Consumer Health Digest #18-23

Your Weekly Update of News and Reviews
June 10, 2018


Consumer Health Digest is a free weekly e-mail newsletter edited by William M. London, Ed.D., M.P.H., with help from Stephen Barrett, M.D. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making. Its primary focus is on health, but occasionally it includes non-health scams and practical tips.


Egregious marketing and prescribing of pain drugs exposed. A recent, lengthy expos√© describes extraordinarily sleazy marketing and promiscuous, off-label prescribing of Subsys, which, by December 2013, became the most widely prescribed branded TIRF (transmucosal immediate-release fentanyl) drug product. [Hughes E. The pain hustlers. The New York Times Magazine, May 2, 2018] Subsys, a spray manufactured by Arizona-based Insys Therapeutics, was FDA-approved for under-the-tongue administration to treat "breakthrough" cancer pain that is not controlled by other medicines. The active ingredient, fentanyl, is an extremely potent synthetic opioid. According to CDC, the huge increase in the opioid overdose death rate between 2015 and 2016 is attributable mostly to synthetic opioids likely driven by illicitly manufactured fentanyl. Allegations of deaths due to improper prescribing of Subsys have also been made. 


Eight Insys officials prosecuted. In December 2016, six former Insys pharmaceutical executives and managers were charged with leading a nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers. They include Michael L. Babich, the former CEO and President of the company; Alec Burlakoff, former Vice President of Sales; Richard M. Simon, former National Director of Sales; former Regional Sales Directors, Sunrise Lee, and Joseph A. Rowan; and former Vice President of Managed Markets, Michael J. Gurry, 53, of Scottsdale, Arizona [Pharmaceutical executives charged in racketeering scheme. U.S. Attorney's Office press release, December 8, 2016] In October 2017, a superseding indictment added additional charges plus allegations against John N. Kapoor, founder, majority owner, and member of Insys's Board of Directors. [Founder and owner of pharmaceutical company Insys arrested and charged with racketeering. U.S. Attorney's Office press release, Oct 26, 2017] In July 2017, Karen Hill, former Insys Therapeutics Regional Manager for the southeastern United States, pled guilty to conspiring to pay illegal kickbacks to doctors in exchange for prescribing Subsys. The others are scheduled for trial early next year.


Subsys over-prescribers receive prison sentences.¬† In May 2017, Dr. John Patrick Couch and Dr. Xiulu Ruan were sentenced to 240 months and 252 months, respectively, in federal prison for running a massive pill mill in Mobile, Alabama in which they prescribed both Subsys and Abstral (another TIRF), almost exclusively for "off-label" treatment of neck, back, and joint pain. The jury found that the defendants received illegal kickbacks from Insys in exchange for prescribing massive quantities of Subsys. Evidence showed that Ruan and Couch had purchased approximately $1.6 million worth of stock in Galena Biopharma, the manufacturer of Abstral, and sought to manipulate the stock price by driving up Abstral sales. The two doctors owned C&R Pharmacy, which was co-located with one of their pain management clinics. Their pharmacy would only fill prescriptions they wrote. They split 75% of the profits that came in from the prescription drug reimbursements. The prescriptions filled at their pharmacy cost patients' insurance $1,000 to $24,000 per month. Both doctors were convicted of:

Ruan was also convicted of money laundering counts. The pair also agreed to a $5,000,000 money judgment and forfeiture of houses, beach condos, and bank accounts, as well as 23 luxury cars, including multiple Bentleys, Lamborghinis, Mercedes, and Ferraris. 

In May 2017, Justin Palmer and Bridgette Parker, both nurse practitioners for Couch, pled guilty to conspiring to prescribe controlled substances outside the usual course of professional practice and not for a legitimate medical purpose. They were sentenced to federal prison for 30 months and 20 months, respectively. Christopher Manfuso, who worked for IPM and later owned CRX, pled guilty to conspiring to pay illegal kickbacks to the doctors and was sentenced to 6 months home confinement and a $50,000.00 fine. Insys Therapeutics drug rep Natalie Perhacs pled guilty to conspiring to pay illegal kickbacks associated with the prescribing of Subsys. [Dr. Couch and Dr. Ruan sentenced to 240 and 252 months in federal prison for running massive pill mill. U.S. Attorney's Office press release, May 26, 2017]

In March 2018, Dr. Jerrold N. Rosenberg, 63 of Warren, the operator of a now-defunct pain management practice in Rhode Island, was sentenced to 51 months in federal prison for committing healthcare fraud and for conspiring to solicit and receive kickbacks in return for prescribing the drug Subsys.

Civil fraud actions filed against TIRF marketers. In April, the United States intervened in five qui tam (whistleblower) lawsuits accusing Insys of violating the False Claims Act in connection with the marketing of Subsys. [United States intervenes in False Claims Act lawsuits accusing Insys Therapeutics of paying kickbacks and engaging in other unlawful practices to promote Subsys, a powerful opioid painkiller. U.S. Department of Justice press release 18-631, May 15, 2018] The suits allege that Insys:


FDA warns online networks marketing unapproved opioids. The U.S. Food and Drug Administration has warned nine online networks, operating a total of 53 websites, that they must stop illegally marketing potentially dangerous, unapproved and misbranded versions of opioid medications, including tramadol and oxycodone. [FDA takes action against 53 websites marketing unapproved opioids as part of a comprehensive effort to target illegal online sales. FDA news release, June 5, 2018]


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This page was posted on June 11, 2018