Opioid Producer Settles Kickback Case for $225M

Insys Therapeutics founder John Kapoor leaves federal court in Boston on Jan. 30. (AP file photo/Steven Senne)

LOS ANGELES (CN) – Opioid manufacturer Insys Therapeutics agreed to pay $225 million to settle a U.S federal government probe of the company’s marketing and kickback scheme involving the distribution of a sublingual opioid spray, prosecutors said Wednesday.

In 2018, federal prosecutors joined five whistleblower lawsuits alleging that the company was paying millions in kickbacks to physicians in order to push Subsys, its sublingual spray containing the opioid fentanyl, a powerful and highly addictive painkiller.

The spray was approved by the Food and Drug Administration in 2012 to treat cancer patients who are in severe pain and who were already receiving daily opioid therapy.  

Prosecutors said in charging documents filed Wednesday in Massachusetts that from August 2012 to June 2015, the Arizona-based company paid physicians through a “sham” speakers program in order to induce them into prescribing Subsys for their patients.

(AP Photo/Patrick Sison)

Insys executives showered physicians and nurses with lavish meals, entertainment and company jobs for their relatives and close friends.

The company also pushed physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients’ diagnoses in order to be reimbursed for prescriptions for Medicare beneficiaries.

A physician’s assistant at a pain clinic in Somersworth, New Hampshire sought out kickbacks from Insys by joining the speakers program in May 2013. The assistant later issued 672 Subsys prescriptions for patients – many of who did not need the painkiller – and in turn, received $44,000.

Opioid overdoses claimed nearly 400,000 lives in the United States between 1999 and 2017, according to the Centers for Disease Control and Prevention, and more than 2 million are addicted to opioids.

As part of the plea agreement in the civil investigation, Insys agreed to pay $195 million to settle allegations that it violated the False Claims Act, according to a statement Wednesday by U.S. attorney for the Central District of California Nicola Hanna.

“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,” Hanna said. “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.”

To settle the criminal matter, Insys will enter into a five-year deferred prosecution agreement with the government in which its subsidiary will plead guilty to five counts of mail fraud and the company will pay a $2 million fine and forfeit $28 million in assets.

Five former Insys executives were convicted at a Boston criminal trial in May on racketeering conspiracy in connection with marketing Subsys to physicians, bringing the total number of former executives who have been convicted for illegal marketing crimes to eight.

A spokesperson for Insys did not respond to a request for comment Wednesday afternoon.

Andrew Lelling, U.S. attorney for the District of Massachusetts, called the convictions of Insys executives the “first step” in holding the company responsible for its role in the global opioid epidemic.

“The second step is holding the company itself accountable for prolonged, illegal conduct that prioritized profits over patient health,” Lelling said in a statement. “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.”

Prosecutors said Wednesday that the whistleblowers’ share of the settlement has not yet been determined.

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