In Wake of NECC Tragedy, Senate Unanimously Approves Compounding Pharmacy Legislation

Contact: Joy Yearout 517-373-8060

May 13,  2014


LANSING - Attorney General Bill Schuette today praised the Michigan Senate for passing legislation which will strengthen oversight of compounding pharmacies.  Senate Bills 704 and 904, sponsored by Senator Joe Hune, (R-Brighton) were passed unanimously by the Senate today with a 38-0 vote and now heads to the House of Representatives for consideration. 

The legislation, introduced last December, follows a comprehensive review of existing state regulations and statutes in the wake of the meningitis outbreak linked to New England Compounding Center (NECC), a now-defunct Massachusetts company, which allegedly distributed tainted steroid injections to patients at clinics in four Michigan counties: Genesee, Livingston, Macomb and Grand Traverse.  Michigan patients were hit hardest by the multi-state outbreak, with 264 infections and 22 deaths according to the most recent official tallies recorded by the Centers for Disease Control and Prevention and the Michigan Department of Community Health.

"This tragedy, where hundreds of Michiganders suffered from infections and sadly, some even lost their lives, could have been deterred with higher standards and requirements in place for compounding pharmacies," said Schuette. "We owe it to these victims to put policies in place ensuring that a disaster of this magnitude does not strike twice.  This legislation will hold every compounding pharmacy operating in the state of Michigan responsible for the drugs they distribute and ensure pharmacists put patient safety first."

Senate Bills 704 and 904

            Senator Hune, who represents Livingston County, one of the four Michigan counties hardest hit by the meningitis outbreak, worked with Schuette to introduce SB 704. The legislation will add the following four safeguards, among others, to Michigan law governing pharmacies, and compounding pharmacies in particular:

  1. Accountability at the Top:  All pharmacies must have a "Pharmacist-in-Charge" who is licensed and responsible for ensuring the pharmacy follows state laws and regulations.

  2. Accurate Record-Keeping:  Compounding pharmacists must maintain a record for all sterile compounded drug products detailing the product's name, strength quantity and dosage, formula to compound, date of preparation, identifying prescription number, manufacturer and lot number of each ingredient, name of the person who prepared the compound, and the name of the pharmacist who approved the compound.  

  3. Background Checks:  Criminal background checks will be required for pharmacy owners who are not yet licensed, and for those licensed prior to October 1, 2008.

  4. Regular and Robust Oversight:  Pharmacies, manufacturers and wholesalers engaged in compounding will submit to regular inspections by state authorities at least once during each two-year licensing cycle.

Senate Bill 904 amends the Pharmacy Practice and Drug Control section of the Public Health Code and is tie-barred to SB 704.

Immediate Action Following the Meningitis Outbreak

On October 12, 2012, following verified reports that NECC was responsible for the meningitis outbreak, Schuette acted to suspend the company's pharmacy license in the state of Michigan.  In a formal Complaint and Order of Summary Suspension filed with the Department of Licensing and Regulatory Affairs, Schuette alleged that NECC acted as a "drug manufacturer" – not a compounding facility – by distributing large amounts of medication to various hospitals and clinics in Michigan.  The company had only been licensed to fill individual prescriptions for Michigan patients as a compounding facility.  NECC's license was suspended and the company was forced to cease operations in Michigan. 

On December 12, 2012, the Michigan Board of Pharmacy Disciplinary Subcommittee formally agreed to the license surrender, and NECC voluntarily surrendered their Michigan pharmacy and controlled substance licenses.  As a result, NECC can no longer do business in the state of Michigan, and its surrender was reported as a disciplinary surrender to other states.  Because the order provides that the surrender is based on a breach of Michigan's Public Health Code, the State of Michigan can deny licensure to any individual who had a financial interest in NECC and applies for a new pharmacy license in the future. 

 State Criminal Investigation Against NECC Remains Ongoing

In April 2013, the Michigan Court of Appeals granted Schuette's historic request to empanel a multi-county grand jury to investigate the fungal meningitis tragedy.  This was the first multi-county grand jury request to be made by an Attorney General and granted by the Court in the state's history. 

The multi-county grand jury's first six month term has since expired, but Schuette reserves the right to petition the presiding judge to reconvene it in the future, if necessary.  Evidence already uncovered by the grand jury may be used in ongoing investigations, and grand jurors remain sworn to secrecy.

In November 2013, Schuette announced a landmark agreement with U.S. Attorney Carmen Ortiz, of Massachusetts, which allows state and federal investigators to coordinate and conserve resources as they advance independent, parallel state and federal investigations into the tragedy.  Schuette's investigation remains ongoing.

Michigan Impact to Date

As of October 23, 2013, the Michigan Department of Community Health (MDCH) reports Michigan citizens have been hardest hit, with 264 infections and 19 deaths.  Three additional deaths of Michigan residents who received treatment at an Indiana clinic are listed in Indiana patient counts, due to the location where they received the tainted treatments.  The latest CDC reports can be viewed online:

On October 6, 2012, NECC issued a recall of all its products currently in circulation that were produced and distributed from its facility in Framingham, Massachusetts. 

Other Tainted Drug Cases

On Tuesday, October 29, 2013, following a report of tainted dextrose injections distributed by a South Lyon pharmacy, Schuette's office filed a Complaint and Order of Summary Suspension with LARA alleging that Specialty Medicine Compounding Pharmacy was acting as a drug manufacturer by distributing large amounts of medication to various hospitals and clinics in Michigan, including Henry Ford in October 2013.  Veterinarian clinics may have also received the tainted drugs.  The pharmacy was only licensed to fill individual prescriptions for Michigan patients. 

Following an investigation, LARA confiscated all controlled substances at the facility in South Lyon, and Specialty Medicine Compounding Pharmacy has ceased operations.  Last month, Schuette announced that Specialty Medicine Compounding Pharmacy and its owner, Kenny Walkup, will together pay $100,000 in state fines and submit to the formal sanctions of license revocation for Walkup and permanent surrender for Specialty Medicine. 

Schuette is continuing to review whether additional legal action is warranted in connection to reports of tainted dextrose injections allegedly manufactured and distributed by Specialty Medicine Compounding Pharmacy.  Staff at Henry Ford Hospital in Detroit recognized foreign objects floating in the vials, and following laboratory confirmation of the contaminate, reported the incident to the Food and Drug Administration and sent a copy of the report to the Department of Licensing and Regulatory Affairs' Bureau of Health Care Services on October 17, 2013.  To date, there have been no reports of illness related to the drug.

More information can be found on the FDA website: FDA announces voluntary recall of certain sterile products from Specialty Medicine Compounding Pharmacy