- Beaten down Insys Therapeutics (INSY -2.8%) is under pressure on average volume as details emerge about the company's role in working with two doctors accused of illegally over-prescribing the opioid Subsys (fentanyl). The physicians are the defendants in a Mobile, AL criminal trial that alleges they made $40M in illicit gains from dispensing the pain med from the pharmacy they owned and operated from the back of one of their pain clinics.
- The doctors, John Couch and Xiulu Ruan, allegedly took $115K in kickbacks from the company in consideration of the high number or prescriptions written. In addition, they and the company are accused to conspiring to defraud insurance companies by misleading them about patients' diagnoses.
- Former Insys sales rep Lacy Fortenberry testified that the company "doled out" speaking programs and fees based on prescription volume. Another sales rep, Natalie Perhacs, who pleaded guilty a year ago to conspiring in a kickback scheme, said she was under constant pressure from her bosses to schedule speaking events for the doctors. Her pay would be docked and her job would potentially be at risk if an event was canceled.
- Ex-CEO Michael Babich and other execs have pleaded not guilty to racketeering and other charges.
- The trial should end this month.
- Source: WSJ