Meningitis Settlement of $ 100 Million
Victims of the outbreak of meningitis and other illnesses caused by the distribution of contaminated steroid injectables to pain management physicians and hospitals will share $ 100 million in settlement funds against the compounding pharmacy and its insiders. This settlement is subject to bankruptcy court approval and does not include any contributions from additional responsible parties against whom litigation continues. This settlement was tentatively agreed upon late last year, but remains subject to bankruptcy court approval and is limited to funds contributed from New England Compounding Company, its owners, their related businesses and insurers. Additional funds are being sought from other companies and health care providers who were allegedly complicit in or otherwise responsible for the tragedy. Litigation is continuing against such entities as the hospitals, clinics and physicians who bought and administered the medication, their insurers, and other entities such as the companies that designed and built the compounding facility and its component parts, e.g. laboratories, clean rooms, and air conditioning and filtration systems.
Under the settlement terms, the Cadden and Conigliaro families, insiders who owned and/or operated the compounding pharmacy will contribute over $ 50 million, as well as an additional $ 10 million from tax refunds they expect from the U. S. Treasury. Insurance companies for NECC and Ameridose, a related company owned by the families, are contributing over $ 25 million. Ameridose is being sold and if the sale goes through, an additional $ 9 million will be paid toward the settlement.
About 751 cases of fungal meningitis from the tainted steroids have been reported in 20 states according to the Centers for Disease Control. There have been 64 deaths. Melvin B. Wright of Colling Gilbert Wright & Carter was appointed to the Official Creditor’s Committee in the bankruptcy proceedings, one of two committees in the dual federal litigation involved in the continued prosecution of the nationwide litigation and in reaching the tentative settlements with NECC and its insiders and insurers and said, “We are fully committed to continuing in our efforts to secure as much compensation as possible for the victims of this tragic outbreak. The job is not done, but this is a good start.”