Clubbing until 4 am, “free dinners with friends” at posh restaurants. Insys racketeering arrests across the US and Bristol-Myers Squibb’s payout for illicit marketing of antipsychotic drug to children and eldery the latest scandals to plague the pharmaceutical industry
Several pharmaceutical executives and managers, formerly employed by Insys Therapeutics, Inc., were arrested Thursday on charges that they led a nationwide conspiracy to bribe doctors to unnecessarily prescribe a powerful and addictive fentanyl-based pain medication and defrauded healthcare insurers.
The 60-page indictment alleges that six employees of the Scottsdale, Arizona-based company fostered schemes to bribe doctors across the country with nights on the town and dinners at lavish restaurants in return for large numbers of prescriptions of the drug called “Subsys,” a powerful narcotic intended to treat cancer – to patients not diagnosed with cancer.
It alleges how in 2012, the company funded a marketing scheme called the “Speaker Program” which required sales representatives to recruit licensed practitioners, most of whom worked in pain clinics, to lecture regarding the use of the drug in exchange for an “honoraria” for each event.
However, according to the indictment, the speaker events were “often just social gatherings at high-priced restaurants that involved no education and no presentation” but “functioned as a bribe in the form of a free dinner with friends.”
One of the Best Nights of His Life
Other “events” are described in more detail. In January of 2013, it alleges, three of the accused, Michael L. Babich, 40, of Scottsdale, Ariz., the former CEO and President of the company; Alec Burlakoff, 42, of Charlotte, N.C., and sales representative Joseph Rowan, 43, of Panama City, Fla. invited an unnamed doctor to corporate headquarters in Arizona. Rowan and Burlakoff allegedly took the doctor to a club and Burlakoff sent the sales representative a text the next day saying, “went fantastic last night…. [Practitioner#4] and I got back around 4AM. He had to have had one of the best nights of his life.”
One week later, the sales representative assigned to Practitioner #4 informed Burlakoff and Rowan that Practitioner #4 had written 17 Fentanyl Spray prescriptions in less than a week. The same day, Rowan allegedly texted Practitioner #4: “we appreciate you more than you could believe. Leaving that meeting Alec and I felt very confident and [sic] what was going to happen. And … you show loyalty to us like no other. You need anything at all, it is done. Thank you for being you.”
Between August 2012 and November 2015, insurers and pharmacy benefit managers authorized payment for approximately 2,030 Fentanyl Spray prescriptions written by Practitioner #4.
The now former corporate executives are also charged with conspiring to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. They allegedly did this by setting up a “reimbursement unit” dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers.
Opioid death toll rising
“Patient safety is paramount and prescriptions for these highly addictive drugs, especially Fentanyl, which is among the most potent and addictive opioids, should be prescribed without the influence of corporate money,” said United States Attorney Carmen Ortiz.
This week the Centers for Disease Control and Prevention released its annual mortality report for 2015. Deaths from opioids, including illicit fentanyl, rose 73 percent to 9,580. But prescription painkillers killed 17,536. Deaths from all overdoses topped 52,000.
Camp for doctors’ kids, Broadway tickets and resort holidays
The illicit trade in prescription drugs is not restricted to painkillers, however. This Thursday 43 states and the District of Columbia announced that they had reached a $19.5 million agreement with Bristol-Myers Squibb (BMS) over allegations that the company illegally sold a popular antipsychotic drug called Abilify for unapproved use in children and demented patients.
It is the latest turn in the company’s decade-long litigation resulting from whistleblower allegations by three BMS employees that led to a multistate consumer protection investigation of Otsuka America Pharmaceutical, Inc., which manufactures Abilify, and BMS, which promoted it.
Court documents filed against BMS have revealed that the pharmaceutical giant gave doctors box seats to games, free enrollment at Los Angeles Lakers basketball camp for their kids, free access to luxury golf courses, Broadway and concert tickets, visits to posh resorts and many more kickbacks in exchange for writing more prescriptions for their drugs.
The company paid $30 million in July to settle charges by California officials of paying kickbacks to induce doctors to prescribe drugs including the cholesterol pill Pravachol, the blood thinner Plavix, the antipsychotic Abilify used to treat major depression, bipolar disorder, schizophrenia and Tourette’s syndrome, the diabetes medicine Glucophage and the anti-anxiety drug BuSpar.
“These companies endangered and compromised the health and well-being of millions of Americans in order to turn a profit,” California Attorney General Kamala Harris said on Thursday. “This settlement makes clear that pharmaceutical companies using deceptive and unlawful tactics to promote drugs will not be tolerated in the United States.”
The fines are a fraction of the company’s profits from the drugs, however. Abilify is a “blockbuster” drug which generated $5.5 billion in sales in 2014, with $2.02 billion of that allotted to BMS.
Drooling, “worm-like tongue movements” and uncontrolled face movements
The drug which is not approved for use in children has an extensive list of documented side effects from speech impairment and drooling, loss of balance, muscle trembling or jerking, shuffling walk, uncontrolled movements of the face, neck, and back and blurred vision to inability to move the eyes, unusual facial expressions, “worm-like movements of the tongue” and severe muscle stiffness.
In 2008, the FDA upgraded its warnings on Abilify to include increased risk of death to demented elderly patients and to teenagers. And a recent injury lawsuit alleges Abilify is responsible for obsessive compulsive behavior too, including gambling addiction.
The complaints this week are more illustration of an industry plagued by a predatory and criminal mindset. But it is not confined to the United States. Last month the drug company Teva revealed it had set aside $520 million of its projected 2016 revenue of more than $21 billion to settle investigations by the Justice Department and Security Exchange Commission into violations of the Foreign Corrupt Practices Act (FCPA) concerning issues that occurred in Russia, Mexico and Ukraine. The company has also been embroiled in accusations of bribes to doctors in Mexico and in Chile.
In the past three decades, nearly every pharmaceutical giant has been involved in settlements or criminal charges of egregious fraudulent practices and bribery schemes. A recent analysis by the consumer advocacy group Public Citizen, found that pharmaceutical companies paid $35.7 billion to settle federal and state civil and criminal charges between 1991 and 2015.