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State to review pharmacy monitoring

Pharmacy’s monitor faced fraud charges

In 2006, Massachusetts regulators responded to complaints about the New England Compounding Center by enlisting an Illinois firm to review the operations of the pharmacy now at the center of the national meningitis outbreak. The chief executive of that firm, the Globe has learned, was awaiting trial on a fraud indictment.

Pharmacy Support Inc., founded by Ross A. Caputo, ­inspected the Framingham ­facility and eventually found it to be satisfactory, helping it avoid probation by the state pharmacy board. Caputo was later convicted and imprisoned for fraud, involving a product blamed for blinding people.

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A spokesman for Governor Deval Patrick said in a statement Monday that his administration is investigating regulators’ “troubling” choice of PSI, a selection he said was made during Governor Mitt ­Romney’s administration.

Also on Monday, federal officials released a list of almost 1,300 New England Compounding customers, including 75 Massachusetts hospitals, doctors offices, and clinics. Late Monday night, the Food and Drug Administration ­removed the list, saying it had found technical problems and “the data are incorrect.”

None of the drugs shipped to Massachusetts facilities ­included vials of the injectable steroid contaminated with a fungus and blamed now for sickening 297 people and killing 23.

Pharmacy board records posted on the Massachusetts Department of Public Health website Monday included a number of complaints against New England Compounding dating back to 1999, including instances when health providers said the pharmacy urged them to use nurses’ names ­instead of patient names to ­facilitate bulk shipments of drugs, a practice not allowed by state law. Yet the board took little disciplinary action against the company, the records show.

Partly as a result of the complaints, New England Compounding was inspected by state and federal health officials in 2002, 2003, and 2004. In a letter Monday to the company’s lawyer, Paul Cirel of ­Boston, congressional investigators said that activities ­observed during those inspections call into question whether the company was operating “on a commercial scale as a drug manufacturer,’’ which would have violated its pharmacy ­license.

The letter from Representative Fred Upton, a Michigan Republican and chairman of the House Committee on Energy and Commerce, and other committee members said the panel hopes to determine why the pharmacy was able to operate in this manner for so long.

They demanded a wide range of documents from Cirel and personal e-mails from pharmacist Barry Cadden, co-owner, president, and pharmacy director of the now-closed company.

The state documents show that New England Compounding repeatedly violated Massachusetts rules that prohibit compounders from mass producing and distributing products. In September 2004 the Massachusetts Board of Registration in Pharmacy resolved four complaints — from Iowa, South Dakota, Texas, and ­Wisconsin – against New ­England Compounding and Cadden, for circumventing state rules to market the company’s products to out-of-state physicians and pharmacists.

State rules require compounders to fill specific prescriptions for specific patients, but all four complaints were ­resolved with advisory letters that expressed regulators’ concern with the company’s conduct.

In April 2004, the board ­received a complaint from a Wisconsin plastic surgery practice that New England Compounding told the practice that it could use the name of a staff member when purchasing an anesthetic cream, instead of supplying specific patient names for each order.

When a technician with the Wisconsin company questioned the legality of that ­approach, a New England Compounding official, whose name is blacked out from the document, “assured her it was legal,” according to the comploaint.

“He indicated that after we received the product it was up to us how we used it and to whom it was administered.”

Months earlier, in February, state regulators inspected New England Compounding and concluded it was complying with the requirement that all medications produced by the company were mixed for a specific patient, records indicate.

But logs kept by the company and provided to the state ­indicate that it was mass producing drugs, said an official of a pharmacists trade group who reviewed the records at the Globe’s request.

One log, from April 10, 2003, indicates the company produced 300 vials in one batch of an injectable steroid, betamethasone. The pharmacist who logged that batch was Cadden.

“I don’t know if the inspectors looked at the compounding logs, but if they had, it’s hard to imagine how you could make the conclusion that they were compounding based on individual prescriptions,” said Todd Brown, executive director of the Massachusetts Independent Pharmacists Association, a trade group that represents most compounders.

In response to the documents released Monday, New England Compounding issued a statement saying the company “worked cooperatively with the Massachusetts Board of Registration in Pharmacy to resolve to the board’s satisfaction any issues brought to the company’s attention.”

In January 2006, the company signed a consent agreement with the board, requiring it to be monitored by PSI.

Caputo was one of three PSI employees who inspected New England Compounding that month. PSI initially found problems at the company, includ­ing with its sterilization procedures, but eventually said New England Compounding had made satisfactory improvements. Under the agreement, that helped the company to avoid a one-year probation.

By that time, Caputo had long been the subject of a federal investigation. He was indicted in federal court in 2003 in connection with falsely marketing a sterilizer, a product linked to blindness in patients, to hospitals while he ran another company, according to court ­records and news reports.

Caputo, chief executive of the now-defunct AbTox Inc., and three other executives were accused of falsely marketing a sterilizer to hospitals as a product approved by the Food and Drug Administration. Caputo was convicted April 13, 2006, and was sentenced to 10 years in prison that September.

Some hospitals used the ­device to sterilize a small tube used during eye surgery. But acid used in the sterilizer reacted with copper in the tubes, creating a substance that damaged the cornea and led to blindness in 18 people, Assistant US Attorney Michael ­Gurland said at the sentencing hearing, according to published reports.

A New England Compounding spokesman, Andrew Paven, said Monday that the firm agreed to pay for an independent evaluator and monitor, but PSI was the board’s choice.

The documents the state posted online show a consent agreement proposed by the pharmacy board in 2004 included an official reprimand and a minimum three-year probation period for New England Compounding and Cadden.

Cirel, the company’s lawyer, protested in a November 2004 letter that the proposed sanctions would be “potentially ­fatal to the business,” which was licensed at that time in 44 states, according to the records.

The board ultimately agreed to drop the reprimand and reduce the probation period in the final agreement to one year, and ultimately the firm avoided even that penalty.

The records also show that New England Compounding and Ameridose, a pharmaceutical company that has the same owners, shared the same distribution facility in Westborough for at least some products.

In May, Ameridose said it planned to use a new facility in Westborough as a joint distribution center for Ameridose, New England Compounding, and a sister company, Alaunus Pharmaceutical. The document was signed by Gregory Conigliaro, the entrepreneur who co-owns all three firms, along with a Framingham recycling business and other ventures.

Todd Wallack of the Globe staff contributed to this story. Liz Kowalczyk can be reached at kowalczyk@globe.com. Kay Lazar can be reached at ­klazar@globe.com
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