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The United States Intervenes in Several False Claims Act Lawsuits Involving Specialty Pharmaceutical Company Insys

According to a 2016 study by the Department of Health and Human Services, the nation’s current opioid crisis has resulted in the deaths of more than 42,000 Americans per year. Spurred by statistics like this, The Justice Department has linked its efforts to combat opioid misuse with its campaign against fraud and abuse of Medicare, Medicaid and TRICARE. To demonstrate this, the Justice Department announced last month that it was intervening in several lawsuits accusing Insys Therapeutics Inc., of violating the False Claims Act and engaging in a complex kickback scheme. According to the government, the specialty pharmaceutical company, which is based in Chandler, Arizona, did so in order to market its drug Subsys. Subsys is a powerful opioid which is taken in sublingual form and is highly addictive. Back in 2012, Subsys was approved by the FDA for the treatment of persistent pain in adult cancer patients who had developed a tolerance to other opioids.

Specifically, the United States alleges that Insys paid kickbacks in order to induce physicians and nurse practitioners to prescribe their drug to patients. The kickbacks came in the form of speaker program payments for physicians which were shams. Insys is also alleged to have used other gratuities as incentives such as lavish meals and entertainment and jobs for the relatives and friends of those they were seeking to influence. Moreover, the government alleges that Insys even encouraged physicians to prescribe their drug for patients who did not have cancer and that they lied to insurers about certain diagnoses so that they could be later reimbursed by Medicare and TRICARE.

“Improper financial relationships between physicians and drug companies can distort a physicians’ best judgment for their patients, in addition to undermining patient health and trust. This is especially troubling when the drugs are opioids,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Lying to federal health programs about patients’ medical diagnoses is also completely unacceptable. The Justice Department will pursue these illegal actions and continue to hold drug companies and doctors accountable for their roles in contributing to this deadly epidemic.”

The government’s actions against Insys have already resulted in criminal convictions or guilty pleas against agents of the company and Subsys prescribers. The government intervention in these lawsuits was aided by the qui tam or whistleblower provisions of the False Claims Act. These provisions allow private citizens to bring suit against those they accuse of false claims. Whistleblowers are also able to receive a share of any recovery. Such actions are usually handled by a qui tam law firm. A qui tam lawyer specializes in all aspects of the False Claims Act. The five separate lawsuits that were consolidated in this case are:


  • United States, et al., ex rel. Guzman v. Insys Therapeutics, Inc., et al., 13-cv-5861
  • United States ex rel. Andersson v. Insys Therapeutics, Inc., 14-cv-9179
  • United States ex rel. John Doe and ABC, LLC v. Insys Therapeutics, Inc., et al., 14-cv-3488
  • United States ex rel. Erickson and Lueken v. Insys Therapeutics, Inc., 16-cv-2956
  • United States ex rel. Jane Doe, et al. v. Insys Therapeutics, et al., 16-cv-7937

“I applaud the Civil Division and the U.S. Attorney for their untiring efforts to hold health care providers accountable to the American taxpayer,” said Vice Adm. Raquel Bono, director of the Defense Health Agency. “The Department of Justice’s efforts safeguard the health care benefit for American service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate those who participate in fraudulent practices.”