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The now-defunct Massachusetts pharmacy behind a 2012 meningitis outbreak that killed at least 64 people will pay out $200 million to its victims and creditors under a bankruptcy reorganization plan approved on Tuesday.
The New England Compounding Center also sickened about 750 people across the United States three years ago by shipping steroids contaminated with bacteria and fungi, according to federal prosecutors. The company's officers knew the steroids, typically given to treat back pain, were contaminated, prosecutors say.
The payout will include about $18 million seized from the Framingham, Massachusetts-based company's founders and its chief pharmacist, one of two people charged in December with second-degree murder for his role,
The company, also known by the acronym NECC, shut down in October 2012 and declared Chapter 11 bankruptcy two months later.
“Victims can never be compensated adequately for the suffering inflicted on them by NECC, but this case does demonstrate how the law, and particularly bankruptcy law, can be used to bring some justice to people seriously injured by a company's misconduct,'' said David Molton, a lawyer who advised NECC's creditors committee.
The case led to strict new U.S. regulations on compounding pharmacies, which mix drugs but had previously been treated with a lighter hand than registered drug manufacturers.
Fourteen people associated with the company now face criminal charges.