Pharmacy Linked to Meningitis Outbreak Expected to File Bankruptcy
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Pharmacy Linked to Meningitis Outbreak Expected to File Bankruptcy

November 26, 2012

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The specialty pharmacy suspected to have caused the deadly outbreak of meningitis that has killed at least 21 people is expected to file for bankruptcy, according to a report from the Boston Herald.

Sources say that New England Compounding Center (NECC), the company believed to have started the meningitis outbreak by releasing tainted steroid injections, will probably file for bankruptcy in order to gain some protection against an inevitable wave of lawsuits.

Just a few weeks after the outbreak first made headlines, at least 10 lawsuits had already been filed against NECC, with anticipated lawsuits to be filed against the company in both federal and state courts.

According to one bankruptcy lawyer in Boston who is tracking the company’s legal woes, the lawsuits are "coming with some regularity," and bankruptcy may be the company’s only option for survival.

By seeking bankruptcy help, NECC would be able to temporarily freeze the legal actions pending against it, and would also be able to prevent others from filing new complaints, which are expected to number in the hundreds, perhaps thousands.

The scale of the potential legal and financial disaster cannot be overstated. Federal officials estimate that at least 14,000 people have been exposed to potentially dangerous steroids made by NECC.

Already, at least 21 people have died due to the company’s mistake, and hundreds of other victims have become very ill. Interestingly, sources note that patients who did not contract meningitis could recover some damages for pain and anxiety caused by the epidemic.

Even if NECC doesn’t file for bankruptcy, it’s unlikely that every patient will be able to recover the appropriate amount of damages. Sources say the company has suspended its production of new drugs, fired most of its workers, and lost its license in several different states.

Of course, if NECC files for bankruptcy, patients affected by the outbreak could still file a claim with the bankruptcy court, but it would be a much more manageable process for NECC, compared with the potential disaster of facing hundreds of lawsuits in multiple jurisdictions.

Sources also note that a bankruptcy filing would not disrupt health officials’ ongoing investigation into how the outbreak occurred.


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