It was recently announced that Jonathan Roper, a former District Manager at Insys Therapeutics, and Fernando Serrano, a former sales representative at Insys Therapeutics, were arrested and charged with violating the Anti-Kickback Statute. The allegations are made as a result of their participation in a scheme to pay doctors thousands of dollars to participate in sham educational programs, in order to induce those doctors to prescribe millions of dollars’ worth of a fentanyl spray.
The fentanyl spray at issue was approved by the FDA around January 2012, solely for the management of breakthrough pain in cancer patients who are already receiving, and who are tolerant, to opioid therapy for their underlying persistent pain. The spray is the only FDA-approved product Insys currently has on the market, and they reported approximately $330 million in net revenue from the spray in 2015.
The FBI and Department of Justice (DOJ) allege that in order to market the spray, Insys established a program to educate healthcare processionals about the spray. Doctors that were selected to be speakers for the program were compensated for “providing educational presentations to a peer-level audience of healthcare professionals using a preapproved PowerPoint presentation.” In reality, however, many of the Speaker Programs that the two individuals organized and attended were predominantly social gatherings at high-end restaurants that had no educational component or slide presentation at all. Many of the programs also lacked a proper audience.
In an attempt to make these “speaker programs” seem legitimate, sign in sheets were forged by adding names and signatures of physicians who had not attended the program. Repeat attendees were also common at speaker programs organized by Serrano. Since all legitimate speaker programs required the use of the same preapproved slide presentation, there was really no educational purpose for healthcare professionals to attend multiple times.
There were a handful of doctors in particular that often acted as the purported speakers at the speaker programs. Those doctors were highly compensation by Insys for their duty as “speaker”: one doctor received over $147,000 and another received over $112,000 in speaker fees in 2014 alone. Those two physicians were also the two largest prescribers of the spray in the United States during that time period: prescribing over $3 million and over $2 million, respectively.
While it was widely understood at the company that doctors were selected as speakers in an attempt to induce them into prescribing large quantities of the spray, Roper explicitly instructed his sales team as such, in one email stating
Where is the ROI [Return on Investment]??!!! All prescribers from this team that are on this list are [Pharma Company-1] speakers. We invest a lot of time, $, blood, sweat, and tears on “our guys” and help spreading the word on treating BTCP [breakthrough cancer pain]. We hire only the best of the best to be apart [sic] of our speaker bureau and dropping script counts is what we get in return?
. . .
This is a slap in the face to all of you and is a good indication as to why NONE of you are climbing in the rankings this quarter. DO NOT be afraid to set your expectations and make them crystal clear as to what they are before, during, and after HIRING these priviliged [sic] set of docs who are fortunate enough to be a part of the best speaker bureau in the market in the world of BTCP [breakthrough cancer pain]. Please handle this immediately as funding will not be given out to anymore [sic] “let downs” in the future. Thanks.
Roper and Serrano were each charged with one count of conspiracy to violate the Anti-Kickback Statute and one count of violating the Anti-Kickback Statute. Each of the two counts carries a maximum term of five years in prison.
According to FBI Assistant Director Diego Rodriguez,
This case should be something the medical industry and the general public should pay close attention to because it’s one of the reasons we’re experiencing an epidemic of overdoses and deaths in this country. Not only did the defendants in this case allegedly bully sales reps into pushing this highly addictive drug, they paid doctors to prescribe it to patients. The more prescriptions written, the more money the doctors made. Instead of seeing a way to help people who are dealing with extreme pain, they allegedly saw a huge payday that potentially put people’s lives in danger.
There are two interesting things to note with respect to this case. First, Insys was not mentioned by name in any of the charging documents; however, it is clear from other details in the document – i.e., when the drug was approved and its annual sales in 2015 – make it clear that Insys is the company in question. Insys has also previously disclosed that it is under a federal investigation for its sales and marketing practices.
Second, the FBI agent utilized both Open Payments data and Medicare Part D data to make his case against Serrano, once again showing that those data can, and will, be used against physicians and others in the healthcare industry.