on 57 counts of racketeering and conspiracy, others charged in the two year outbreak investigation have yet to go on trial. Codefendant Glenn Chin's trial is scheduled for Sept. Others are scheduled for next year
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Denial of Cadden's New Trial Motion Urged

By Walter F. Roche Jr.

Stating that a federal jury "properly considered overwhelming evidence of his guilt," federal prosecutors today asked a judge to deny Barry Cadden's motion for a new trial on racketeering and mail fraud charges.
In a 48-page motion filed in U.S. District Court in Boston, Mass. federal prosecutors charged that all the arguments for a new trial already had been considered and denied either by presiding judge or the jury.
Cadden was convicted on March 22 following a 10-week trial on charges that Cadden's New England Compounding Center operated as a criminal enterprise.
He was cleared of 25 counts of second degree murder, although a majority of the jurors voted for a guilty verdict in all but four of the murder counts. A unanimous verdict was required for a conviction.
Cadden was one of 14 persons associated with NECC to be charged following a two year investigation of a deadly fungal meningitis outbreak that sickened 778 patients and killed 76 of them.
Cadden, in his motion for a new trial or acquittal, had argued that the inclusion of the murder counts prejudiced the jury.
"A majority of the jurors found Cadden guilty of 21 of 25 murders" including eight in Michigan and seven in Tennessee. The jury's verdict confirmed that racketeering acts were properly included," the filing states.
Denying Cadden's claim of "prejudicial spillover," prosecutors Amanda Strachan and George Varghese said that evidence of murders was "largely limited and tactfully presented" with no attempt to evoke emotional appeal.
"The jury properly considered overwhelming evidence of the defendant's guilt as to each of the 57 counts," the filing continues.
The prosecutors defended the inclusion of details of Cadden's actions and inactions in the days leading up to the first public announcement of the deadly outbreak in 2012.
Repeating the details of the timeline they noted that there was a several day delay from Sept. 20, when Cadden first learned of a problem with Tennessee patients becoming ill, and Sept. 26 when he began calling clinics telling them not to use NECC's spinal steroid.
 "Cadden didn't disclose people were getting sick. These were critical moments in an evolving national disaster," the brief states.
Accusing Cadden and his lawyers of sensationalism, the prosecutors charged that allegations of government misconduct in the handling a a binder of evidence was "untethered to any factual or legal foundation."
Stating that Cadden had "intimate knowledge and understanding of NECC's fraudulent compounding operations," they charged that Cadden knowingly and repeatedly violated the industry standards for compounding sterile drugs as set by the U.S. Pharmacopeia.
Recounting the testimony of witnesses from the U.S. Centers for Disease Control and Prevention, the filing states that Cadden had been warned a decade earlier that his testing procedures were flawed and too few samples were being tested.
They also defended the charges against Cadden stemming from the fact that an unlicensed technician was working for nearly two years in one of NECC's sterile drug compounding rooms. Emails, the filing states, showed Cadden had authorized the unlicensed individual to use his (Cadden's ) identification sign on so that there would be no records.
"There is next to nothing in the motion (for a new trial) that has not already been decided by this court and/or jury," the filing states, adding that Cadden actions led "to the largest public health crisis ever caused by a pharmaceutical drug."
Sentencing in Cadden's case is scheduled for June 29 before U.S. District Judge Richard G. Stearns.
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Judge Orders Prosecutors to Produce Binder

By Walter F. Roche Jr.

A federal judge has ordered prosecutors to turn over a binder full of exhibits that has become a point of heated dispute in the aftermath of the criminal trial of a one time drug company executive.
In a two-page order dated Tuesday, U.S. District Judge Richard G. Stearns sitting in Boston, Mass. ordered federal prosecutors to turn over to him a binder full of exhibits and a PowerPoint presentation used in the recent trial of Barry J. Cadden.
Though Stearns had previously stated that he was certain the binder had not been provided to the jury during its deliberations, he said in his latest ruling that it was quite possible that the binder did find its way into the jury room.
"If there is any possibility (and now it appears that there is a real one)  that the binder was submitted to the jury, there is no reason that it should not be included in the trial record," Stearns wrote
The 12-member jury found Cadden guilty of 57 counts of racketeering and mail fraud but cleared him of 25 counts of second degree murder.
The dispute about the binder arose following the jury verdict when Cadden's lawyers filed a motion seeking either acquittal or a new trial. His lawyers also demanded that the binder be made part of the record for appeal purposes.
Stearns noted that federal prosecutors in responding to Cadden's motion on the binder disclosed that the binder was provided to the courtroom clerk "during the customary post-trial exhibit review, but that Cadden's counsel did not object to its inclusion in the jury materials."
In ordering prosecutors to turn over the binder, Stearns wrote, "there is no reason to keep secret something that was used (effectively in the court's judgment) in open court. Transparency is the best antidote for unwonted suspicion."
Cadden's lawyers have argued that the binder contained materials favorable to the prosecution case and did not include rebuttal material.
Stearns order requires prosecutors to turn over the binder by Friday. They also must file a copy of a PowerPoint presentation that was used by federal prosecutors in closing arguments.
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IG Finds Some Flaws in VA Compounding

By Walter F. Roche Jr.

A review of drug compounding practices at Veterans Administration facilities showed that more than a quarter of those reviewed could not provide evidence that shelving and storage areas in sterile drug preparations area were cleaned at least once a month, the required standard.
In a 20-page report issued today,  the VA's Inspector General concluded that while there was generally high compliance with sterility and other standards at VA health facilities, there were about a half dozen areas needing improvement.
The report comes as national attention has been focused on the dangers of sterile drug compounding stemming from the recent criminal trial of the president and part owner of a now defunct Massachusetts drug compounding company.
A federal jury in Boston, Mass. recently convicted Barry J. Cadden on 57 counts of racketeering and mail fraud following a 10-week trial. Cadden headed the New England Compounding Center, the company blamed for the deadly 2012 fungal meningitis outbreak which took the lives of 76 patients across the country.
As VA officials pointed out in response to the audit, none of the deaths resulted from treatment at VA facilities, although several veterans were among the victims.
In the report, which covered 28 VA facilities where sterile drug compounding takes place, the IG found that in 26 percent there was no documented evidence that shelving and storage areas were cleaned at least once a month, as required under the national standard, the U.S. Pharmacopeia. At 11 percent of the facilities, the IG found that there was no documentation of daily cleaning of floors in so-called clean rooms where sterile drugs are compounded.
The report states that competency assessments for those compounding sterile drugs failed to include gloved fingertip sampling in 18 percent of some 267 employees reviewed. Written tests were not included for 20 percent of the employees and 15 percent of the assessments did not include"visual observation or hands on skills assessment of aseptic techniques."
The IG also found that at 24 facilities where high risk chemotherapy drugs were prepared, special protective gloves needed in such procedures were not available.
The IG noted that at some facilities the reporting requirements for so-called "near misses," cases in which patients could be at risk, were unclear. He recommended that guidance be provided by VA administrators to ensure that all near misses are being reported.
In its response, the VA agreed with the findings and submitted a timetable for achieving compliance.
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Status Report Requested on Outbreak Grants

By Walter F. Roche Jr,

A dozen members of Congress have called on the Massachusetts Attorney General for a status report on the processing of requests for grants from a $40 million fund earmarked for victims of the 2012 fungal meningitis outbreak.
The letter to Massachusetts Attorney General Maura Healey comes seven months after U.S. Rep. Mike Bishop, a Michigan Republican, was able to secure up to $40 million from a national victims fund for victims of the deadly outbreak.
A spokeswoman for Healey recently reported that some 400 applications had been submitted by victims, but no awards have yet been made. The deadline for submitting a claim is Dec. 16.
In the letter, the congress members asked Healey to respond to the request by May 17.
 "The victims - our constituents- continue to suffer as a result of the injections they received almost five years ago," the letter states. "This suffering need not be compounded by financial distress, but for far too many, their bills continue to go unpaid."
In addition to Bishop and several other Michigan members, those signing the letter include congress 
members from Indiana, Tennessee and  Minnesota.
Stating that "time is of the essence," the letter asks that Healey treat the request as a priority.
Interviews with victims show many have been hesitant to file a request because of language in the application indicating that any awards will eventually have to be paid back.
Aides to Bishop however, have stated that it is highly unlikely any grants will have to be paid back.
The 2012 outbreak was caused by fungus laden steroids injected into the spines and joints of victims. A total of 778 patients became ill, many with debilitating fungal meningitis. Seventy-six of those victims died.
The drugs were shipped from the now defunct New England Compounding Center, located in Framingham, Mass.
Recently a federal jury convicted one of the founders of NECC on 57 felony counts including racketeering and mail fraud. Barry J. Cadden is scheduled for sentencing on June 29.
Bishop's Michigan district was one of the hardest hit with some 200 patients sickened and 15 died as a result..
"We have a duty to continue fighting for the victims of this tragedy," Bishop said in announcing the letter.

Prosecutors Charge Acquittal Motion Patently False

By Walter F. Roche Jr.


Federal prosecutors are charging that the acquittal motion filed in behalf of a former drug company executive is based on "patently false and dishonest" allegations.
In a 48-page motion filed Monday in U.S. District Court in Boston, Mass., the U.S. Attorney asked the court to deny the motion for acquittal or a new trial for Barry J. Cadden, the president of a now defunct drug compounding firm.
Noting that a 12-member jury found Cadden guilty of 57 felony counts, including racketeering and mail fraud, the motion recounts detailed trial testimony in which witnesses describe the unsanitary conditions at the New England Compounding Center, the Framingham, Mass., the firm that Cadden headed.
Cadden, whose trial ended over a month ago, was one of 14 person indicted in late 2014 following a federal probe of the 2012 fungal meningitis outbreak which sickened some 778 patients killing 76 of them. State and federal regulators determined that the outbreak was caused by fungus laden drugs shipped by NECC.
While the jury found Cadden guilty of racketeering and mail fraud, they acquitted him of 25 counts of second degree murder.
In their motion federal prosecutors noted that while the second degree charges were not affirmed by all of the jurors, a majority did vote to convict him on 21 of the 25 murder counts.
Charging that trial testimony showed NECC manufactured drugs under "filthy conditions," the motion argues that the limited testimony on the second degree murder counts did not prejudice the jury, as Cadden had argued.
Stating that there was "no prejudicial spillover," prosecutors asserted that charges of prosecutorial misconduct were "patently false and dishonest."
In a separate motion prosecutors disputed Cadden's claim that prosecutors improperly presented jurors with a binder of drug tests and other evidence. They noted that the presiding judge, U.S. District Judge Richard G. Stearns, concluded that the binder was never given to jurors during their deliberations.
Assistant U.S. Attorneys George Varghese and Amanda Strachan said the binder was only used as a "pedagogical devise," during closing arguments. They also noted that Cadden's lawyers did not raise any objections when the binder was described to jurors.
The motion against acquittal cites detailed testimony during the trial about the fact that NECC routinely shipped drugs before they had been tested for sterility even though the company repeatedly assured customers that the drugs were quarantined until tests were completed.
Citing "a staggering amount of evidence" presented to jurors, the motion states that it was reasonable for the jurors to conclude that "Cadden operated NECC as a fraudulent enterprise on a massive- deadly scale."
Cadden is scheduled for sentencing on June 29.

Prosecutors Win Extension for Dismissal Motion Reply

A federal judge in Boston, Mass. has granted a motion filed by federal prosecutors for an extension of the deadline for filing a response to a dismissal motion filed by defendants in the criminal case stemming from a 2012 fungal meningitis outbreak.
U.S. District Judge Richard G. Stearns approved the motion extending the filing deadline to May 12. The original deadline passed on Friday.y
The motion filed in behalf of Gregory Conigliaro seeks the dismissal of a charge of conspiring to defraud the U.S. Food and Drug Administration.
Conigliaro's motion was joined by two other defendants. Conigliaro's lawyers cited comments by Stearns himself during the recent trial of Barry J. Cadden. Stearns said during the final moments of Cadden's trial that he could not see what the FDA was deprived of.
Cadden was convicted on mail fraud and racketeering charges but cleared of second degree murder charges. Cadden faces sentencing on June 29.