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Insys Therapeutics Corporate Integrity Agreement

Over the past two years, much of the healthcare community has observed the government`s persecution of Insys Therapeutics because of its sales and marketing practices related to its Subsys spray. Subsys is a powerful and highly addictive fentanyl spray (administered under the tongue) approved by the FDA in 2012 for the treatment of persistent paroxysmal pain in adult cancer patients who have already received regular opioid treatment and are tolerant. On June 5, 2019, the DOJ announced a comprehensive solution with Insys, including criminal pleas, a delayed prosecution agreement (DPA), a civil transaction agreement and a corporate integrity agreement (CIA). On June 10, 2019, Insys sought insolvency protection, triggering the ability of DOJ and HHS to amend these agreements and bring criminal, civil and exclusionary proceedings against Insys. As part of the complaint, Insys agreed to provide a detailed statement of facts out of his criminal conduct with respect to the illegal marketing of Subsys. Insys will enter into a five-year agreement with the government, while Insys` operating subsidiary will plead guilty to five counts of mail fraud, in accordance with the plea to be filed in the District of Massachusetts. Under the terms of the criminal decision, Insys will be fined $2 million and $28 million. The Court has not yet commenced oral proceedings. Last month, five former Insys executives were convicted after a trial for predatory conspiracy in connection with the marketing of Subsys. In total, eight Boston company executives were convicted of crimes related to the illegal marketing of Subsys. Insys also entered into an agreement on corporate integrity and conditional exclusion authorization with the Office of Inspector General (OIG) of the U.S.

Department of Health and Health Services, which gave the OIG the power to exclude Insys from DenS health programs such as Medicare, Medicaid and Tricare. The company integrity agreement forced Insys to sell Subsys, its flagship product, to a third party. In addition to the above, Insys agreed to a 5-year CIA and exclusionary parole, the DOJ described as “unprecedented.” OIG has decided not to exclude Insys from the Federal Public Health Programs because of the “extensive cooperation… prosecuting those guilty and agreeing to strengthen the CIA`s demands.¬†Instead, OIG asked Insys to agree and recognize that such facts form the basis of permissive exclusion, and OIG will only grant Insys an exemption from its permissive exclusionary power if the CIA Insys obligations are met. In announcing the transaction, DOJ noted that the OIG`s reservation on the release of Insys` permissive exclusionary power was contrary to its usual practice in the FCA colonies of providing such authorization to CIA parties.

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