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Leon Kaye headshot

States Sue Opioid Manufacturers for Fraud Over Overdoses

By Leon Kaye

The federal government may not yet have a plan to combat the nationwide opioid crisis, but many state attorneys general are doing their part by pushing back against drug companies. And AGs from red and blue states alike are hitting opioid makers where it hurts the most: their pocketbooks.

Many drug companies ensnared in this scandal – and what are also tragedies for citizens who lose loved ones to opioid addiction – have responded with token programs in an effort to make amends, or to critics dodge responsibility, for their roles in the crisis. But those efforts, in the eyes of several AGs, are far from enough.

For example, Insys Therapeutics, which manufactures and markets an opiate, fentanyl, under the name Subsys, is now caught in the cross-hairs of several state top cops. Last week, New Jersey Attorney General Christopher S. Porrino, in filing a lawsuit against Insys, claimed that the company “engaged in a greed-driven campaign of consumer fraud and submission of false claims to health insurers” in a push to increase market share for Subsys. The litigation accuses Insys of wide array of abuses, including outrageous price hikes, the submission of false medical records to insurers and giving financial “kickbacks” to physicians.

On Friday in a public statement, Insys retorted to Porrino’s complaint that Subsys only represented 0.02 percent of opioid prescriptions in the U.S. during 2016, with sales ranking below the top 50 opioid manufacturers in the nation. The company also claimed that it has since come under new management and that 90 percent of its sales force has been replaced.

“It’s disingenuous to repeatedly demonize a company that has made a firm and sincere commitment and is taking all the necessary steps to conduct business according to high ethical standards,” an Insys spokesperson said. “It’s also unfair to the company’s current employees, most of whom are new to Insys and had no involvement in the past misdeeds.”

The problem with such a defense, however, is that while these companies have made huge profits across the U.S., states have been left with the expenses of hospitalizations, burdens on local law enforcement and lost productivity at companies. "Firm and sincere commitments" do not fund health care, reimburse lost wages or provide counseling for either those who have succumbed to addiction or for those who have lost family members and friends to opioid overdoses.

Insys has also been sued by the attorney general of its home state, Arizona. AG Mark Brnovich filed a lawsuit against the company in August, accusing the company of engaging in a “fraudulent marketing scheme.”

Meanwhile, Insys settled with Massachusetts AG Maura Healey last week. The company agreed to pay $500,000 in response to allegations that it illegally marketed Subsys with tactics including financial incentives that encouraged physicians to prescribe that drug, which is frequently described as 50-to-100 times stronger than morphine.

Other drug manufacturers can expect to see a long pipeline of litigation in the coming years. Purdue Pharma, the subject of a lengthy Los Angeles Times investigation last year, has been accused of engaging in a long, deceptive marketing campaign for OxyContin by Washington State AG Bob Ferguson. “Purdue conducted an uncontrolled experiment on the American public without any reliable clinical evidence that opioids are effective at treating chronic pain,” claimed Ferguson in announcing his state’s lawsuit last month.

New Hampshire, which supposedly was described as a “drug den” by President Trump earlier this year, is also taking on Purdue. The state’s AG office launched an investigation of the company in 2015. Upon filing a lawsuit in a superior court this August, AG Ann M. Rice insisted that Purdue continued many dubious business practices, including downplaying the risk of OxyContin addiction and failing to report any suspicious distribution of its products. Rice’s office had also investigated Insys at the beginning of this year.

Watch for more lawsuit announcements to hit the newswires as more state AGs realize this is one successful tactic that states can deploy to generate funds, which at a minimum can help local communities cope with this ongoing crisis. In August, for example, Illinois AG Lisa Madigan reached a $4.45 million settlement with Insys in order to fund such programs.

“Insys pushed a highly addictive opioid in complete disregard for patients’ health to increase company profits,” Madigan announced on August 18. “It’s unethical, greedy behavior by companies like Insys that is responsible for creating the opioid epidemic and resulting overdose deaths in our state.”

Image credit: Lowlova/Wiki Commons

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

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