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Arizona accuses Insys of fraudulent opioid marketing scheme

Arizona accuses Insys of fraudulent opioid marketing scheme

(Story updated below to reflect later settlement)

(Reuters) — Arizona's attorney general sued Insys Therapeutics Inc. on Thursday, accusing the drugmaker of engaging in a fraudulent marketing scheme aimed at increasing sales of a fentanyl-based cancer pain medicine.

The lawsuit by Arizona Attorney General Mark Brnovich in Maricopa County Superior Court in Phoenix comes during a series of federal and state investigations centered on Insys' Subsys opioid drug.

The lawsuit accuses Insys of paying doctors sham speaker fees in exchange for writing prescriptions of Subsys without regard for the health of patients.

The lawsuit also named three Arizona doctors as defendants who it said collected speaker fees from Insys while writing prescriptions that generated more than $33 million in sales of Subsys, or 64 percent of all sales of the drug in the state.

"We need to put a stop to the unethical and greedy behavior in the pharmaceutical industry that is fueling the opioid crisis in our state," Mr. Brnovich said in a statement.

Insys did not immediately respond to a request for comment. Lawyers for the three doctors — Steve Fanto, Nikesh Seth and Sheldon Gingerich — could not be immediately identified.

The case is the latest to center on Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a highly addictive and regulated synthetic opioid.

In December, federal prosecutors in Boston charged six former Insys executives and managers, including ex-Chief Executive Michael Babich, with engaging in a scheme to bribe doctors to prescribe Subsys.

Mr. Babich and his co-defendants have pleaded not guilty. Federal charges have also been filed in several other states against other ex-Insys employees and medical practitioners who prescribed Subsys.

Insys has said it is in talks with the U.S. Justice Department to resolve the federal probe.

The Arizona-based drugmaker previously agreed to pay a combined $8.95 million to resolve investigations by attorneys general in Oregon, New Hampshire and Illinois.


In August 2021, Arizona’s attorney general’s office announced it had obtained consent judgments with Dr. Seth and Dr. Gingerich, whereby the physicians would pay a combined $500,000 to resolve the allegations over speaker fees from Insys.


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