Insys settles opioid case, files for bankruptcy; Mallinckrodt settles drug pricing case

By PharmaCompass

2019-06-13

Impressions: 126 Article

Last month, PharmaCompass had carried a report on billionaire John Kapoor, founder of Insys Therapeutics, being convicted by a federal jury in Boston. He, along with four of his senior colleagues, had engaged in a bribery scheme to get doctors to prescribe its potent and addictive opioid painkiller — Subsys. A federal jury in Boston had also charged them with duping insurers into paying for the drug.

Last week, there was news that Insys has decided to settle the fraud probes by agreeing to pay US$ 225 million. Moreover, an operating unit (named Insys Pharma) will plead guilty to fraud to settle probes into the payment of kickbacks to induce doctors to prescribe highly addictive opioids, the US Department of Justice (DOJ) said.

Subsys is an under-the-tongue spray meant to treat pain in adult cancer patients. It contains fentanyl, an opioid 100 times stronger than morphine.

Insys will pay a US$ 2 million fine, forfeit US$ 28 million, and pay US$ 195 million to settle charges it defrauded the government under the False Claims Act.

“For years, Insys engaged in prolonged, illegal conduct that prioritized its profits over the health of the thousands of patients who relied on it,” US Attorney Andrew Lelling in Massachusetts said. “Today, the company is being held responsible.”

In one instance, the company paid nearly US$ 260,000 to two New York doctors who wrote more than US$ 6 million worth of Subsys prescriptions in 2014.

After this US$ 225 million settlement, Insys filed for bankruptcy. It will sell off its assets post the settlement with DOJ.

Another drugmaker who decided to settle a DOJ probe was Mallinckrodt Plc. The company said it had tentatively agreed to pay US$ 15.4 million to resolve the DOJ probe into how a drugmaker it had bought over marketed an expensive treatment for a rare infant seizure disorder and multiple sclerosis.

The DOJ also alleged that from 2010 to 2014 the drugmaker used a patient assistance charity as a conduit to improperly subsidize Medicare patients’ copayment obligations, allowing the company to keep raising prices for the drug — HP Acthar Gel. Mallinckrodt said it will fight this new claim by the department.

In March, the department joined a pair of whistleblower lawsuits that alleged Questcor Pharmaceuticals, which Mallinckrodt had acquired in 2014, defrauded government healthcare programs by illegally marketing Acthar.

The DOJ said the price of the drug had spiked in the years since Questcor acquired it in 2001 from about US$ 50 per vial to US$ 32,200 in 2014. Mallinckrodt said the drug’s price today is US$ 38,892 per vial. Last year, Acthar represented 35 percent of Mallinckrodt’s US$ 3.2 billion sales.

The PharmaCompass Newsletter – Sign Up, Stay Ahead

Feedback, help us to improve. Click here

Image Credit : #Phisper Infographic by SCORR MARKETING & PharmaCompass is licensed under CC BY 2.0

“ The article is based on the information available in public and which the author believes to be true. The author is not disseminating any information, which the author believes or knows, is confidential or in conflict with the privacy of any person. The views expressed or information supplied through this article is mere opinion and observation of the author. The author does not intend to defame, insult or, cause loss or damage to anyone, in any manner, through this article.”

NEWS

DRUGS & DEVELOPMENTS

MARKET INTEL by PharmaCompass