The director of the board that regulates pharmacies in Massachusetts has been fired for ignoring a complaint about the company implicated in the continuing fungal meningitis outbreak.

James Coffey, director of the Massachusetts Board of Registration in Pharmacy, took no action when Colorado health officials complained that the New England Compounding Center (NECC) was acting like a drug manufacturer, according to Lauren Smith, MD, the interim commissioner of the Massachusetts health department.

Coffey has been dismissed and a pharmacy board attorney, Susan Manning, has been placed on administrative leave, Smith said in a statement Wednesday.

"It is incomprehensible that Mr. Coffey and Ms. Manning did not act on the Colorado complaint given NECC's past, and their responsibility to investigate complaints," Smith said.

Coffey had the authority and responsibility to order an investigation and did not, she said.

The Framingham, Mass., company made the injectable steroid -- preservative-free methylprednisolone acetate -- that is blamed for 424 infections and 31 deaths in 19 states.

It was licensed in Massachusetts as a compounding pharmacy and allowed to make drugs on a patient-specific basis after receiving a valid prescription. Instead, the Colorado health department said in July 2012, it was distributing drugs to hospitals there without having prescriptions in advance.

Since the start of the current outbreak, both the FDA and the Massachusetts health department have also said the company was acting more like a drug maker than a compounding pharmacy, shipping more than 17,000 vials of the steroid to pain clinics in 23 states without advance prescriptions.

Despite that, Smith said Wednesday, there's no sign that Coffey or Manning ever told the pharmacy board about the Colorado complaint.

She said she expects "staff charged with oversight to perform their duties to the highest standards. That failed to happen here."

The role of NECC in the outbreak has focused attention on compounding pharmacies in general, with a congressional committee planning to hold a hearing on the issue.

Coincidentally, Coffey had agreed earlier this week to testify before a subcommittee of the House Energy and Commerce Committee, along with FDA Commissioner Margaret Hamburg.

The FDA's authority over compounding pharmacies "has never been straightforward" and it's not clear what it could have done to prevent the current crisis, argued Kevin Outterson, JD, of the Boston University School of Law.

"The thousands of U.S. compounding pharmacies are not registered with the FDA; they are not subject to federal record keeping and reporting rules for drug manufacturers; and, through litigation, the FDA can be blocked for many months from visiting them," Outterson noted in a Perspective article published online in the New England Journal of Medicine.

The problem stems from a 2002 Supreme Court ruling striking down a section of the Food, Drug, and Cosmetic Act that codified the agency's role in policing compounding pharmacies.

If the ruling had gone the other way, Outterson argued, "It's possible that ... the tragedy at NECC could have been averted."

Among other things, he wrote, the invalidated section of the act would have increased cooperation between the FDA and state agencies and would have limited interstate shipments of drugs.

While the current outbreak involves contamination of a drug, Outterson noted that there are four other forms of risk associated with uncontrolled compounding pharmacies: "subpotency, superpotency, overmedication, and medication replacement."

To deal with all of the possible risks, he called for:

More transparent state rules

Mandatory disclosures to physicians and patients

Mandatory reporting of adverse events

User fees to pay for oversight

Clear FDA authority to register and inspect non-traditional compounding pharmacies

Better incentives for whistleblowers

Changes in reimbursement rules to "blunt the economic incentives driving industrial-scale compounding"

In an accompanying editorial, the NEJM editors noted that compounding pharmacies can play a "valuable role" in providing specialized products for patients with special needs.

The best way to balance the need for the "designer therapeutics" with safety, they argued, is to give the FDA broader powers, since current state-based oversight is "clearly inadequate to protect the public health."

"States lack the resources to supervise what has become a national industry with interstate activity," they argued.