Pharmaceutical manufacturer Insys Therapeutics, Inc., has tentatively agreed to settle allegations by the U.S. Justice Department that it paid kickbacks to doctors in order to get them to prescribe its drug Subsys. The drug is an under-the-tongue spray containing the opioid fentanyl, which is some 100 times stronger than morphine. Subsys was intended to manage pain in cancer patients.
According to Justice Department allegations, Insys paid kickbacks to doctors and nurse practitioners in order to induce them to write more subscriptions for Subsys. In some cases, the kickbacks came in the form of payments for speeches to be made to other physicians in an alleged effort to educate them about the drug. The speaking program, however, was mostly a sham to justify the kickbacks. In other cases, Insys provided prescribers with jobs for their relatives and friends, along with lavish entertainment and meals.
Moreover, the Justice Department says that Insys improperly encouraged the prescription of Subsys to patients who did not have cancer. Furthermore, Insys employee allegedly lied to insurers about diagnoses in order to gain payment of Subsys prescriptions written for Medicare and TRICARE patients.
All of these alleged actions were in violation of the federal False Claims Act. In April, the Justice Department intervened in five whistleblower lawsuits, which were presumably brought by employees of Insys, and consolidated them into a single action.
"The illegal marketing activities alleged in the government's case helped fuel the crisis by improperly introducing opioids into the market," said one U.S. attorney. "Our goal is bring about an end to the tragic epidemic that is harming untold numbers of people across the United States."
Insys's tentative agreement to settle comes after criminal charges were brought against several former executives and physicians, including Insys's billionaire founder, John Kapoor. Kapoor has been charged with conspiring with former managers and executives to pay the kickbacks and to defraud insurers. He and the others have pled not guilty.
However, some employees have pled guilty, including a 51-year-old man who just pled guilty to conspiring to violate the Anti-Kickback Law. He is scheduled to be sentenced in October and faces up to five years in prison.
Insys has agreed in principle to a settlement requiring it to pay $150 million over five years, along with potentially $75 million in additional payments.
Private citizens who notice fraud or illegal kickbacks in the medical field can file what are called "qui tam" whistleblower actions and receive a portion of the total recovery as a reward for their efforts. For example, the federal False Claims Act offers a reward of between 10 and 30 percent to the whistleblower.