September 6, 2018 / 4:59 PM / 15 days ago

UPDATE 2-Maryland charges Insys with engaging in deceptive opioid scheme

(Adds details from charging papers, background on related cases)

By Nate Raymond

Sept 6 (Reuters) - Maryland on Thursday charged Insys Therapeutics Inc with deceptively marketing a powerful opioid pain killer so that it was prescribed inappropriately beyond its intended use with cancer patients.

Maryland Attorney General Brian Frosh announced that he had filed administrative charges against Arizona-based Insys, which he said provided thousands of dollars in inducements to doctors to promote prescribing its medication Subsys to their patients.

The company declined comment. It has said that it has taken steps to prevent past mistakes from happening again.

Maryland alleged the company influenced doctors to prescribe the drug beyond its labeled use with inducements that included payments purported to be compensation for participating in educational events.

In one instance the company supplied the drug for a doctor's own illegal use and in another a sales representative engaged in a sexual relationship with a doctor, the state said.

The state alleged that over 90 percent of the prescriptions for Subsys in Maryland ultimately were for patients who should never have received the product, an under-the-tongue spray that contains fentanyl, an opioid 100 times stronger than morphine.

"The allegations against Insys describe a calculated scheme employing doctors, pharmacist, and sales reps to increase profits and market share at the expense of the health and well-being of vulnerable patients," Frosh said in a statement.

The state's case, which would be heard by an administrative law judge, seeks to recover of all funds Insys earned through the scheme plus penalties. Frosh's office said Insys earned more than $20 million in Maryland from its conduct.

The case added to the legal woes of Insys, whose former top executives have been caught up in a federal criminal investigation into accusations the company paid medical practitioners kickbacks to prescribe Subsys.

Those executives include billionaire founder John Kapoor, who has pleaded not guilty to racketeering conspiracy and other charges. Insys in August said it reached a deal to pay at least $150 million to resolve a U.S. Justice Department probe.

Federal prosecutors in Boston say that beginning in 2012, Kapoor, former Chief Executive Michael Babich and others conspired to bribe doctors to prescribe Subsys and to defraud insurers into paying for it. Babich has also pleaded not guilty.

Insys previously settled cases by attorneys general in Oregon, New Hampshire, Massachusetts and Illinois for $9.45 million. It faces lawsuits by several other states as well. (Reporting by Nate Raymond in Boston Editing by Marguerita Choy and Cynthia Osterman)

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