Former Pharma Execs Accused Of Boosting Fentanyl Sales By Bribing Doctors With Sham Speaking Engagements

Fentanyl is an incredibly potent opioid painkiller; it acts quickly and powerfully, but doesn’t last as long as others, meaning its medical application is limited. So if you’re a drug company trying to boost sales of your new fentanyl spray, how do you sell more of a product that very few people have a real need for? You could bribe doctors with paid “speaking engagements,” take them out and show them the “best nights of their life,” all so they write prescriptions for patients who probably shouldn’t be getting your drug.

This is according on an indictment [PDF] filed yesterday by the Justice Department against the former CEO and five other employees of Insys Therapeutics, makers of the Subsys brand fentanyl spray, a fast-acting form of the drug that was primarily intended for cancer patients experiencing high levels of pain that couldn’t be managed through more traditional opioids.

The DOJ alleges that, starting in 2012, former Insys CEO Michael Babich and his fellow defendants bribed and provided illegal kickbacks to at least ten physicians — mostly operators of pain clinics — in ten different states.

“In exchange for those bribes and kickbacks, the practitioners wrote large numbers of Fentanyl Spray prescriptions, most often for patients who did not have cancer,” notes the indictment. “The bribes and kickbacks took different forms, but were most frequently disguised as fees the Company paid the practitioners for marketing events.”

Standing Out In A Crowd

When Subsys was introduced four years ago, it entered into a crowded field with a limited customer base. The DOJ notes that only between 1-2 million cancer patients in the U.S. met the pain and treatment standards that would indicate they should be prescribed the fentanyl spray. Meanwhile — in addition to the many opioids already on the market — four other similar drugs had recently been approved in the four years leading up to the Subsys debut.

Additionally, very few doctors in the U.S. were actually prescribing these sorts of last-resort, highly dangerous painkillers. According to the DOJ, 90% of all prescriptions in Subsys’ category were written by just 1,900 physicians in the U.S., while a mere 200 doctors were responsible for an astounding 30% of these prescriptions.

Insys allegedly set about to win over these niche medical practitioners, first launching a program that recruited certain physicians to give paid lectures — using content provided by Insys sales staff — on the use of Subsys.

The Not-So-Great Orators

The DOJ contends that internal Insys documents indicate that the company was not targeting physicians based primarily on their ability to communicate with other doctors, but on their ultimate use as revenue generators.

In a 2012 email quoted in the indictment, a regional sales manager reminds sales staff about “the important nature of having one of their top targets as a speaker. It can pay big dividends for them.”

In a separate text from this same executive, the DOJ says he makes it clear that doctors chosen for the program “do not need to be good speakers, they need to write a lot of [Fentanyl Spray prescriptions].”

That regional manager was soon promoted to VP of Sales for all of Insys, notes the indictment.

What Defines A “Speaking Engagement”?

As for the speaking engagements themselves, the DOJ says they were little more than “social gatherings at high-priced restaurants that involved no education and no presentation.”

In fact, the indictment claims that the audience members at these events had previously attended other presentations for Subsys, and that many of the people in attendance weren’t actually physicians but “support staff employed by the speaker.” Some events were just free dinners with no other attendees present, notes the DOJ, so Insys staff allegedly falsified the names and signatures of attendees.

The more prescriptions a “business partner” doctor wrote, say prosecutors, the more benefits they received from Insys in the form of “Area Business Liaisons” and “Business Relations Managers” — who were, according to the indictment, employees of Insys that were generally sent to work as support staff at the office of certain co-conspirator practitioners.

Insys is also accused of offering kickbacks in the form of jobs and payments to friends and family members of targeted doctors. The DOJ claims that in some cases the company would rent speaking venues — and purchase food from — businesses owned by the doctors and their loved ones.

Paid To Prescribe

The program worked, according to the examples highlighted in the indictment.

A doctor in Alabama had been writing a little more than two Subsys prescriptions per week before they became part of the Insys paid speaker program. The same week that this physician began getting paid to speak about Subsys, they wrote 18 prescriptions for the drug — more than six times their weekly average. The doc subsequently averaged around 11 Subsys prescriptions a week, while making around $7,000 per month for speaking at allegedly sham events.

There’s a similar story from a doctor operating pain clinics with more than 5,000 patients in Michigan. Before they became part of the speaker’s program, they were only writing around four prescriptions a week for Subsys. Then in mid-October 2011, Insys reps took him to dinner, after which they told their boss to “expect a nice ‘bump'” in sales linked to this practitioner.

In a span of approximately two months, this doctor allegedly wrote some 120 Subsys prescriptions — about four times what they’d been writing for patients. Over a 20-month span, that doctor was responsible for more than 2,800 Subsys prescriptions. During that time, the DOJ says the doctor took in more than $138,000 in payments from Insys, not including support staff provided by the drugmaker to the physician free of charge.

Best Night Ever

A Florida practitioner wasn’t even averaging one Subsys prescription a week in Aug. 2012. Then he became part of the speakers program, and that inched up to 3.3 per week. This was not enough for Insys, says the DOJ.

In Jan. 2013, the Insys VP of Sales took this doctor out to a club until 4 a.m. “He had to have had one of the best nights of his life,” wrote the VP.

Within a week, that doctor had already written 17 prescriptions for the drug. He eventually brought in $260,000 from speaking fees, according to the indictment.

Give & Take

If a doctor in the speakers program did not write enough Subsys prescriptions, says the DOJ, Insys reduced the number of scheduled speaking events for that physician “unless and until the practitioner wrote more prescriptions for the Fentanyl Spray.”

The DOJ points to a pain-management doctor in Arkansas with a heavy caseload of potential Subsys patients. Insys allegedly identified him early on and brought him into the speakers program, even though they knew this doctor was reluctant to prescribe opioids because his in-building pharmacy was apparently under investigation.

Even so, they brought this doctor into the program and began paying him for speaking events. However, it was months before he began writing prescriptions for Subsys, and Insys began canceling events they had scheduled for him.

Then in early 2014 a new sales rep came on board, brought this doctor back into the speaking engagement fold and — according to the indictment — immediately saw results, with the doctor writing some 30 Subsys prescriptions per week.

Cancer Patients = “Small Potatoes”

The DOJ says Insys sales staff were told to push doctors to prescribe Subsys to their patients without cancer.

The VP of sales allegedly told staff in 2014 that cancer patients were “small potatoes,” and that sales reps should say to doctors, “do you have a thousand people in your practice, a thousand patients, twelve of them are currently on a rapid-onset opioids. That leaves me with at least five hundred patients that can go on this drug.”

Because of the cost of Subsys and similar drugs, most insurance companies require patients to obtain prior authorization before the insurer will cover its portion of the price tag.

The DOJ says that insurance companies were reluctant to pay for Subsys when it was prescribed to patients without cancer, and so Insys allegedly set up call center to defraud insurers by lying to insurance companies about “patient diagnoses, the type of pain being treated, and the patient’s course of treatment with other medication.”

Employees in the Insys “Reimbursement Unit” were allegedly instructed to, among other things, tell insurers that a Subsys patient had been diagnosed with cancer, “regardless of whether the practitioner had prescribed the Fentanyl Spray for a different diagnosis.”

According to the indictment, these same employees would mislead insurers about treatments the patients had tried before resorting to Subsys.

The six defendants are accused of racketeering, mail fraud, wire fraud, and providing illegal kickbacks.

Harold H. Shaw, Special Agent in Charge of the FBI’s Boston Field Division says that these defendants “contributed to the growing opioid epidemic and placed profit before patient safety.”

For its part, Insys maintains that these allegations involve investigations that the company had previously disclosed. The drugmaker says it “continues to cooperate with all relevant authorities in its ongoing investigations and is committed to complying with laws and regulations that govern our products and business practices.”

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