Insys Therapeutics today responded to the federal indictment Friday of five doctors on charges of conspiring to receive bribes and kickbacks from the company by expressing a commitment to “high ethical standards” and cooperation with authorities.
The U.S. Attorney’s Office for the Southern District of New York and the FBI on Friday unsealed the indictments, which allege that the five doctors accepted bribes and kickbacks in the form of fees for sham educational programs, in exchange for prescribing millions of dollars’ worth of Subsys® (fentanyl sublingul spray).
Insys this morning issued a statement committing the company to “compliant and ethical business practices” while continuing to advancing its product pipeline.
“The company continues striving to take responsibility for inappropriate actions of some former employees and has invested significant resources over the last several years to establish an effective compliance program and build an organizational culture of high ethical standards,” Insys stated. “Intending to learn from past events, we also continue working with relevant authorities to resolve issues related to inappropriate actions taken by former employees.”
Insys also committed itself to:
- Reinforcing an organizational culture of high ethical standards;
- Remaining “firmly committed to operating the business with a strong focus on the best interests of patients”; and
- Continuing to invest in innovating new treatment options for serious unmet patient needs.
“We believe our actions over the last several years, including our significant investment in R&D programs, illustrate our commitment to these priorities and the company’s future,” Insys added.
The charges against the doctors come five months after Insys’ founder and majority owner, John N. Kapoor, Ph.D., 74, of Phoenix, AZ, was indicted on federal racketeering and conspiracy charges stemming from what federal prosecutors alleged was a nationwide conspiracy to profit by bribing doctors and pharmacists to prescribe Subsys. He and other indicted executives of the company have pleaded not guilty.
Subsys is indicated for the management of breakthrough pain in cancer patients 18 years old and older who are already receiving, and are tolerant to, around-the-clock opioid therapy for their underlying persistent cancer pain. Subsys ranked number 19 on GEN’s most-recent list of Top 20 Abused Prescription Drugs, published September 11, 2017.
Last year, Insys generated $139.25 million in net revenues from Subsys—down nearly 43% from $242.275 million in 2016, as authorities continue to focus on reducing opioid abuse and scrutinizing the company's business practices.
“Speaker’s Bureau” Fees Scrutinized
According to the federal agencies’ 75-page indictment, Insys launched a “speakers’ bureau” in 2012 with the stated goal of physicians informing their peers about Subsys—but which was used by the company to induce the doctors to prescribe large volumes of the fentanyl spray by paying them “speaker program” fees.
Many of the speaker programs “were merely social gatherings at high-end restaurants with no educational presentation whatsoever,” the indictment stated.
All five doctors have been charged with anti-kickback conspiracy (for which they face up to 5 years in prison if convicted), violation of the anti-kickback statute (5 years), and honest services fraud conspiracy (20 years). Some of the doctors face additional charges.
Gordon Freedman, M.D., 57, of Mount Kisco, NY—a doctor certified in pain management and anesthesiology who owned a private pain management office on Manhattan’s Upper East Side—received the highest amount in speaker fees with approximately $308,600.
In 2013, the indictment alleges, Dr. Freedman was urged by a regional sales manager for Insys to prescribe Subsys to more of his patients—to which he responded, “Got it,” and significantly increased his prescriptions in subsequent months. During the fourth quarter of 2014, Dr. Freedman was the nation’s fourth-highest prescriber Subsys, accounting for approximately $1,132,287 in overall net sales, according to the federal agencies.
Jeffrey Goldstein, M.D., a doctor of osteopathic medicine who owned a private medical office on the Upper East Side, received approximately $196,000 in fees from Insys after the company urged him to switch patients to Subsys from a competitor painkiller, according to the indictment.
Dr. Goldstein, 48, of New Rochelle, NY, faces the additional charges of aggravated identity theft (2 years mandatory), and wrongful disclosure of individually identifiable health information (1 year).
Drinks and Lap Dances Alleged
Todd Schlifstein, M.D.—a doctor certified in physical medicine and rehabilitation who co-owned a private medical office on the Upper East Side with Dr. Goldstein— received approximately $127,100 in speaker program fees from Insys in exchange for prescribing large volumes of the fentanyl spray.
The federal agencies allege that Dr. Schlifstein’s Subsys prescriptions rose substantially after a senior Insys executive took him, Dr. Goldstein, and others to a Manhattan strip club where the company spent approximately $4100 on a private room, alcoholic drinks, and lap dances for the two doctors. The trip occurred after he expressed interest in becoming a speaker for Insys in October 2013, the indictment stated.
The following year, when Insys cut Dr. Schlifstein’s speaker programs to goad him into prescribing more Subsys, he repeatedly requested more speaker programs—only to be told by the company that he would need to step up his prescribing of the fentanyl spray, which the federal agencies allege he did. They added that Dr. Schlifstein finished the second quarter of 2015 as the nation’s 19th-highest prescriber of Subsys, accounting for approximately $593,373 in net sales.
Dr. Schlifstein, 49, of New York, was additionally charged with wrongful disclosure of individually identifiable health information (1 year).
Dialecti Voudouris, M.D., a doctor specializing in oncology and hematology who worked at a private medical office on the Upper East Side, received approximately $119,400 in speaker fees from Insys in exchange for prescribing the drug—and finished the first quarter of 2015 as the 10th-highest prescriber of the fentanyl spray nationally, accounting for total net sales of approximately $581,500, the indictment stated.
Dr. Voudouris, 47, of Long Island City, NY, was additionally charged with aggravated identity theft (2 years mandatory), and wrongful disclosure of individually identifiable health information (1 year).
Alexandru Burducea, D.O., a doctor certified in pain management and anesthesiology, received approximately $68,400 in fees from Insys in exchange for prescribing large volumes of Subsys—becoming the 14th-highest prescriber of fentanyl spray nationally, with total net sales of approximately $621,345, the U.S. Attorney’s Office and FBI contended.
Dr. Burducea, 41, of Little Neck, NY, was additionally charged with false statements to federal officers (5 years), and wrongful disclosure of individually identifiable health information (1 year).
Doctors Plead Not Guilty
All five doctors pleaded not guilty before U.S. Magistrate Judge Sarah Netburn, and have been released on $200,000 bond.
“These prominent doctors swore a solemn oath to place their patients’ care above all else. Instead, they engaged in a malignant scheme to prescribe fentanyl, a dangerous and potentially fatal narcotic 50 to 100 times more potent than morphine, in exchange for bribes in the form of speaker fees,” U.S. Attorney Geoffrey S. Berman said in a Justice Department statement. “Payments from pharmaceutical companies should not influence how doctors prescribe—especially when a potent and dangerous drug like fentanyl is involved.”
The authorities also unsealed the guilty pleas of two former Insys employees who participated in the bribery and kickback scheme, but are now cooperating with the federal agencies, Jonathan Roper and Fernando Serrano.