Company in meningitis outbreak cleared to bypass law

In a series of news briefings over the past three weeks, Massachusetts officials have expressed surprise and outrage over the operations of a drug compounding company blamed for a nationwide fungal meningitis epidemic that has claimed 24 lives, nine in Tennessee.

Massachusetts records, however, show that officials of New England Compounding Center and a nearby firm with the same owners gave clear notice as early as 14 years ago that they were not acting as normal pharmacies. In fact, they got permission to bypass the law.

In 1998, NECC asked that it not be required to carry a wide range of common medicines because it would not be selling directly to the public.

In 2003, the company told the Massachusetts pharmacy board that it routinely compounded and stockpiled drugs before getting prescriptions for specific patients as required by state law.

In 2006, sister company Ameridose also applied for and received a waiver from regular pharmacy rules.

Since the outbreak of fungal meningitis linked to NECC's products, Massachusetts officials have been quick to claim credit for prompt and decisive action.

Dr. Madeleine Biondolillo, a top state health official, said New England Compounding "was operating beyond the scope of (its) compounding license, instead acting as a manufacturer."

By mass-producing drugs without prescriptions for specific patients, she said, the company was violating state law and regulations that apply to all pharmacies.

At one event this week she was joined by Gov. Deval Patrick, who spoke of the "decisive steps" taken by state health officials to immediately protect the public.

New England Compounding has been shut down by state and federal health officials, while Ameridose has agreed to suspend operations until Nov. 5 pending a parallel investigation. Patrick disclosed this week that NECC was the subject of a federal criminal investigation.

In a statement issued late Thursday in response to a request for comment, the department noted that the waivers were granted several years ago.

"We will take the necessary and appropriate actions at the conclusion of our comprehensive review which is actively looking into decisions made by the board more than six years ago. All options are on the table, and no actions have been ruled out," the statement said.

The statement noted that the process has begun to permanently revoke the license of NECC and its owners, and a criminal investigation is under way.

'Unique blend'

Records released by the Massachusetts health department show that in a 1998 license application, New England Compounding sought a waiver from the requirement that all pharmacies maintain a supply of drugs "in accordance with the usual needs of the community."

The application said the company would offer "a unique blend of products and services and thus should not be required to provide the full range of commercially available products."

The waiver was granted by the pharmacy board.

In a March 26, 2003, letter to the state pharmacy board, in response to a complaint, NECC's attorney Paul Cirel presented a detailed explanation of the company's operations, including the fact that the firm regularly built up an inventory of some products in advance of anticipated orders.

"NECC compounds some prescription medication in advance of the receipt of valid prescription orders from authorized prescribers," the eight-page letter said.

The letter described how batches of some drugs were prepared ahead of time "based on the historical demand for that particular compound."

Open access

Ameridose, the sister firm, filed its own application for a waiver from regular pharmacy rules in 2006. Both firms are owned by Gregory Conigliaro and members of his family, including brother-in-law and pharmacist Barry J. Cadden.

The waiver request was signed by Sophia Pasedis, chief pharmacist of record for Ameridose, who by then had served on the state pharmacy board for two years. State health officials have said that Pasedis has abstained from voting on matters involving Ameridose. She has not responded to a request for comment.

The Ameridose waiver application makes clear that the firm does not serve the general public but provides services to "hospital pharmacy departments, clinics and physician's offices. Ameridose will not service the public directly."

In a statement issued earlier this week, Cirel, the NECC attorney, noted that state inspectors had open access to the company facilities.

"The board had numerous opportunities, including as recently as last summer, to make firsthand observations of the NECC's facilities and operation," he said in the statement, adding that "it is hard to imagine that the board has not been fully apprised of both the manner and scale of the company's operations."

New England Compounding did face an investigation from the state pharmacy board in 2004, and under a staff recommendation would have faced three years of probation and an official reprimand. But the board in early 2006 overruled the staff, approving a consent agreement under which the firm was placed on probation for a year but the probation was immediately stayed. The action followed a plea from Cirel, the company attorney, that the probation would have placed an undue financial burden on the firm and would trigger punitive action in other states where the firm was licensed.

"The collateral consequences to many if not all of NECC's other licenses in 42 states would be potentially fatal to the business," Cirel wrote.

State officials agreed not to report the reduced action to regulators in other states.

The investigation was triggered by an adverse event involving the drug methylprednisolone, the same drug blamed for the ongoing meningitis outbreak.

New lawsuits

Meanwhile, new lawsuits have been filed against NECC in Indiana and Minnesota, bringing the count of federal suits to nine. State and county suits number about a dozen, including four in Nashville.

The Indiana lawsuit charges that Mary Jo Tolbert contracted meningitis from a tainted dose of methylprednisolone on Sept. 3 at a facility in Elkhart.

The Minnesota suit says that Joanne P. Ross, a Montrose resident, was injected with a "fungus contaminated" steroid at a Maple Grove clinic on July 12.