The U.S. Department of Justice and five U.S. states, including California, have stepped into a previously secret lawsuit against Insys Therapeutics, Inc., revealing for the first time the central role played by whistleblower Maria Guzman in the government’s years-long pursuit of Insys for illegally marketing a dangerous opioid spray named SUBSYS.
The resulting probe has led to a series of convictions, guilty pleas, and indictments of doctors and former Insys executives – including the company’s billionaire founder, John Kapoor, who was indicted in 2017 on federal racketeering charges. The drugmaker is accused of trying to generate more profit by paying kickbacks to doctors to prescribe powerful opioid medications.
The government’s involvement was disclosed in a filing made public on Monday when the case filed in 2013 was unsealed. The move adds firepower to the civil litigation as Insys tries to resolve a federal probe into its marketing of Subsys, a spray form of fentanyl. Six U.S. states – California, Colorado, Indiana, New York, North Carolina and Virginia – also joined whistleblower litigation against Insys, according to the filing in U.S. District Court in Los Angeles.
Ms. Guzman alleged a nationwide scheme by Insys to defraud Medicare and Medicaid by inducing doctors, via kickbacks that ranged from cash to favors to sex, to prescribe large doses of the drug SUBSYS for federally insured patients who never should have received the drug, a form of fentanyl that’s designed to be sprayed beneath the tongue of people who suffer from extreme pain due to cancer.
Using a mantra of “pain is pain,” Insys illegally pushed the prescription of SUBSYS for lesser “off-label” conditions such as back pain and migraines, according to the complaint. Ms. Guzman was fired in 2013 after objecting to the potentially deadly scheme.
In federal court filings unsealed on May 11, the U.S. government and five U.S. states said they would take over litigation of the major part of Ms. Guzman’s action, specifically including her claims against Insys for kickbacks.
The original complaint was filed in Los Angeles federal court in 2013. The 139 page Second Amended Complaint in the case provides an account of Ms. Guzman’s experience at Insys. In addition to outlining a fraudulent scheme against taxpayers, it also alleges that Insys was a discriminatory workplace for women.
Indeed, much of the Second Amended Complaint can serve as a training manual for designing illegal kickback schemes. The first third of the document describes in detail how it was done under these topical categories.
– The INSYS Business Model and Kickbacks to Doctors (Page 12)
– Kickbacks and Speaker Programs (Page 14)
– Strip Clubs, Shooting Ranges, Meals, and Referrals (Page 17)
– Hiring a Doctor’s Significant Other Family Member, or Friend (Page 22)
– Burlakoff Offered Physicians Lucrative Business Deals and Partnerships (Page 24)
– Instructions for Avoiding Anti-Kickback Standards (Page 24)
With regard to the topic of avoiding anti-kickback standards, the Complaint claims that during the April 2013 INSYS conference in Arizona, management and specialty sales professionals shared methods with one another on how to avoid anti-kickback standards. At the conclusion of the meeting on of the presenters said “I don’t want to know what you do,” but stated they should do what they need to do, but “It’s not on me.”