Woburn drug maker may stop making sterile injections

Interim health commissioner Dr. Lauren Smith testified before the Joint Committee on Public Health on Tuesday.
Interim health commissioner Dr. Lauren Smith testified before the Joint Committee on Public Health on Tuesday.

The owner of a Woburn specialty pharmacy that recalled two dozen drugs after the discovery of ­unidentified contaminants told regulators Tuesday that he was uncertain whether he would continue mixing sterile injectable medications and eye solutions, the riskiest kind of compounded drugs.

Making his first public appearance since last month’s recall, James Nahill, owner of ­Pallimed Solutions Inc., testified for more than two hours before the Massachusetts Board of Registration in Pharmacy about three problems found earlier. They included production of a super-potent batch of painkillers last year that left two patients hospitalized.

As Nahill was grilled by regulators, legislators on Beacon Hill reviewed proposals to more tightly regulate the compounding industry following last year’s ­national fungal meningitis outbreak. ­Steroids made by New England Compounding Center in Framingham sickened 730 people, including 51 who died.


The Joint Committee on Public Health is reviewing several bills on compounding pharmacies, which custom mix drugs for patients who need doses or formulations not available off-the-shelf. Legislation proposed by Governor Deval Patrick would, among other things, change the makeup of the Pharmacy Board to include more members who are not pharmacists and require pharmacies located out of state to be licensed in Massachusetts before distributing drugs here.

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At the pharmacy board meeting, Nahill — between sometimes flippant and evasive answers — said that an inspection of his facility by federal and state regulators March 22 has made him a better compounder.

“Despite the obvious elephant in the room, the Board of Pharmacy and FDA inspections have been enlightening,” Nahill said.

“What we thought we knew, the FDA brought us to a whole new level,” Nahill said. “We are not sure we are going to continue with sterile compounding, but it applies to our nonsterile work.”

Last month, state regulators called in the Food and Drug Administration after waiting months for Pallimed to submit acceptable plans for correcting problems discovered at the company dating back to 2011. Inspectors found contaminants in a number of vials, and tests to identify them are pending. ­Pallimed was ordered to halt production of all drugs that do not require sterile processing.


Regulators in November ­accused Pallimed of producing Viagra from ingredients that were intended for use only in animals and of violating an April 2012 agreement it signed with its supplier that stipulated the ingredients were to be for veterinarian-use only.

Former Pallimed pharmacist Justin McDowell testified Tuesday that Nahill knowingly violated the April agreement.

“I discussed it with Jim, and he said he would take care of it and instructed me to fill it out and fax it back,” McDowell said.

Nahill denied that, and told pharmacy board members he was unaware of the agreement until accused by regulators of the violation months later.

The regulators also grilled Nahill about apparently violating state rules that prohibit pharmacists from compounding drugs, such as Viagra, that are commercially available from a manufacturer. Nahill denied that, saying he provided only special formulations without lactose and starch for ­patients who cananot tolerate those ingredients.


But state investigative reports provided to the Globe show that of 187 Viagra prescriptions investigators reviewed that were compounded by Pallimed between April and August last year, just 15 were specially formulated.

Nahill defended his actions to regulators, saying that his company provides “salvage therapy” to desperate men suffering from erectile dysfunction.

Board members deferred ­action on most of the pending complaints against the company, but did vote to issue a one-day probation to Pallimed pharmacist Michael Costanzo, who formulated lidocaine painkiller in February 2012 at nine times the prescribed strength, causing an 82-year-old patient and a 60-year-old to be hospitalized for one day.

The action is not considered discipline, so Costanzo will not be required to disclose it to other states or prospective employers, the board said.

At the legislative hearing, Representative Jeffrey Sánchez, said Pallimed’s drug recall was especially troubling because the company was “touted to me as a model compounder.”

Last November, Sánchez toured Pallimed’s facility at the suggestion of the Massachusetts Independent Pharmacists Association as he tried to learn about the industry following the fungal meningitis outbreak.

“I am more concerned now than ever,” said Sánchez, a Democrat from Jamaica Plain who is House chairman of the Joint Committee on Public Health.

He later challenged Todd Brown, executive director of the independent pharmacists group, on why he used Pallimed as an example.

“We never held that pharmacy up as a model,” Brown said.

He said he had suggested Sánchez tour the facility ­because it was the only member of the association “that was remotely similar to [New England Compounding],” in its practice of sterile compounding.

Committee members questioned trade group leaders and hospital pharmacy directors on whether the state should ­require continuing education for compounding pharmacists and whether annual inspections are enough to make sure pharmacies are meeting safety standards.

Kevin Outterson, a Boston University law professor who sat on a special commission on compounding pharmacies created by the governor, urged lawmakers to create a hot line that pharmacy employees could use to alert regulators to any problems.

Other states are watching, he said.

Kay Lazar can be reached at Follow her on Twitter @GlobeKayLazar. Chelsea Conaboy can be reached at cconaboy@
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