Compounding Pharmacy Owners Reach $100M Settlement
The owners of the New England Compounding Center and their insurers have reached an agreement in principle to pay more than $100 million to a fund for victims and other creditors of the pharmacy, which formulated tainted products that have been linked to 64 deaths and the illnesses of at least 700 other people.
The settlement, announced in this press release, was reached in the course of the pharmacy's bankruptcy proceedings in Boston. The actual settlement has not yet been filed with the court.
According to bankruptcy trustee Paul Moore of Duane Morris, a substantial portion of this $100 million will be paid directly by the pharmacy's owners with insurers paying the balance. The agreement was negotiated by the unsecured creditors committee, represented by David Molton and William Baldiga of Brown Rudnick and Anne Andrews of Andrews Thornton. Thomas Sobol of Hagens Berman Sobol Shapiro negotiated for the plaintiffs steering committee.
In October 2012 an outbreak of fungal meningitis was traced to medicine prepared by the pharmacy that was used for epidural steroid injections. NECC declared bankruptcy the following December. All claims against the pharmacy must be filed by Jan. 15, 2014.
"The [creditors] committee is pleased to have made significant progress in this case after the one-year anniversary of the bankruptcy," said David Molton of Brown Rudnick, who represents the creditors committee. "Significant contributions by the owners in addition to insurance will help us establish a victims fund." Lawyers for creditors and victims are still pursuing claims against clinics and doctors who used this medicine and other entities that provided services to the NECC.
In the press release, NECC’s owners commented that “while they deny any liability or wrongdoing, nonetheless they strongly desire to play a major role in establishing a fund for people who died or suffered as a result of this tragic outbreak."