Whistleblowers who come forward to report medical fraud perform an important public service. Recent news, once again, shows how sometimes dangerous judgments are made in a reckless pursuit of profit. The trial, conviction, and sentencing of the owner and head pharmacist of the New England Compounding Center is one such case.
In 2012, a fungal meningitis outbreak killed 64 people and sickened nearly 700 more people across the country. The outbreak was linked to the New England Compounding Center (NECC).
This week, the owner of NECC was sentenced to nine years in prison for charges of medical fraud related to that outbreak.
The outbreak of fungal meningitis and other infections in 20 states was traced by the Centers for Disease Control and Prevention (CDCP). Investigators determined that contaminated injections of medical steroids, given mostly to people with back pain, were directly responsible for the outbreak. Those steroids had been manufactured by NECC, a pharmaceutical compounding facility, based in Framingham, MA.
Compounding pharmacies produce custom-mixed medications for patients. Compounding pharmacies are useful for helping produce a customized medication for a specific patient, when there is no appropriate blend on the market and for (in some cases) lowering medication costs for some medications.
In theory, a compounding pharmacy is only making small quantities of custom medications. However, in practice, there are facilities, like NECC, that produce large quantities of certain types of medications. Even more important to note, compound pharmacies are not subject to the same federal restrictions and oversight as ordinary drugstores even though they are producing and dispensing medications. In an industry entrusted with people’s lives, putting profit before patient safety can come with serious consequences – and may even cause death.
According to the jury verdict, this is exactly what happened at NECC.
A “massive and reckless” medical fraud
In this case, NECC was accused of using expired ingredients and failing to follow safety standards, which resulted in the tainted drugs and the deaths of 64 patients.
Prosecutors claimed Barry Cadden, the owner and head pharmacist, ran NECC in “an extraordinarily dangerous way” in order to push production and increase profits. Cadden was accused of deliberately skirting industry regulations on sterility in what Assistant U.S. Attorney Amanda Strachan said was “a massive reckless and fraudulent organization.”
According to the prosecution, NECC used expired ingredients and falsified logs to make it look as if the so-called clean rooms had been disinfected, prosecutors said. After the outbreak, regulators found multiple potential sources of contamination, including standing water and mold and bacteria in the air and on workers’ gloved fingertips.
Cadden pleaded not guilty to the charges but a jury found him guilty on the charges of racketeering, racketeering conspiracy, mail fraud and the introduction of misbranded drugs into interstate commerce with the intent to defraud and mislead. Cadden had also been charged with second-degree murder under federal racketeering law but was acquitted of those charges.
Medical fraud is not just a theft of money. Like this case, medical fraud frequently involves cutting corners on patient care or outright deception about the quality of care, or the care, itself. People get hurt. And, as this case proves, people die because of medical fraud.
Every case of medical fraud will not result in death, but when whistleblowers come forward to expose instances of health care providers and drug companies putting profits before patients, they’re not just being troublemakers: they’re protecting our safety.
To confidentially report suspected medical fraud, contact our Utah Whistleblower Hotline at (801) 323-5000 to speak with an experienced whistleblower attorney.