Several pharmaceutical executives and managers, formerly employed by Insys Therapeutics, Inc., were arrested today on charges that they led a nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers.
The indictment alleges that Michael L. Babich, 40, of Scottsdale, Ariz., the former CEO and President of the company; Alec Burlakoff, 42, of Charlotte, N.C., former Vice President of Sales; Richard M. Simon, 46, of Seal Beach, Calif., former National Director of Sales; former Regional Sales Directors, Sunrise Lee, 36, of Bryant City, Mich. and Joseph A. Rowan, 43, of Panama City, Fla.; and former Vice President of Managed Markets, Michael J. Gurry, 53, of Scottsdale, Ariz., conspired to bribe practitioners in various states, many of whom operated pain clinics, in order to get them to prescribe a fentanyl-based pain medication. The medication, called *Subsys, is a powerful narcotic intended to treat cancer patients suffering intense episodes of breakthrough pain. In exchange for bribes and kickbacks, the practitioners wrote large numbers of prescriptions for the patients, most of whom were not diagnosed with cancer.
The indictment also alleges that the now former corporate executives charged in the case conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. They achieved this goal by setting up the ‘reimbursement unit’ which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers.
“Patient safety is paramount and prescriptions for these highly addictive drugs, especially Fentanyl, which is among the most potent and addictive opioids, should be prescribed without the influence of corporate money,” said United States Attorney Carmen M. Ortiz. “I hope that today’s charges send a clear message that we will continue to attack the opioid epidemic from all angles, whether it is corporate greed or street level dealing.”
“As alleged, top executives of Insys Therapeutics, Inc. paid kickbacks and committed fraud to sell a highly potent and addictive opioid that can lead to abuse and life threatening respiratory depression,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “In doing so, they contributed to the growing opioid epidemic and placed profit before patient safety. These indictments reflect the steadfast commitment of the FBI and our law enforcement partners to confront the opioid epidemic impacting our communities, while bringing to justice those who seek to profit from fraud or other criminal acts.”
“We take allegations of paying kickbacks to physicians in exchange for prescribing medically unnecessary painkillers extremely seriously,”said Special Agent in Charge Phillip Coyne of the US Department of Health and Human Services, Office of the Inspector General. “Working closely with our law enforcement partners, we will continue to protect the health of Medicare beneficiaries and the integrity of the nation’s healthcare system.”
The defendants were arrested in their respective states and will appear in US District Court in Boston at a later date. Babich is charged with conspiracy to commit racketeering, conspiracy to commit wire and mail fraud and conspiracy to violate the Anti-Kickback Law; Burlakoff, Simon, Lee and Rowan are charged with RICO conspiracy, mail fraud conspiracy and conspiracy to violate the Anti-Kickback Law; Gurry is charged with RICO conspiracy and wire fraud conspiracy.
Prescription Drug Labels: Actions Needed to Increase Awareness of Best Practices for Accessible Labels Blind or Visually Impaired
What GAO Found
GAO found that some pharmacies can provide accessible prescription drug labels, which include labels in audible, braille, and large print formats and are affixed to prescription drug containers.
Mail order pharmacies: Four pharmacy benefit managers (PBMs) used by large insurers that GAO contacted reported that they can provide accessible labels through their mail order pharmacies.
Retail pharmacies: Six of the 9 largest chain pharmacy companies and 8 of the 18 selected individual retail pharmacy locations GAO contacted also reported that they can provide accessible labels through their store-based retail pharmacies.
The percent of prescriptions dispensed with accessible labels was generally low — less than one percent of all prescriptions dispensed—according to some PBMs and chain pharmacy companies that GAO contacted. With regard to best practices, a working group convened by the US Access Board — a federal agency that promotes accessibility for individuals with disabilities — developed and published 34 best practices for accessible labels. Four PBMs, six chain pharmacy companies, and eight individual retail pharmacy locations GAO contacted reported that they have generally implemented most of the 34 best practices for accessible labels. However, stakeholders GAO contacted said that individuals who are blind or visually impaired continue to face barriers accessing drug label information, including identifying pharmacies that can provide accessible labels.
Stakeholders GAO contacted identified four key challenges that pharmacies faced in providing accessible labels or implementing the best practices: (1) lack of awareness of the best practices; (2) low demand and high costs for providing accessible labels; (3) technical challenges for providing these labels; and (4) an absence of requirements to implement the best practices. Many stakeholders identified greater dissemination of the best practices as a step, among others, that could help address some of these challenges.
The National Council on Disability (NCD) — the federal agency responsible for conducting an informational campaign on the best practices, as required by the Food and Drug Administration Safety and Innovation Act (FDASIA) — has conducted limited campaign activities. Primarily in 2013 and 2014, NCD used its website and social media to disseminate an agency statement and press releases on the best practices. However, most stakeholders GAO spoke with said they had no communication with NCD about its campaign, and some said they were unaware of the best practices. Agency officials provided GAO with an original plan for conducting campaign activities through 2014, but most activities were not conducted. During the course of our review, NCD developed a corrective action plan for conducting future campaign activities. However, neither plan assigned responsibilities for conducting these activities nor does the agency have plans to evaluate them, which is inconsistent with federal internal control standards. Without assigning responsibilities and developing an evaluation plan, NCD will be unable to adjust its action plan and assess whether the information on the best practices is effectively reaching its target audience.
Why GAO Did This Study
About 7.4 million Americans are blind or visually impaired and may face difficulty reading prescription drug container labels. FDASIA required the US Access Board to develop best practices for accessible labels and NCD to conduct an informational campaign on these best practices.
FDASIA also included a provision for GAO to review pharmacies’ implementation of these best practices. This report examines: the extent to which pharmacies can and do provide accessible labels and implement the best practices; pharmacy challenges; and the extent to which NCD conducted its informational campaign, among others.
GAO collected information from 55 stakeholders, including 4 PBMs used by large insurers; 9 of the largest chain pharmacy companies; 18 randomly selected individual retail pharmacy locations in 4 states with varying levels of visually impaired residents; and 24 others, such as state regulating bodies and advocacy and industry groups. GAO sent a web-based questionnaire to PBMs, chain pharmacy companies, and individual retail pharmacy locations. GAO also interviewed stakeholders and reviewed state regulations and documents from NCD.
What GAO Recommends
NCD should assign responsibility for conducting campaign activities and evaluate these activities. NCD neither agreed nor disagreed with the recommendation but indicated that it is taking steps to address this issue.
For more information, contact John Dicken at (202) 512-7114 or dickenj@gao.gov.
“Like Putting an Arsonist in Charge of Fighting Fires”; “[Pruitt] Has Fought Environmental Protection Agency Pollution Limits on Toxic Substances Like Soot and Mercury”
The following is a statement from Earthjustice President Trip Van Noppen in response to President-elect Trump’s nomination of Scott Pruitt, a climate-change denier, to head the Environmental Protection Agency:
“Every American should be appalled that President-elect Trump just picked someone who has made a career of being a vocal defender for polluters to head our Environmental Protection Agency.
“We all rely on the Environmental Protection Agency to enforce our clean air and clean water laws to keep us safe from toxic pollution. The leader of this agency should respect the importance of our bedrock environmental laws, be guided by science to make informed decisions and, above all, place the health of our families and communities above corporate profits.
“Scott Pruitt possesses none of these values. He has long opposed responsible rules for cutting toxic pollution, including the EPA’s Clean Power Plan [for Existing Power Plants], and he’s been in lockstep with the oil industry for years.
“He’s been so cozy with polluter lobbyists that he let them draft comments about federal pollution limits, changed a few words, then copied it onto his official Oklahoma Attorney General stationery and submitted it as the comments of the people of Oklahoma.
“He has fought Environmental Protection Agency pollution limits on toxic substances like soot and mercury that put us all at risk for increased cancer, childhood asthma and other health problems. He falsely claims that fracking doesn’t contaminate drinking water supplies.
“The media uncovered that he’s been part of a secretive, coordinated national corporate campaign to undo the federal pollution protections that are supposed to keep our air and water clean. In exchange, the oil industry has reciprocated with campaign contributions.
“Polluters would clearly be the ones who benefit from Pruitt being the Environmental Protection Agency Administrator. Regular Americans would be the losers.
“Earthjustice strongly believes that President-elect Trump should retract this announcement or the Senate should reject this nomination.
“The head of the Environmental Protection Agency should be making sure that our air is clean to breathe and our water is safe to drink, not working to make sure polluters make more money.
“Despite the wealth of research worldwide documenting the connection between CO2 emissions from pollution and climate change, Pruitt has cast doubt about whether global warming is related to human activity. Anyone who doesn’t believe in scientific research is completely unqualified to lead the primary federal agency tasked with addressing this issue.”