Will the $100 Million Fund for Fungal Meningitis Outbreak Victims Suffice?

On May 6, 2014, the attorneys for victims of the 2012 fungal meningitis outbreak announced that a settlement figure had been reached and a motion for approval of a $100 million fund to compensate the hundreds of victims affected by the outbreak was filed. In 2012, pain shots that were contaminated with mold, which were distributed by the New England Compounding Center (NECC), caused at least 64 deaths and ultimately resulted in 751 reported cases of fungal meningitis in 20 different states, the worst outbreak of this kind in U.S. history. When the outbreak was initially discovered and the full impact of the effect of the contaminated shots were still to be determined, the investigation of who was affected and to what extent was reported in this blog. The issue is ripe for reconsideration now that the class action has commenced and settlement figures have been announced.

Fungal Meningitis

According to the CDC, fungal meningitis is a rare disease that is caused by the introduction of fungus through blood in the spinal cord. Although it may affect anyone, those with weakened immune systems due to such conditions as HIV infection or cancer are at a higher risk of contracting fungal meningitis. If appropriately and timely diagnosed, fungal meningitis can be treated with antifungal drugs which are typically introduced intravenously. However, the length of treatment varies considerably based on the status of the infected person’s immune system and the type of fungus that caused the infection.

Outbreak

After the patients who had received epidural steroid injections began to show symptoms of fungal meningitis and the source of the fungus was identified, the CDC teamed up with the FDA as well as state and local authorities to further investigate the epidemic. NECC, which is based in Framingham, Massachusetts, issued a voluntary recall of all products that were distributed from the Framingham facility. Eventually, it was determined that NECC shipped vials of the drug methylprednisolone that were infected with mold. These vials were injected into the spinal columns of patients across the country and reports of infections were made in many states, yet large numbers of outbreaks appeared to be concentrated in a handful of areas. Michigan, Indiana, and Tennessee reportedly experienced the most cases of fungal meningitis, with 264, 93, and 153 being reported in each state respectively.

Settlement

The attorneys  representing the victims in the class action that resulted from the outbreak, which include those actually infected by the contaminated shots as well as the families of those who died as a result of the use of those shots, negotiated a settlement that would require the creation of a $100 million fund to compensate those affected individuals. Because the NECC has declared bankruptcy since the outbreak, the fund would be comprised of personal contributions from the owners of NECC as well as funds from an insurer of NECC—Ameridose—and a related company, Pharmacists Mutual and Maxum.

Issues

While Kristen Johnson, the lead attorney of the Plaintiff’s steering committee, which is also representing the victims in the matter, declared that, “[t]his is a good recovery given the reality of the bankruptcy,” she qualified that statement noting: “but it isn’t nearly enough to make up for all that the victims and their loved ones have suffered.” Indeed, reports have identified that of those living victims, many still are required to take powerful antifungal drugs to this day. Moreover, the attorneys of the victims are continuing to seek out potential liable parties that may ultimately be required to contribute to the $100 million fund including UniFirst, a company responsible for controlling contamination, as well as individual providers that distributed the shots. Finally, it must be noted that the settlement has just been submitted to the court for its approval. Reports indicated that these settlement terms had been agreed upon as early as December of last year but were not filed for approval until recently. While it appears that approval of the settlement is forthcoming, the actual distribution of the funds is not expected until at least 2015.