With the deadline just days away, Tennessee officials have filed a $10 million claim in the bankruptcy case of the Massachusetts drug compounding firm blamed in the deaths of 16 Tennessee patients.
But state officials acknowledge that they'll probably never see that much money.
The claim was filed this week in U.S. Bankruptcy Court in Boston in the case of the New England Compounding Center, which was shut down permanently in the midst of the fungal meningitis outbreak caused by tainted spinal steroids.
The deadline for filing claims is Wednesday, and it approaches in the wake of an agreement to provide a fund of up to $100 million to pay creditors and victims with contributions from the owners of NECC, insurance companies and other related parties.
Gill R. Geldreich, senior counsel in the Tennessee attorney general's office, said the $10 million was only an estimate of the costs the state could claim in fines, penalties and administrative expenses stemming from the outbreak. He said it would be up to the state Pharmacy Board and state health officials to finally determine the total.
Geldreich said that under bankruptcy rules the state's claims would be given a lower priority than the dozens of claims filed on behalf of victims of the outbreak. As a result, he said, it is unlikely the state will ever collect the $10 million.
Despite that disclaimer, attorneys for some of the victims expressed surprise at the state's action.
Attorney Gerard Stranch of Nashville said he planned to ask the state to either withdraw the claim entirely or formally agree that victims' claims would get automatic priority.
Noting that fines and penalties are intended to punish the wrongdoers, Geldreich acknowledged that since NECC has gone out of business, any money diverted to pay penalties would reduce the amount available to victims.
He said the fines would stem from the "multiple violations" of state laws and regulations by NECC when it shipped thousands of vials of fungus-tainted methylprednisolone acetate to three Tennessee health facilities.
Other claims filed in the case include victims from Tennessee, New Jersey, Michigan and Virginia. There also are claims from the state of New York, chemical companies that supplied NECC and other service providers.
In addition to the 16 deaths among Tennessee patients, the outbreak sickened 153 Tennessee patients. Nationwide, 751 people were sickened and 64 died. Court records show more than 300 victims or their survivors have filed suit.
In another development stemming from the outbreak, the U.S. Food and Drug Administration issued new guidelines and information on a new federal drug compounding law to state officials across the country and to drug compounding firms.
Letters were sent to about 6,000 health care providers urging them to purchase any sterile compound drugs from companies that registered with the FDA under the new law.
The FDA also issued a list of 10 firms that already registered under the new law to compound large volumes of the drugs. One firm, PharMedium Services, has four locations, including a facility in Memphis.