A U.S. Bankruptcy Court judge ruled Wednesday against Cantrell Drug Co.’s request to stay a federal regulators’ civil lawsuit, which now threatens to put the Little Rock compounding pharmacy out of business.
Cantrell Drug, which is in Chapter 11 bankruptcy reorganization, had asked U.S. Bankruptcy Judge Phyllis Jones to put a 45-day stay on the lawsuit filed by U.S. Department of Justice, on behalf of the Food & Drug Administration, to stop Cantrell Drug from manufacturing or selling products the FDA alleged were unsafe.
Cantrell Drug argued that if Jones didn’t stay the lawsuit, “it will be forced to liquidate because it does not have sufficient cash reserves to allow it to continue for more than a week following the hearing,” according to Jones’ 49-page order.
But Steve Weintz, a spokesman for Cantrell Drug, said in an email to Arkanas Business Thursday that the company is still in business and “working hard to find a settlement with the FDA to continue operations.”
He also said that Cantrell Drug completed last month “an intensive thorough, and grueling inspection by the FDA. There has been no recall of any existing Cantrell product.”
Still, by going forward with the FDA’s lawsuit in U.S. District Court, Cantrell Drug said it thought its reorganization plans would be hurt, employees would lose their jobs and patients would not be supplied with their medications.
The FDA, though, said that filing a lawsuit against a compounding company was rare and done as a last resort to protect patients.
Cantrell Drug “adamantly disputes the United States’ allegations,” Jones wrote.
Jones ruled Wednesday that Cantrell Drug has already been hurt financially by the lawsuit and a March 1 FDA news release warning patients and customers not to use Cantrell Drug’s products.
Jones said that she didn’t believe that staying the lawsuit for 45 days, “in and of itself, will allow [Cantrell Drug’s] operations to return to levels needed for an effective reorganization. … A resolution of the issues between the parties is what is needed to avoid irreparable harm to [Cantrell Drug].”
Cantrell Drug also asked that Jones order the FDA to retract the March 1 news release.
Jones said that she couldn’t do that but ordered the FDA not to issue any more news releases against Cantrell Drug until there is a resolution in the district court case. The FDA, however, could file an emergency motion with Jones if some new risk of imminent harm to consumers arises.
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