DoJ Takes Action On Insys For 'Unfair, Deceptive Marketing Practices' Of Fentanyl Drug

Insys Therapeutics Inc INSY is a commercial-stage specialty pharmaceutical company whose product Subsys is a sublingual fentanyl spray for breakthrough cancer pain (BTCP) in opioid-tolerant patients

On Thursday, shares of Insys fell more than 3 percent after the Department of Justice announced it has brought enforcement actions against the company for alleged unfair and deceptive marketing practices surrounding Subsys.

The U.S. Food and Drug Administration approved Subsys for the management of breakthrough cancer pain in patients 18 years and older in January 2012.

The Case Against Insys

DoJ Attorney General Joseph Foster announced it has brought an enforcement action against Insys. The agency noted that patients in the state of New Hampshire received more than 100,000 units of Subsys during 2013 and 2014 and the majority of the prescriptions were written by a physician assistant named Christopher Clough who was employed at PainCare, a pain clinic in Somersworth.

The DoJ said that Clough was a frequent speaker within the Insys Speaker Bureau and was paid a total of $44,000 for speaking at around 40 programs on behalf of the company.

"The Attorney General's investigation concluded that many of these speaking engagements were a scheme by Insys to provide payments to induce prescribes to write Subsys prescriptions," the DoJ report stated. "Some of these speaking programs did not include anyone who could actually prescribe the drug and were sham events that were mostly social gatherings at high-end restaurants attended by Clough's friends and members of the office staff at PainCare."

Settlement

The DoJ noted that unlike other opioid manufacturers under investigation by the Attorney General, Insys was cooperative in investigations.

As part of an agreement with the Attorney General, Insys agreed to several terms, including a cap on the number of speaking events for any one speaker and a cap on the payments that a speaker can receive in a year.

Insys will also pay the State of New Hampshire $2.9 million for its collective violations of the Consumer Protection Act.

Attorney General Foster commented, "This settlement represents an important first step in our investigation of the marketing practices of opioid manufacturers. Understating or misrepresenting the addictive nature of opioids can and has led to addiction and, in far too many cases, overdose deaths in our state. It is important for this investigation to continue into the conduct of other opioid makers to assure that false and deceptive marketing practices have or will be stopped."