Cadden Disputes Losses From Tainted Drugs

By Walter F. Roche Jr.

Convicted former drug executive Barry J. Cadden says his upcoming sentence should be based on losses of only $189,848 not the "wildly inflated" $132.8 million claimed by federal prosecutors.
In a 25-page filing coming less than a week before his scheduled sentencing, Cadden's lawyers argued that he should be held liable for only those drugs which prosecutors clearly proved were deficient.
The dollar value of losses could prove critical when U.S. District Judge Richard G. Stearns determines Cadden's sentence following his conviction in late March on 57 felony counts including racketeering and mail fraud. The hearing is set for Monday in Stearn's Boston, Mass. courtroom.
"The actual loss is confined to a narrow time period and several narrow categories of drugs, not the government's sweeping allegation," the Cadden brief states.
Federal prosecutors have argued that the sentence should be based on the assumption that every cent of income collected by Cadden's New England Compounding Center between 2006 and 2012 was a loss for its customers.
Cadden was indicted following a two year probe of a deadly fungal meningitis outbreak caused by fungus laden steroids shipped by NECC to health facilities in more than 20 states. Following a 10-week trial earlier this year Cadden was acquitted on 25 counts of second degree murder but found guilty on the racketeering and mail fraud charges.
In their filing Cadden's lawyers argued that the so-called losses should be limited to two shipments of methylprednisolone acetate shipped in 2012. They said the government failed to prove that a third lot shipped in May of 2012 was deficient.
Contending that the vast majority of drugs shipped by NECC "were of proper quality, untainted by any contamination or any other defect," the brief charges that the government's loss claims were "vastly overstated."
And, the brief adds, the losses should be limited to three years and not the seven claimed by prosecutors.
In addition, the memo argues, loss calculations should not include drugs shipped with false patient names since there was no evidence those drugs were deficient or caused any harm. Nor should it include drugs compounded by a codefendant, Scott Connolly.
Connolly had surrendered his registration as a drug technician, but Cadden's lawyers argued, there was no evidence drugs he processed were deficient.
"Connelly was a peripheral part of the NECC team," the brief states.
Cadden's lawyers also argued that  their client was not involved in the day-to-day operations of the clean rooms where critical sterile drugs were compounded. Instead, they said, that task was performed by another co-defendant, Glenn Chin. Chin is scheduled for trial in September while Connolly and other defendants will go on trial following the Chin case.
As for a cancer treatment drug called methotrexate, Cadden's lawyers said that there was no evidence the drug caused any harm to pediatric patients despite the fact that it was made with outdated ingredients.
"NECC produce hundreds of thousands of vials of drugs from 2006 to 2012 that safely and successfully treated patients," the brief concludes.
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