The namesake facility operated by Cantrell Drug Company, owned by Dr. James L. "Dell" McCarley Jr. (inset) and his wife Lynn.
Cantrell Drug Co. of Little Rock and federal regulators reached a settlement in U.S. Bankruptcy Court Friday morning in a legal fight that had threatened to close the drug compounding company.
Cantrell Drug, already reorganizing under bankruptcy court protection, went to court on Wednesday to prevent the U.S. Food & Drug Administration from going forward with a lawsuit filed Feb. 28 to stop Cantrell’s production and distribution of compounded drugs.
The terms of the settlement call for Cantrell Drug to remain open and for the FDA to reinspect its operations during a 10-day period, said Will McCarley, a spokesman for Cantrell Drug. A date hasn’t been set for when the inspection will begin.
Cantrell Drug will be able to make drugs during the inspection period but won’t be allowed to ship them until after the company receives FDA approval.
“This will give us a chance to show them … that we really are compliant,” and that Cantrell’s drugs are sterile and safe, he said. “Cantrell really felt that the FDA wasn’t listening to us, and we felt that there was a communication problem.”
On Feb. 28, U.S. Department of Justice, on behalf of the FDA, sued to stop Cantrell Drug and McCarley from manufacturing or selling products the FDA alleged were unsafe.
The day after the lawsuit was filed, the FDA issued a news release that said that federal regulators were seeking a preliminary injunction to stop Cantrell’s production and distribution of compounded drugs.
“Health care professionals should immediately check their medical supplies, quarantine any drug products from Cantrell Drug Co. and not administer them to patients,” the news release said. “Patients who have received any drug product by Cantrell and have concerns should contact their health care professional.”
The fallout from the news release has been “devastating” to the company, James L. McCarley Jr., the CEO of Cantrell Drug, testified Wednesday during a hearing in U.S. Bankruptcy Court in Little Rock. He said that 20,000 pharmaceutical compounds that were in the process of being made were canceled by health care providers.
Will McCarley said Friday that he didn’t know if the FDA was going to issue a new press release.
But he said he said he thinks the company’s sales will rebound.
“It’s going to take a lot of work to get back to where we were,” McCarley said. “We do have a lot of hospitals and hospital systems that are really depending on morphine. … So I think that’s going to help us rebuild our customer base.”
Hearing
Cantrell Drug’s bankruptcy attorney, Kevin Keech of Little Rock, said Cantrell Drug’s products were sterile. “Not one single patient has been hurt” by Cantrell Drug’s products, he told U.S. Bankruptcy Judge Phyllis M. Jones on Wednesday in a courtroom packed with more than 40 of Cantrell Drug’s employees.
Keech wanted Jones to order the FDA to retract the news release and prevent the DOJ from going forward for at least 45 days with its civil lawsuit in U.S. District Court in Little Rock.
“Cantrell Drugs is not going to make it to next week,” Keech said Wednesday. He said that the company would then move to bankruptcy liquidation and McCarley would have to file for personal bankruptcy.
Raquel Toledo, an attorney for the DOJ, told Jones during the hearing that Cantrell’s products posed a “serious risk” to patients’ health and the company “doesn’t seem to realize that.”
She said that taking steps to shut down a drug compounding company was “extremely rare” and the FDA is shutting down Cantrell Drug because of the unsanitary conditions at the company.
“The government doesn’t take this step lightly,” she said. But Cantrell Drug has “brought it on themselves,” Toledo said.
Problem With Microbes
Microbiological contamination of injectable drug products “is a significant problem,” according to a Feb. 28 statement from Brooke Higgins, a compliance officer and senior policy adviser at the FDA. Her statement was included in the DOJ’s court filings.
Higgins said her review of FDA inspections of Cantrell Drug’s facility in Little Rock found “that all of Cantrell’s compounded drug products intended to be sterile are at risk of contamination.”
She also accused the company of failing to follow its written procedures to prevent contamination of drug products purporting to be sterile.
In its lawsuit, the FDA said it had “no confidence” in the reliability of the data reported by Cantrell employees. “For example, during the 2017 inspection, FDA investigators observed microbial growth on environmental monitoring plates that Cantrell employees recorded as containing no growth,” Higgins wrote.
A 2016 inspection led to Cantrell Drug voluntarily recalling certain products “due to lack of sterility assurance,” according to a Cantrell Drug news release. In July 2017, Cantrell Drug made a similar announcement, but this time it was for all sterile drug products. McCarley said the recalls led to the company filing for bankruptcy reorganization in November, listing $7.46 million in debts and $15.1 million in assets.
Still, the company said it has seen financial improvement since the bankruptcy filing. It has hired about 25 people, bringing the total to about 85, and had seen its sales improve. In January, it reported sales of $1.4 million, up from $1.1 million in December, according to the company’s most recent monthly operating report on file.
But after the FDA news release on March 1, sales have been “decimated” and were reduced by 100 percent, McCarley testified Wednesday.
The company had projected it would have $340,000 a week in sales.
“My honest desire is to do things right and fully comply with all the FDA’s regulations,” McCarley wrote in a March 1 news release. “I’ve dedicated the last 12 months and most of my life’s savings trying to satisfy the Agency.”
Sign up for Daily E-news
