Insys Therapeutics: Speaker Bribes and the Reimbursement Center

In the Insys Subsys fraud case, Insys Therapeutics agreed to a $195 million civil settlement over alleged speaker kickbacks, medically unnecessary prescriptions and false reimbursement submissions. The alleged business model joined the payment to the prescriber with the story told to the insurer. In that account, Insys paid for prescriptions, then used its reimbursement center to help get them covered.

Subsys was a fentanyl spray administered under the tongue. Its approved use was narrow: breakthrough pain in adult cancer patients already receiving, and tolerant to, around-the-clock opioid treatment for their underlying cancer pain. The company’s alleged sales methods reached far beyond that patient population.

The Justice Department announced the civil resolution on June 5, 2019.

What the Insys Speaker Program Was Built to Produce

The civil complaints describe a speaker program that rewarded prescribing and removed speakers who did not produce it. A fee for talking about Subsys became a reason to prescribe Subsys.

The Founder’s Test for Keeping a Speaker

The founder allegedly made prescribing the test of a speaker’s belief in the product. The civil complaint describes an instruction to the sales leader: speakers had to support Subsys or lose their place in the program, and high prescribing demonstrated that support.

The complaint put the company’s stated selection policy beside the alleged instruction. Insys said it selected speakers for clinical experience. The founder’s alleged test was whether they wrote enough prescriptions.

The Chief Executive’s Sales Incentives

The chief executive allegedly reinforced that pressure through the sales force’s compensation. The same complaint described a structure in which potential bonuses exceeded the representatives’ base salaries. It also alleged that he understood the financial benefit of pushing patients to higher doses, quoting his explanation that prescriptions became more valuable as patients stayed on the drug and moved up in dose.

That connects the speaker program to the company’s own payroll. According to the complaint, both the prescriber and the representative had financial reasons to increase sales. Dose growth added another way to make the same patient worth more to Insys.

The Sales Leader’s Daily Prescription Demand

The sales leader allegedly measured spending by the prescribing it brought back. In an email accompanying an expense report, he said representatives with the highest meal expenses should rank first in their regions and produce a return on investment.

The complaint also reproduced a text to a prescriber that combined a possible job for the prescriber’s girlfriend with a demand for Subsys prescriptions:

The whistleblower alleged that Insys subsequently hired the girlfriend. An offer of work and a prescription demand appeared in the same exchange. An employee looking only at the speaker-fee account would miss that part of the alleged bargain.

The Prescription Data Behind a Sales Pitch

Claims data can tell a manufacturer where prescribing business is concentrated. A 2004 commentary in the American Journal of Health-System Pharmacy, Examining the Value of Pharmacy Benefit Management Companies, described pharmacy benefit managers selling claims data on drug types and volumes through data brokers to manufacturers. It described an established market behind prescription processing:

The Insys civil complaint shows how that capability could be pitched to a drug company. It reproduces an email proposing Qforma’s analytics to Insys, including the use of medical and pharmacy claims to identify valuable physician targets and their networks. The whistleblower separately alleged that business discussions concerned targeting physicians who prescribed large amounts of opioids.

The Reimbursement Center Was the Other Half of the Sale

The Insys Reimbursement Center sought insurers’ approval to pay for Subsys. The civil complaint alleged that sales representatives knew center staff would lie to obtain approval. Getting the prescription was only part of the sale.

Prior authorization puts an approval decision between the prescription and coverage. A sales representative could persuade a doctor to prescribe a drug and still need the insurer to agree to pay. Insys allegedly put its own staff on that second task.

The civil complaint describes the paperwork passing through the company. Sales representatives supplied partially completed authorization forms. After the physician completed the form, the representative or office staff sent it to the center. Center employees contacted the Medicare Part D insurer or another insurer to seek reimbursement.

The whistleblower alleged that sales staff prefilled forms with chronic-pain diagnoses and a statement that the patient was opioid tolerant. Those entries were patient information presented for a coverage decision, yet the complaint described sales employees supplying them in advance. The approval process was becoming another sales function.

That is the connection between paying for prescriptions and false reimbursement submissions. The alleged inducement created the prescription. The authorization work helped turn it into a covered sale. The alleged result was public and private insurance paying for medically unnecessary prescriptions. The complaint named Medicare, Medicaid and TRICARE among the government health care programs billed.

Gift Cards Hidden Behind Coffee Receipts

A separate whistleblower complaint alleged that Insys sales staff disguised gift-card purchases as ordinary office refreshments. The alleged benefit to the prescriber disappeared into a different description on the expense receipt.

The complaint described a manager teaching a representative to buy gift cards from local delicatessens and obtain receipts showing coffee and other items that could be delivered to doctors’ offices. The manager allegedly submitted those receipts to Insys for reimbursement and used the cards to reward Subsys prescribing. The receipt explained the expense to the employer while concealing what the doctor received.

Novartis admitted a closely related practice in its speaker-program settlement. A sales representative arranged fake restaurant receipts for dinners that had not occurred and used the funds to buy gift cards for high-prescribing doctors. Across both accounts, the expense description concealed the benefit that reached the prescriber.

What Insiders Could See Beyond Open Payments

The public payment data has a significant gap here. Physician assistants and other non-physician practitioners first became reportable recipients in Open Payments for program year 2021. During the Insys conduct, payments to physician assistants were outside that reporting requirement, and the criminal information charging Insys described kickbacks to a physician assistant.

Open Payments also records payments rather than prescriptions. An internal account of why a speaker was selected, what prescribing the company expected and what it told the insurer can therefore explain something a public payment search cannot.

Different employees see different connections. A representative may know the instruction behind a speaking invitation. A reimbursement employee may know who supplied a diagnosis or what the caller said to an insurer. An employee reviewing expenses may recognize that the receipt describes something other than what was bought. We work with pharmaceutical whistleblowers to connect that knowledge to the company decisions and government claims it affected.

What the Civil Settlement Covered

The Insys civil settlement resolved allegations about speaker bribes, medically unnecessary Subsys prescriptions and false reimbursement submissions. The government’s announcement tied those allegations to five qui tam lawsuits brought by whistleblowers. The United States joined the cases. In its complaint, the government alleged that Insys paid kickbacks to physicians and nurse practitioners through payments for sham speaker program speeches, jobs for prescribers’ relatives and friends, and lavish meals and entertainment. It also alleged that Insys encouraged physicians to prescribe Subsys for patients who did not have cancer and lied to insurers about patients’ diagnoses to obtain reimbursement for prescriptions written for Medicare and TRICARE beneficiaries. Insys also entered a five-year corporate integrity agreement and a conditional exclusion release with the Department of Health and Human Services’ Office of Inspector General. The agreement carries enhanced material breach provisions, and the inspector general will release its authority to exclude Insys only after the company satisfies its obligations under the agreement.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Company Wanted Paid

If you saw speaker fees buying prescriptions or sales staff supplying the story an insurer needed to hear, speak with our whistleblower experts. We build the case with you, bring in pharmaceutical fraud whistleblower lawyers who understand prescriber payments and reimbursement records, and stay beside you through the case.