Big Pharma Execs Indicted For Racketeering, Finally
December 13, 2016 (Fault Lines) – Between drug-ravaged parking lots in small town West Virginia and a quiet commercial park in Arizona, there runs a common thread. Opiate abuse. But while you may see drug busts sweeping up the local druggies for possession charges, nobody in that office park is probably spending much time worrying about the cops busting down their doors. Until an indictment last week sent a resounding message to the pharmaceutical industry.
According the Centers for Disease Control and Prevention, people who abuse opioid prescription painkillers are 40 times more likely to abuse heroin. Where some see tragedy, others see profits. All those drug addicts need to buy drugs somewhere, and plenty of profiteers are ready to step in and provide that service. Only it’s not just foreign cartels peddling death in a pill, or a powder, or a needle, or however else one might be able to get high.
These powerful drugs are doing a whole lot more than relieving pain. They are fueling an addiction that affects nearly everyone in our country. If it’s not just drug cartels that are responsible for this addiction, who else can we look to?
One of the deadliest drugs in this whole mix is fentanyl. First manufactured in the 1950s as a safer and better alternative to painkillers like morphine, fentanyl is an incredibly powerful synthetic opioid.
Fentanyl is the strongest opioid approved for medical use in the United States, rated as 50 to 100 times more potent than morphine and 30 to 50 times more potent than heroin, according to the National Institute for Drug Abuse.
“The epidemic spares no one,” [Executive Director of the American College of Medical Toxicology Paul] Wax said. “It affects the wealthy, the poor, the prominent and not prominent. That’s the nature of an epidemic.”
And behind that epidemic is a suspect that appears more and more often in connection with the painkiller epidemic: the pharmaceutical industry. Big Pharma is all about the drug business, and business is good…to the tune of about $24 billion worldwide. Of that number, 80% is spent in America, since Americans consume most of the world’s supply of painkillers.
That market has become increasingly crowded, as pharmaceutical companies see the enormous profits reaped from a public that thinks anything and everything can be fixed with a pill. And a public that likes to get high. As companies look for an edge, they end up with billions of reasons to cheat.
Since Big Pharma hires lobbyists instead of hit men, the federal government has little trouble turning a blind eye to drug dealers dressed up like millionaire pharmaceutical executives.
Or at least it did. After last week, serious cash may not be the only driving force in the pharmaceutical industry. Perhaps the sound of prison cell bars clanging shut will have an effect on business practices. And while prosecution isn’t well-suited to solve most of our problems, this wake-up call from the Department of Justice may be just what the pharmaceutical industry and its victims customers needed.
Last week, the Department of Justice indicted 6 executives from a company called Insys Therapeutics. Insys is best known for a drug called Subsys, a fentanyl spray that sends a dose of the powerful painkiller directly to the user’s system in minutes. Designed for breakthrough pain suffered by cancer patients, the drug has noble intentions. Insys execs, on the other hand, don’t. The cancer market would be extremely profitable.
While details about this breakthrough cancer pain medication are hard to find, or at least ones that are not self-serving management hype, veteran sales staff members from Insys and other pharmaceutical firms projected the company’s future growth rate to be roughly 10 percent a year. If this ends up being the case and the company is selling to oncologists, then the growth possibilities for Insys should be a function of that plus whatever business it can take away from its larger competitors. Many companies would be happy for those odds.
But that cancer market wasn’t enough. Insys’ revenue nearly doubled on the sales of its fentanyl product. And apparently that caught the feds’ attention. The indictment lays out a scheme that involves two broad crimes: fraud and bribery.
The fraud accusations stem from lying to insurance companies about the need for fentanyl.
…Subsys is not approved for use in people who don’t have cancer. Among the allegations made by federal prosecutors is that Insys employees lied, telling insurers patients had cancer when they did not in order to get the insurer to pay.
In fact, the company had employees whose job was to figure out how to get insurance companies to pay for fentanyl prescriptions.
The bribery accusations reveal a typical pharmaceutical sales pattern taken too far.
…the indictment contains more evidence about plans to pay doctors and nurse practitioners to convince them to prescribe Subsys. The method for this is a common pharmaceutical industry practice of paying doctors to give scientific talks to their peers in order to increase prescribing for a drug. In this case, the prosecutors allege, the money given for the talks was solely there as a reward for prescribing Subsys. Prosecutors go through ten different prescribers, all roughly matching the same pattern.
The speaking engagements were, according to prosecutors, sham events attended by office staff or friends. But they were definitely lucrative, paying as much as a quarter of a million dollars or more over a few years’ time. Reports of texts between the company and doctors sound more like mafia loyalty oaths than a corporate-medical relationship.
Which brings up a good point. The charges against Insys are racketeering charges. The federal RICO statute was originally designed to go after the mafia and other organized crime. As those criminal syndicates became more sophisticated, regular prosecutions simply weren’t cutting it. The idea behind RICO was to go after the business aspects of organized crime.
The pharmaceutical industry is certainly organized. As time goes on, its seems to be getting a lot more criminal. The numbers alone reflect an industry creating problems rather than solving them. The incredible amount of painkiller prescriptions is not in response to any epidemic of pain that just hit us out of nowhere. They are in response to the immense profits to be made from the drugs.
Street dealers know that creating addicts results in a steady stream of demand to match their supply. It’s a shitty way to do business, but it works. For dollar crack deals just as well as fancy prescription drugs.
Maybe it will turn out the Insys executives didn’t commit any crimes. But it will be interesting to see how they defend their business practices. People in those corporate office parks might want to be a little more careful.