North Carolina accuses drugmaker Insys of scheme to push opioid

BOSTON (Reuters) - North Carolina sued Insys Therapeutics Inc INSY.O on Thursday, accusing the pharmaceutical company of illegally pushing a powerful fentanyl-based cancer pain medicine called Subsys to boost profits amid the U.S. opioid epidemic.

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The lawsuit announced by North Carolina Attorney General Josh Stein comes amid a federal investigation that has led to charges against several former executives accused of engaging in a scheme to bribe doctors to prescribe Subsys.

Stein accused Insys of paying kickbacks to doctors to promote and prescribe Subsys for uses other than treating cancer pain and of deceiving insurers into covering prescriptions for the company’s product.

“As we allege in our complaint, Insys carried out an extensive, coordinated scheme of kickbacks, deception and fraud in the marketing of its drug, Subsys,” Stein said at a press conference in Raleigh, North Carolina that was streamed online.

Chandler, Arizona-based Insys did not respond to requests for comment. It has said that it has taken steps to prevent past mistakes from happening again and has stressed that Subsys made up 0.02 percent of opioid prescriptions in 2016.

Thursday’s lawsuit, filed in a North Carolina state court, came as the U.S. Centers for Disease Control and Prevention reported that opioids were involved in 42,249 overdose deaths in 2016, up 28 percent from a year earlier.

Insys has found itself at the center of investigations focused on Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a synthetic opioid.

In October, federal prosecutors in Boston brought charges against billionaire Insys founder John Kapoor, adding him to a case filed last year against six former Insys executives and managers initially charged, including former Chief Executive Michael Babich.

Prosecutors said that beginning in 2012, Kapoor, Babich and others schemed to pay speaker fees and other bribes to medical practitioners to prescribe Subsys and to fraudulently induce insurers into approving payment for it.

Kapoor, Babich and the others have pleaded not guilty. Several other ex-Insys employees and medical practitioners have also faced charges related to Subsys.

Insys has said it is in settlement talks with the U.S. Justice Department and has estimated the minimum amount it may have to pay is $150 million.

It previously agreed to pay $9.45 million to resolve investigations by attorneys general in Oregon, New Hampshire, Massachusetts and Illinois. It also faces lawsuits by attorneys general in Arizona, New Jersey and New Mexico.

(The story was refiled to correct the headline to say “drugmaker” instead of “drugmakers”)

Reporting By Tom Brown