Dive Brief:
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Charges were filed on Wednesday against several former Insys Therapeutics executives and managers, including former president and CEO Michael Babich, accused of bribing doctors to prescribe fentanyl-based painkiller Subsys.
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They are being charged with crimes normally associated with organized crime, including racketeering, conspiracy to commit wire and mail fraud, and RICO conspiracy, as well as conspiracy to violate the Anti-Kickback law.
- In the past, Insys has faced lawsuits in multiple states over its marketing practices and criminal charges were filed against other former Insys employees in four states, according to Reuters.
Dive Insight:
While doctors are allowed to prescribe medications for off-label use, drugmakers aren’t allowed to market them for non-approved purposes. Subsys, the only product currently marketed by Insys, received FDA approval to treat pain in cancer patients. However, prosecutors say that the acted illegally to persuade doctors to write large numbers of prescriptions for patients without cancer.
The former Insys executives allegedly set up a reimbursement unit that allowed the company to get prior authorization of insurers and pharmacy benefit managers. In September, Stat reported on a case of a woman killed by Subsys, which she began taking after meeting with an Insys sales rep.
The arrest comes as reports continue to crop up over doctors taking payments from pharma and device companies. For example, Phoenix Business Journal recently reported area doctors received $26 million in non-research payments last year from such companies and Dallas Business Journal reported $2.6 billion in non-research related payments were made to doctors nationwide and that $67.5 million went to Texas doctors in 2015.
These payments may give the impression of impropriety, but some say that physician relationships with drug and device makers spur innovation. While motivations to accept money might not always be nefarious, financial relationships between doctors and drug and device makers influence treatment decisions, according to data from the ProPublica Dollars for Docs project.
This is not Insys’ first brush with the law. The company has been under investigation from federal authorities, as well as state authorities in California, Massachusetts, Connecticut, Arizona and Illinois.
The arrest come amid a national opioid addiction epidemic. On an average day in the U.S., there are 650,000 opioid prescriptions dispensed, according to the U.S. Department of Health and Human Services. More people died of drug overdoses in 2014 than any year on record and six out of ten of those deaths were due to opioid abuse. More than $55 billion in health and social costs are attributed to opioid abuse each year.
The federal government, as well as private entities, are taking steps to address this issue.