Tag: Subsys

08/6/19

Whistling in the Wind Against Insys

© Antonio-S | stockfresh.com

John Kapoor, the founder and former CEO of Insys was found guilty in May of 2019 of federal racketeering conspiracy charges for his role in Insys’s kickback scheme to boost sales of Subsys, its fentanyl spray, which is 100 times more powerful than morphine. His four co-defendants, former Insys executives and sales managers Michael Gurry, Richard Simon, Sunrise Lee and Joseph Rowan, were found guilty of federal racketeering conspiracy charges as well. Reuters, FiercePharma and NPR reported Kapoor was found guilty of running a nationwide scheme to pay doctors to prescribe Subsys by retaining them as speakers for what were sham events at strip clubs and expensive restaurants.

The FDA approved Subsys in 2012, but only to treat severe cancer pain. Prosecutors said Kapoor directed efforts to defraud insurers who were resistant to paying for Subsys, which could cost tens of thousands of dollars a month. Insys allegedly set up a call center where employees pretended to be from doctor’s offices. “Jurors heard phone calls in which Insys employees made up diagnoses to ensure that insurance companies covered Subsys.” Alec Burlakoff, the former director of the paid speaker program was seen in an internal promotional video (dressed as a dancing bottle of Subsys) where he and other sales managers were rapping about wooing physicians and capitalizing on opioid titration, boosting dosages of patients who develop a tolerance to the drug.

To be great, it takes a decision to be better than the competition. . . . Get a speaker you can meet with over supper. We can come to your office. We can go and bring some lunch in. While your staff is getting fed we can start discussing Subsys.

Burlakoff reached a plea deal in November and went on to testify against Kapoor. In early April he pleaded guilty and turned state’s evidence in Arizona, implicating Insys executives in a parallel lawsuit. He was forced to forfeit $9.5 million to the state.

Former Insys sales representative Holly Brown testified that Sunrise Lee gave a doctor a lap dance at a Chicago club in 2012. Brown said she saw Lee sitting on the doctor’s lap, “kind of bouncing around. . . . He had his hands sort of inappropriately all over her chest.” Lee is a former stripper turned regional sales manager for Insys. She was hired as a regional sales manager despite having no experience with pharmaceuticals. The Washington Post reported that her only previous managerial experience included running an escort service.

The doctor was Paul Madison who ran a notorious, “shady pill mill.”  Madison’s “speaker” events were held at a Chicago restaurant owned by Kapoor and were attended by his friends instead of clinicians. “The idea was these weren’t really meant to be educational programs but were meant to be rewards to physicians.” Insys paid Madison over $70,800. He was convicted in November on unrelated fraud charges for billing insurance companies for chiropractic manipulations that were never performed.

Kapoor, Lee and the other co-defendants denied any wrongdoing. Lee’s attorney specifically denied the lap dance allegation in court and accused prosecutors of “objectifying her in the same way … Dr. Madison did.” The heart of Kapoor’s defense argument was he was unaware of the illegal schemes, blaming Burlakoff and other former employees who pled guilty and then testified for the prosecution.

NPR said Kapoor is among the highest-ranking pharmaceutical executives to face trial for actions taking place in the midst of the opioid epidemic. It was the first successful prosecution of top pharmaceutical executives for crimes related to illegally prescribing and marketing opioids. U.S. Attorney Andrew Lelling said: “”This is a landmark prosecution that vindicated the public’s interest in staunching the flow of opioids into our homes and streets.” The guilty verdict could influence the cases against other pharmaceutical executives, as with Purdue Pharmaceuticals. See “The Tale of the OxyContin Lie” and “Giving an Opioid Devil Its Due” for more on the Sacklers and Purdue Pharmaceuticals.

Last year Insys agreed to pay $150 million over five years to end a Justice Department investigation into the bribery and kickback scheme. Since 2015, Insys shares have fallen 90 percent in value. On June 5, 2019, Insys Therapeutics agreed to settle the government’s separate criminal and civil investigations for $225 million. As part of the criminal resolution Insys will plead guilty to five counts of mail fraud, and pay $195 million to settle allegations that it violated the False Claims Act. Insys has been named in approximately 1,000 lawsuits over Subsys.

According to the charging document, from August 2012 to June 2015, Insys began using “speaker programs” purportedly to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners. However, the programs were actually used as a vehicle to pay bribes and kickbacks to targeted practitioners in exchange for increased Subsys prescriptions to patients and for increased dosage of those prescriptions.

Then on June 10th, the Wall Street Journal reported Insys filed for chapter 11 bankruptcy. This means the U.S. Justice Department will have to share available money with other unsecured creditors, suggesting it almost certainly will not collect its settlement in full. More than 90% of the company’s revenue came from opioid sales, but it wasn’t enough to cover the costs of lawsuits and investigations. How much the government collects depends on how much Insys can raise by selling its assets and the competition from other creditors. These other creditors include the U.S. Attorneys Office in Massachusetts, and the law firms who defended Insys and its former executives, including Kapoor. Insys spent more on legal costs in the first quarter than it did on research and development, sales, and marketing combined.

The company’s chapter 11 filing on Monday marks the first corporate bankruptcy directly linked to the nation’s opioid crisis, but more are possible as corporations struggle to dig out from under liabilities stemming from accusations that they profited from addiction.

Leo Beletsky, a professor of law and health sciences at Northeastern University, told NPR the trial against Kapoor and Insys overlooked broader issues, such as drug companies legally spending billions of dollars to maximize the use of their medications. “We need to think much more deeply about how we regulate the pharmaceutical industry and how we prevent these kinds of practices from occurring in the first place.” Yet there are no major legislative efforts to regulate the pharmaceutical industry. Hopefully Beletsky’s suggestion will be acted on and not become another example of whistling in the wind against attempts to hold pharmaceutical companies like Insys accountable for their actions.

For more on Insys and fentanyl, see “Fentanyl: Fraud and Fatality” and “A Time of Reckoning Is Coming.”

08/21/18

A Time of Reckoning is Coming

in the public domain; etching by Arnold van Westerhout (1651-1725)

There was an interesting study published in JAMA Internal Medicine noting that doctors who received any opioid-related payments in 2014—even for a single meal—prescribed more opioids in 2015. “One company, INSYS Therapeutics, accounted for 50% of nonresearch payments.” A relatively small number of physicians given nonresearch opioid-related payments (perks), 436 of 25,767 (1.7%), received $1,000 or more in total. The researchers said their findings suggested manufacturers should consider either a voluntary decrease or complete cessation of marketing to physicians for opioids. Federal and state governments were urged to consider legal limits on the number and amount of payments that could be given to doctors.

The research letter by Hadland et al. can be found here. In “More evidence companies pay some doctors to prescribe opioids,” Maggie Fox noted the Hadland study found that one out of every 12 U.S. doctors received something of value (money, lunch, etc.) from companies making opioids. PhRMA (Pharmaceutical Research and Manufacturers of America), the lobby group for pharmaceutical companies, issued a voluntary code of conduct to curb the once-widespread practice of handing out free branded items (mugs, prescription pads and other “swag”).

The three opioid manufacturing companies with the highest payment totals were Insys Therapeutics, Teva Pharmaceuticals USA and Janssen Pharaceuticals. Insys makes Subsys, a spray formulation of fentanyl licensed for extreme pain in cancer patients. “Payments made by Insys topped $4.5 million. Teva and Janssen each spent more than $800,000.”

Former Insys executives were charged with conspiring to “mislead and defraud” health insurance companies. See “Fentanyl: Fraud and Fatality.” Two former Insys executives have pled guilty and are cooperating federal prosecutors. “The company’s billionaire founder, John Kapoor, and other Insys officials and employees are also under indictment.” Insys said a new management team is making efforts to build a company culture of “high ethical standards.”

A company spokesperson wrote: “The company no longer hosts speaker programs for Subsys.” Further, he said there was a decrease of Insys-hosted physician speaker programs by 87% and an 82% drop in the amount in honoraria paid to those physician speakers from 2015 to 2017.  “In reality, according to federal prosecutors, the ‘lectures’ were just booze-fueled social gatherings, and the fees were kickbacks paid to prescribe Subsys.”

In “Opioid-Makers Cut Back On Marketing Payments To Doctors,” Charles Ornstein and Ryann Grochowski Jones wrote how the past two years has been a “time of reckoning” for pharmaceutical manufacturers over their contribution to the opioid epidemic through how they promoted opioid drugs. State and local governments have sued Purdue Pharma, Insys Therapeutics and other drug makers for their allegedly deceptive marketing of opioids. See “Giving an Opioid Devil Its Due” for more on Purdue Pharma and its promotion of OxyContin.

In 2016, drugmakers spent $15.8 million to pay doctors for speaking, consulting, meals and travel related to opioid drugs. That was down 33 percent from $23.7 million in 2015 and is 21 percent less than the $19.9 million spent in 2014. Companies are required to report the payments publicly under the Physician Payment Sunshine Act, a part of the 2010 Affordable Care Act.

The ProPublica Dollars for Docs online tool showed there were $9 billion in promotional payments made to more than 900,000 doctors between 2013 and 2016. The biggest decreases among opioid payments were for Subsys (from more than $6 million in 2015 to less than $2.4 million in 2016); and Hysingla ER, an extended release formula of hydrocodone made by Purdue, which dropped from around $6.3 million in 2015 to $2.2 million in 2016.

Purdue ended its speaker program for OxyContin at the end of 2016 and for Hysingla ER in November 2017. Earlier this year, it ended all direct promotion of its opioids to prescribers and last week [June 20th], the company laid off its remaining sales representatives.

Michael Barnett, an assistant professor of public health and management at Harvard thought while the decline in opioid marketing is potentially good news, it isn’t clear exactly why it is happening. He said if it is because manufacturers were aware their advocacy and payments to physicians could be seen as pushing opioids in a way that was ethically dubious, that would be a beneficial development. “Given the deluge of media attention with the opioid epidemic, I think we’ve seen the pendulum swing in the opposite direction.” Instead of opioids being seen as a needed and compassionate way to treat pain, they are now “being viewed as pretty toxic and only to be used as a last resort.”

Unfortunately, there has been a slower decrease in the use of prescription opioids than the sharp drop in marketing them noted above. The number of opioid prescriptions in Medicare was 81.7 million in 2014, dropping to 80.2 million in 2015 and then 79.5 million in 2016. Yet the rate of opioid overdoses continues to grow. Of the 42,000 reported overdoses in 2016, 40% involved a prescription opioid.

In a blog post on May 14, 2018, the FDA Commissioner Scott Gottlieb referred to opioid addiction as the biggest public health crisis facing the FDA. He said he regularly hears stories about “the emotional, physical and financial toll this epidemic is taking on Americans.” The FDA is considering guidelines for doctors to encourage the “more rational prescribing” of opioids. One idea is to encourage medical societies to develop evidence-based guidelines on prescribing opioids for acute medical indications.

Having sound, evidence-based information to inform prescribing can help ensure that patients aren’t over prescribed these drugs; while at the same time also making sure that patients with appropriate needs for short and, in some cases, longer-term use of these medicines are not denied access to necessary treatments.

While there are many individuals in need of opioids for short and long-term use, a time of reckoning still needs to take place with the opioid manufacturers who exploited this need for their own financial ends. In March of 2018 the CDC released an in-depth analysis of drug overdose data for 2016. From 1999 to 2015, 568,699 persons died from drug overdoses in the U.S. “There were 63,632 drug overdose deaths in 2016; 42,249 (66.4%) involved an opioid.” Increases were noted across demographics, urbanization levels and states. Overdose deaths from prescription opioids increased by 10.6%, from 2015 to 2016. Eight states had significant increases in death rates that included prescription opioids. West Virginia, Maryland and Maine and Utah had the highest rates.

03/14/17

Fentanyl: Fraud and Fatality

© Alexi Novikov

In December of 2016, several former pharmaceutical executives and managers of Insys Therapeutics were arrested on charges they participated in a nationwide conspiracy to bribe medical practitioners to prescribe one of the company’s fentanyl products, Subsys. The medication is approved for treating cancer patients suffering intense episodes of breakthrough pain. “In exchange for bribes and kickbacks, the practitioners wrote large numbers of prescriptions for the patients, most of whom were not diagnosed with cancer.” The indictment also alleges that these same former Insys executives conspired to “mislead and defraud” health insurance companies who were reluctant to approve payment for Subsys when it was prescribed for non-cancer patients.

The Special Agent in Charge of the Boston Field Division of the FBI said top executive of Insys Therapeutics, Inc. allegedly paid kickbacks and committed fraud in selling the highly addictive opioid. “The indictment also alleges that the conspiracy to bribe practioners and to defraud insurers generated substantial profits for the defendants, their company, and for the co-conspirator practioners.” The investigative team included multiple federal agencies, including: FBI, FDA Office of Criminal Investigations; Health and Human Services (HHS), U.S. Postal Service, the Department of Labor, and the Department of Veterans Affairs.

Reporting for STAT News on the indictments, David Armstrong said a Florida doctor was invited to Insys headquarters near Phoenix, where sales officials took him out for a night on the town. In a text message to a sales rep, one of the company’s regional sales managers said: “He had to have had one of the best nights of his life.”  The next week the doctor wrote 17 prescriptions for Subsys, when he usually wrote three. “He also received $260,050 in payments over three years for participating in the Insys speaking program — something federal officials allege was nothing more than a mechanism for bribing doctors.”

Subsys was launched in March 2012 into a crowded field of competitors, which included other brand-name medications and several generics. The drug was approved only for cancer patients with intense flares of pain — a narrow market — and only about 2,000 doctors in the country prescribed fentanyl products. The drug is also expensive, costing thousands of dollars a month.

Prosecutors allege the company overcame these challenges with a speaker program, where “educating” doctors on the use of the drug was actually a way to bride them. A former chief executive of Insys wrote to sales managers that they needed to make it clear to sales reps how having one of their top targets as a speaker “can pay big dividends for them.” Doctors didn’t need to be good speakers; they just needed to “write a lot of” Subsys prescriptions. The indictment did not identify any of the parishioners by name who allegedly received and kickbacks.

To sweeten the pot, the Insys employees allegedly scheduled speaking events at establishments owned by doctors, or their families and friends. The events allegedly had little do with education: They were often held at high-priced restaurants and attendees were frequently just friends of the doctor hired as the speaker, the indictment alleges. Fake names were used on sign-in sheets, and some events had no attendees at all, according to prosecutors.

The cancer market for Subsys was considered to be “small potatoes” by one of the indicted former Insys executives. While the alleged bribes led doctors to prescribe more prescriptions for Subsys, insurance companies were reluctant to pay when the drug was prescribed for non-cancer patients. So a system was created to deceive insurers into paying for off-label uses of the drug, which is incidentally, quite expensive. A call center was created at Insys to handle insurance reimbursement approvals for doctors prescribing Subsys.

Employees in this unit are alleged to have contacted insurers, giving the appearance they were calling from the doctor’s office.  Along with the supposedly deceptive medical information given to the insurers, they reportedly said patients had difficulty swallowing, which meant Subsys, as a nasal spray, had a distinct advantage over similar products that were in pill form. “Employees of the unit were rewarded with lucrative financial bonuses if the entire unit met a weekly target of reimbursement approvals.”

The Subsys fiasco is not the only fentanyl-related contribution to the opioid problem in the U.S. Two years ago the DEA issued a nationwide alert on fentanyl as a threat to health and public safety. State and local labs reported 3,344 fentanyl submissions in 2014, an increase from 942 in 2013. “In addition, the DEA has identified 15 other fentanyl-related compounds.” Warnings were issued to law enforcement about guarding against fentanyl absorption through the skin or accidental inhalation of airborne powder, as it is 30 to 50 times more potent than heroin. Ingesting as small as .20 mg to 2mg of fentanyl can be lethal. The following image, taken from the 2016 National Drug Threat Assessment (NDTA), illustrates the size of 2mg of fentanyl compared to a penny.

 

Globally, fentanyl abuse has increased in Russia, Ukraine, Sweden and Denmark. Mexican authorities have seized fentanyl labs run by the drug cartels. Intelligence indicated the precursor chemicals for fentanyl have come from companies in Mexico, Germany, Japan and China.

According to the 2016 NDTA, licit fentanyl is only diverted on a small scale. Illicit fentanyl, typically manufactured in China or possibly Mexico, is smuggled into the U.S. across the border with Mexico. Traffickers usually obtain fentanyl and mix it with heroin on their own. This happens at a variety of locations, including homes and even hotel rooms.

In August 2015, the DEA Manchester, New Hampshire DO, along with the Salem, New Hampshire Police Department, conducted an enforcement operation at a fentanyl mill in a hotel in New Hampshire. The traffickers used a hotel room kitchenette for mixing heroin and fentanyl together. Upon entry by law enforcement officers, the traffickers attempted to dispose of the drugs down the sink, spilling the highly lethal drugs all over the room.

Traffickers in the U.S. are also using fentanyl powder and a pill press to create counterfeit pills of oxycodone and other drugs. Officials in New Jersey and Tennessee seized pills that appeared to be oxycodone. But laboratory analysis indicated they were fentanyl or acetyl fentanyl. In May of 2015, Orange County Police Officers in California seized what appeared to be black tar heroin. “Upon laboratory analysis, the substance was revealed to be fentanyl and showed no traces of heroin or any other drug.”

In another article for STAT News, David Armstrong described the China connection with fentanyl. Raw fentanyl and the machinery necessary for assembly-line production of the drug are coming from Chinese suppliers. “The fentanyl pills are often disguised as other painkillers because those drugs fetch a higher price on the street, even though they are less potent, according to police.” A Southern California fentanyl lab had a dozen different packages shipped to mail centers and residences. A box labeled as a “Hole Puncher” was in fact a quarter-ton pill press. “The Southern California lab was just one of four dismantled by law enforcement in the United States and Canada in March [of 2016].”

In British Columbia, police raided a lab at a custom car business that was allegedly shipping 100,000 fentanyl pills a month to Calgary, Alberta. Federal agents shut down a Seattle lab set up in the bedroom of a home in a residential neighborhood. Police near Syracuse New York raided a similar residential lab, where they were warned by the people there not to touch the fentanyl without gloves because of its potency. “The emergence of decentralized drug labs using materials obtained from China — and often ordered over the Internet — makes it more difficult to combat the illicit use of the drug.” See “Buyer Beware Drugs” for more on this topic.

In January of 2017 the acting administrator of the DEA met with Chinese officials to address the synthetic drug crisis in the U.S. He said: “These meetings underscore our improving relationship and cooperative efforts as we work to stem the flow of dangerous synthetic opioids and related chemicals.  I appreciate the good work they are doing in China to help us address our opioid epidemic.” The DEA maintains an office in Beijing and hopes to expand its presence in China. Hopefully, if the China connection with fentanyl is turned off, the future outlook from the 2016 NDTA will not be as bleak.

Fentanyl will remain an extremely dangerous public safety threat while the current production of non-pharmaceutical fentanyl continues. Fentanyl poses not only a threat to users, but also to law enforcement personnel and postal service employees as minute amounts of the drug are lethal and can be inadvertently inhaled or absorbed through the skin. Although many drug users avoid fentanyl, still others actively seek it out for its strong and intense high. In 2015 traffickers expanded the historical fentanyl markets as evidenced by a massive surge in the production of counterfeit tablets containing the drug, and manipulating it to appear as black tar heroin. The fentanyl market will continue to expand in the future as new fentanyl products attract additional users.

In February 2017, Time reported that China announced that carfentanyl (carfentanil) and three related synthetic opioids would be added to its list of controlled substances effective March 1, 2017. The DEA called China’s action a potential “game changer.” Russell Baer, a DEA special agent said: “It’s a substantial step in the fight against opioids here in the United States. . . We’re persuaded it will have a definite impact.” In October, the Associated Press identified 12 Chinese companies the offered carfentanyl for export. That same month China began evaluating whether to add it and three other fentanyls to its list of controlled substances. “Usually, the process can take nine months. This time, it took just four.”