Illinois Sues Drug Firm Accused of Deceptive Marketing and Paying Indicted Doctor for “Sham” Speeches

Tuesday, August 30, 2016
Insys CEO John N. Kapoor (photo: University at Buffalo)

By Jessica Huseman, ProPublica


Illinois’ attorney general has filed suit against Insys Therapeutics, accusing the controversial pharmaceutical company of using deceptive marketing practices — including paying an indicted doctor thousands of dollars for “sham” speaking events — to sell its signature pain medication.


It’s not unusual for drug makers to pay doctors who have histories of misconduct for consulting or speaking about their products. A recent ProPublica analysis found that more than 2,300 doctors with records of discipline in five states had received payments from drug and medical device companies since 2013.


Insys was one of more than 400 companies that made payments to such doctors, but its activities have received far more attention than those of its peers.


According to investigations in several states, Insys’ business model relied on funneling substantial payments to the doctors who most frequently prescribed its drugs, even if they had troubling disciplinary records or even criminal histories. These payments were mostly for services related to Subsys, a fentanyl-based medication approved by the FDA to treat patients suffering from cancer pain resistant to other types of opioid drugs.


Insys’ activities have been the subject of 2014 and 2015 reports by CNBC and The New York Times. In June 2015, a nurse in Connecticut pleaded guilty to receiving kickbacks in connection to speaking payments she received from Insys while she was the top prescriber of Subsys to Medicaid patients in the state. In February of this year, a sales representative in Alabama pleaded guilty to fraud charges and in April, a district manager and a sales representative pleaded not guilty in New York, all in relation to kickbacks to doctors involved in speaking programs.


The most recent civil suit, filed Thursday by Illinois Attorney General Lisa Madigan in Cook County Circuit Court, seeks to impose financial penalties and bar the company from selling its products in the state. Madigan contends Insys routinely marketed the drug for off-label uses, including treatment for chronic migraines. Rather than forging relationships with doctors who treated cancer patients, “Insys instead directed its promotion and marketing in Illinois to high-volume opioid prescribers who are not oncologists or pain specialists who treat cancer,” the lawsuit says. An Insys spokesperson did not return a call for comment.


The company’s highest volume prescriber was Dr. Paul Madison, who prescribed 58 percent of Subsys prescriptions in the state despite treating “few, if any, cancer patients.” Madison was indicted in December 2012 on federal false claims charges for billing insurers for non-existent procedures. Insys sales representatives were aware of this indictment, and were also aware of Madison’s troubling prescribing habits, the lawsuit alleges.


The lawsuit says that in an August 2012 email sent to the company’s then CEO, Michael Babich, a sales representative said Madison ran “a very shady pill mill and only accepts cash,” and that he “basically just shows up to sign his name on the prescription pad, if he shows up at all.” That October, the same representative sent another email saying Madison had “called me personally” to say his office was “really under the eye of the DEA, and that he planned on getting patients started on Subsys in Indiana.”


Babich, unconcerned, replied he was “very confident that Dr. Madison will be your ‘go to physician.’ Stick with him.” Under pressure over negative publicity and growing numbers of investigations, Babich stepped down in November 2015.


Insys paid Madison more than $87,000 for speaking, travel and food from 2013 through 2015. Madison could not be reached for comment.


The lawsuit alleges the speaking events “functioned more as social gatherings,” and physicians in attendance hardly mentioned the drug at all, instead ordering as much food and drink as they liked. Most events referenced by the lawsuit took place in an upscale restaurant in Chicago. Madison’s speeches were titled, “Advancements in the Treatment of Breakthrough Pain in Cancer Patients,” despite his almost complete lack of experience treating cancer patients.


Beyond Madison, Insys had financial ties to an array of doctors with troubling records. ProPublica’s analysis - which included payments for things like speaking, consulting, travel, education and gifts, but excluded those for meals - found the company had paid Florida physician Paul Wand more than $93,000 since 2013 for services related to Subsys. In 2010, the Florida Board of Medicine filed an administrative complaint against Wand after a review of his records found he was “inappropriately and excessively” prescribing controlled substances to patients “without medical justification.” Earlier this year, he reached a settlement with the board under which he gave up his authority to prescribe controlled substances.


Insys has also paid Texas physician Fernando Avila $170,000 since 2013. Avila has had multiple disciplinary issues, dating as far back as 2003. In 2009, he was found to have improperly prescribed pain medication, and in 2011 he was disciplined after a patient was left with brain damage from a procedure in which Avila improperly administered anesthesia.


Neither Wand nor Avila responded to messages left at their offices.


The New York Times also found Insys had made large payments to a Michigan neurologist who was charged criminally for defrauding Medicare and a Rhode Island psychiatrist sanctioned by his state medical board. Both were accused of inappropriately prescribing Subsys.


To Learn More:

Illinois Sues Controversial Drug Maker over Deceptive Marketing Practices (by Jessica Huseman, ProPublica)

Doctors Disciplined for Misconduct Remain on Industry Payroll as Consultants and Speakers (by Jessica Huseman, ProPublica)

Drug Firm Hired Doctors with Troubling Track Records to Promote Powerful Painkiller (by Noel Brinkerhoff, AllGov)


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