By Tim McLaughlin and Bill Berkrot
BOSTON/NEW YORK, Oct 19 (Reuters) - Executives at the Boston-area pharmacy whose injectable steroids have been linked to a deadly U.S. meningitis outbreak have been sued in an action aimed at freezing their personal assets, while the death toll on Friday rose to 21 with more than 260 cases of infection reported.
Peter McGrath, a lawyer who is a former federal prosecutor, said he was spearheading a civil case that alleges Massachusetts-based NECC and company officers Barry and Lisa Cadden and Greg Conigliaro are responsible for the tainted drugs. The lawsuit was filed on behalf of an unnamed plaintiff in Middlesex County Superior Court in suburban Boston, court records show.
"We want to pierce the corporate veil and go after the individuals," McGrath said Friday in a telephone interview.
Fourteen new cases of fungal meningitis in patients who received the contaminated steroid injections for back pain were reported on Friday, bringing the total to 268, and the death toll rose by one to 21, the U.S. Centers for Disease Control and Prevention said.
There were four new cases each reported in Michigan and Florida, one each in Indiana, Ohio and Virginia, and three in Tennessee, which has been the hardest hit of the 16 states with confirmed cases. The latest death was in Michigan, its fifth.
There have also been three cases of peripheral infections from injections into joints.
Florida surgeon general John Armstrong said Friday that NECC would no longer be allowed to do business in the state.
"The company will cease to operate as a pharmacy in our state, immediately," Armstrong said. "Further, the NECC may never re-apply for a pharmacy permit in the state of Florida."
U.S. health regulators confirmed on Thursday the presence of the deadly Exserohilum fungus in vials of the NECC steroid used for the pain injections. They estimate that as many as 14,000 people may have been exposed to the contaminated medication.
Three potentially contaminated lots of the drug, methylprednisolone, were shipped to 76 facilities in 23 states. After confirming contamination in one of the three lots, the U.S. Food and Drug Administration and the CDC said they are checking the other two lots for the fungus, as well as additional injectable NECC drugs as a precautionary measure.
A Tennessee clinic that received more potentially contaminated steroid than any facility in the nation temporarily closed to cope with the fallout from the outbreak. The Nashville clinic received 2,000 vials of the NECC drug.
Federal authorities are investigating how NECC supplied hospitals, clinics and other healthcare providers with large orders of compounded drugs and whether it violated state laws regulating pharmacies.
The FDA and CDC said about 97 percent of potentially exposed patients have been contacted so far. The agencies cautioned doctors and patients to be on the lookout for potential meningitis symptoms for months after injections.
According to a paper published online Thursday in the Annals of Internal Medicine based on a 2002 outbreak of fungal meningitis linked to contaminated steroids, the incubation period from exposure could be up to six months.
Doctors also warned that early diagnosis and treatment with a powerful antifungal drug was vital to prevent meningitis from attacking the brain.
In the lawsuit filed in Massachusetts, the plaintiff identified as "John Doe" is seeking a court order on Nov. 6 to freeze the assets of NECC and the named officers. Such a "prejudgment remedy" is allowed in Massachusetts state courts during pending litigation.
"My clients are in a lot of pain," said McGrath, whose New Hampshire-based firm is representing several people injured in the meningitis outbreak. NECC's public relations firm did not return a call seeking comment.
Members of the Boston-area family who own the pharmacy and related companies spent several million dollars on luxury homes in the months before U.S. authorities shut down their operations. Greg Conigliaro is a recycling entrepreneur who joined forces with his pharmacist brother-in-law, Barry Cadden, and other family members to start NECC in 1998. His sister Lisa is also a pharmacist and is married to Cadden.
The real estate transactions, disclosed in publicly available deeds filed in March and April, provide a glimpse into the Conigliaro family's fortune before authorities moved in and shut down the pharmacy operations of NECC and Ameridose LLC, a related, but larger drug manufacturer and compounder.
In March and April, Greg Conigliaro paid $2.4 million for a beach front home on Cape Cod, while his brother Doug Conigliaro paid $4.2 million for a penthouse condo on Beacon Street in Boston's tony Back Bay neighborhood, the deeds show.
About the same time, a real estate venture owned and managed by the two brothers paid $4.6 million to buy the state-of-the-art facility that Ameridose used to win new customers and rapidly expand its business, real estate records show. Ameridose previously leased the building.
Ameridose said Friday that the Massachusetts Board of Registration in Pharmacy requested an extension of its closure to allow authorities to continue and complete an inspection that has been under way since Oct. 10.
Ameridose products have not been linked to the meningitis outbreak. "As this extension agreement states, neither the Board nor the Registrants are aware that any product compounded or produced by the Registrants is in any way unfit for use or consumption," Ameridose said in a statement.
Doug Conigliaro, who is president of Medical Sales Management, the sales arm for NECC and Ameridose, is not named in the lawsuit filed in Middlesex County.
The Caddens, Greg Conigliaro and Doug Conigliaro did not immediately respond to messages seeking comment. (Additional reporting by Aaron Pressman, Toni Clarke, David Bailey and Michael Peltier; Editing by Gerald E. McCormick, Lisa Von Ahn, Andre Grenon and Leslie Adler)