Firm investigated amid meningitis outbreak cuts staff

A drug compounder linked to the firm behind a national outbreak of meningitis has cut 90 percent of its staff.

Ameridose is a sister company of the New England Compounding Center (NECC), whose tainted steroid injections appear to be responsible for 32 deaths in 19 states.

Both firms have recalled their products, while the NECC also shuttered amid a range of investigations. Ameridose said its layoffs — expected to hit at least 650 employees — were a response to federal and state probes that have shut down operations temporarily. 

The firm notified its employees in a letter Friday, saying "it may be necessary to resume operations at a reduced level" after investigators conclude their work this month. About 200 layoffs will be permanent, the company said, according to Reuters.

The Food and Drug Administration (FDA) has sought improvements to the way Ameridose tests the sterility of its products.

The meningitis outbreak linked to the NECC has raised questions about compounding pharmacies, firms that reprocess drugs on a large scale to fit patients' needs but are not obligated to follow many rules that apply to drug makers.

Several House Democrats have either introduced or promised legislation that would strengthen federal oversight of drug compounders.

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