- In early 2013, a physician's assistant practicing at a pain clinic in a small New Hampshire city joined a speaker program run by Insys Therapeutics, the maker of the fentanyl spray Subsys. The assistant then went on to write 672 Subsys prescriptions, despite having never prescribed the drug in the 16 months prior.
- The speaker's program was a sham, according to charges brought by the U.S. government against Insys, used by the drugmaker as a "vehicle to pay bribes and kickbacks" to practitioners for prescribing more of the potent opioid painkiller. In the case of the New Hampshire physician's assistant, Insys paid $44,000 in kickbacks from what the government says were medically unnecessary prescriptions.
- As part of a deal with the Department of Justice announced Wednesday, a subsidiary of Insys will plead guilty to five counts of mail fraud tied to the speaker's program, agreeing to pay $30 million in fines and forfeiture. Separately, Insys also agreed to pay $195 million to settle allegations it violated the False Claims Act.
Wednesday's settlement follows last month's conviction of five former Insys executives, including the company's founder John Kapoor, for their involvement in bribing physicians to prescribe Subsys.
Subsys, which is approved to treat intense pain that cancer patients can experience, is extremely potent, considered to be roughly 50 to 100 times more powerful than morphine.
Insys, the government charges, constructed an elaborate scheme to convince doctors to prescribe the drug for other uses outside of cancer pain. In addition to the speaker's program — for which Insys' subsidiary acknowledged its criminal conduct in Wednesday's deal — the parent company allegedly paid kickbacks to physicians and nurses, offering jobs for relatives and friends of providers willing to prescribe Subsys.
The Department of Justice also alleges Insys lied to insurers about patient diagnoses so as to receive reimbursement for prescriptions written for Medicare and Tricare beneficiaries.
The latter allegations stem from five whistleblower lawsuits that accused the company of violating the False Claims Act. By settling those civil charges, Insys will enter into a five-year corporate integrity agreement.
In May, the company disclosed that it may need to file for Chapter 11 bankruptcy due to dwindling cash reserves and a then estimated $240 million liability connected with proposed settlement with the government. Wednesday's total of $225 million comes in below that forecasted sum.
"For years, Insys engaged in prolonged, illegal conduct that prioritized its profits over the health of the thousands of patients who relied on it," said Andrew Lelling, U.S. Attorney for the District of Massachusetts, in a statement from the DOJ. "Today, the company is being held responsible for that and for its role in fueling the opioid epidemic."