Chandler drug firm facing mounting legal woes - SanTan Sun News SanTan Sun News

Chandler drug firm facing mounting legal woes

September 18th, 2017 development
Chandler drug firm facing mounting legal woes

By Wayne Schutsky, Staff

Insys Therapeutics is in hot water over business practices related to its fentanyl-based Subsys pain reliever as the state of Arizona, health insurer Anthem and even a U.S. senator accuse the Chandler-based pharmaceutical company of misconduct.

In a consumer fraud lawsuit filed in Superior Court, the Arizona Attorney General’s Office alleges that Insys engaged in a plot to defraud insurers and increase prescriptions and reimbursements for Subsys by bribing doctors and providing misinformation to insurers regarding patient diagnoses.

The allegations made by the state of Arizona mirror those presented in a lawsuit brought by Anthem and a report released recently by U.S. Senator Claire McCaskill, D-Mo.

Subsys is an opioid pain reliever approved by the FDA for a narrow patient group.

It is approved to treat breakthrough pain in cancer patients 18 years and older who have become tolerant to other opioid treatments and is a Schedule II substance under the Controlled Substances Act.

The Arizona lawsuit alleges that Insys misled healthcare providers in order to convince them that Subsys had additional FDA approvals in order to drive off-label use of the drug.

Off-label refers to using an FDA-approved drug for an unapproved use.

Off-label use of prescription drugs is not uncommon. According to the Food and Drug Administration, “Once the FDA approves a drug, health care providers generally may prescribe the drug for an unapproved use when they judge that it is medically appropriate for their patient.”

Because of its highly addictive properties, Subsys, along with other transmucosal immediate release fentanyl (TIRF) medications on the market, are highly regulated by the federal government.

The state also claims Insys bribed doctors to increase Subsys prescriptions and disguised these bribes as “speaker fees” it paid to medical professionals to participate in educational events.

According to the state, Insys sold nearly $52 million worth of Subsys between March 2012 and April 2017.

Sixty-four percent of those prescriptions came from three doctors – also named in the lawsuit – who received speaker fees from Insys.

Those doctors – Sheldon Gingerich, Nikesh Seth and Steve Fanto –  each wrote about 1,000 Subsys prescriptions each during that time. The number of Subsys prescriptions written by the doctors increased during the time they received payments from Insys, the state claims.

The Anthem lawsuit contains many of the same allegations as the litigation brought by the state of Arizona, including that Anthem bribed doctors and deceived Anthem representatives in order to increase Subsys prescriptions and pre-authorizations.

Anthem is attempting to recoup over $19 million in insurance payments that it claims paid for Subsys prescriptions that should not have been covered.

The insurance company claims that Insys committed multiple unlawful acts – including bribery and fraud – in order to receive those payments, according to a criminal complaint filed by multiple Anthem subsidiaries in the U.S. District Court for the District of Arizona.

According to Anthem’s complaint, Insys engaged in a large-scale bribery effort to increase Subsys prescriptions.

While Insys does admit it paid speaker fees to certain prescribers, it denies allegations that these payments were criminal or drove up off-label prescriptions.

It also contends that many different types of physicians can treat breakthrough pain in cancer patients.

The second major allegation levied by Anthem relates to the reimbursement unit mentioned in the state’s lawsuit.

According to Anthem’s complaint, Insys used this reimbursement unit from 2013 to 2016 to lie or misrepresent facts to Anthem representatives about patient conditions and receive approvals for prescriptions that otherwise would not have been covered.

Anthem prohibits anyone other than a member or a prescriber from making a pre-authorization request.

Additionally, Anthem accused the reimbursement unit employees of making false statements, such as saying patient had a cancer diagnosis even if that wasn’t true, in order to gain pre-approvals.

In its response, Insys confirms that it did have a reimbursement unit, which it called Patient Services Center. However, it claims that this unit was necessary because Anthem and other insurers created an intentionally arduous pre-authorization process.

The McCaskill report contains similar allegations that Insys employees participated in an illicit scheme to defraud insurance companies and increase Subsys prescriptions.

The report stems from an investigation into the nationwide opioid crisis by McCaskill’s office that included wide-ranging document requests to Insys and other opioid producers related to marketing and sales practices.

Fentanyl is a key contributor to the opioid epidemic with deaths involving fentanyl doubling between 2015 and 2016, according to McCaskill’s report.

McCaskill’s report cites allegations that employees in Insys Reimbursement Center – charged by higher-ups with increasing pre-authorizations for Subsys by insurance providers – deceived insurers and their representatives through a variety of means, including lying about patient diagnoses.

In lawsuits filed by Arizona and Oregon against Insys, both states contend that a large portion of pre-authorizations sought for Subsys in those states – 67 percent in Arizona – were for patients without breakthrough cancer pain who were suffering from other issues like back pain.

The report further alleges that Insys was aware of the problems in its pre-authorization unit and failed to take proper actions to correct them.

“We thought that it was important to get this information out there,” McCaskill said in a press conference. “We’ll be sharing this information with law enforcement authorities and with anyone that we’re aware of that has current action against this company.”

The report links those deceptive practices to the death of Sarah A. Fuller, a New Jersey woman who suffered from fibromyalgia and back pain and ultimately died due to reactions to prescription medications she was taking.

Transcripts included in the McCaskill report show an Insys employee misrepresenting himself to an insurance company representative and following a script used by Insys employees to mislead representatives about patients like Fuller who did not have a cancer diagnosis.

In addition to OxyContin and Percocet, Fuller had been prescribed Subsys by Dr. Vivienne Matalon.

Matalon continued to prescribe Subsys to Fuller despite directions to stop doing so after the patient was hospitalized on a previous occasion for health issues related to opiate use, according to medical records referenced in the report “During the 14-month period in which Ms. Fuller received Subsys treatment, Medicare paid as much as $24,000 per month for the prescriptions,” the report reads.

Neither Matalon nor an Insys representative informed Fuller that the drug was approved for breakthrough pain only in cancer patients.

Matalon received $600 in payments from Subsys in 2015.

“Although this amount pales in comparison to other payments physicians have received from the company, a clear link exists between even minimal manufacturer payments and physician prescribing practices,” the report states.

Several former Insys executives, including former president and CEO Michael Babich, were indicted in 2016 on charges related to bribery and the actions of the reimbursement unit. That case is ongoing.

The former head of Insys’ reimbursement unit, Elizabeth Gurrieri, pleaded guilty to a wire fraud charge related to her role in fraudulent schemes used to gain authorizations from insurance companies.

In response to McCaskill’s inquiry, current Insys CEO Saeed Motahari stated that the company has taken steps to impose ethical business standards and ensure compliance among its employees.

He also stated that the company has turned over a large portion of its staff, including key management positions.

McCaskill left the door open as to how the government could use the information her report uncovered.

“As I indicated, I think this is the first thorough examination that has been done on sales and marketing techniques as it relates to opioid products, and I would prefer to wait and see what the rest of the investigation uncovers before making any determination if in fact there are any legislative fixes that would be appropriate,” she said.

McCaskill also stated that the Department of Health and Human Services, Department of Veterans Affairs and the market itself could potentially play a role in preventing the continued use of deceptive sales and marketing practices by opioid producers.