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Founder and executives of opioid company convicted of bribing doctors and lying to insurance companies to increase sales

The founder and four former executives of Insys Therapeutics Inc. were convicted Thursday by a federal jury in Boston of bribing medical practitioners to prescribe Subsys, a highly-addictive, fentanyl spray intended for cancer patients, and for defrauding Medicare and private insurance companies.

John Kapoor, Insys founder and former chairman, and other executives of the Arizona-based company could face prison sentences for the felony convictions that run as long as 20 years.

From May 2012 to December 2015, the defendants bribed practitioners, many of whom operated pain clinics, to get them to prescribe Insys’ Subsys to patients often when it wasn’t medically necessary. Subsys is a powerful, under the tongue, rapid-onset opioid used to treat cancer patients suffering intense breakthrough pain.

The defendants used pharmacy data to identify practitioners who either prescribed unusually high amounts of rapid-onset opioids, or might prescribe it, and bribed and provided kickbacks to them to increase the number of new Subsys prescriptions, and to increase the dosage and number of units of Subsys. The defendants measured their success by comparing the net revenue earned from targeted practitioners with the total value of bribes and kickbacks paid. The defendants used this information to reduce or eliminate bribes paid to practitioners who didn’t meet the prescribing requirements.

The bribes and kickbacks took many forms. In March 2012, Insys began using “speaker programs” which were supposed to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners. However, the programs were a way to pay bribes and kickbacks to practitioners in exchange for increased Subsys prescriptions and increased dosages. In most cases, the programs were shams, said U.S. Attorney Andrew E. Lelling.

The defendants also mislead health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. The defendants set up the “Insys Reimbursement Center” or IRC to get prior authorization for payment from insurers and pharmacy benefit managers.

Beginning in October 2012, employees of the IRC posed as employees of the practitioner and used “the spiel” – a script of false information about patient diagnoses to get approval for the drug, Lelling said. For example, since insurers were more likely to authorize payment for Subsys if a patient was being treated for cancer-related pain, IRC employees were instructed to mislead insurers about the true diagnosis of the patient.

“Today’s convictions mark the first successful prosecution of top pharmaceutical executives for crimes related to the illicit marketing and prescribing of opioids,” he said. “Just as we would street-level drug dealers, we will hold pharmaceutical executives responsible for fueling the opioid epidemic by recklessly and illegally distributing these drugs.”

Copyright 2019, Rita R. Robison, Personal Finance Writer

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