NECC insider describes fraud at heart of meningitis outbreak

(CBS News) Forty-eight people are dead, and hundreds are being treated after the worst pharmaceutical disaster in decades. It started last fall, when a pharmacy called New England Compounding Center, known as NECC, shipped contaminated steroids to 23 states.

On Thursday night's broadcast of the "CBS Evening News," an NECC lab technician became the first to reveal what happened there. Tonight, as part of a "60 Minutes" investigation, another company insider explains how they mass produced drugs without the oversight of the FDA.

The steroid made by NECC was injected into nearly nearly 14,000 Americans seeking relief from pain. It was contaminated with fungus. Many patients we met have been hospitalized repeatedly over months for treatment with brutal anti-fungal medications.

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"The medicine is just unbearable," one patient told us.

Asked to describe the effects of the anti-fungal medications, another patient said, "The horrible hallucinations -- I would see people's faces and their shapes would change, and the next thing I would see would be, like, legs and feet flying around."

NECC was exempt from FDA oversight because it was a so-called compounding pharmacy, limited by law to making specialty drugs for individuals -- one prescription at a time. So why had it shipped 17,000 vials of toxic steroid?

Watch: NECC lab technician says greed, sloppiness contributed to meningitis outbreak, below.

A salesman for NECC told us the company sent drugs nationwide to 3,000 hospitals and clinics. The necessary prescriptions, he said, were often fraudulent. Clinics provided pages of names -- any names.

"Bart Simpson, Homer Simpson, that we -- those ones did raise red flags, and we told to call our client back and say, 'Hey, give us different names,'" the salesman said. "The follow-up names would be like a John Doe, Jane Doe, Bill Doe, you know, Jane Smith, Bill Smith, et cetera."

He said it was obvious the actions were not above board.

"I mean, if you're in your position, if you're a buyer, and your job is to save money, and you're gonna get a brand name for $40, and we're gonna offer you a $20 vial for the same drug, same size, same everything -- what are you gonna do? You're gonna go and get two for the price of one, and using us," he said. "So, they -- most of them knew that. I mean, some of them wouldn't do business with us. The ones that we didn't have as clients are the ones that knew, 'Hey, you guys can't be doing this. You're not doing it right.' And we'd run into that a lot, but we'd move on to the next one. There's more big fish out there."

The salesman asked us to disguise him and not reveal his name, because a connection with NECC would ruin his career. NECC was shut down. Its president, Barry Cadden, is the target of a criminal investigation. He declined to be interviewed.

The full investigation can be seen this Sunday on "60 Minutes" at 7 p.m. ET.

  • Scott Pelley

    Anchor and Managing Editor, "CBS Evening News;" Correspondent, "60 Minutes"

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