Inside the New England Compounding Center

NEW YORK A former employee of the New England Compounding Center, under scrutiny as a result of the nationwide meningitis outbreak which has claimed 15 lives to date, said questions about whether NECC was engaging in specialty compounding or was crossing over into manufacturing were actively discussed by company management as far back as 2009.

The former employee, who spoke only on the condition of anonymity, told CBS News that New England Compounding Center's insurance contract in 2009 "had a very clear manufacturing exclusion in their policy, " meaning the company was not covered for manufacturing, only smaller specialty compounding.

Under government regulations, if the company was a manufacturer, it would be subjected to more regulatory oversight.

• First lawsuit filed against New England Compounding Center amid mounting criticism
• Meningitis outbreak spreads to 15 states
• CDC scientists fight to stop deadly meningitis outbreak
• Regulations eyed in meningitis outbreak

CBS News tracked down five former NECC employees who provided new details about the pharmacy's operation.

An employee who left in 2008 told CBS News that she did not recall any orders that did not have a prescription attached to them.

But another employee, who also spoke on the condition of anonymity because of a non-disclosure agreement, said by 2009 NECC was regularly filling large orders.

"It was usually more bulk than individual shipments," the employee said. "It was very rare that it was one bottle for one person."

While he was employed at NECC, the pharmacy produced vials in the low thousands each day depending on the drug, he said.

FDA officials have said the three potentially contaminated lots had over 17,000 vials in them.

Fourteen thousand patients may have been exposed to the contaminated injections, federal officials say. As of Monday there were 214 cases of meningitis and 15 deaths tied to the injections from NECC, according to the Centers for Disease Control.

On Monday, the FDA announced another case of possible meningitis from another possible NECC drug, noting in a statement: "At this point in FDA's investigation, the sterility of any injectable drugs, including ophthalmic drugs that are injectable or used in conjunction with eye surgery, and cardioplegic solutions produced by NECC are of significant concern..."

"Our intent has always been to comply with all regulations, and cooperate with all regulatory agencies,'' said Cosmo Macero, a NECC spokesman in an email. He did not respond to other inquiries.

The New England Compounding Center is a family-owned and operated pharmacy based in Framingham, Mass. It is owned by Barry J. Cadden, his wife, Lisa Cadden and her brother Gregory Conigliaro, according to public records from the Secretary of Commonwealth.

Massachusetts Department of Public Health officials announced that two other companies: Ameridose and Alaunus Pharmaceutical, also owned by Cadden and his wife's family, would shut down temporarily. In addition to NECC, the FDA is also investigating Ameridose.

Dr. Madeleine Biondolillo, the Director of the Bureau of Healthcare Safety and Quality at the Massachusetts Department of Public Health, was asked about the family ownership at a recent press conference. She said: "The corporate governance structure [of NECC] is very much at the center of the investigation."

Former employees of NECC told CBS News the main manager, Barry Cadden, was good to his employees and careful about compliance.

"NECC was like a small close-knit community," said one employee who started working at New England Compounding Center when he was 19 years old. He started in shipping, then data entry and worked his way up to sales and management.

A former quality assurance specialist at NECC's sister company Ameridose, who requested that she not be identified, said the two companies were completely separate and did not share clean rooms or raw material. The former employee who left in 2011 said the only thing the two companies shared was the same management. But she said NECC did not have the same high level of quality assurance as the much larger Ameridose.

Officials at the Massachusetts Department of Public Health said NECC was in violation of its license and noted that the company's shipments to other states "bears looking at at a federal level."

Yet the company did not conceal the fact that it was shipping nationwide. The company's website claimed the business was licensed in all 50 states.

Susan Maynard, a former sales representative who worked at NECC as a regional sales manager from 2008 to 2011 described NECC's scale and aggressive national marketing in her online resume noting that she had "168 existing hospital accounts and 300 prospect accounts" throughout six states. She notes that she opened 240 new accounts between 2009 and 2011 and reached $100,000 in monthly sales in 2009.

Inside the "clean room"

Tom DiAdamo, who worked as a sales representative for NECC in 2009, told CBS News that he was "really surprised when this happened" and said that Barry Cadden, "is a dynamite guy who is meticulous about safety."

Former employees say NECC's offices were small. with 8 to 10 rooms for about 50 employees.

Despite a 2006 warning letter from the FDA that mentioned the agency was concerned about "potential microbial contamination," former employees said the "clean room" where the vials would have been filled was a controlled space. Workers in the clean room wore blue scrubs, masks and gloves, former employees said. There were usually no more than 6 people in the clean room and one employee said workers handled vials through gloves that were attached to boxed hoods. In order to get into the clean room a worker would have to enter a middle room that was air tight, change clothes and spray their gloves with sterilizer, according to a former employee.

A current employee posted on his online resume that NECC adhered to "USP 797" which is the safety and sterilization standard set by the United States Pharmacopeia that sets standards for pharmacies. Massachusetts is one of 18 states that mandates the 797 standard, according to an expert who advises US Pharmacopeia..

One former employee who worked in the pharmaceutical industry for over a dozen years and left NECC in 2008 told CBS News: "I hate the fact that it's being painted as some kind of back alley operation," she said, "Cause it certainly wasn't."