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Compounder that operated like drug plant paid big bucks to owners

Judge orders NECC shareholders to keep hands off $21 million in payments
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It turns out that compounding pharmacies that operate like small drug manufacturers can provide their owners with Big Pharma kinds of compensation. At least that was the case with New England Compounding Center (NECC), whose tainted drugs infected nearly 700 with meningitis, resulting in 44 deaths and embroiling the FDA in a fight with Congress over whether it should have had a closer eye on the operation.

The company closed down last year after it was tied to the outbreak and inspections found serious sterility issues at its Framingham, MA, plant. It filed for bankruptcy protection in December. Now a bankruptcy judge has ordered its owners to keep their hands off about $21 million they received in salary and shareholder distributions last year that were only recently uncovered, Reuters reports. The private company's largest shareholder, Carla Conigliaro, it says, extracted nearly $9 million from the company last year. And MSN News says court documents show that the owners received more than $70.5 million in payouts over the last 6 years. NECC said much of the money distributed last year was to cover taxes.

Federal and state authorities launched a criminal investigation into the operation after its steroid products were tied to an outbreak of a rare meningitis. One report found that NECC was operating like a small drug manufacturing plant, distributing products through much of the U.S., but without following the strict quality and safety oversight that would come if it had been treated like a manufacturer and regularly inspected by the FDA.

When the FDA was called in to inspect, it found serious sterility problems at the operation and at an affiliated operation, Ameridose. While compounders are traditionally overseen by the states in which they operate, some members of Congress criticized the FDA for not preventing the crisis and called FDA Commissioner Margaret Hamburg on the carpet to explain. Hamburg acknowledged that the FDA had earlier inspected the plant when it received a specific complaint about the operation but said the oversight of compounders is a gray area. She called on Congress to pass legislation that would explicitly give the agency authority to inspect large operations like NECC. 

The bankruptcy judge also ordered three companies tied to NECC, including Ameridose, not to make any payments to the owners.

- read the Reuters story

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