Authorities investigating a Massachusetts pharmacy linked to a deadly outbreak of meningitis said they found shoddy sterilisation practices and unclean conditions there, including debris-covered floor mats and standing water from a leaking boiler.
State officials also said the New England Compounding Centre (NECC) shipped steroids from the possibly contaminated batches suspected over the outbreak before it received its own test results confirming the drugs were sterile.
Governor Deval Patrick said he had ordered state pharmacy regulators to conduct surprise inspections - the first of which happened on Tuesday - at companies similar to the NECC and take other steps to tighten oversight.
The state has also moved to revoke the company's operating licence and the licences of its top three pharmacists. "Those whose laboratory practices caused this outbreak should never practice pharmacy or manufacture in Massachusetts again," Mr Patrick said.
The outbreak of fungal meningitis, an inflammation of the lining of the brain and spinal cord, has affected 308 people, including 23 who have died, in 17 states. The outbreak has been linked to a steroid made by the NECC and taken mainly for back pain.
Compounding pharmacies such as NECC custom mix solutions in doses or forms generally not commercially available.
The US government is conducting a criminal investigation.
On Tuesday the state said that its preliminary investigation, which began last month after the company was first suspected in the growing outbreak, found large batches of drugs ready for general distribution but not labelled for specific patients.
Its state licence permits the company to fill out only specific prescriptions for specific patients, and distributing drugs in bulk like a manufacturer would violate that, said Dr Madeleine Biondolillo, director of the state Department of Public Health's Bureau of Healthcare Safety.
But company lawyer Paul Cirel said it was "hard to imagine" state regulators were not previously aware of the scale of its operations because they had worked so closely together. The state Board of Pharmacy always had complete access to the facility and board members were there as recently as last summer, he said.