“Is this the start of indictments against senior executives at Big Pharma opioid manufacturers”
By Mark A. York (October 27, 2017)
(Mass Tort Nexus)
The founder of Insys Therapeutics, Inc., Johnathon N. Kapoor was arrested Thursday October 26, 2017 and charged with leading a massive conspiracy across the United States to pay bribes and use fraudulent sales methods in the illegal distribution of Subsys, a fentanyl spray intended for cancer patients. The Insys boardroom orchestrated an “off label” marketing campaign of “Subsys” which is a fast-acting sublingual fentanyl product, resulting in indictments against all members of the pre-2017 Insys executive board, as well as mid level managers and sales representatives across the country.
Dr. John N. Kapoor, 74, of Phoenix, Arizona, the former Chairman-CEO of Insys and still a member of its board, was indicted on federal charges of racketeering, conspiracy to commit fraud and conspiracy to violate the Anti-Kickback law. The racketeering and fraud charges carry prison sentences of up to 20 years, while the kickback charge can bring up to five years as well as millions of dollars in fines and asset forfeitures
Prosecutors allege the company paid hundreds of thousands of dollars to doctors in exchange for prescribing a sublingual spray called Subsys that contained the powerful and synthetic opioid fentanyl which is highly addictive. Three top prescribers have already been convicted of taking bribes from Insys, along with several sales and marketing representatives having entered plea deals in federal courts across the country.
In various media reports, former sales rep Patty Nixon, turned whistleblower, explained how the company lured doctors into prescribing the drug for patients who didn’t need it, known as “off-label” marketing. She stated “It was absolutely genius, it was wrong, but it was genius.”
“What I did, I was instructed to do, I was trained to do,” Nixon, who was fired by Insys after becoming adverse to the company sales activity, “she felt guilty about lying on the job” and decided to not return to work. “It was wrong, but it was genius.”
In a statement related to the Kapoor indictment, Nixon said, “I wasn’t sure this day would ever come. It is a great day for justice. A great day for the victims. Dr. Kapoor is an evil man. I give a lot of credit to all the prosecutors and all the people who worked on bringing him to justice. It’s what needs to be done.”
She said that if requested to testify against Kapoor, “I absolutely will.”
Subsys is 100 times stronger than morphine, and was approved by the FDA to treat patients with cancer who had “breakthrough” pain, that is pain which other narcotics are not addressing. This was soon seen as not the way Insys Therapeutics wanted to market Subsys and they developed a very direct and highly profitable marketing campaign that placed “profits over patients” and contributed to the current opioid crisis across the USA. They Insys executive suite quickly ramped up a sales and marketing campaign that reached from Alabama to Alaska, two states where the Subsys sales skyrocketed, all based on the company sales efforts
The role of the sales staff was to make sure Subsys got into the hands of as many patients as possible, whether they had cancer or not, and this included using illegal and unethical methods of getting doctors to write massive numbers of Subsys prescriptions for questionable pain complaints.
THE REIMBURSEMENT UNIT FRAUD
“My job responsibilities were to contact insurance companies on behalf of the patients and the doctors to get the medication approved and paid for by their insurance company,” along with several others.
Subsys is not cheap prescription, a 30-day supply costs anywhere from $3,000 to $30,000 and the fraudulent scheme depended upon insurance approval.That was Nixon’s job, along with the other employees in the Reimbursement Unit, who were tasked with the role of misleading insurers into believing the drug was “medically necessary.”
“I would say, ‘Hi, this is Patty. I’m calling from Dr. Smith’s office. I’m calling to request prior authorization for a medication called Subsys,” taken form the Unit’s management created insurance approval script.
The Unit staff would often pretend they were calling from the office of a cancer doctor to increase the chances of approval, as well as using specific diagnosis codes, likely to be approved, whether the patient had the condition or not.
The Reimbursement Unit role at Insys, was making sure that patients got approval for Subsys, which includes fentanyl, from insurance companies. “The unit job responsibilities were to contact insurance companies on behalf of the patients and the doctors to get the medication approved and paid for by their insurance company,” said Patty Nixon.
“We told complete bold-faced lies” as part of the part of the ongoing fraudulent Insys business model.
CHRONIC PAIN LEADS TO DEATH
One of the patient who was prescribed Subsys was Sarah Fuller, who was prescribed the drug even though she didn’t have cancer. In her case, it was chronic neck and back pain from two car accidents. And when her doctor prescribed Subsys, an Insys sales rep was sitting in the room with them. Within a month, Fuller’s prescription was tripled. And 14 months after she started using the drug, she was found dead on a bedroom floor.
What killed her? “Well, technically fentanyl,” Fuller’s mother said. “But a drug company who couldn’t care less about a human life. And, apparently, a doctor who didn’t either.” Sarah’s Cherry Hill, New Jersey physician, Dr. Vivienne Matalon, had her medical license suspended over the “off-label” prescribing that resulted in the death of Sarah Fuller, but denies responsibility for her death.
Sadly, Fuller is not alone, FDA reports of adverse events and possible related complications include hundreds of deaths.
Attorney Richard Hollawell who represents the Fuller’s family, is suing everyone involved in marketing and prescribing Subsys to Sarah, and said, “This is serious stuff that we’re dealing with … People need to finally be held accountable.”
Insys has denied any responsibility and insists it shouldn’t be blamed for how doctors prescribe their products. The corporation is not currently facing criminal charges and is still selling Subsys — some $240 million worth of Subsys just last year. But the company is under investigation by various states across the country regarding how the “off-label” marketing campaign came to be the company business model..
KAPOOR ADDED TO PRIOR INSYS INDICTMENTS
Dr. Kapoor will appear in federal court in Phoenix Thursday, and will have to appear in federal court in Boston, where the indictments originated, at a later date. The indictment, unsealed today in Boston, also includes additional allegations against several former Insys executives and managers who were initially indicted in December 2016.
“In the midst of a nationwide opioid epidemic that has reached crisis proportions, Mr. Kapoor and his company stand accused of bribing doctors to overprescribe a potent opioid and committing fraud on insurance companies solely for profit,” said Acting United States Attorney William D. Weinreb of Massachusetts. “Today’s arrest and charges reflect our ongoing efforts to attack the opioid crisis from all angles. We must hold the industry and its leadership accountable.”
Subsys, a fentanyl sublingual spray from Insys Therapeutics
“As alleged, these executives created a corporate culture at Insys that utilized deception and bribery as an acceptable business practice, deceiving patients, and conspiring with doctors and insurers,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The allegations of selling a highly addictive opioid cancer pain drug to patients who did not have cancer, make them no better than street-level drug dealers.”
Brian Kelly, a lawyer for Kapoor, said, “My client is innocent and he intends to fight these charges vigorously.”
In response to an early 2017 investigation, Insys stated that charges against individuals discussed in the media related to “previously disclosed investigations and litigation and Insys continues to cooperate with all relevant authorities in its ongoing investigations, including our federal investigation which began in and around December 2013.”
“We are committed to complying with laws and regulations that govern the promotion of our products and all other business practices. We continue to emphasize ethical behavior within our organization and pursue opportunities to illustrate that our company’s mission is to put patients first.”
The October 26, 2017 indictments were the first naming John Kapoor, but also include enhanced charges against the entire executive board of Insys Therapeutics, Inc. who were already facing long prison sentences and financial penalties in one of the most far reaching and aggressive US Department of Justice investigations into the root cause of the “Opioid Crisis” that is gripping all areas of the United States.