Groundwork laid for lawsuits over deaths from tainted steroids ■ A judge declared a Massachusetts drug compounding facility whose products were linked to meningitis deaths as insolvent, potentially allowing third-party suits against physicians and others. By JENNIFER LUBELL amednews staff — Posted Aug. 12, 2013

Washington Representatives of those who died or were injured in a multistate fungal meningitis outbreak may have new opportunities for filing third-party product liability claims following a judge's declaration of insolvency for the facility that has been linked to the outbreak. Some health care observers, however, question how successful these cases would be if brought against physiciansinvolved in the patients' care.

The outbreak, which to date has sickened nearly 750 people across the nation and killed 63, was linked to contamination of injectable steroids provided by the New England Compounding Center in Framingham, Mass. The Centers for Disease Control and Prevention had detected the presence of Exserohilum rostratum in sealed vials of preservative-free methylprednisolone acetate produced by NECC. The compounding center suspended production soon after the outbreak and eventually filed for Chapter 11 bankruptcy.

Meningitis cases traced to the outbreak spanned about 20 states, but they were concentrated in Michigan and Tennessee. Responding to a motion brought by Bertram Walker Bryant, Jr., a Tennessee man whose wife died during the outbreak, Henry J. Boroff, a U.S. bankruptcy judge in Springfield, Mass., declared NECC insolvent on July 24.

The judge's ruling comes as no surprise, said Laura Carpenter, CEO and founder of Arizona-based Bula: Pharmacy Law Intelligence and a principal at Carpenter Law Firm. “It was obvious from the beginning that as large as the number of people that were harmed, one small entity was not going to be able to have the funds to compensate everyone.”

What the insolvency ruling does is provide another avenue for product liability claims that alleged victims of the outbreak presumably could bring against other facilities and physicians involved in ordering the drugs, Carpenter said. “Depending on the state, there can be a strict liability on product liability. What that basically means is if something's wrong with the product, it's easier to prove wrongdoing on the part of the physician or hospital. So it may be an easier claim to get some money for.”

Boroff's ruling holds relevance in Tennessee, which has a product liability law that required judicial insolvency before a strict liability case could be brought against a person who administered such injections or a company that bought them, said Michael D. Galligan, a Tennessee attorney representing Bryant. The judge's ruling is applicable to states other than Tennessee, depending on what their laws are, although not all states with strict liability laws have the same requirements on insolvency as Tennessee, he clarified.

Physicians might not be main target

Some observers said that bringing such claims against physicians might prove to be difficult. Frank B. O'Neil, senior vice president and chief communications officer for the national medical liability carrier ProAssurance Corp., said he has not found any prior instances in which physicians were held to have committed malpractice in the event they used an approved product in the normal course of providing medical treatment to a patient.

“That doesn't mean that there can't be lawsuits filed, and that doesn't mean that physicians won't need a strong defense, but in the past it has not been shown that physicians are held liable under product liability theory,” he said. Such a decision would bring up the question of whether physicians would be expected to test every drug they administer, he added.

continue to read here