By Nate Raymond
BOSTON (Reuters) - A federal appeals court on Monday restored the convictions of a co-owner and former employee of a Massachusetts compounding pharmacy accused of deceiving regulators before its drugs sparked a deadly fungal meningitis outbreak in 2012.
The 1st U.S. Circuit Court of Appeals in Boston ruled that a judge wrongly found it was legally impossible for New England Compounding Center co-owner Gregory Conigliaro and ex-employee Sharon Carter to defraud the U.S. Food and Drug Administration.
The ruling could clear the way for them to be sentenced. Defense lawyers did not respond to requests for comment.
Conigliaro and Carter were among 14 people associated with NECC who were indicted after mold-tainted steroids it produced sparked a fungal meningitis outbreak that sickened 793 people nationally, including more than 100 who died.
The defendants included Barry Cadden, NECC's ex-president and co-founder, and Glenn Chin, its former supervisory pharmacist, who were convicted of racketeering and fraud and are serving prison sentences of 14-1/2 and 10-1/2 years, respectively.
Unlike Cadden and Chin, Conigliaro and Carter were not charged with playing a direct role in the outbreak.
A federal jury in 2018 instead found them guilty of misleading the FDA into thinking Framingham, Massachusetts-based NECC was operating like a conventional pharmacy that should be subject to state oversight, rather than a drug manufacturer.
State-regulated compounding pharmacies produce customized drugs pursuant to patient-specific prescriptions. But prosecutors said NECC was actually a drug manufacturer making medications in bulk without valid prescriptions.
U.S. District Judge Richard Stearns said the FDA at the time was unsure it could regulate compounding pharmacies like NECC and was as a result not doing so, making it impossible to impede the agency's functions.
But U.S. Circuit Judge David Barron, writing for Monday's three-judge panel, said Stearns never identified any instance in which the FDA disavowed authority to treat a compounding pharmacy as a manufacturer subject to heightened oversight.
(Reporting by Nate Raymond in Boston; Editing by Stephen Coates)