Drug Maker’s Former Employees Accused of Shady Dealings With Doctors


A lawyer for Mr. Roper, 37, of Commack, N.Y., declined to comment. A lawyer for Mr. Serrano, 30, of Manalapan, N.J., did not return a call. It is unclear why the two employees left the company.

In the indictment, filed in the Southern District in Manhattan, prosecutors said that doctors were paid as much as $3,000 per speaking engagement and that the events were held in fancy restaurants. Rather than inviting doctors who were new to using the product, the guests were often friends of the speakers, or were doctors who had already attended similar events and were unlikely to learn anything new. Sign-in sheets contained signatures that were forged to make the events look legitimate, the prosecutors said.

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The spray Subsys, Insys’s only product, contains fentanyl. It is approved for use only in cancer patients.

After the dinners, the doctors and sales representatives sometimes left for a strip club, where the doctors were not asked to pay a cover charge or for their drinks. Instead, they were entertained at a reserved table with bottles of liquor, according to the indictments.

But all of this attention did not come free, prosecutors argued: Mr. Roper and Mr. Serrano expected that the doctors would return the favor by prescribing more Subsys.

One top speaker, according to Mr. Roper’s indictment, was paid $147,245 in speaking fees in 2014 and accounted for about $1.2 million in prescriptions of Subsys that were reimbursed through Medicare. Another doctor singled out in the complaint was paid $112,340 in speaking fees in 2014 and prescribed $1.4 million worth of Subsys that was paid for by Medicare, according to the indictment. The doctors were not named in the indictment.

Approved in 2012, Subsys is a form of fentanyl that is sprayed under the tongue and is approved for use only in patients who have cancer and experience pain even though they are already on round-the-clock painkillers. Fentanyl can be deadly if it is prescribed in large doses to someone who has not already become tolerant to opioids.

Despite the drug’s tight restrictions, sales of Subsys have been strong, taking in $330 million in 2015. Although Insys was an early favorite with Wall Street, it has struggled as it has faced questions about its marketing practices. Its stock is down more than 50 percent in the last year, and fell more than 12 percent on Friday alone.

In 2014, an analysis by the research firm Symphony Health found that just 1 percent of prescriptions for Subsys were from oncologists, those who would be most likely to treat cancer patients. Doctors who prescribe Subsys must take a test that proves they understand the drug’s risks. But according to the indictment on Thursday, Mr. Roper gave a doctor answers to the test questions.

Drug companies have paid billions of dollars in fines in recent years to settle allegations that they improperly marketed their drugs. This case has unfolded in an unusual way: prosecutors pursuing criminal charges against various people.

In 2014, a Michigan neurologist was arrested after federal prosecutors said he defrauded Medicare of $7 million and improperly prescribed Subsys. Last year, a nurse at a Connecticut pain clinic who pleaded guilty for receiving $83,000 in kickbacks from Insys acknowledged that the money influenced the prescribing of the drug. The nurse, who was authorized to prescribe medication, was responsible for more than $1 million in Medicare claims and was the highest prescriber of Subsys in Connecticut.

“We’re not talking about acne cream here,” said Patrick Burns, the executive director of Taxpayers Against Fraud, an advocacy group for whistle-blowers. “We’re talking about one of the most addictive substances known to man, that puts people in a box on a daily basis.”

He predicted that further action against Insys was likely. “I suspect that they are zeroing in on their scope in order to go for a larger corporate hunt,” he said.

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