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Co-owner of pharmacy in deadly outbreak pleads not guilty

Bruce Singal, attorney for owner Barry Cadden, was swarmed by the media outside the courthouse on Wednesday.
Bruce Singal, attorney for owner Barry Cadden, was swarmed by the media outside the courthouse on Wednesday.Pat Greenhouse/Globe Staff/Globe Staff

Barry Cadden, former president and head pharmacist at a Framingham company that produced tainted drugs blamed in the deaths of 64 people, made $62 million from 2010 to 2012 while routinely flouting federal safety regulations, an FBI agent testified Thursday.

At a hearing in US District Court in Boston, FBI Special Agent Clayton Phelps testified that Cadden oversaw the entire operation at the now-closed New England Compounding Center Inc., from manufacturing to distribution, and knowingly sidestepped testing procedures and in one instance used ingredients that had expired several years earlier.

“He was into everything that occurred,” Phelps said.

Cadden and Glenn Chin, the company’s supervisory pharmacist, are charged with 25 counts of second-degree murder in seven states related to a 2012 fungal meningitis outbreak that disease investigators say was sparked by contaminated steroids from the compounding center.

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A dozen other people, including six of the company’s pharmacists, face a 131-count indictment that alleges the company operated like a criminal enterprise, with profit placed above basic health and safety standards.

Cadden and Chin pleaded not guilty Thursday, as their lawyers argued they should not be held in custody while awaiting trial. Prosecutors said the case against the two men was exceedingly strong, and that they could spend the rest of their lives in prison.

“The weight of evidence in this case is overwhelming,” prosecutor George Varghese said.

Later Thursday, Chief Magistrate Judge Jennifer Boal ruled that the men would not be detained, and scheduled a hearing Friday for conditions of their release.

Under questioning from a prosecutor, Phelps testified that in August 2011, Cadden told Chin to label untested drugs as if they had been tested to “cover our ass.”

Barry J. Cadden
Barry J. CaddenWrentham Police Department

“Bottom line is we can’t be caught with our pants at our ankles,” Cadden wrote.

In a December 2011 e-mail, Chin wrote Cadden that they had some amount of a powder left, but that it had expired in 2007.

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“When I say old I mean OLD,” Chin wrote. “We make it for our injectables and we send it out for testing and it comes out pretty close . . . I would probably guess that it’s at about 90 to 95 percent potent.”

Phelps, one of about a dozen federal agents who have investigated the company, also testified that in July 2012, the company sent 150 syringes to an Illinois hospital before the medicine was tested by an independent lab. Tests showed that the drugs were not sterile, but they had already been shipped, Phelps said.

After the company learned about the test results, Cadden wrote another employee about how to handle the situation.

“Obviously do not discuss with him,” he wrote, apparently referring to the microbiologist who had contacted the company about the test results. “I do not see anything else to do . . . just tell him it’s easier and cheaper to just discard lot and remake if u need to tell him anything. No more investigation.”

Phelps said Cadden and Chin continued operations even after discovering mold in the facility, including a “fungal bloom” in June 2012. Interviews with former employees revealed that Chin told employees to sign false cleaning reports, he said.

From May through September 2012, more than 17,000 vials of methylprednisolone acetate, a steroid commonly injected into a patient’s spine to reduce back pain, were prepared in the company’s contaminated labs and shipped to customers across the country, authorities said.

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At least 64 people died, and more than 700 people fell ill.

At the hearing, lawyers for Cadden and Chin objected to the detailed presentation of evidence, saying the hearing should focus on whether the defendants pose a flight risks or a threat to public safety.

Although he had long expected to be indicted on serious charges, Cadden has made no effort to evade authorities, Singal said. Efforts to detain him until the trial were “a vast overreach,” he added.

Singal said Cadden had been expecting to be indicted for weeks, and had taken to waking up at 4 a.m. in anticipation of federal agents arriving at his house.

Chin’s lawyer, Stephen Weymouth, said Chin has not attempted to flee despite being arrested in September as he and his family prepared to fly to Hong Kong. Authorities had set up an alert to notify them if the men attempted to board a plane, Phelps said.

Varghese focused on the charges against the two men, and Phelps, the FBI agent, described how an Indiana woman died from meningitis after receiving a tainted injection from the Framingham company. She died of a brain hemorrhage, Phelps said.

“The nature of these charges is incredibly severe,” Varghese said. “The evidence is voluminous.”

John R. Ellement and Martin Finucane of the Globe staff contributed to this report. Peter Schworm can be reached at schworm@globe.com.