"Really all I can say is that the case settled prior to trial," Nunn said.
Two of the people who founded New England Compounding Pharmacy Inc. in 1998 — Gregory Conigliaro and Barry Cadden — formed Ameridose in 2006, according to documents filed with the Massachusetts Secretary of State's office. The company's website says it provides hospitals around the country with products including intravenous solutions and prefilled oral syringes of painkillers and other medications.
This summer, an organization that represents hospitals in purchasing deals with drug suppliers cancelled a contract with Ameridose over allegations that it had poor quality control practices that "rose to a level of concern for patient safety," according to a lawsuit that Ameridose filed in August.
Ameridose denies those allegations and filed a defamation and slander lawsuit in U.S. District Court in Massachusetts on Aug. 8, saying Novation LLC hurt its reputation by making allegations including that there was "no separation between sterile and non-sterile products" in an Ameridose warehouse.
The lawsuit doesn't say what the products were or elaborate on how they were stored. Novation declined to release a copy of its report.
Novation, which leverages hospitals' combined buying power to get better prices on medical goods, sent two employees to audit Ameridose on July 15 and terminated its contract, the lawsuit said.
"Novation has determined that Ameridose does not meet the quality systems requirements needed to maintain a Novation agreement," Novation told its members in an Aug. 2 newsletter, according to the lawsuit.
Ameridose strongly objected to the allegations and said in its defamation lawsuit that the Novation auditors were unqualified and made false and misleading statements. Ameridose also said it had been audited in recent years by several other organizations that determined its quality control system "meets or exceeds their high quality standards." Ameridose is regulated by the U.S. Food and Drug Administration.
The lawsuit ended in a confidential settlement Sept. 24.
Paven, the Ameridose and New England Compounding Center spokesman, said Wednesday in his email that the "suit involved contractual commercial issues between the companies that have since been resolved."
A statement from Novation said that while it "vigorously disputed each and every claim made in the lawsuit, the parties ultimately agreed to settle the lawsuit."
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