Insys & Mallinckrodt: Is Legal Really Necessary on Your Promotional Review Teams?

The Critical Role Legal Plays on Promotional Review Teams Legal plays a critical yet often overlooked role in promotional review teams--ensuring that companies remain compliant with federal regulations and avoid costly fines and penalties.  In the case of opiate manufacturer Insys Therapeutics, the company was recently forced to pay as much as $225 million in settlement to the government as a result of criminal and civil investigations into Insys’ marketing practices.  This case marks a rare instance of prosecutors holding executives responsible for the opioid epidemic, and also demonstrates some of the more drastic repercussions companies face as a result of bribery and illegal kickbacks. Insys Therapeutics’ Sham Speaker Program Insys Therapeutics was primarily targeted by the federal government for its bribery scheme in which it provided kickbacks to physicians to prescribe large amounts of its potent opioid painkiller, Subsys.   Subsys was originally intended for use by cancer patients suffering with significant amounts of pain, however, due to the company’s kickback scheme, this drug was being over-prescribed to patients who did not require such a powerful narcotic.  In an effort to induce physicians to over-prescribe its drug, Insys Therapeutics set up a sham speaker program in which it paid doctors to write prescriptions, rather than give speeches endorsing the drug. As a consequence of Insys Therapeutics’ bribery scheme, as many as five of its top executives have been found guilty of racketeering conspiracy by the federal jury, including founder John Kapoor--one of the highest ranking pharmaceutical executives to be convicted amidst the opioid epidemic.  As one Insys spokesperson commented, the company itself was in danger of folding due to the massive amounts of fines that it was facing, including a hefty fine of $225 million to end the settlement.   Mallinckrodt’s Drug Bribery Case Another parallel case can be seen in Mallinckrodt, which is expected to pay $15 million in an effort to settle with the U.S. Department of Justice after allegations that Questcor Pharmaceuticals, acquired by the company in 2014, had bribed doctors to prescribe its drug H.P. Acthar Gel.  The drug itself, primarily intended to treat seizures in children, had its price exponentially raised from $40 to $38,892--a move allegedly intended to boost profits for Questcor. In addition to the suits for its bribery scheme, Mallinckrodt has also faced accusations from the government for Questcor’s charitable foundation activities between 2010 and 2014.  As the government alleges, Questcor has been using its charitable foundation as a means of paying illegal kickbacks to market its drug as free to doctors and patients.   The Importance of Legal Review These cases highlight the importance of legal and regulatory on promotional review teams, particularly as a means of preventing millions of dollars in fines and potential jail time.  Regulatory attorneys offer reviews of company transactions to ensure compliance, and can also investigate how payment is affecting patients and doctors, whether speakers are necessary, and if a drug’s cost is fair market value.  In addition to all of these services, legal is also able to evaluate proposed market plans, and determine whether or not they are part of a bigger scheme.