Company admits illegal conduct regarding promotion of
Subsys, a powerful opioid painkiller
LOS ANGELES
– Opioid manufacturer Insys Therapeutics agreed to a global resolution to
settle the government’s separate criminal and civil investigations, the
Department of Justice announced today.
As part of
the civil resolution, Insys agreed to pay $195 million to settle allegations
that it violated the False Claims Act. As part of the criminal resolution,
Insys will enter into a deferred prosecution agreement with the government,
Insys’s operating subsidiary will plead guilty to five counts of mail fraud,
and the company will pay a $2 million fine and $28 million in forfeiture.
Both the
criminal and civil investigations stemmed from Insys’s payment of kickbacks and
other unlawful marketing practices in connection with the marketing of Subsys.
Insys’s drug Subsys is a sublingual fentanyl spray, a powerful, but highly
addictive, opioid painkiller. In 2012, Subsys was approved by the Food and Drug
Administration for the treatment of persistent breakthrough pain in adult
cancer patients who are already receiving, and tolerant to, around-the-clock
opioid therapy.
In April
2018, the United States intervened in five qui tam lawsuits accusing Insys of
violating the False Claims Act. In its complaint, the United States alleged
that Insys, headquartered in Arizona, paid kickbacks to induce physicians and
nurse practitioners to prescribe Subsys for their patients. Many of these
kickbacks took the form of speaker program payments for speeches to physicians
that were, in fact, shams; jobs for the prescribers’ relatives and friends; and
lavish meals and entertainment. The United States also alleged that Insys
improperly encouraged physicians to prescribe Subsys for patients who did not
have cancer, and lied to insurers about patients’ diagnoses in order to obtain
reimbursement for Subsys prescriptions that had been written for Medicare and
TRICARE beneficiaries.
Today, an
information charging Insys and its operating subsidiary with five counts of
mail fraud was filed by the United States Attorney’s Office for the District of
Massachusetts. According to the charging document, from August 2012 to June
2015, Insys began using “speaker programs” purportedly to increase brand
awareness of Subsys through peer-to-peer educational lunches and dinners.
However, the
programs were actually used as a vehicle to pay bribes and kickbacks to
targeted practitioners in exchange for increased Subsys prescriptions to
patients and for increased dosage of those prescriptions. One practitioner
targeted by Insys was a physician’s assistant who practiced with a pain clinic
in Somersworth, New Hampshire. During the first year that Subsys was on the
market, the physician’s assistant did not write any Subsys prescriptions for
his patients. In May 2013, the physician’s assistant joined Insys’s sham
speaker program knowing that it was a way to receive kickbacks for writing
Subsys prescriptions. After joining the sham speaker program, the physician’s
assistant wrote approximately 672 Subsys prescriptions for his patients – many
of which were medically unnecessary – and in turn, received $44,000 in
kickbacks from Insys.
As part of
the criminal resolution, Insys agreed to a detailed statement of facts
outlining its criminal conduct with respect to the illegal marketing of Subsys.
Insys will enter into a five-year deferred prosecution agreement with the
government, while Insys’s operating subsidiary will plead guilty to five counts
of mail fraud pursuant to the plea agreement that will be filed in the District
of Massachusetts. According to the terms of the criminal resolution, Insys will
pay a criminal fine of $2 million and forfeiture of $28 million. The Court has
not yet scheduled the plea hearing. Last month, five former Insys executives
were convicted after trial of racketeering conspiracy in connection with the
marketing of Subsys. In total, eight company executives have now been convicted
in Boston for crimes relating to the illegal marketing of Subsys.
“Today’s
settlement underscores our determination to hold opioid manufacturers
accountable for pushing these highly addictive narcotics on the public via
kickbacks to doctors and nurses, and other illegal means,” said United States
Attorney for the Central District of California Nick Hanna. “Our goal is to
bring about an end to the tragic epidemic of opioid addiction and to go after
those who profit from that epidemic.”
“The
Department of Justice is committed to taking steps to address the opioid
epidemic,” said Principal Deputy Associate Attorney General Claire Murray.
“Illegal conduct by pharmaceutical manufacturers, especially in the midst of
the opioid crisis, will not be tolerated. We will continue to investigate and
vigorously prosecute these types of allegations and hold opioid manufacturers
accountable under the law.”
“The opioid
epidemic is a plague that has devastated communities and ravaged families
across this country,” said Assistant Attorney General Jody Hunt of the
Department of Justice’s Civil Division. “The Department of Justice is committed
to using the legal tools at our disposal to combat the illegal marketing and
distribution of opioids, including fentanyl. Today’s settlement sends a strong
message to pharmaceutical manufacturers that the kinds of illegal conduct that
we have alleged in this case will not be tolerated. I want to assure the
families and communities ravaged by this epidemic that the Department of
Justice will continue to act forcefully to hold opioid manufacturers
accountable for their actions.”
“The first
step towards holding this pharmaceutical company responsible for its role in
fueling the opioid epidemic was the conviction of top Insys executives,” said
United States Attorney for the District of Massachusetts Andrew E. Lelling.
“The second step is holding the company itself accountable for prolonged,
illegal conduct that prioritized profits over patient health. This global
resolution is the culmination of years of work by prosecutors and agents, and
these successful prosecutions and civil enforcement efforts should be a model
for confronting Corporate America’s role in the opioid epidemic.”
“The
announced settlement is a vivid example of the Department of Defense's dogged
efforts to protect the integrity of the U.S. military’s health care system and
its beneficiaries” said Bryan D. Denny, Special Agent in Charge of the Defense
Criminal Investigative Service, Western Field Office. “DCIS remains committed
to working with its law enforcement partners and the U.S. Attorney’s Office to
combat health care fraud, especially when pharmaceutical companies use
taxpayers' dollars to induce physicians with bribes and kickbacks to prescribe
their drugs for unauthorized off-label usage that may very well endanger the
recipient's health and safety.”
“I applaud
the Department of Justice and the U.S. Attorney for their continued efforts to
hold pharmaceutical companies accountable to the American taxpayer,” said Vice
Adm. Raquel Bono, director of the Defense Health Agency. “The efforts of the
Department of Justice safeguard the health care benefit for our service
members, veterans and their families. The Defense Health Agency continues to
work closely with the Justice Department, and other state and federal agencies
to investigate all those who participated in fraudulent practices.”
“Paying bribes and providing other incentives
to prescribe opioids with little regard to patient welfare surely signals a
company is more concerned with profits than patients,” said Christian J.
Schrank, Special Agent in Charge for the Office of Inspector General of the
U.S. Department of Health and Human Services. “Today’s settlement reaffirms our
commitment to ensuring that companies pay a very heavy price for attacking
vital government health programs.”
Insys
entered into an unprecedented 5-year Corporate Integrity Agreement (CIA) and
Conditional Exclusion Release with OIG. Because of the extensive cooperation
provided by Insys in the prosecution of culpable individuals and its agreement
to enhanced CIA requirements, OIG elected not to pursue exclusion of Insys at
this time. The CIA includes several novel provisions, including enhanced
material breach provisions, designed to protect Federal health care programs
and beneficiaries. In addition, Insys admitted to a Statement of Facts and
acknowledged that the facts provide a basis for permissive exclusion. OIG did
not release its permissive exclusion authority, as it generally does for CIA
parties in False Claims Act settlements. Instead, OIG will provide such a
release only after Insys satisfies its obligations under the CIA.
The
allegations resolved by the settlement stem from five lawsuits that were filed
under the qui tam, or whistleblower, provisions of the False Claims Act, which
permit private citizens to bring suit on behalf of the United States for false
claims and share in any recovery. The lawsuits are: United States, et al., ex
rel. Guzman v. Insys Therapeutics, Inc., et al., 13-cv-5861; United States ex
rel. Andersson v. Insys Therapeutics, Inc., 14-cv-9179; United States ex rel.
John Doe and ABC, LLC v. Insys Therapeutics, Inc., et al., 14-cv-3488; United
States ex rel. Erickson and Lueken v. Insys Therapeutics, Inc., 16-cv-2956; and
United States ex rel. Jane Doe, et al. v. Insys Therapeutics, et al.,
16-cv-7937. The whistleblowers’ share of the settlement announced today has not
yet been determined.
These
matters were handled by the United States Attorney’s Office for the Central
District of California; the Department of Justice’s Civil Division; the United
States Attorney’s Office for the District of Massachusetts; and the Department
of Health and Human Services, Office of Inspector General.
Investigations were conducted by the Federal Bureau of Investigation,
Boston Field Division; the Food and Drug Administration, Office of Regulatory
Affairs; the Drug Enforcement Administration, New England Field Division;
Department of Defense, Defense Criminal Investigative Service; U.S. Department
of Labor, Employee Benefits Security Administration, Boston Regional Office;
U.S. Postal Inspection Service’s Boston Division; United States Postal Service,
Office of Inspector General, Northeast Area Field Office; Department of
Veterans Affairs, Office of Inspector General, Criminal Investigations
Division; Office of Personnel Management, Office of Inspector General; and the
Defense Health Agency.
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