Cadden Could Face Increased Prison Term, Forfeitures

By Walter F. Roche Jr.

A former pharmacist implicated in a deadly fungal meningitis outbreak could have his federal prison sentences extended and financial penalties increased as a result of a federal appeals court ruling.
U.S. District Judge Richard G. Stearns has set a July 7 date for a hearing in his Boston, Mass. courtroom on whether Barry J. Cadden should face additional penalties.
The First Circuit Cout of Appeals, in an 87-page decision issued last year, said Stearns, in setting Cadden's nine year prison sentence had failed to consider whether the victims of the 2012 funagal meningitis outbreak were vulnerable victims. That in turn would bring a longer jail term.
At the same time, Stearns will hear arguments on whether co-defendant Glenn Chin's eight year sentence should be enhanced and penalties increased.
The outbreak was caused by highly contaminated drugs produced at the New England Compounding Center, where Cadden served as president and part owner. Chin was a supervising pharmacist in the clean room where the tainted drugs were produced.
"The district court determined that the patients were necessarily not victims at all," the appeals court noted.
In sending the issue back to Stearns, the appeals panel said the district court erred in not considering that the patients were not just victims but also vulnerable victims.
The appeals court also ruled that Stearns' erred in failing to consider whether Cadden's actions at NECC resulted in the conscious or reckless risk of death or serious injury.
That would, in turn, subject Cadden to a second sentence enhancement.
"The District Court should have found that the enhancement applied," the appeals court ruling states.
"Thus we remand for the District Court to do what it has not yet done; directly consider the risk of death assessment," the appeals court concluded.
As for the financial penalties, the appeals court found that Stearns erred when he concluded that Barry Cadden's wife, Lisa Cadden,'profits from NECC were completely exempt from forfeiture. She was never charged with a crime.
But the appeals court disagreed and sent the issue back to Stearns to determine how much of Lisa Cadden's NECC income was derived from illegal activities.
"We remand for the District Court to consider what amount of Lisa Cadden's earnings should be included in Barry Cadden's forfeiture order because they were tainted by racketeering activity," the 2020 ruling states.
Court records show the Caddens collected some $72 million from NECC in the six year period preceding the outbreak. In a related development, property previously owned by the Caddens has been sold and half of the $300,000 in proceeds will go to the federal government under a forfeiture agreement. The two vacant Wrentham, Mass. lots were adjacent to the Caddens former family home.
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Advocates Warn of Drug Compounding Loophole

By Walter F. Roche Jr.

Warning that it leaves the public subject to harmful exposure to dangerous drugs, an advocacy group is calling on the U.S. Food and Drug Administration to close a loophole that allows drug compounders to produce drugs deemed harmful or ineffective.
In a petition filed with the FDA, Public Citizen said closing the loophole was crucial to minimizing the risk to patients of harmful exposure.
Specifically the petition asks the agency to add two drugs,the weight loss drug locaserin, formerly known BELVIQ, and injectable forms of bacitracin, to the list of drugs removed from the market because they were deemed unsafe or ineffective.
Placing the drugs on that list would make it illegal for drug compounders to produce snd msrket this drug, said Michael Carome of Public Citizen.
Carome noted that the FDA already had removed those drugs from the market due to safety or effectiveness concerns.
Carome said that in the past the FDA has sometimes taken several years to place banned drugs on the official list.
"Such foot-dragging poses unacceptable and avoidable risks to patients and public health," Carome said.
Earlier this month the FDA issued notices that the two drugs were being withdrawn for sale for safety reasons. Carome noted that the FDA had asked the two manufactuers of the drugs to withdraw them from the market.
In addition to asking the FDA to act on locaserin and bacitracin, Carome asked the agency to institute a new policy requiring that when drugs are withdrawn from the market for safety and efficacy concerns, that they simultaneously be placed on the banned drug list.
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Cadden Forfeiture Property Being Sold

By Walter F. Roche Jr.

Court approval is being requested for the sale of two lots owned by the convicted president of a defunct drug compounding firm who is serving a nine year federal prison sentence.
A motion filed in U.S. District Court in Boston, Mass. today seeks approval to sell two vacant lots in Wrentham, Mass for a total of $600,000. The lots are adjacent to the former home of Barry J. Cadden and he and his wife Lisa own the adjoining properties at 15 and 17 Manchester Drive.
The joint motion by federal prosecutors and lawyers for the Caddens calls for the lots to be sold to Brendan Duckworth and his wife, Christina. Both their names would go on one lot and the other would be in Brendan's name alone.
Under the forfeiture agreement between the Caddens and federal prosecutors half of the sale proceeds will go to the federal government and half to Lisa Cadden, who was never charged.
The forfeiture agreement was reached following Barry Cadden's conviction on racketeering, conspiracy and mail fraud charges.
The charges stemmed from a two year probe of the 2012 fungal meningitis outbreak, which was caused by contaminated drugs shipped by the New England Compounding Center the company Cadden headed.
The Cadden family home also was subject to the forfeiture order and it was sold for $1.3 million in late 2019.
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2012 Outbreak Murder Case in MI Appeals Court

By Walter F. Roche Jr.

Lawyers for a former pharmacist charged with 11 counts of second degree murder say the charges must be dropped because prosecutors failed to identify a particular act by the defendant that caused the deaths.
In filings with the Michigan Court of Appeals, lawyers for Glenn Chin are asking the court to overrule the decision of a Livingston County Judge who found that Chin and co-defendant Barry Cadden must stand trial on the charges.
State prosecutors from the Michigan Attorney General's office in a 27-page filing with the appeals court argued that not only did the evidence show crimes had been committed, they also showed there was probable cause to believe Chin and Cadden committed them.
The case stems from the deadly 2012 fungal meningitis caused by contaminated drugs shipped from the New England Compounding Center, where Cadden was part owner and president and Chin was a supervising pharmacist.
The deadly drugs, thousands of vials of methylprednisolone acetate, were prepared in the clean room where Chin was the supervisor. And a batch of those drugs were shipped to the Michigan facility where the 11 victims were being treated.
"He (Chin) repeatedly ignored and often promoted dangerous practices," the prosecution brief states, asserting that the district court did not abuse its discretion when it ruled that Chin and Cadden must face trial.
Citing the testimony of employees who worked under Chin's supervision, the prosecution brief states that Chin, especially in 2012, threw safety precautions aside and ordered a speedup of production.
When one employee raised questions about the consequences, the filing states, Chin repled,"That's why we have lawyers."
Citing testimony on lack of testing and the improper handling and labeling of drugs in Chin's clean room, the filing states that when federal investigators swooped down on NECC's Framingham, Mass. office, Cadden and Chin began to try to cover their tracks. Chin, for instance, was seen throwing out medications as federal investigators were closing in.
There was "ample reason to believe that but for Chin's action at NECC these deaths would have been avoided," the filing concludes.
While the Attorney General's filing was 27-pages long, the Chin brief was a brief six pages.
While admitting that prosecutors proved malice, Kevin Gentry, Chin's appeals court lawyer, wrote that malice by itself was insufficient under Michigan law.
"There must be a causal link between the defendant's conduct and the victims' injury," the filing states.
"The prosecution has not shown, nor really tried to show any particular act of the defendant that caused the deaths" the filing concludes.
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Feds Seek Release on Cadden Land

By Walter F. Roche Jr.

Federal prosecutors are asking a judge to release its hold on a two two acre properties owned by the now jailed former president of a drug compounding company and his wife.
In a series of filings in U.S. District Court in Boston, Mass., U.S. Justice Department lawyers asked that the lien on the two properties be lifted "as these properties no longer need to be restrained by the court."
Property records show the parcels are owned by Barry J. Cadden and his wife, Lisa. The lots are immediately adjacent to the Caddens family home, which they were forced to sell following Barry Cadden's conviction on racketering, conspiracy and mail fraud charges.
The house was sold for $1.3 million in 2019 with half the proceeds going to the federal government under a forfeiture order.
Cadden was president and part owner of the New England Compounding Center, the company blamed for the deadly 2012 fungal meningitis outbreak. He is currently serving a nine year federal prison sentence. He also is awaiting trial on 11 counts of second degree murder brought by the Michigan Attorney General.
The Michigan charges are based on the deaths of 11 patients who were injected with contaminated methylprednisolone acetate produced by NECC.
Wrentham records show the two lots are assessed for a little over $500,000. One of the lots is currently listed for sale at $325,000 with a notation that a sale is pending. If sold by the Caddens, half the proceeds would go to the federal government under the terms of the forfeiture order.
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Final Victims' Payments Start in April

By Walter F. Roche Jr.

The final payments to victims of the 2012 fungal meningitis outbreak will start to be distributed next month, several months earlier than previously predicted.
Lynne Riley, the overseer of funds collected for the hundreds of victims, said payments will begin in April, assuming the release of the funds comes as scheduled.
The funds have been held in escrow because the time for the IRS to contest money in the fund had not expired.
Riley said she is awaiting word from a court appointed attorney on the exact amount being released within the next few days. Previously the total was estimated at $11.5 million.
The disclosure means checks will begin flowing well before the earlier predicted date in June.
The checks will be the third wave of relief for the victims. Prior distributions totaled more than $100 million and went to a little over 2,000 victims.
The final payment will come from tax refunds collected from the owners of the New England Compounding Center, the company blamed for the deadly outbreak. The owners agreed to give up a portion of the tax refunds as part of a court approved settlement.
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Hospital Failed to Monitor Patient

By Walter F. Roche Jr.

A patient at a Bucks County hospital who was supposed to be monitored every hour was not checked for seven hours when he was finally found unresponsive.
The November incident at Saint Mary Medical Center prompted inspectors from the state Health Department to declare a state of immediate jeopardy when they arrived at the facility in early December.
The details of the case were spelled out in a report just made public by the state agency.
The report does not indicate whether the patient recovered and hospital officials did not respond to a series of questions.
According to the report the patient, who had a history of diabetes and a heart condition arrived at the hospital on Nov. 23 and a physician ordered that he be placed on a continuous insulin drip. Under hospital policy that meant the patient was supposed to be monitored every hour for glucose levels.
According to the report, hospital records showed that the patient was not monitored at all from 10:45 a.m. till 7:08 p.m. when he was found unresponsive.
"Glucose measurements should have been taken every hour," the report states, adding that "a patient has a right to receive care in a safe setting."
In response to the immediate jeopardy declaration, hospital officials drew up an immediate response including staff education and a system to create an alert whenever a continuous insulin drip is ordered.
The state of immediate jeopardy was lifted at 8:12 p.m. on Dec. 12 after the immediate response plan was approved.
According to the report the employee, identified as Employee 3, who was supposed to have monitored the patient was on leave and unavailable for interview.
"Employee 3 did not follow the appropriate physician's orders," the report states.
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