Fund grows to $200M for victims of meningitis outbreak tied to compounder

A fund for victims of a fungal meningitis outbreak that sprung from contaminated drugs sold by the now-defunct New England Compounding Center (NECC) has reached $200 million, twice what was initially expected.

The fund is laid out in the bankruptcy plan for NECC approved by a federal judge Tuesday, according to NBC News. The compounding center shut down in 2012 after regulators tied contaminated steroids it sold to pain centers to the outbreak which sickened about 750 people and killed about 65. The company filed for bankruptcy a couple of months later.

The victims' fund includes about $18 million seized from the founders of the Framingham, MA-based operation, as well as its chief pharmacist, one of two people charged in December with second-degree murder for their part in the outbreak. The fund, when first announced in December 2013, had been expected to be about $100 million, but additional settlements have fattened it. In March, The Boston Globe reported that Insight Health, a Virginia clinic that gave the contaminated drugs to some of its patients, kicked in $40 million, while UniFirst, a Massachusetts company that had been hired to sterilize NECC's "clean room," agreed to contribute $30.1 million.

In December, 14 owners and former employees of the company were indicted on federal charges that included 25 counts of second-degree murder filed against Barry Cadden, NECC's former president and lead pharmacist, and Glenn Chin, a supervising pharmacist.

The 2012 outbreak shined a spotlight on the growth of the drug compounding industry, where large operations were mass-producing drugs and using sales forces to market them nationally. Former FDA Commissioner Margaret Hamburg was repeatedly grilled by congressional committees investigating the outbreak who wanted to know why the FDA had not provided more oversight of the traditionally state-regulated industry. The backlash led to Congress passing the Drug Quality and Security Act, which gives the FDA new, but limited, powers to oversee compounding pharmacies that volunteer to be regulated.

While it did not get the authority it sought, the agency has been aggressive with violators and and has provided the basis for legal actions against other large compounders, including operations in Texas, New Jersey, and Tennessee, whose drugs were tied to patient illnesses.

- read the NBC News story
- here's the Boston Globe story

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