PHOENIX — The state’s top prosecutor is charging a major Arizona manufacturer of opioids of using unfair and deceptive marketing practices designed to pad company profits at the expense of patient safety.
A lawsuit filed late Wednesday in Maricopa County Superior Court claims Insys Therapeutics engaged in a nationwide scheme to deceive patients, doctors and insurers about the safety of Subsys, its sublingual spray form of the powerful opioid fentanyl.
“Insys lied to insurers, concealed key facts from doctors and patients, and paid doctors sham ‘speaker fees’ in exchange for writing prescriptions, all in order to increase the sales of Subsys, without regard for the health and safety of patients,” charged Attorney General Mark Brnovich. “Insys made hundreds of millions of dollars from its deceptive scheme but also put countless patients in harm’s way, exposing them to unacceptable and unnecessary risks of addiction and death.”
Brnovich is using the state’s Consumer Fraud Act to ask a judge to block Insys and its employees from engaging in unfair, deceptive or misleading acts. That allows him to demand the Chandler-based company to both pay restitution to consumers who should never have been prescribed the drug as well as force the company to surrender all of its profits from what Brnovich says is the company’s illegal practices.
There was no immediate comment from an Insys spokeswoman, but the company clearly knew it was under investigation.
In June, Insys told the Securities and Exchange Commission the firm had received a “civil investigative demand” from officials in Arizona as well as other states. The company said the demands sought information about its sales and marketing practices related to Subsys, which happens to be the company’s only federally approved product.
What Brnovich learned formed the basis for the litigation not only against Insys but against three doctors who he said were responsible for 64 percent of the nearly $51.9 million Subsys sales in Arizona during a five-year period.
At the heart of the lawsuit is Brnovich’s contention that Insys promoted Subsys in ways designed to generate sales while ignoring health concerns.
Brnovich said the U.S. Food and Drug Administration has approved Subsys only to manage “breakthrough pain in cancer patients 18 years of age and older who are receiving and tolerant to around-the-clock opioid therapy for their underlying persistent cancer pain.”
At the same time, he said, the FDA-required label spells out the things it should not be used for, things like postoperative pain and for headaches and migraines. In fact, he said, the FDA warns that deaths have occurred in patients give fentanyl products who are not tolerant of opioids.
But Brnovich said Insys ignored all that to promote sales.
One of the biggest schemes, he said, has been getting insurers to pay for the expensive drug, even in situations where its use was neither necessary nor appropriate.
In general, a doctor must get prior authorization from the insurer, sharing information like the patient’s medical history and current conditions. In late 2012, Brnovich said, fewer than a third of those requests were granted.
But in 2013, he charged, Insys inserted itself into the process, having doctors contact Insys and company employees contacting the insurers. Brnovich said those employees “manipulated the (patient) information provided to insurers” to convince them that a Subsys prescription was needed.
By July 2013, the lawsuit says, Insys got prior payment authorization more than 75 percent of the time. By November, the company’s board of directors was told that had increased to 100 percent.
It wasn’t just that Insys employees were the ones calling the insurers. Brnovich said Insys instructed its employees to lead insurers and pharmacy benefit managers to believe they were calling from a doctor’s office “when in fact they were calling directly from Insys.”
Worse yet, Brnovich said Insys employees falsely claimed that patients had cancer and “breakthrough pain,” since that was the only diagnosis for which the FDA had approved the drug.
Brnovich said Insys employees told insurers that patients had tried other medications and found them ineffective “when in fact patients had not tried those medications.”
The lawsuit also claims the company’s so-called “speaker fees” program was really a thinly disguised effort to reward doctors who prescribed the most Subsys.
In the case of the three doctors named in the suit — Dr. Sheldon Gingerich of Tucson, Dr. Nikesh Seth of Maricopa County and Dr. Steve Fanto of Maricopa County — Brnovich said they collectively wrote about nine Subsys prescriptions a month before they started getting money from Insys. When the checks started coming in, that figure averaged about 62 prescriptions a month.
“Those startling statistics were no accident,” Brnovich said. “Instead, they were the predictable and calculated results of a scheme operating by Insys both in Arizona and nationwide.”
The results, said Brnovich, resulted in nearly $200 million in profits in 2014, more than $300 million in 2015 and in excess of $215 million in 2016.
The new lawsuit is far from the company’s first legal problem. Earlier this month, Insys paid $4.5 million to resolve a lawsuit filed by the Illinois attorney general, who charged that the company was deceptively marketing Subsys for off-label uses. In agreeing to that deal, the company put out a press release saying it “reflects our firm commitment to take responsibility for actions by our former employees.”
But there were limits to that admission.
“We do not believe it is factually accurate to state that Insys has materially contributed to the opioid crisis in the state of Illinois or the nation,” the statement said.
Insys also reported it entered into an “assurance of voluntary compliance” with the state of Oregon that “requires us to maintain certain control and processes around our promotional sales related to Subsys in Oregon. While the company said it did not admit to any violation, it did agree to pay about $1.1 million.
The company also reported it paid $2.9 million to New Hampshire and a $500,000 contribution to a charity to be used to prevent or remediate problems relating to abuse, misuse or “misprescribing” of opioid drugs.