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Advisen Healthcare Front Page News - Thursday, September 7, 2017


Dow Jones

Opioid maker bent rules to get drug to patients, Senate report says -- 2nd update
Opioid maker bent rules to get drug to patients, Senate report says -- 2nd update
Publication Date 09/06/2017
Source: Dow Jones News Service
By Joseph Walker 

A representative of Insys Therapeutics Inc. misled a health insurer into approving payment for a prescription of the company's addictive fentanyl painkiller, and 14 months later the woman who received the prescription was dead at age 32 from complications related to the drug, according to a report by a U.S. Senate committee investigating the opioid crisis.

The report released Wednesday is the first to stem from an investigation into the soaring rate of opioid deaths in the U.S., one being led by Sen. Claire McCaskill, the top-ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee. The investigators said they have been reviewing "thousands of pages" of documents to learn how companies marketed the drugs and what steps they have taken to prevent opioids from being diverted onto the black market.

Wednesday's report provides new details on the operation of the Insys Reimbursement Center, or IRC, which was tasked with helping patients and doctors secure prior authorization from insurers for prescriptions of Subsys, an inhaled form of fentanyl. The report also includes a copy of a 2014 audit of the IRC that was conducted on behalf of Insys by a consulting firm now owned by accounting firm Deloitte. The audit showed that Insys "lacked even basic measures to prevent its employees from manipulating the prior authorization process," the report alleges.

The Senate investigation comes as Insys is already facing multiple state, federal and civil lawsuits over allegations that it defrauded insurers and paid kickbacks to doctors. Federal prosecutors have alleged that IRC staff, under the direction of Insys executives and managers, frequently misrepresented their identities and patient diagnoses to defraud insurers who paid for Subsys, which can cost tens of thousands of dollars a month.

Insys is seeking to reach a legal settlement with the U.S. attorney's office in Boston to resolve allegations related to the company's sales and marketing practices and the IRC, the company has said. The Boston prosecutors are investigating both civil and criminal allegations against the company, according to people familiar with the matter.

Insys, based in Chandler, Ariz., has revamped its executive ranks over the past year, and 90% of its sales force before 2014 is no longer with the company, CEO Saeed Motahari said in a letter to Sen. McCaskill included in the report. The "mistakes and unacceptable actions of former Insys employees" do not reflect the company's current culture, Mr. Motahari said.

In a statement emailed to The Wall Street Journal on Wednesday, Insys said it cooperated extensively with Sen. McCaskill's investigation, but "we respectfully disagree with certain characterizations" in the report. "The report relates to activities of former employees of our company and matters that the company has addressed in its own efforts and in connection with investigations" by state and federal officials, the company said.

Mr. Motahari, a former executive at Oxycontin-maker Purdue Pharma, took over as Insys CEO earlier this year and serves on the company's board of directors. Despite the organizational changes at the company, the majority of its directors have been with the company since before its launch of Subsys in 2012. The company's directors include former CEO John N. Kapoor, the company's co-founder and largest shareholder.

According to the Senate report, a doctor prescribed Subsys to New Jersey resident Sarah Fuller in January 2015 to treat her back pain and other ailments. But because of the drug's high price tag, combined with its high potential for abuse and overdose, insurers like Ms. Fuller's had restricted its use to patients who suffered from severe cancer pain, the only use approved by the Food and Drug Administration.

An Insys representative called Ms. Fuller's insurance administrator, EnvisionRx, to get clearance for the prescription, and said she was "calling with [Ms. Fuller's] doctor's office," according to a transcript of the January 2015 call included in Wednesday's report. The Insys representative provided the doctor's national provider identifier number, or NPI.

When the EnvisionRx representative asked if the Subsys prescription was for cancer pain, "the Insys employee avoids responding directly and instead explains 'there's no code for breakthrough cancer pain,'" according to the Senate report. The Insys representative later says, "it's for breakthrough pain, yeah," according to the report.

A spokeswoman for EnvisionRx didn't immediately respond to a request for comment.

Ms. Fuller's prescription was approved, and "the result...was death due to allegedly improper and excessive Subsys abuse," the report says. In a wrongful-death suit filed against Insys and others in New Jersey state court, Ms. Fuller's family alleges she died in March 2016 as "a result of an adverse reaction to prescription drugs," including Subsys and the antianxiety medication known by the brand name Xanax.

Insys is defending itself vigorously against the lawsuit, the company has said in regulatory filings.

In an interview Wednesday, former Insys employee Patty Nixon said the IRC misrepresented Subsys prescriptions, and that this played a vital role in expanding the use of Subsys to patients without cancer. Many of them, she said, didn't need the drug and their insurers wouldn't have paid for it otherwise.

"The only way to get it into the patient's hands was it had to get through the IRC, otherwise the patient had to figure out how to pay thousands of dollars to pay for this medication," said Ms. Nixon.

Several former Insys executives and managers, including ex-CEO Michael Babich, have been charged with crimes related to their work at the company. Mr. Babich has pleaded not guilty to charges including racketeering conspiracy, mail fraud and violations of the anti-kickback statute. Elizabeth Gurrieri, the former head of the IRC, pleaded guilty in June to wire-fraud conspiracy and is cooperating in a federal investigation into Insys, according to court records.

According to the Senate report, Ms. Gurrieri was interviewed as part of the audit of the IRC conducted by Compliance Implementation Services, a consulting firm acquired by Deloitte in 2015. The audit report, dated February 2014, was conducted at the request of Insys and found no "major violation" of the company's policies or guidance to employees, but noted that such policies were often lacking or nonexistent.

Deloitte didn't immediately respond to a request for comment.

Write to Joseph Walker at

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