The DOJ has focused particularly on the payment of kickbacks that induce physicians to prescribe more, or more expensive, opioids.
Last week, President Trump unveiled the administration’s new plan to combat the opioid epidemic. In 2016, more than 11 million Americans misused prescription opioids, resulting in 42,000 related deaths and $504 billion in related economic costs. The plan includes stiffer penalties for high-volume drug dealers, including seeking the death penalty where it is appropriate under current law, and a stated goal to reduce prescriptions of the powerful painkillers by one-third nationwide.
Long before this week’s announcement, however, the U.S. Department of Justice (DOJ) has been hard at work on these goals. Last summer, as we reported on Monitor Monday, Attorney General Jeff Sessions announced opioid-related healthcare fraud as a priority for the agency. In 2017, 34 percent of defendants charged by the Medicare Fraud Strike Force were charged with crimes involving opioid prescriptions.
The DOJ has focused particularly on the payment of kickbacks that induce physicians to prescribe more, or more expensive, opioids. This in violation of a law known as “the anti-kickback statute,” which prohibits medical providers from paying or receiving kickbacks, remuneration, or anything of value in exchange for referrals of patients who will receive treatment paid for by government healthcare programs, such as Medicare and Medicaid. The law is designed to keep medical treatment decisions free from the influence of potential monetary gain. As the DOJ has explained, “[p]atients are entitled to be sure that the care they receive is based on their actual medical needs rather than the financial interests of their physicians.” Violations of the anti-kickback law can also be violations of the False Claims Act, which allows private citizens to blow the whistle on fraud against the government, and share in the amount recovered.
Last October, Dr. John Kapoor, the chief executive officer of Insys Therapeutics, a manufacturer of fentanyl (a powerful opioid), was charged with violations of the False Claims Act. Prosecutors alleged the company paid hundreds of thousands of dollars to doctors in exchange for prescribing a spray called Subsys that contained fentanyl; Subsys is 100 times stronger than morphine. The scheme was brought to light by a whistleblower who was a former Insys employee. Dr. Kapoor pleaded not guilty in November, and the case is ongoing.
Two weeks ago, one of the doctors who received payments from Insys was sentenced to 51 months in prison by a federal court in Rhode Island. Dr. Jerrold Rosenberg, whose sentencing hearing included testimony from three former patients about the debilitating effects they experienced from the drug, received over $180,000 in payments from the company. His son was also a sales representative for Insys. In addition to jail time, Dr. Rosenberg will also have to pay Medicare over $750,000 in restitution due to his overprescribing of the spray.
Just last Friday, prosecutors in New York charged five more doctors with accepting kickbacks from Insys. All five allegedly received lavish payments from the company that were disguised as speaking fees, and totaled hundreds of thousands of dollars. Each one of the doctors charged also prescribed over $500,000 of Subsys in a single quarter.
With many related actions involving the kickback scheme currently ongoing, this will be a case to watch.