Originally in The News & Observer

December 21, 2017

Attorney General Josh Stein filed a lawsuit on Thursday against Insys Therapeutics, an Arizona-based pharmaceutical company that he accused of illegally pushing a fentanyl-based cancer pain medication at headache clinics in North Carolina to fatten company coffers.

The lawsuit, filed in Wake County Superior Court, focuses on Subsys, a spray form of fentanyl that is 50 times stronger than heroin, according to Stein, and 100 times more potent than morphine.

Because the medication is so powerful and addictive, the lawsuit contends, Subsys is only supposed to be marketed to prescribers for use by cancer patients experiencing “severe ‘breakthrough’ pain” after other pain medications no longer provide relief.

Because that was such a limited market, Stein contends, the company developed a strategy to push doctors to prescribe the drug to non-cancer patients. To bolster his claim, the attorney general highlighted comments that Alec Burlakoff, a Charlotte-based vice president of sales, is alleged to have made at a national sales meeting in 2015 before he was indicted and arrested a year later.

“These (doctors) will tell you all the time, well, I’ve only got like eight patients with cancer,”the lawsuit describes Burlakoff saying at the meeting. “... Doc, I’m not talking about any of those patients. I don’t want any of those patients. That’s, that’s small potatoes. That’s nothing. That’s not what I’m here doing.”

That strategy, according to the lawsuit, included “giving illegal kickbacks — often in the form of speaking fees — to doctors who excelled at promoting and prescribing Subsys to non-cancer patients.” The lawsuit contends that Insys deceived health insurance companies into paying for prescriptions by leading the insurers to believe the drugs were being prescribed to cancer patients when they knew they weren’t.

Insys employees also urged doctors to switch patients being prescribed other drugs not as potent as Subsys to their product, which often was at a starting dose more than 10 times what the label directed.

Joe McGrath, a spokesman for the company, said there would be no comment from Insys at this time.

Decline in life expectancy

The North Carolina lawsuit comes on the heels of a Centers for Disease Control and Prevention report that showed for the second year in a row life expectancy in this country declined, primarily because of drug overdoses. Two-thirds of the drug deaths in 2016 — about 42,000 — involved opioids, a category that includes heroin, methadone, fentanyl and prescription pain pills like OxyContin.

Fatal overdoses that involved fentanyl and fentanyl-like drugs doubled in one year, to more than 19,000, mostly from illegally made pills or powder often mixed with heroin or other drugs.

“As millions of Americans were becoming addicted to these prescription painkillers and communities were struggling to respond to the crisis, we allege that Insys unlawfully pushed these powerful painkillers on North Carolina patients just to make more money,” Stein said at a news conference Thursday. “It’s unconscionable. It’s unacceptable. It’s illegal and today I am taking action to put a stop to it.”

Stein’s action comes almost three months after federal prosecutors filed criminal charges against Insys founder John Kapoor, adding him to a list of other company executives charged in a case that has provided a glimpse of a marketing strategy that has become the focus of several federal probes across the country.

The U.S. Food and Drug Administration approved Subsys for cancer patients with breakthrough pain not controlled by conventional pain medicines. That means Insys Therapeutics cannot legally market the drug to non-cancer patients, but doctors may prescribe the drug “off label” for uses other than cancer.

The FDA-required label spells out the things it should not be used for, like postoperative pain, headaches and migraines.

Prosecutors argue that beginning in 2012, Kapoor, former chief executive officer Michael Babich, Burlakoff and others devised a scheme to pay speaker fees and other bribes to medical practitioners to prescribe Subsys, as well as defraud insurers.

The other defendants include former Insys Vice President Michael Gurry; ex-national sales director Richard Simon; and former regional sales directors Sunrise Lee and Joseph Rowan. They have pleaded not guilty.

“The opioid epidemic has taken lives and torn apart families all across North Carolina,” Stein said Thursday. “Over the past year, I have heard far too many gut-wrenching stories from families who have lost dear loved ones. ... Tens of thousands of North Carolinians suffer from opioid addiction or substance use disorder. Nearly four people die a day in North Carolina from an accidental overdose, more than any other type of accidental death in our state, and even more overdose each day and are revived by EMS or taken to a hospital for treatment.”

Stein has put much of his focus during his first year as the state’s attorney general on the opioid crisis. He has toured the state to get a ground-level view of the problem, and sought feedback and information on social media platforms. In September, Stein and 40 other state attorneys general across the country expanded their investigation into manufacturers and distributors of prescription opioids in an attempt to hold the pharmaceutical industry responsible for its part in the nationwide overdose crisis.

Speakers program and fees

Dr. Christopher Grubb, a pain specialist in Greenville, took the podium after Stein on Thursday to talk about how Subsys works. The fentanyl in the spray is extremely addictive “due to its quick absorption into the bloodstream and its immediate euphoric effects.” If the patient has not developed a tolerance to “round-the-clock opioids,” Subsys can cause respiratory depression, or slow and shallow breathing that can lead to a buildup of carbon dioxide in the blood.

“Therefore, marketing Subsys for anyone other than those with terminal cancer needlessly puts patients at risk for unintentional overdose and drug addiction,” Grubb said.

The lawsuit offers details of Insys speaker programs, which the company described as a method for “educating and informing prescribers in the medical community about marketed INSYS products in a fair and balanced manner.”

Lawyers from the attorney general’s office describe them in a much different way.

“In reality, Insys’ speaker series was designed with the specific purpose of inducing, influencing, and rewarding top-performing prescribers of Subsys, for expanding the market for Subsys to include many non-cancer patients,” the lawsuit states.

They contend the company devoted “a substantial amount of its budget to providing kickbacks for its top prescribers, using a variety of methods to disguise the payments, including characterizing them as compensation for speaker programs and related events, and for prescribers who served as ‘consultants’ or ‘advisers’ on sham Insys-organized boards.”

Headaches and Subsys

Insys, the lawsuit contends, routinely rated the success of speaker programs by keeping detailed statistics on the number of presentations, the number of prescriptions the speaker wrote, the percentage of Subsys prescriptions written versus those for competitors’ drugs and measuring the company’s “return on investment.”

In 2012, Burlakoff is reported to have told one sales representative not to focus on a potential speaker’s communication skills. “They do not need to be good speakers,” Burlakoff is quoted in the lawsuit as saying. “They need to write a lot of (Subsys prescriptions).”

In 2013, Insys sponsored a speaker program at the Carolina Headache Institute in Chapel Hill, Stein said. At the program, a speaker paid with Insys funding promoted Subsys to the headache specialists.

Another speaker program was held in Winston-Salem later that year that was geared toward specialists who were not oncologists trained to diagnose and treat cancer.

In the lawsuit, Stein, on behalf of the state of North Carolina, has asked the court to permanently restrain Insys, its agents and employees from “engaging in unfair or deceptive trade practices” in the promoting and marketing of pharmaceutical products. He’s seeking civil penalties and any funds the company acquired as a result of the practices outlined in the lawsuit.