September 30, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW HAVEN, Conn. – A former Insys sales manager has been charged with engaging in a kickback scheme that defrauded federal healthcare programs after encouraging physicians to prescribe Subsys, a drug containing the addictive fentanyl.
Jeffrey Pearlman, 49, of Edgewood, N.J., a former district sales manager for Insys, was in charge of selling the opioid spray across Connecticut, New York, New Jersey and Rhode Island. The spray is used to treat pain in cancer patients. Charges were brought by Deirdre Daly, United States Attorney for the District of Connecticut.
According to the federal complaint, between 2012 and 2015, Pearlman and his subordinate sales representatives used various tactics, including kickbacks, to get physicians and other prescribers to prescribe the drug. The feds said Pearlman used hundreds of sham “speaker programs.” According to the government the speaker programs appeared on the surface to be educational programs about the drug. However, the government alleged “the events were usually just a gathering of friends and co-workers, most of whom did not have the ability to prescribe the fentanyl spray, and no educational component took place.” The government said speakers were generally paid fees of $1,000 or more for attending. The government also said Pearlman, the government did not name Insys in the charges, forged sign-in sheets to make it appear as if the speakers were addressing “an appropriate audience of healthcare professionals.” The government alleged Insys, again, it did not name the company in the charges, paid one healthcare provider approximately $83,000 in “illegal kickbacks” to prescribe the company’s fentanyl spray in favor of similar medications.
The government alleged the kickback scheme cost federal healthcare programs millions of dollars in losses.
If convicted, Pearlman faces five years in prison and a fine of up to $250,000. Pearlman was released on $200,000 bond.
Arizona-based Insys has been under fire for its sales tactics regarding Subsys. Last year the company faced allegations it falsified data in order to sell more of its painkiller. In response, Insys said it is committed to patient safety and has complied with all law, including those related to adverse event reporting.
The kickback charges Pearlman faces may not be the only ones that will be levelled at Insys. Last year, the Southern Investigative Reporting Foundation (SIRF) issued a report alleging an Insys unit has been misleading insurers to change documents to state that pain was cancer-related in order to prescribe Subsys. SIRF maintains Subsys, the spray-on painkiller approved for the treatment of cancer-related pain, is 100 times more powerful than morphine. SIRF said the medication was being used to treat chronic pain that was not cancer related, including joint pain or pain related to military injuries. SIRF also alleged that some prescribers received tens of thousands of dollars in kickbacks to prescribe the medication.
“Since the drug launched in January 2012, the FDAs Adverse Events Reporting System lists 203 deaths where medical providers fingered Subsys as the probable candidate for triggering an adverse reaction. Moreover, the pace of purported Subsys-related deaths is accelerating, with FAERS disclosing 52 deaths in the second quarter alone,” SIRF said in its report.
Subsys, which launched in 2012, generated about $330 million in revenue last year for Insys. Insys said it delayed the launch of Subsys until after a Fentanyl risk evaluation study was completed “due to the company’s commitment to ensuring the product would be used and prescribed appropriately.”
