Anthem Sues Opioid Maker Over Kickback Scheme

PHOENIX (CN) – Health insurer Anthem has sued Insys Therapeutics, claiming the company bilked millions from the insurer by giving kickbacks to doctors for prescribing its opioid Subsys.

The lawsuit, filed Wednesday in Phoenix Federal Court, claims Insys paid doctors to write prescriptions and market off-label uses for Subsys, and structured such payments as “speaker fees” to hide the scheme. Subsys, a sublingual spray of the highly addictive opioid fentanyl, is often prescribed to cancer patients as a painkiller.

“While the exact amount of those kickbacks has yet to be determined, criminal indictments of the recipients indicate that Insys paid ‘speaker fees’ of hundreds of thousands, if not millions, of dollars,” the complaint says.

Anthem claims Insys also lied about why the drug was prescribed to get reimbursement for prescriptions that otherwise would not have been approved.

A prescription for Subsys would only be approved under Anthem’s plans if the patient had cancer, was being treated by an opioid already and was being prescribed Subsys to deal with pain that the other opioid could not alleviate.

“Under instruction of management, reimbursement team members routinely, intentionally, and falsely represented that enrollees in Anthem plans met each of the criteria necessary to render Subsys prescriptions covered and payable when Insys knew that was not the case,” the lawsuit claims.

As a result of Insys’ scheme, Anthem says it paid out more than $19 million for Subsys prescriptions that should not have been covered.

According to the complaint, Insys targeted doctors at pain clinics that were high-volume opioid prescribers instead of oncologists treating patients that met Anthem’s conditions.

“The top 10 prescribers of Subsys were paid handsomely for their participation in the speaker program – collectively receiving more than $870,000 in speaker fees in 2013 and 2014 alone,” Anthem says.

Two of the top 10 prescribers, Dr. Xiulu Ruan and Heather Alfonso, have been convicted for participating in the scheme.

Ruan, an Alabama doctor, was sentenced to 21 years on drug and fraud charges in May. Alfonso, a Connecticut nurse, pleaded guilty in 2015 to having received kickbacks.

In December, federal prosecutors announced charges against six former Insys executives in connection with the kickbacks.

Two former Insys saleswomen pleaded guilty Tuesday to conspiring to violate a federal anti-kickback statute by paying kickbacks to doctors to prescribe Subsys.

One of the women, Natalie Levine, is married to former Insys chief executive Michael Babich. Babich has pleaded not guilty to racketeering conspiracy charges.

In June, Insys’ new chief executive reiterated the company’s commitment to maintaining high standards and cooperating with any government investigations.

“We remain committed to cultivating a culture of trust, transparency and ethical behavior while executing against our mission of improving the quality of care for patients in need,” said Saeed Motahari, president and CEO of Insys, in a statement. “As the new CEO, I believe it is imperative that we learn from the past. The company has taken appropriate steps to strive to ensure that ethical standards of conduct and patient interests are at the heart of all business decisions.”

A Insys spokeswoman could not be reached for comment.

Anthem seeks punitive damages and an injunction to stop Insys from further false reimbursements.

 

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