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Meningitis suit seeks freeze of pharmacy owners' assets

Source: Thomson Reuters Foundation - Fri, 19 Oct 2012 18:01 GMT
Author: Reuters
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* Suit filed by federal prosecutor in Boston

* NECC owners spent millions on luxury homes

* Meningitis cases at 254 in 16 states (Adds number of cases, background)

By Tim McLaughlin

BOSTON, Oct 19 (Reuters) - Patients exposed to a deadly U.S. meningitis outbreak are suing to freeze the personal assets of executives at the New England Compounding Center, the pharmacy whose injectable steroids have been linked to 20 deaths and over 250 cases of infection.

Peter McGrath, a former federal prosecutor, said he was spear heading a civil case that alleges Massachusetts-based NECC and company officers Barry and Lisa Cadden and Greg Conigliaro are responsible for the tainted drugs. The lawsuit was filed on behalf of an unnamed plaintiff in Middlesex County Superior Court in suburban Boston, court records show.

"We want to pierce the corporate veil and go after the individuals," McGrath said Friday in a telephone interview. "My clients are in a lot of pain."

His firm, based in Concord, New Hampshire, is representing several people injured in the meningitis outbreak.

NECC's public relations firm did not return a call seeking comment.

U.S. health regulators confirmed on Thursday the presence of the deadly Exserohilum fungus in vials of the NECC steroid used for pain injections that has so far led to 254 fungal meningitis cases in 16 states. They estimate that as many as 14,000 people may have been exposed to the contaminated medication.

Three potentially contaminated lots of the drug, methylprednisolone, were shipped to 76 facilities in 23 states. After confirming contamination in one of the three lots, the U.S. Food and Drug Administration and Centers for Disease Control and Prevention said they are checking the other two lots for the fungus, as well as additional injectable NECC drugs as a precautionary measure.

A Tennessee clinic that received more potentially contaminated steroid than any facility in the nation temporarily closed to cope with the fallout from the outbreak. The Nashville clinic received 2,000 vials of the NECC drug.

Federal authorities are investigating how NECC supplied hospitals, clinics and other healthcare providers with large orders of compounded drugs and whether it violated state laws regulating pharmacies.

The FDA and CDC said about 97 percent of potentially exposed patients have been contacted so far. The agencies cautioned doctors and patients to be on the lookout for potential meningitis symptoms for months after injections for back and neck pain.

Doctors also warned that early diagnosis and treatment with a powerful antifungal drug was vital to prevent meningitis from attacking the brain.

LUXURY HOMES

In the new lawsuit, the John Doe plaintiff is seeking a court order on Nov. 6 to freeze the assets of NECC and the named officers. Such a "prejudgment remedy" is allowed in Massachusetts state courts during pending litigation.

Members of the Boston-area family who own the pharmacy and related companies spent several million dollars on luxury homes in the months before U.S. authorities shut down their operations. Greg Conigliaro is a recycling entrepreneur who joined forces with his pharmacist brother-in-law, Barry Cadden, and other family members to start NECC in 1998. His sister Lisa, is also a pharmacist and married to Cadden.

The real estate transactions, disclosed in publicly available deeds filed in March and April, provide a glimpse into the Conigliaro family's fortune before authorities moved in and shut down the pharmacy operations of NECC and Ameridose LLC, a related, but larger drug manufacturer and compounder.

In March and April, Greg Conigliaro paid ${esc.dollar}2.4 million for a beach front home on Cape Cod, while his brother Doug Conigliaro paid ${esc.dollar}4.2 million for a penthouse condo on Beacon Street in Boston's tony Back Bay neighborhood, the deeds show.

About the same time, a real estate venture owned and managed by the two brothers paid ${esc.dollar}4.6 million to buy the state-of-the-art facility that Ameridose used to win new customers and rapidly expand its business, real estate records show. Ameridose previously leased the building.

Doug Conigliaro, who is president of Medical Sales Management, the sales arm for NECC and Ameridose, is not named in the lawsuit filed in Middlesex County.

The Caddens, Greg Conigliaro and Doug Conigliaro did not immediately respond to messages seeking comment. (Additional reporting by Aaron Pressman, Toni Clarke and Bill Berkrot; Editing by Gerald E. McCormick, Lisa Von Ahn and Andre Grenon)

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