In a decision heavy on complex legal analysis and discussion of the issue of “legal impossibility,” District Judge Richard G. Stearns overturned unanimous jury verdicts and issued judgments of acquittal for defendants Gregory Conigliaro and Sharon Carter, both formerly affiliated with the New England Compounding Center (NECC).

NECC was the compounding pharmacy behind a massive and nationwide outbreak of fungal meningitis that sickened hundreds and was traced to tainted steroid medications shipped out from NECC’s Boston facility in the latter months of 2012 and early 2013. In all, over 700 fell ill and, by the CDC’s estimate, 64 people died.  The subsequent investigation demonstrated that NECC not only operated in a filthy, unsanitary environment, but that it compounded, sold, and shipped drugs to persons without valid prescriptions, and that those drugs contained expired or contaminated ingredients. More than 17,000 vials of the steroid were shipped from the pharmacy to dozens of hospitals and other medical facilities nationwide.

Conigliaro, once part owner of NECC, and Carter, NECC’s former Director of Operations, were convicted by a jury of conspiring to defraud the United States Food and Drug Administration (FDA).

The judge’s decision to grant the defendants’ motions for judgment of acquittal turned on his analysis of the issue of “legal impossibility.”  Essentially, legal impossibility occurs “when the actions which the defendant performs or sets in motion, even if fully carried out as he desires, would not constitute a crime.”

In the context of the NECC case and defendants Conigliaro and Carter, the question of their convictions for conspiracy to defraud the FDA came down to the judge’s determination that, as a compounding pharmacy and not a drug manufacturer, the FDA did not have the clear authority to regulate the activities of NECC. As discussed at great length in the decision, the FDA’s authority to regulate compounding pharmacies at the time of the outbreak, especially those that seemed to function more as drug manufacturers than pharmacies, was hampered by a legal framework, as well as split decisions in the circuit courts, that did not permit the FDA to identify and regulate them, there being no federal statute in effect that expressly provided for the FDA to regulate compounding pharmacies. In Stern’s words, “….during the critical times, these defendants (and NECC) could not have defrauded the FDA by interfering with the relevant regulatory functions because there were none to speak of.”

Before Stearns’ ruling last week, only one of the 14 defendants in the NECC case was acquitted.

Since the 2012/2013 outbreak, Congress and FDA have taken additional measures to address the safety of compounded human drug products under the Drug Quality and Security Act of 2013 (DQSA). Should you have any questions regarding this alert or the operation of the DQSA as it applies to your business, please do not hesitate to contact any of the FisherBroyles Health and Pharmacy Law attorneys listed below.

Brian Dickerson, FisherBroyles Partner
Brian E. Dickerson
brian.dickerson@fisherbroyles.com
202.570.0248

Anthony Calamunci, FisherBroyles Partner
Anthony Calamunci
Anthony.calaunci@fisherbroyles.com
419.376.1776

Nicole Waid, FisherBroyles Partner
Nicole Hughes Waid
nicole.waid@fisherbroyles.com
202.906.9572

Amy Butler, FisherBroyles Partner
Amy Butler
amy.butler@fisherbroyles.com
419.340.8466