By Pat Anson, Editor
The former CEO of Insys Therapeutics and five other former company executives have been arrested on federal charges of racketeering and bribing doctors to prescribe a potent painkiller off-label.
The arrests culminate a lengthy investigation into the Arizona drug maker, which has been accused of sordid sales practices that led to the overdose deaths of hundreds of pain patients.
The fentanyl-based painkiller, called Subsys, has FDA approval for breakthrough cancer pain. The Insys executives allegedly bribed and gave kickbacks to doctors to prescribe the oral spray off-label for patients suffering from conditions such as joint pain and post-traumatic stress disorder.
Fentanyl is a synthetic opioid 50 to 100 times more potent than morphine.
“Patient safety is paramount and prescriptions for these highly addictive drugs, especially fentanyl, which is among the most potent and addictive opioids, should be prescribed without the influence of corporate money,” U.S. Attorney Carmen Ortiz said in a statement.
Former CEO Michael Babich and the other Insys executives are also charged with misleading and defrauding insurance companies that were reluctant to approve payments for Subsys when it was prescribed for non-cancer patients. The company created a special “reimbursement unit” that was dedicated to obtaining prior authorization from insurers, often by falsely claiming they were for patients with medically urgent cancer diagnoses.
“As alleged, top executives of Insys Therapeutics, Inc. paid kickbacks and committed fraud to sell a highly potent and addictive opioid that can lead to abuse and life threatening respiratory depression,” said Harold Shaw, Special Agent in Charge of the FBI’s Boston Field Division. “In doing so, they contributed to the growing opioid epidemic and placed profit before patient safety."
The Southern Investigative Reporting Foundation released a report last year, headlined “Murder Incorporated,” that blamed aggressive sales practices at Insys for the overdose deaths of hundreds of pain patients. CNBC also accused the company of “putting profits before patients as it makes millions off your pain.”
In June, federal agents arrested two Insys sales representatives for bribing doctors to prescribe Subsys. Some physicians were wined and dined at upscale restaurants in New York City, while others were taken to private tables at a strip club and given free drinks. According to the indictment, the salesmen were instructed to "expect and demand" that doctors hired by Insys to speak at promotional events prescribe "large quantities" of Subsys. The doctors obliged, prescribing over $5 million worth of Subsys in 2014, much of it billed to private insurers or Medicare.
Doctors are allowed to prescribe drugs for conditions not approved by the FDA, a practice known as off-label prescribing, but drug makers are not permitted to market or promote medications for off-label use.
According to Open Payments, a government website that tracks industry payments to doctors, Insys paid over $6 million to nearly 7,800 doctors last year for food, beverages, travel, lodging and speaker fees. The payments were 30 times more than what the company reported spending on research.
Subsys is a lucrative product for Insys and its biggest moneymaker. According to the Healthcare Bluebook, 30 spray bottles of Subsys currently cost about $5,600.