Settlement Reached in New England Compounding Meningitis Outbreak MDL

The trustee of bankrupt New England Compounding Pharmacy Inc., a drug supplier blamed for a 2012 meningitis outbreak that killed 64 people, has agreed to a class action settlement that will provide $100 million in compensation to victims.

The outbreak, which infected more than 750 people, was blamed on steroid shots that were tainted with fungal meningitis. The meningitis outbreak settlement will resolve claims against the drug supplier, its executives and its related companies.

Under the terms of the class action settlement, the owners of the New England Compounding Center (NECC), its insurers and trustee will contribute more than $100 million to a settlement fund that will be distributed to the pharmacy’s creditors, including victims of the meningitis outbreak.

The class action settlement still needs to be approved by a bankruptcy judge before victims will be able to receive compensation. Trustee Paul D. Moore has indicated that he hopes to distribute the settlement funds to victims by the end of the year.

“The settlements embodied in the Funding Agreement are a significant step towards funding a chapter 11 plan that will furnish a mechanism to provide meaningful compensation to personal injury claimants with allowed claims who have suffered death, grievous injuries and illnesses from the administration of allegedly contaminated medications compounded by NECC,” Moore wrote in his motion supporting the class action settlement.

Under the terms of the class action settlement, $50 million will come directly from NECC owners, plus an additional $20 from their expected tax refunds. Insurance will pay $25 million, and up to $10 million will be contributed to the settlement fund from the future sale of a related company.

“The commitment from the outset of the shareholders of NECC and their families to make a substantial contribution to a fund for those who died or suffered significant injuries as a result of the outbreak resulted in an expeditious consensual agreement with them,” Moore said in a statement.

In October 2012, the NECC recalled all of its products distributed from its Framingham, Mass. location and ceased operations in connection with a probe by the state board, the Centers for Disease Control and Prevention and the U.S. Food & Drug Administration.

In December 2012, NECC filed for chapter 11 bankruptcy as the number of meningitis outbreak lawsuits filed against the company increased. According to court documents, more than 320 separate meningitis outbreak lawsuits have been consolidated in multidistrict litigation (MDL) against NECC. Thousands more claims have been submitted by individuals claiming they were injured from the tainted steroid injections.

More information about how to file a claim for the NECC meningitis outbreak class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

The plaintiffs are represented by Kimberly Dougherty and Robert Jenner of Janet Jenner & Suggs LLC.

The New England Compounding Meningitis Outbreak MDL is In re: New England Compounding Pharmacy Inc., Case No. 1:12-bk-19882, in the U.S. Bankruptcy Court for the District of Massachusetts.