Illinois-based Drug Compounding Company Acquisition Stalls as Industry Attracts Scrutiny

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The nationwide meningitis outbreak linked to a contaminated injectible steroid made by the New England Compounding Center has stalled the sale of an Illinois drug compounding company, the private equity backed Pharmedium Healthcare Corp., Dow Jones’ LBO Wire reported last week.

Allegedly, Pharmedium Services, which has no connection to any of the meningitis cases, was about to close a deal to sell itself to Baxter International Inc., when the sale was put on hold, according to LBO sources. Pharmedium produces compounded intravenous and epidural drugs for hospitals.

The 18-year-old Pharmedium declined to comment, according to Crain’s, although the company released a statement on its website on October 12 ensuring that its processes result in the highest level of safety for its patients.

A spokeswoman for Baxter also declined to confirm there was ever a deal on the table, telling Crain’s, “We don’t comment on rumors.”

Drug compounding companies combine customized doses of drugs and sell them to doctors, hospitals and other medical providers. The compounded drugs do not have to be approved as new drugs by the Food and Drug Administration before being dispensed and there are also exempt to many of the usual FDA regulations.

Since the meningitis outbreak the industry has come under scrutiny. So far 247 cases of meningitis in 15 states have been reported to the U.S. Centers for Disease Control and Prevention. Nineteen people have died.

The 80-year-old Baxter International Inc. employs approximately 45,000 people worldwide and is headquartered in the U.S. in Deerfield, Illinois. The company assists healthcare professionals and their patients with the treatment of complex conditions, as stated on its website.

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