Employees of Insys Therapuetics allegedly used a variety of ruses with insurers and pharmacy benefit managers (PBMs) to get reimbursement approval for their fentanyl spray (Subsys), including posing as doctor’s office employees and being deceitful about individual patients’ cancer status, according to a new congressional report issued on September 6 by US Senator Claire McCaskill (D-Mo).
A powerful synthetic opioid, Subsys was approved in 2012 for breakthrough pain in cancer patients who are already receiving other, around-the-clock opioids but who experience lapses in relief.
However, after FDA approval, only about 30% of Subsys prescriptions were being approved for reimbursement by payers, according to the report.
So, in 2013, the company set up a unit of employees, according to McCaskill’s report, to boost the company success rate with the “prior authorization” process, which is an insurance industry mechanism designed to prevent excessive use of expensive drugs such as Subsys.
Insys apparently succeeded in their efforts ― revenues tripled, and profits rose 45% after its initial public offering of stock in 2013. The value of company stock increased 296% between 2013 and 2016, according to the congressional report.
But the new report vividly details the systematic fraud that Insys employed to get around the authorization process.
The report includes a revealing transcript of conversations between an Insys employee and representatives from Envision Pharmaceutical Services, a PBM, regarding a Subsys prescription for patient Sarah Fuller. A New Jersey resident, Fuller died allegedly because of improper and excessive use of Subsys in March 2016.
Fuller did not have cancer but suffered from other medical conditions, including fibromyalgia and back pain.
“An Outright Falsehood”
In recorded phone calls obtained by congressional investigators, an Insys employee called the PBM and first identified herself as being “with” the office of Fuller’s doctor, Vivienne Matalon, MD, of Cherry Hill, New Jersey. In the second conversation, the same employee said she was “calling from the doctor’s office.” This was allegedly a standard practice by Insys employees, according to the report.
At a press conference on Wednesday, Senator McCaskill said the Insys employee’s claim was “an outright falsehood,” as reported by CNN. McCaskill added: “She’s not calling from the doctor’s office.”
During the recorded call, the Insys employee told the PBM that the drug Subsys was “intended for the management of breakthrough cancer pain.” The Insys employee continued but dropped any mention of cancer, saying that Fuller suffered from “breakthrough pain.”
Later in the call, when asked by the PBM whether the Subsys prescription will treat “breakthrough cancer pain or not,” the Insys employee avoided the question and responded by saying there was “no code for breakthrough cancer pain.” The Insys employee then said that the prescription was “for breakthrough pain, yeah.”
The Insys employee never identified herself as working for Insys, nor did she explain that the phone call came from an Insys office.
The new congressional report also describes how Insys avoided being identified as the source of phone calls to PBMs.
First, Insys obscured its outgoing phone number on caller ID. Second, when asked for a phone number for any return calls from insurers and PBMs, Insys employees provided a 1-800 number that was staffed by other Insys employees instead of providing the phone number of the prescribing physician.
Insys has paid a price for its actions, suggests the congressional report.
In the past 2 years, two major PBMs, Express Scripts and OptumRx, have excluded Subsys from their list of covered drugs.
In December 2016, federal prosecutors indicted former Insys Chief Executive Officer Michael Babich and five other former Insys executives on racketeering charges, alleging that these individuals “approved and fostered” fraudulent prior authorization practices. Another Insys manager, who was in charge of the prior authorization unit, pled guilty “to having conspired to defraud insurers” earlier this year.
With regard to prior authorization policies and practices, Insys President and CEO Saeed Motahari said, in a letter to the congressional committee that is posted in the new report, that the company had “completely transformed its employee base over the last several years,” including personnel in “key management positions.”
Motahari said Insys has “actively taken the appropriate steps to place ethical standards of conduct and patient interests at the heart of [its] business decisions.”
McCaskill, who is the top-ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee, also recently expanded her investigation into the causes of the opioid crisis in the United States. She is now including inquiries into the efforts drug companies made to report and investigate the diversion of drugs for illicit use, according to a Reuters report.
Currently, 91 Americans die daily as a result of opioid overdose, according to the US Centers for Disease Control and Prevention.
Follow Medscape senior journalist Nick Mulcahy on Twitter: @MulcahyNick
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