Yet another former Insys Therapeutics sales manager has been arrested in connection with a scheme to boost prescriptions of the Subsys painkiller, which contains fentanyl, a powerful and addictive opioid, and is used for managing pain in cancer patients.
The feds say that Jeffrey Pearlman, 49, arranged for kickbacks to be paid to doctors and nurses by using “sham” speaking programs. And in the process, his efforts caused federal health care programs to lose millions of dollars for unnecessary prescriptions that were written. Medicare alone lost an estimated $1.3 million, according to court documents.
How did the scheme work?
Doctors and nurses were allegedly paid to attend dinners at “high-end restaurants” that masqueraded as speaker programs. One location was a well-known steakhouse in New Haven, Conn., called Carmen Anthony’s, which has since closed. In reality, the events were often “gathering of friends and co-workers,” many of whom could not prescribe the drug. And educational activities never took place, according to Deidre Daly, the US Attorney for Connecticut.
The purported speakers were allegedly paid fees up to several thousand dollars, while the names of health care providers were forged on sign-in sheets. One health care provider, who did participate in the programs, was paid about $83,000 in “illegal kickbacks” in order to boost Subsys prescriptions, according to an affidavit filed in federal court. And Pearlman allegedly authorized these payments.
As for Pearlman, who worked for Insys from September 2012 through December 2015, he allegedly profited because the increasing number of prescription generated larger bonuses. For example, he received a $95,000 bonus in the third quarter of 2013, according to court documents. Pearlman could not be reached for comment.
The arrest is only the latest development in a contentious drama involving Insys and its marketing of Subsys. The drug, which was approved in 2012 to treat acute cancer pain, is a form of the fentanyl narcotic that carries a high risk of dependency. And the company is being probed by various federal and state agencies that doctors and nurses were encouraged to prescribe the drug for unapproved uses.
Indeed, this is hardly the first time that Insys has been named in connection with illegal activities designed to boost prescriptions for Subsys.
Last year, a Connecticut nurse pleaded guilty to federal charges of accepting $83,000 in kickbacks from Insys, indicating the information provided by this person was used in making a case against Pearlman. In February, a former Insys sales rep in Alabama pleaded guilty to violating federal kickback laws in connection with an alleged scheme to boost prescriptions. And last June, a former district sales manager and a sales rep in New York were both arrested for such a scheme.
The string of arrests suggests increasing efforts by federal prosecutors to step up their investigation into the company. Their efforts reflect intensifying controversy over the abuse and misuse of prescription painkillers, and the extent to which these are appropriately marketed and prescribed.
From 1999 to 2014, more than 165,000 people have died in the United States from overdoses related to prescription opioids, according to data from the US Centers for Disease Control and Prevention. At least half of all opioid overdose deaths in the US involve a prescription opioid and, in 2014, more than 14,000 people died from overdoses involving prescription opioids.