A REPORT BY MASS TORT NEXUS
by Mark A. York ( September 26, 2017)
Subsys – an Insys Therapeutics, Inc. Pharmaceutical Opioid Product
Here’s a perfect example of how corporate greed and licensed medical providers helped create the now rampant US opioid crisis– how payments to doctors and prescribers across the country caused addictive painkillers, like “Subsys” a fentanyl based opioid, to suddenly rip through our country like a flash fire.
Insys Therapeutics,a publicly traded pharmaceutical company based in Arizona, is just one small example of what Big Pharma has been doing for the last 10 years in every city and state in the United States, often increasing corporate earnings right alongside the catastrophic opioid related death rates. For Insys Theraputics executives, the sales team and its nationwide cadre of fraudulent doctors, the results have been felony indictments and long federal prison sentences, with many more to come.
INSYS EXECUTIVES INDICTED
December 2016 saw Insys Therapeutics CEO Michael Babich and five other senior executives indicted on criminal charges for paying kickbacks and bribes to medical professionals and committing fraud against insurance companies across the country for offering a highly addictive Fentanyl prescription product “Subsys” to the masses. The Insys boardroom was indicted in the US District Court of Massachusetts, where the entire team has engaged a stable of top national law firms to defend the indictments. The “Subsys” sales teams were charged in federal indictments across the country, including Arkansas, Connecticut, Alaska and New York and the indictments will only increase as those cases proceed and “cooperating witnesses” decide that prison isn’t an option.
To compound further harsh scrutiny for Insys, it’s new CEO Saeed Motahari, moved over from Purdue Pharmaceuticals, the Oxycontin maker, who’s also a major target of criminal and civil investigations across the country by local state and federal agencies. Purdue is charged with false marketing, off-label use and ignoring the Oxycontin highly addictive dangers for years, while bringing in literally billions of dollars in profits, but Purdue’s transgressions are in Part 2 of our ongoing reports on big pharma and opioid abuses.
DOCTORS FACING NUMEROUS CHARGES
Doctors and their pain clinics, medical centers and other healthcare facilities have been indicted for fraudulent prescription writing, submitting false claims to insurance companies and numerous other federal charges and all face a minimum of 20 to 50 years in federal prison. Two of the busiest “Subsys” prescription writers in the country were Alabama doctors, John Couch and Xiulu Ruan, who earned over $40 million from Insys, and were charged with running a pill mill between 2013 and 2015, have been convicted and sentenced to 20 years each in federal prison. The top “Subsys: prescriber of all, Dr. Gavin Awerbach, of Saginaw, MI pled guilty to defrauding Medicare and Blue Cross out of $3.1 million in improper Subsys prescriptions, his criminal sentence is pending. To show the far reach of Insys and it’s corporate plans to saturate the US market with opioids, in Anchorage, Alaska Dr. Mahmood Ahmad, was charged with heading a massive Subsys prescribing operation, which he denies, but immediately surrendered his Alaska medical license which the caused the revocation of his medical license in Arkansas.
INSURANCE COMPANIES FILED SUIT
Adding weight to this tragedy is Anthem Insurance — you may recognize them as Blue Cross, one of the largest insurers in the country, now setting their sights on Insys Theraputics and it’s executives.
Anthem is suing Insys Therapeutics, the maker of the powerful opioid Subsys, for allegedly lying, cheating and defrauding its way into the medicine cabinets of Anthem clients across the country. The drug according to Anthem’s complaint, was off market prescribed to thousands of patients for years. Review shows that 54% of patients who are taking Subsys don’t really have cancer — one of the requirements for prescribing the drug, Subsys was FDA approved for “treatment of pain related to cancer” and any other use is unauthorized or off-label use.
Anthem says that’s because Insys devised an elaborate scheme to get around Anthem’s system — by falsifying records and posing as medical professionals, often with the complete knowledge and cooperation of medical doctors across the country who then received thousands of dollars in kickbacks. These doctors chose to exchange high fees from Insys in exchange for writing off-label prescriptions to patients seeking pain relief for non-life threatening conditions.
Anthem claims it ultimately paid $19 million more for Subsys than it should have. “But the harm inflicted by Insys’s conduct is not merely financial in nature,” the complaint states “Insys put Anthem’s members’ health at risk.”
THE OFF LABEL CAMPAIGN
The only people who are supposed to be taking Subsys are adult cancer patients, according to the FDA “Subsys” approval files, anything other than that is an “off label” indication. Now you can take a drug to treat something off label if you want to, but you have to get your doctor to get pass a prior authorization.
Anthem alleges that Insys has an entire unit to get around this requirement — it’s titled the “reimbursement unit.” Investigative journalists exposed this fraud initially as far back as 2015 on behalf of the Southern Investigative Reporting Foundation, see Insys Therapeutics “Subsys” Off Label Rx Fraud.
The Reimbursement Unit claim was basically the company’s fraudulent prescription approval factory, which helped participating doctors process claims (the doctors had so many they couldn’t handle them all). The unit falsified records to show patients had cancer and called insurers, pretending to be patients or other medical professionals, to facilitate approval of payment for off-label treatment.
This is the Unit’s script for obtaining off-label approval (taken from the Anthem suit):
The script read: “The physician is aware that the medication is intended for the management of breakthrough pain in cancer patients. The physician is treating the patient for their pain (or breakthrough pain, whichever is applicable).” The script deliberately omitted the word “cancer as applied to the patient treatment under discussion.”
DO STOCKS RISE AND FALL ON INDICTMENTS
In late 2016 the entire top level of Insys executives, including former CEO Michael Babich, and five others were indicted and charged with multiple counts of fraud and conspiracy. Since then a number of sales reps and medical practitioners have pled guilty to charges that they gave or accepted kickbacks in furtherance of the fraudulent prescription scheme. The manager of reimbursement services, Elizabeth Gurrieri, pleaded guilty to wire fraud in June. There have been numerous deaths and related overdoses attributed to the over prescribing of Subsys across the country, which to date, show most parties involved being able to avoid the scrutiny of criminal charges related to off-label marketing and prescribing. Insys has tried to re-shuffle the executive board by bringing in new members, but business as usual in the Big Pharma boardroom goes on, as they simply brought in other more experienced “opioid industry” insiders to help further the continued use of “Subsys” and purportedly the major Insys New Pharma” entry, a line of complex medical marijuana products, that may enable them to shake off the current Insys label as the United States leading “opioid abuse by boardroom design” corporation.
As part of the boardroom strategy to get doctors to prescribe Subsys, Insys spent millions paying them off through a fraudulent “speakers program” meant to educate medical professionals about the drug. The speaking engagements were a veiled attempt to cover-up the direct payment to doctors for writing prescriptions, the more prescriptions you wrote, the higher your “speaking fees” increased. There are e-mails, texts and other Insys communications from all levels of company personnel stating “if they not writing prescription, they’re off the speaking program”, this policy resulted in one Alabama sales rep being paid over $700 thousand in Subsys based Rx commissions for one year, while her base salary was $40 thousand.
“While the exact amount of those kickbacks has yet to be determined, criminal indictments of the recipients indicate that Insys paid “speaker fees” of millions, of dollars, which may result in additional criminal charges against the doctors as well as the doctors facility staff who often worked hand in hand with Insys staff.
SALES REP NATALIE REED PERHAC
In the plea, Perhacs admitted that she was hired to be the personal sales representative for one of Insys’s most important prescribers, Dr. Xiulu Ruan. Ruan is one of two Alabama doctors who picked up over $115,000 in speaker fees from 2012 to 2015, and earned in excess of $40 million in related medical earnings during the same period. Earlier this year they were sentenced to 20 years in jail each for running a “pill mill” and helping Insys sales rep Natalie Reed Perhacs sell Subsys, for which she was paid in excess of $700 thousand in commissions, see Perhac Guilty Plea in Alabama Federal Court.
Perhac Plea Excerpts:
Admision No. 78: . Perhacs admitted that her primary responsibility at Insys was to increase the volume of Subsys® prescribed by Dr. Ruan, and his partner Dr. John Patrick Couch. This… was accomplished by (1) handling prior authorizations for their patients who had been prescribed Subsys®; (2) identifying patients who had been at the same strength of Subsys® for several months and recommending that Dr. Ruan or Dr. Couch increase the patients’ prescription strength; and (3) setting up and attending paid speaker programs.
Admission No. 79:. Ms. Perhac admitted that because of her involvement in the prior authorization process, she knew that the vast majority of Dr. Ruan and Dr. Couch’s patients did not have breakthrough cancer pain.
As you can see by the Perhac admissions, numbers 78 and 79, which reflect the vast number of charges lodged against her, the federal government is cracking down on everyone involved with the “Subsys” fraud. According to confidential sources, the recent June 2017 FDA “Opioid Crisis” Conference and related strategic review of the opioid crisis, will result in many more indictments and charges against drug makers and the medical providers who’ve helped facilitate the opioid epidemic that is currently in place across the United States.
Coming in “The Opioid Crisis In America” Part 2: How Insys Therapeutics, Purdue Pharmaceuticals, Endo Health, J&J’s Janssen Pharmaceutical and other opioid manufacturers were allowed to place profits over patients for more than 15 years…