Pharmacy Connected with Meningitis Outbreak Files For Bankruptcy

Pharmacy Connected with Meningitis Outbreak Files For Bankruptcy

A few short months following the deadly meningitis outbreak that impacted hundreds of people nationwide, the pharmacy blamed for the outbreak has filed for Chapter 11 bankruptcy protection.

New England Compounding Center, a specialty pharmacy, filed for protection under bankruptcy law in the U.S. Bankruptcy Court for the District of Massachusetts, as heavy litigation costs have threatened the company’s finances. The group currently faces a number of personal injury lawsuits after distributing tainted steroid shots that infected hundreds of people with meningitis and resulted in 39 deaths in September. The outbreak spanned 19 states. The NECC said it plans to set up a fund through the bankruptcy process to compensate victims and pay out claims.

“We want to assemble a substantial fund, and then distribute it fairly and efficiently to those who are entitled to relief,” Keith Lowey, NECC chief restructuring officer, told Reuters.

The company’s problems did not begin with the recent outbreak, and the NECC has narrowly escaped severe punishment from health officials in the past, the new source reports. Concerns over insufficient documentation and poor controls involving sterilization were addressed years ago, but regulations have focused more heavily on these questions since the September outbreak.

In addition to taking action against the company itself, attorneys of the victims told the Boston Globe that they are likely to pursue litigation against the companies associated with the center, as the NECC has few assets to compensate those impacted by the recent outbreak. They also noted that they plan to take an aggressive approach toward obtaining compensation for the victims and hope to begin making distributions as early as 2013.