$100 Million Settlement Reached for Meningitis Outbreak

Published Online: Monday, June 16, 2014
Lawyers have reached a settlement totaling more than $100 million with insurers and the owners of the compounding pharmacy that produced the tainted steroids responsible for the 2012 fungal meningitis outbreak. Most of the money is expected to go to the families of the 64 victims who died and hundreds of patients who were infected, although it is still unclear when and how the funds will be allocated to victims.

Under the proposed settlement, the owners of the now-bankrupt New England Compounding Center in Framingham, Massachusetts, will contribute a combined $47.75 million. Insurers for the pharmacy and its landlord are expected to contribute an additional $29 million, and another $20 million is expected to come from tax refunds the pharmacy will receive from its losses.

In addition, lawyers hope to raise up to $10 million through the sale of Ameridose, a sister company that manufactured and repackaged medications for hospitals and medical centers. Additional money could come from facilities that administered the contaminated drugs and from other potentially liable companies.

Lawyers cautioned, however, that the final total will most likely fail to fully compensate the more than 3000 creditors who have filed claims with the bankruptcy court. The settlement still needs to be approved by a judge, and a system for allocating funds to the victims has yet to be created.

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A guide to how compounding activities need to change in the wake of the meningitis outbreak associated with the New England Compounding Center.
Meaningful federal compounding legislation has been developed.
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