United States Intervenes in False Claims Act Lawsuits Alleging Insys Therapeutics Inc. Paid Kickbacks to Promote Opioid Drugs
The Department of Justice recently announced it intervened into five consolidated False Claims Act (FCA) lawsuits against pharmaceutical manufacturer Insys Therapeutics, Inc. (Insys). The qui tam whistleblowers who brought the claims, allege Insys violated the FCA and the Anti-Kickback Statute when it paid kickbacks to induce physicians and nurse practitioners to prescribe their patients Subsys for non-approved uses.
Insys manufactures and markets Subsys, a liquid form of fentanyl, which was approved by the FDA to treat breakthrough pain in adult cancer patients who have become tolerant to other opioids. Subsys is a powerful controlled substance that has not been approved for uses other than treating opioid-tolerant cancer patients.
The qui tam whistleblower lawsuit claims that Insys paid kickbacks which included payments for sham speaking events, jobs for relatives and friends, strip club visits, and meals and entertainment. The lawsuit also alleges that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer and that Insys employees lied to insurers about patients’ diagnoses to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries.
The extent of Insys’s scheme is shocking considering the current opioid crisis in the U.S. Fentanyl, about fifty times more potent than heroin, has become “one of the most prominent killers linked to the drug crisis.” Often laced into other drugs sold illegally, users are not always aware that their purchases contain fentanyl. Because of fentanyl’s potency, fraudulent coverage of Subsys prescriptions could exacerbate the opioid epidemic and increase the number of fatal fentanyl-related overdoses.
In fact, the complaint filed against Insys describes a patient who was illegally prescribed Subsys based on misrepresentations made by an Insys representative; the patient died of a drug overdose in March 2016. Information about this patient was publicly revealed last September in a report issued by Senator Clair McCaskill, the top-ranking Democrat in the U.S. Senate Committee on Homeland Security and Government Affairs. The report, which describes Insys’s manipulation of the prior authorization process for Subsys prescriptions, is part of a larger investigation into opioid manufacturers and distributors.
In February, the DOJ identified the False Claims Act as a tool to target misconduct by painkiller manufacturers and distributors—which it views as the root of the opioid epidemic in the United States—and created a task force charged with tackling the over-prescription of opioid painkillers.
“Our intervention in these cases is just one part of the Justice Department’s multi-pronged efforts to combat the opioid crisis,” said United States Attorney Nicola T. Hanna. “The illegal marketing activities alleged in the government’s case helped fuel the crisis by improperly introducing opioids into the market. We are committed to hold accountable corporations and individuals who use kickbacks, off-label promotions and other illegal activities to sell lethal and highly addictive narcotics. Our goal is [to] bring about an end to the tragic epidemic that is harming untold numbers of people across the United States.”
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May 9, 2025
