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Meningitis Missteps Spur U.S. Regulators to Seek Control

Nov. 13 (Bloomberg) -- A U.S. probe into the compounding pharmacy tied to a recent meningitis outbreak has found that officials at an auditing company that cleared sterile procedures used by the pharmacy in 2006 were previously convicted of defrauding federal regulators.

The Massachusetts Board of Registration in Pharmacy accepted the audit’s findings even though its staff knew the company’s executives had earlier been “convicted of federal crimes related to defrauding” regulators, said Lauren Smith, interim commissioner of the State Department of Public Health, in prepared testimony released by a House subcommittee in advance of a hearing tomorrow.

Lawmakers are reviewing the actions of regulators dating to 2002 when New England Compounding Pharmacy Inc., or NECC, was inspected after the same type of steroid linked to the most-recent outbreak was tied to meningitis-like symptoms in two patients. The U.S. Food and Drug Administration is seeking stronger authority to regulate compounding pharmacies.

“We look forward to working with Congress to prevent this from happening again.” said Sarah Clark-Lynn, an agency spokeswoman, in an e-mail.

The latest meningitis outbreak has infected 438 people, killing 32.

Staff Knowledge

Smith also said in her prepared remarks that staff never advised the pharmacy board that officials involved with the auditing company, Pharmaceutical Systems Inc., had been convicted of a crime.

The FDA suggested suspending NECC’s operations in 2003 in discussions with Massachusetts officials after inspections of the pharmacy. The agency and Massachusetts regulators agreed NECC was operating as a compounding pharmacy, not a drugmaker, which kept the FDA from acting at the time.

Barry Cadden, owner of NECC, also served on a task force convened by the pharmacy board in 2002 to study oversight of compounding pharmacies. While the group met for about two years, it appears never to have made recommendations for oversight changes, Smith said in her prepared testimony.

Board member Karen Ryle, who still sits on the board and serves as secretary, according to the website, convened the task force. Energy and Commerce Chairman Fred Upton, a Republican from Michigan, issued a subpoena for Cadden to testify at tomorrow’s hearing.

Inspection Report

The pharmacy board’s executive director and counsel knew about the convictions related to the auditor in April 2006, Smith said. The board told Cadden two months later NECC had satisfactorily completed the terms and conditions of a consent agreement, according to a report summarizing inspection records released yesterday by the House subcommittee.

The consent agreement was renegotiated in January 2006, and was a weaker version of an earlier one with a provision for a one-year probation to be stayed with the condition NECC hire an independent auditor.

“Despite interviews with board and staff members involved with these decisions and a thorough review of the limited records retained from this period, troubling questions remain about what influenced the more lenient consent agreement resolution, given NECC’s track record,” Smith said. “I will not be satisfied until we know the full story behind this decision.”

Massachusetts has put new policies in place to increase oversight of compounding pharmacies, including more inspections, and Smith said she supports federal legislation to give the FDA more authority over compounding pharmacies.

To contact the reporter on this story: Anna Edney in Washington at

To contact the editor responsible for this story: Reg Gale at

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