Ex-Insys salespeople plead not guilty in Subsys kickbacks scheme

Two former Insys Therapeutics salespeople indicted in a kickback scheme pleaded not guilty in Manhattan federal court Wednesday. The two are the latest ex-Insys staffers to run afoul of a federal probe of the company’s fentanyl marketing.

Jonathan Roper and Fernando Serrano were arrested in June on charges that they built sales of Subsys, a powerful fentanyl spray, by shelling out thousands in speaking fees to doctors.

In announcing the indictments in June, U.S. Attorney Preet Bharara said the allegations against the two men were particularly important in light of the opioid abuse epidemic. Though the opioid OxyContin and other hydrocodone products have been staples in prescription drug abuse, fentanyl is becoming a common alternative.

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“Because of its deadly power, its legitimate prescription faces significant and severe restrictions,” Bharara said in a statement. Roper and Serrano “corruptly induced doctors to prescribe millions of dollars’ worth of Fentanyl ... [and], as alleged, helped feed this devastating surge of opioid addictions by tapping into another age-old addiction, greed.”

Subsys brought in $329 million in sales for Insys last year. Its fast sales growth after an approval in 2012 raised eyebrows and triggered investigations into potential off-label marketing; the drug is approved only to treat cancer pain, but the company allegedly promoted it for other uses including migraine and neck pain. In 2014, a New York Times analysis found that half of Subsys scripts were written not by oncologists and pain specialists, as recommended by the FDA, but by other types of physicians such as GPs, neurologists and dentists.

The company has disclosed a raft of Justice Department probes in federal jurisdictions outside Manhattan. It also faces investigations at the state level.

Late last year, Insys CEO Michael Babich stepped down amid the controversy over Subsys marketing, to be replaced by the company’s founder, John Kapoor.

According to the latest federal indictment, Subsys educational events were actually thinly veiled social occasions where doctors paid to speak actually did not, Bharara’s office said in the statement. Roper and Serrano both organized the sales events, and Roper selected doctors eligible to participate in the speaker program, the indictment states.

The events were often held at high-end New York restaurants, the indictment states, and doctors were selected to speak on the basis of their Subsys script numbers. Two high-prescribing doctors who participated in a series of sham events each collected more than $100,000 from the company, the Justice Department says. One of them prescribed more than $3 million worth of Subsys, and the other prescribed more than $2 million.

Last June, a Connecticut nurse, Heather Alfonso, pleaded guilty to accepting $83,000 in kickbacks from Insys, in the form of speaking fees for events attended only by a company rep or by Alfonso’s personal friends. As part of her guilty plea, Alfonso admitted that the speaking fees influenced her prescribing decisions; prosecutors said she prescribed Subsys to many patients who did not have cancer.

- get the DOJ release
- see the Reuters news

Related Articles:
Nurse pleads guilty to taking Insys kickbacks as Subsys marketing probe continues
In guilty plea, ex-Insys sales rep says she was the inducement in a kickback scheme
Blockbuster sales of Insys painkiller raise suspicions of off-label marketing
Insys CEO Michael Babich steps down

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