Owners and insurers agree to a $100M fund for victims of NECC's tainted drugs

The fungal meningitis outbreak tied to New England Compounding Center (NECC) led to the bankruptcy of the company and new authority for the FDA to oversee this niche of the drug industry. Meanwhile, the more than 750 victims and families of those who were infected, some of whom died, have been left to wonder what compensation they may see. Now a preliminary agreement has been reached to set up a victims' fund that could surpass $100 million.

One of the lawyers of a court-appointed group to speak for plaintiffs said in a blog Monday the preliminary agreement was reached by the owners, operators and insurers of the bankrupt compounding pharmacy. It said this agreement is separate from legal proceedings against some of the health centers that gave the drugs made by NECC.

Thomas Sobol, lead counsel for the plaintiff's steering committee, said in the post that the agreement still requires sign-off by creditors and a federal court for fairness and adequacy and by the plaintiff's lawyers to make sure that victims' rights are fully protected. He also noted that "any amount of money would be grossly inadequate to compensate the families of those persons killed and others grievously injured by the callous conduct of those in charge of NECC."  

The outbreak was discovered last year and quickly tied to steroidal drugs that had been made by NECC and injected into patients as a pain treatment. More than 750 people were infected and at least 64 of those have died. The backlash put the FDA into the spotlight for not providing stricter oversight of compounding pharmacies. Traditionally, compounding pharmacies tended to be small operations that created special formulations of drugs at the request of doctors and were overseen by state authorities. But in the face of drug shortages in recent years, some grew into small manufacturers that were producing sterile drugs without doctors' prescriptions and selling them to hospitals nationally.

In the fall, Congress passed the Drug Quality and Security Act, which gives the FDA new, but limited, powers to oversee compounding pharmacies that volunteer to be regulated. The idea is that FDA oversight will set these companies apart and that hospitals will use those operators that agree to the stricter oversight. Separately, the law sets up a timeline for the drug industry to begin a so-called national track-and-trace system, with the intent of making it possible to eventually electronically track individual drug packages from production to patient.

- here's the announcement