$100 Million for Victims of Meningitis Outbreak

We’ve previously written about the 2012 meningitis outbreak caused by contaminated drugs originating from the New England Compounding Pharmacy (NECC). The meningitis outbreak from these tainted steroids was linked to 64 deaths and hundreds of injuries. The outbreak was severe enough to prompt the creation of a slew of new FDA regulations on compounding pharmacies and more thorough enforcement of previous regulations. Sadly, compounding pharmacies that choose to operate at subpar standards still exist. On the bright side, the initial case against NECC is finally coming to a close and the victims of this horrible tragedy are, at last, getting some justice.

The trustee of the now bankrupt NECC announced on May 6, 2014 that it had reached a settlement in the case to the tune of $100 million dollars. The money for the settlement will be contributed by the owners of the company, the company’s insurance provider, and from the potential sale of a sister company which will hopefully be enough to raise the remainder. The official announcement marks the end of almost two years of settlement negotiations with the pharmacy. While the settlement is not yet finalized, there are hopes on both sides that it will be approved by a judge by the end of this year. If it is, victims of the tainted drug may be able to look forward to payments in 2015.

While this settlement will end all claims against the New England Compounding Pharmacy, it is by no means the end of the litigation as a whole. There are still other named defendants in relation to the outbreak. For example, the victims and their attorneys will continue litigation against the companies which may partially be responsible for the subpar conditions and terrible maintenance at the NECC facility. The United States Attorneys’ Office is also still investigating the tainted drugs and may consider bringing criminal charges against those responsible.

The settlement, while possibly falling short of compensating the victims in a meaningful way, is still at least some good news. This is especially true when considering that the victims were able to salvage $100 million from a company that declared Chapter 11 bankruptcy. While the case may be finally coming to an end for the victims of the tainted drug from the New England Compounding Pharmacy, other compounding pharmacies are still being caught for operating below FDA standards. At the very least, this settlement will hopefully send a message to these lawbreakers that dirty and unsafe facilities will not be tolerated in the United States and that there will be a high price tag attached if they continue to produce tainted drugs.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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