Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 1 of 101 Page ID #:1 1 2 3 4 5 Kolin C. Tang (SBN 279834) ktang@sfmslaw.com Cl ,::R'" .· - \I SHEPHERD, FINKELMAN, MILLER & SHAH, LLP ' . f i' FILED ~l~TO l(:: "r' ...;"')J RT OCT2 5 2016 11755 Wilshire Boulevard , 15th Floor Los Angeles, CA 90025 Phone: (323) 510-4060 Fax: (866) 300- 7367 6 7 8 (Additional Counsel Listed on Signature Page] Attorneys for Relator-Plaintiff LA CV 1 6 O7 9 3 7- TJ» - JVfMJx 9 IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION 10 11 12 13 23 UNITED STATES OF AMERICA, ex rel. JANE DOE and the States of CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, FLORIDA, GEORGIA, HAW All, ILLINOIS, INDIANA, IOWA, LOUSIANA, MARYLAND , MASSACHUSETTS, MICHIGAN, MINNESOTA, MONTANA, NEV ADA, NEW JERSEY, NEW MEXICO, NEW YORK , NORTH CAROLINA, OKLAHOMA, RHODE ISLAND, TENNESSEE , TEXAS, VERMONT, VIRGINIA, WASHINGTON , the CITY OF CHICAGO, and the DISTRICT OF COLUMBIA, 24 Relator- Plaintiffs, 14 15 16 17 18 19 20 21 22 25 26 27 28 V. INSYS THERAPEUTICS, LINDEN CARE LLC, Defendants. INC. and CASE NO. -- ---- -- FILED UNDER SEAL PURSUANT TO 31 U.S.C. § 3730(b)(2) COMPLAINT ~)c.; -~,, J,,f ·: :. DEMAND FOR WRY TRIAL ·•' .. •; ~ ' 'L Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 2 of 101 Page ID #:2 1 FALSE CLAIMS ACT COMPLAINT 2 3 The facts alleged in this qui tam Complaint establish that INSYS Therapeutics, 4 5 Inc., ("INSYS") committed a massive fraud at the expense of taxpayers affd·unwitting 6 patients with respect to its sales of Subsys, and that LINDEN CARE LLC ("LINDEN 7 CARE") enabled that fraud while also profiting from it. Through a widespread off-label 8 9 marketing campaign, INSYS took a dangerous opioid, approved only for breakthrough 10 pain experienced by opioid-tolerant cancer patients, and pushed it to the pain 11 management field as the ultimate answer for chronic, intractable pain, a use for which it 12 13 14 15 is neither approved nor safe. Industry analysts estimate that more than 90% of Subsys is prescribed for this sort of off-label use. This is no coincidence. INSYS' management pressures its sales staff to use sex appeal, bribery, and blatant 16 17 and aggressive off-label promotion to sell as much Subsys as possible despite it being a 18 dangerous controlled substance which has reportedly resulted in numerous overdose- 19 related deaths. Relator Jane Doe ("Relator") experienced INSYS' unlawful misconduct 20 21 22 first hand, as detailed herein. She faced the death of a patient who overdosed on opioids while taking Subsys for an off-label and unapproved use. 23 I. INTRODUCTION 24 25 26 27 1. On behalf of the United States of America ("United States"), the States of California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, 28 Complaint 1 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 3 of 101 Page ID #:3 1 New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, 2 3 Tennessee, Texas, Vermont, Virginia, Washington, (collectively, the "States"), the 4 District of Columbia ("D. C. "), and the City of Chicago ("Chicago"), and pursuant to the 5 qui tam provisions of the Federal False Claims Act, 31 U.S.C. §§ 3729-3733 and the 6 7 False Claims Acts of the States, D.C., and Chicago, Relator-Plaintiff Jane Doe 8 ("Relator") files this qui tam Complaint against INSYS Therapeutics, Inc. ("INSYS") 9 and LINDEN CARE LLC ("LINDEN CARE") (hereinafter referred to collectively as 10 11 12 13 "Defendants"). 2. Relator Jane Doe brings this action on behalf of the United States and the Plaintiff States against INSYS and LINDEN CARE for damages and civil penalties 14 15 arising from violations of the False Claims Act, 31 U.S.C. § 3729, et seq. ("FCA") and 16 state-law counterparts in California, Colorado, Connecticut, Delaware, Florida, Georgia, 17 Hawaii, Illinois, Indiana, Iowa, Louisiana, Mary land, Massachusetts, Michigan, 18 19 20 21 Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, D.C. and Chicago. The States, Chicago, D.C., and the UNITED STATES are hereafter collectively 22 23 24 25 referred to as the Government. 3. The complained of violations arise out of requests for payment from Medicare, Medicaid, TRI CARE, and possibly other federally-funded government 26 27 28 Complaint 2 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 4 of 101 Page ID #:4 1 healthcare programs (hereinafter referred to as "Government Healthcare Programs"). The 2 3 4 5 state-law violations arise out of requests for payment under the Medicaid programs. 4. This action concerns INSYS' illegal marketing of the patented fentanyl spray Subsys, from 2012, when the Food and Drug Administration ("FDA") approved 6 Subsys, to the present, as well as LINDEN CARE's unlawful distribution of the drug 7 8 9 during the same time period. 5. Through their intentional and reckless acts, which included false statements 10 11 and claims for payment to the Government Healthcare Programs, INSYS and LINDEN 12 CARE have put patients at risk and received millions of dollars in improper government 13 payments. 14 15 6. Relator filed anonymously to protect her identity from disclosure due to the 16 fact that she remains employed in the pharmaceutical industry and seeks to avoid the 17 retaliation that would most certainly result if her name were to be released. 18 19 20 21 7. Relator worked as a sales representative for INSYS for approximately two years, after more than a decade of experience in the pharmaceutical industry. 8. INSYS, a Delaware corporation, is a developer and marketer of 22 23 24 25 pharmaceutical products in the United States and throughout the world. 9. INSYS was founded in 1990 (as Oncomed Inc.) and is headquartered in Phoenix, Arizona. One of its primaty business activities involves the company's 26 27 28 Complaint 3 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 5 of 101 Page ID #:5 1 manufacture and sale of Subsys, the patented fentanyl spray which is the subject of this 2 action. 3 4 5 10. As detailed herein, INS YS engaged in a variety of illegal marketing practices as part of this fraud, including, but not limited to: 6 a. Off- label marketing; 8 b. Misbranding; 9 C. Coopting physicians by circumventing educational assessments required 7 10 by TIRF-REMS; 11 12 d. Paying kickbacks and other unlawful remuneration to physicians; 13 e. Focusing the majority ofINSYS' sales force on promoting Subsys for 14 non-cancer uses, including contraindicated uses; 15 16 f. 17 Advising physicians to begin Subsys patients at dosages twice the FDAapproved entry dose; 18 19 g. without discussing dosage changes with their physicians; 20 21 Advising patients to "titrate up," finding their optimal effective dose, h. Training and supervising Relator and her sales colleagues in the use of 22 illegal promotion and kickbacks before and during their promotion of 23 Subsys; and 24 25 1. Supervising fraudulent practices by the INSYS Reimbursement Center 26 which, upon information and belief, encouraged INSYS' employees to lie 27 28 Complaint 4 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 6 of 101 Page ID #:6 1 to Medicare Part D insurers to assure prior authorization for Subsys 2 prescriptions. 3 4 These practices were widespread, egregious and orchestrated from the 11. 5 highest levels ofINSYS. 6 7 8 LINDEN CARE, a limited liability company based in Woodbury, New 12. York, is a provider of specialty pharmacy services to the pain management industry. 9 10 11 12 LINDEN CARE was founded in 2006, and is licensed in all fifty U.S. states 13. and the District of Columbia. 14. As detailed herein, LINDEN CARE engaged in a variety of illegal practices 13 14 as part of this fraud, including, but not limited to: 15 a. Dispensing prescriptions based on faxed prescriptions for Schedule II 16 narcotics in violation of federal regulations; 17 18 19 b. Mislabeling prescription medicines; C. Dispensing prescriptions in contravention of the terms of the 20 TIRF-REMS program; and 21 d. 22 23 Dispensing prescriptions in amounts, dosages, and for indications forbidden by law. 24 25 26 15. Relator has complied with all procedural requirements of the laws under which this case is brought. 27 28 Complaint 5 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 7 of 101 Page ID #:7 1 16. Relator is informed and believes that the pervasive off-label marketing and 2 3 4 kickback schemes herein described began in 2012 and continue to date throughout the United States. 5 II. JURISDICTION AND VENUE 6 7 17. This Court has federal subject matter jurisdiction of this action pursuant to 8 28 U.S.C. § 1331 and 31 U.S.C. § 3742(a). This Court has supplemental jurisdiction over 9 the counts relating to the state False Claims Acts pursuant to 28 U.S.C. § 1367. 10 11 18. This Court has personal jurisdiction over Defendants INSYS and LINDEN 12 CARE because they can be found in, reside in, or transact business in this District. 13 Additionally, this Court has personal jurisdiction over both Defendants because acts 14 15 16 17 prohibited by 31 U.S.C. § 3729 occurred in this District. 31 U.S.C. §3732(a). 19. Venue is proper in this District pursuant to 28 U.S.C. § 1391 and 31 U.S.C.§ 3732(d), because INSYS and LINDEN CARE transact business in this District. (Or, 31 18 19 20 21 U.S.C. § 3732(a) by way of acts proscribed by 31 U.S.C. § 3729?) 20. Relator's claims and this Complaint are not based upon allegations or transactions which are the subject of a civil suit or an administrative proceeding in which 22 23 24 25 the Government is already a party, as enumerated in 31 U.S.C. § 3730(e)(3). 21. Relator brings this action based on her direct knowledge and, where indicated, on information and belief. None of the actionable allegations set forth in this 26 27 Complaint are based on a public disclosure as set forth in 31 U.S.C. §3730( e)(4)(A), and 28 Complaint 6 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 8 of 101 Page ID #:8 1 Relator is the original source of the information upon which this Complaint is based, as 2 3 that phrase is used in the False Claims Act and other laws at issue herein. 22. 4 5 At all times relevant hereto, INSYS and LINDEN CARE acted through their agents and employees, and the acts of their agents and employees were within the scope 6 7 of their agency and employment. The policies and practices alleged in this Complaint 8 were, on information and belief, established and/or ratified at the highest corporate levels 9 ofINSYS and LINDEN CARE. 10 III. 11 12 13 A. THE REGULATORY ENVIRONMENT FDCA and FDA Regulations 23. The Federal Food Drug and Cosmetic Act ("FDCA"), 21 U.S.C. § 321 et 14 15 seq., provides a regulatory regime for the approval of new drugs and new drug 16 formulations intended to be marketed for use in interstate commerce. Under the FDCA, a 17 new drug product cannot be marketed unless the FDA approves the product and 18 determines that it is safe and effective for its intended use. See 21 U.S.C. § 355(a). 19 20 21 24. When the FDA approves a drug, it approves the drug only for the particular use for which it was tested, the intended use. 21 C.F.R. § 201.128. An intended use, once 22 23 24 25 approved, is called an "indication." Uses other than the approved indication are called "off-label." 25. In approving uses for a drug, the FDA specifies particular dosages 26 27 determined to be safe and effective for each indication. The indication and dosages 28 Complaint 7 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 9 of 101 Page ID #:9 1 approved by the FDA are set forth in the drug's labeling, the content of which is also 2 3 reviewed and approved by the FDA. 21 U.S.C. §§ 352, 355(d). An example of the drug's 4 labeling is the printed insert in the drug's packaging. The FDA will only approve the New 5 Drug Application if the labeling conforms to the uses and dosages that the FDA has 6 7 8 9 approved. 21 U.S.C. §355(d). 26. Under the Food and Drug Administration Modernization Act of 1997 ("FDAMA"), the manufacturer who wishes to market or promote an approved drug for 10 11 alternative uses, i.e., uses not listed on the approved label, must re-submit the drug for 12 another series of clinical trials similar to those for the initial approval. 21 U.S.C. § 13 360(a)(b) & (c). Until subsequent approval of the new use has been granted, the 14 15 unapproved use is considered to be "off-label". The term "off-label" refers to the use of 16 an approved drug for any purpose, or in any manner, other than what is described in the 17 drug's labeling. "Off-label" use includes treating a condition not indicated on the label; 18 19 20 21 treating the indicated condition with a different dose or frequency than specified in the label; or treating a different patient population (e.g. treating a child when the drug is approved to treat adults). 22 23 24 25 27. While a physician may prescribe a drug for a use other-than one for which it is approved, the FDCA prohibits a drug manufacturer from marketing or promoting a drug for non-approved uses. 21 U.S.C. § 33 l(d), 355(a). It therefore is illegal for a drug 26 27 28 Complaint 8 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 10 of 101 Page ID #:10 1 manufacturer and its sales representatives to initiate discussions with medical 2 professionals regarding any off-label use of the drug. 3 4 5 28. The FDA prohibits "misbranding," the labelling of a pharmaceutical without "adequate directions for use." 21 U.S.C. §352(f). "Adequate directions" are those which 6 7 will allow a lay patient to use the drug safely for its "intended use." 21 C.F.R. §201.5. 8 When a pharmaceutical manufacturer markets a drug, the actions of those who label and 9 attempt to sell the drug form its intended use, whether or not that accords with the 10 11 12 13 indication approved by the FDA. 21 C.F.R. §201.6. 29. In addition to prohibiting manufacturers from directly marketing and promoting a product's unapproved use, Congress and the FDA have acted to prevent 14 15 manufacturers from employing indirect methods to accomplish the same end. The FDA 16 regulates manufacturer support for Continuing Medical Education ("CME") programs 17 and "speaker" programs that focus on off-label uses. 18 19 30. With regard to manufacturer involvement in CME programs, the FDA 20 published an Agency Enforcement Policy Guidance which states that CME programs 21 must be truly independent of the drug companies and sets forth a number of factors that 22 23 24 25 the FDA will consider in determining whether a program is "free from the supporting company's influence and bias". 62 Fed. Reg. 64074, 64093. These factors include, among others, an examination of the relationship between the program provider and 26 27 supporting company; the company's control of content and selection of presenters; 28 Complaint 9 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 11 of 101 Page ID #:11 1 whether there is a meaningful disclosure of the company's funding and its role in the 2 3 program; whether multiple presentations of the same program are held; whether the 4 audience is selected by the sales or marketing department of the company; and whether 5 information about the supporting company's product is disseminated after the initial 6 7 program other than in response to an unsolicited request. The promotion of off-label drug 8 uses at a CME program fails this test of "independence" and violates Congress' off-label 9 marketing restrictions. 10 11 31. Pursuant to the Anti-Kickback Act, 42 U.S.C. Section 1320a-7b(b ), it is 12 unlawful to knowingly offer or pay any remuneration in cash or in kind in exchange for 13 the referral of any product (including a prescription drug product) for which payment is 14 15 sought from any federally-funded health care program, including Medicare, Medicaid, 16 and TRICARE. 17 32. The Anti-Kickback Act is designed to, inter alia, ensure that patient care will 18 19 20 21 not be improperly influenced by inappropriate compensation from the pharmaceutical industry. 33. Every federally-funded health care program requires every provider or 22 23 24 25 supplier to ensure compliance with the provisions of the Anti-Kickback Act and other federal laws governing the provision of health care services in the United States. 34. The Anti-Kickback Act prohibits suppliers such as pharmaceutical 26 27 manufacturers from compensating, in cash or in kind, a health care provider when a 28 Complaint 10 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 12 of 101 Page ID #:12 1 purpose of the payment is to influence the provider's prescribing habits or to gain favor 2 for its product over the product of any competitor. 3 35. 4 5 B. A violation of the Anti-Kickback Act is a violation of the False Claims Act. The False Claims Act and The Medicare Fraud & Abuse/ Anti-Kickback 6 Statute 7 8 9 36. Congress adopted the FCA and amended it in 1986 to fight fraud in government payments. 10 11 37. (a)(l) ... [A]ny person who (A) lmowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval; (B) knowingly makes, uses, or causes to be made or used, a false records or statement material to a false or fraudulent claim; 12 13 14 15 *** 16 17 18 19 The United States Civil FCA provides, in pertinent part, that: 3 8. is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000 ... plus 3 times the amount of damages which the Government sustains because of the act of that person. See 31 U.S.C. § 3729. The FCA imposes liability on false claims and/or false statements material to 20 21 22 23 a false or fraudulent claim. 3 9. The submission of claims that are induced and written because of the off- label marketing of a pharmaceutical company is a violation of the False Claims Act. 24 25 26 27 40. The States, D.C., and the Cities that are party to this Complaint have enacted False Claims Act statutes that apply to, inter alia, Medicare and Medicaid fraud and/or fraudulent health care claims submitted for payment by municipal funds. 28 Complaint 11 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 13 of 101 Page ID #:13 1 41. The Medicare Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), which also 2 3 applies to the state Medicaid programs and/or municipal programs, provides penalties for 4 individuals or entities that knowingly and willfully offer, pay, solicit or receive 5 remuneration to induce the referral of business reimbursable under a federal health 6 7 8 9 benefits program. The offense is a felony punishable by fines ofup to $25,000 and imprisonment for up to 5 years. 42. The Medicare Anti-Kickback statute arose out of Congressional concern that 10 11 payoffs to those who can influence health care decisions will result in goods and services 12 being provided that are medically unnecessary, of poor quality, or even harmful to a 13 vulnerable patient population. To protect the integrity of the federal health care programs 14 15 from these difficult to detect harms, Congress enacted a prohibition against the payment 16 of kickbacks in any form, regardless of whether the particular kickback actually gives rise 17 to overutilization or poor quality of care. 18 19 20 21 43. The Balanced Budget Act of 1997 amended the Medicare Anti-Kickback Statute to include administrative civil penalties of $50,000 for each act violating the AntiKickback Statute, as well as an assessment of not more than three times the amount of 22 23 24 25 remuneration offered, paid, solicited, or received, without regard to whether a portion of that amount was offered, paid, or received for a lawful purpose. See 42 U.S.C. § 1320a. 44. In accordance with the Anti-Kickback Statute, Medicare regulations directly 26 27 prohibit providers from receiving remuneration paid with the intent to induce referrals or 28 Complaint 12 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 14 of 101 Page ID #:14 1 business orders, including the prescription of pharmaceuticals paid as a result of the 2 3 volume or value of any referrals or business generated. See 42 C.F .R. § 1001.952(:f). 4 Under this statute, drug companies may not offer or pay any remuneration, in cash or 5 kind, directly or indirectly, to induce physicians or others to recommend drugs that may 6 7 be paid for by a federal health care program. The law not only prohibits outright bribes 8 and rebate schemes, but also prohibits any payment by a drug company that has as one of 9 its purposes inducement of a physician to write additional prescriptions for the 10 11 12 13 company's pharmaceutical products. 45. Such remunerations are kickbacks when paid to induce or reward physicians' prescriptions. Kickbacks increase Government-funded health benefit 14 15 program expenses by inducing medically unnecessary overutilization of prescription 16 drugs and excessive reimbursements. Kickbacks also reduce a patient's healthcare 17 choices, as physicians may prescribe drug products based on the physician's own 18 19 20 21 financial interests rather than according to the patient's medical needs. 46. The Medicare Anti-Kickback Statute contains statutory exceptions and certain regulatory "safe harbors" that exclude certain types of conduct from the reach of 22 23 24 25 the statute. See 42 U.S.C. § 1320a-7b(b)(3). None of the statutory exceptions or regulatory safe harbors protects INSYS or LINDEN CARE's conduct in this case. 47. Recently, the Patient Protection and Affordable Care Act ("PPACA"), 26 27 Public Law No. 111-148, Sec. 6402(g), amended the Medicare Anti-Kickback Statute or 28 Complaint 13 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 15 of 101 Page ID #:15 1 "Social Security Act," 42 U.S.C. § 1320a-7b(b), to specifically allow violations of its 2 3 "anti-kickback" provisions to be enforced under the False Claims Act. The PPACA also 4 amended the Social Security Act's "intent requirement" to make clear that violations of 5 the Social Security Act's anti-kickback provisions, like violations of the False Claims 6 7 8 Act, may occur even if an individual does "not have actual knowledge" or "specific intent to commit a violation." Id. at Sec. 6402(h). 9 48. As detailed herein, INSYS devised a scheme whereby the company paid 10 11 kickbacks to physician-speakers in the form of cash and cash-equivalents with the 12 specific aim of artificially increasing the prescription and sale of Subsys for off-label 13 uses. 14 49. 15 Knowingly paying kickbacks to physicians to induce them to prescribe a 16 prescription drug on-label or off-label (or to influence physician prescriptions) for 17 individuals who seek reimbursement for the drug from a federal Government health 18 19 20 21 program or causing others to do so, while certifying compliance with the Medicare AntiKickback Statute (or while causing another to so certify), or billing the Government as if in compliance with these laws, violates state and federal False Claims Acts. 22 23 24 25 C. Government Healthcare Programs 50. The federal government enacted the Medicaid program in 1965 as a cooperative undertaking between the federal and state governments to help the states 26 27 provide health care to low-income individuals. The Medicaid program pays for services 28 Complaint 14 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 16 of 101 Page ID #:16 1 2 pursuant to plans developed by the states and approved by the U.S. Department of Health and Human Services ("HHS") Secretary through the Centers for Medicare and Medicaid 3 4 Services ("CMS"). See 42 U.S.C. §§ 1396a(a)-(b ). States pay doctors, hospitals, 5 pharmacies, and other providers and suppliers of medical items and services according to 6 established rates. See 42 U.S.C. §§ 1396b(a)(l), 1903(a)(l). The federal government then 7 8 pays each state a statutorily established share of "the total amount expended ... as medical 9 assistance under the State plan[.]" See 42 U.S.C. § 1396b(a)(l). This federal-to-state 10 11 12 13 payment is known as Federal Financial Participation. 51. Medicare Part A is funded primarily by a federal payroll tax, premiums paid by Medicare beneficiaries, and appropriations from Congress. Medicare Part A generally 14 15 pays for inpatient services for eligible beneficiaries in hospital, hospice and skilled 16 nursing facilities, as well as some home healthcare services. 42 U.S.C. §§1395e- 42 17 U.S.C. §§ 1395i-5. Prescription drugs are covered under Medicare Part A only if they are 18 19 20 21 administered on an inpatient basis in a hospital or similar setting. 52. Medicare Part B is optional to beneficiaries and covers some healthcare benefits not provided by Medicare Part A. Medicare Part B is funded by appropriations 22 23 24 25 from Congress and premiums paid by Medicare beneficiaries who choose to participate in the program. 42 U.S.C, §§ 1395j to 42 U.S.C. §§ 1395w-4. Medicare Part B pays for some types of prescription drugs that are not administered in a hospital setting. 42 U.S.C. 26 27 § 1395k(a); 42 U.S.C. § 1395x(s)(2); 42 C.F.R. § 405.517. These typically include 28 Complaint 15 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 17 of 101 Page ID #:17 1 drugs administered by a physician or other provider in an outpatient setting, some orally 2 3 administered anti-cancer drugs and antiemetics ( drugs which control the side effects 4 caused by chemotherapy), and drugs administered through durable medical equipment 5 such as a nebulizer. 42 U.S.C. § 1395k(a); 42 U.S.C. § 1395x(s)(2); 42 C.F.R. § 6 7 405.517i. 53. 8 9 Medicare Part D, administered by CMS, went into effect on January 1, 2006. For "dual eligibles," defined as individuals who received prescription drug coverage 10 11 under Medicaid in addition to Medicare coverage for other health care in 2005, 12 enrollment in Medicare Part D was compulsory. Such beneficiaries were automatically 13 switched to Part D plans for 2006 and commenced receiving comprehensive prescription 14 15 drug coverage under Medicare Part D. 54. 16 17 Coverage of prescription drugs under Medicare Part D is subject to the same regulations as coverage under the Medicaid Program described above. 18 55. 19 20 21 TRICARE is the component agency of the U.S. Department of Defense that administers and supervises the health care program for certain military personnel and their dependents. TRICARE contracts with a fiscal intermediary that receives, 22 23 24 25 adjudicates, processes and pays health care claims submitted to it by TRICARE beneficiaries or providers. The funds used to pay the TRICARE claims are government funds. 26 27 28 Complaint 16 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 18 of 101 Page ID #:18 1 2 56. The Railroad Retirement Medicare program is authorized by the Railroad Retirement Act of 1974, at U.S.C.A. §231 et seq. It is administered through the United 3 4 States Railroad Retirement Board, ("RRB 11) and furnishes Medicare coverage to retired 5 railroad employees. 6 7 57. The Federal Employees Health Benefits Program ("FEHBP") is 8 administered by the United States Office of Personnel Management ("OPM")pursuant to 9 5 U.S.C.A. § 8901 et seq. and provides health care coverage to federal employees, 10 11 12 13 retirees and their dependents and survivors. 58. The Civilian Health and Medical Program of the Department of Veterans Affairs ("CHAMPV A") is a comprehensive health care program in which the VA shares 14 15 the cost of covered health care services and supplies with eligible beneficiaries. The 16 program is administered by Health Administration Center and their offices are located in 17 Denver, Colorado. In general, the CHAMPV A program covers most health care services 18 19 20 21 and supplies that are medically and psychologically necessary. 59. Due to the similarity between CHAMPVA and the Department of Defense TRI CARE program, the two are often mistaken for each other. CHAMPV A is a 22 23 Department of Veterans Affairs program whereas TRICARE is a regionally managed 24 health care program for active duty and retired members of the uniformed services, their 25 families and survivors. In some cases, a veteran may appear to be eligible for both/either 26 27 28 Complaint 17 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 19 of 101 Page ID #:19 1 program on paper. However, military retirees, or the spouse of a veteran who was killed 2 in action, are and will always be TRICARE beneficiaries. 3 4 5 60. Pursuant to 38 U.S.C.A. § 8126, and the regulations based thereon, and contracts the Veterans Administration had with manufacturers, drugs furnished to the 6 7 8 9 Veterans' Administration by drug manufacturers must be furnished at the best price. 61. The VA and CHAMPUS/TRICARE operate in substantially similar ways to the Medicare and Medicaid programs, but primarily for the benefit of military veterans, 10 11 12 13 their spouses (or widowed spouses) and other beneficiaries. 62. The Indian Health Service is responsible for providing comprehensive health services to more than 1,400,000 Americans. It is administered by the department of 14 15 health and human services pursuant to 42 U.S.C.A. § 2002 et seq. The statute authorizes 16 the Secretary to enter into contracts with independent providers to furnish health services 17 to Native Americans whenever the Secretary determines that independent providers can 18 19 20 21 better meet the population's need. 63. At all times material to this Complaint, off-label uses of Subsys promoted by INSYS are not eligible for reimbursement under the Government Healthcare Programs 22 23 24 25 because such off-label uses are neither listed in the labeling approved by the FDA nor, on information and belief, otherwise deemed safe and effective by any of the applicable drug compendia. 26 27 28 Complaint 18 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 20 of 101 Page ID #:20 1 64. As a direct result ofINSYS' improper off-label and misleading marketing 2 practices involving Subsys, in addition to the payment of illegal kickbacks, the 3 4 Government Healthcare Programs paid false or fraudulent Subsys reimbursement claims 5 for off-label, non-medically accepted indications. The United States would not have 6 7 8 9 paid such false claims but for INSYS' illegal and fraudulent conduct. D. The Food, Drug, and Cosmetics Act ("FDCA") And FDA Regulations 65. The Food and Drug Administration ("FDA") regulates drugs based on the 10 11 "i1!tended uses" for such products. Before marketing and selling a prescription drug, a 12 manufacturer must demonstrate to the FDA that the product is safe and effective for each 13 intended use. 21 U.S.C. § 33 l(d); 21 U.S.C. §§ 355(a). 14 15 66. The FDA reviews pharmaceutical manufacturers' applications for new drugs 16 to determine whether the drug's intended uses are safe and effective. See 21 U.S.C. § 17 355. Once a drug is approved for a particular use, doctors are free to prescribe the drug 18 19 20 21 for "non-indicated" or off-label purposes. While doctors may independently request information from drug manufacturers about such off-label uses, with very few exceptions, the FDA prohibits drug manufacturers from marketing or promoting drugs for 22 23 24 25 uses, i.e. "indications," not approved by the FDA. As described herein, "off-label" refers to the marketing of an FDA-approved drug for uses that have not undergone FDA review and approval, i.e., for purposes not approved by the FDA. 26 27 28 Complaint 19 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 21 of 101 Page ID #:21 1 2 67. While purely scientific or educational programs are permissible, sales and marketing presentations, promotions, or marketing to physicians for uses other than those 3 4 approved by the FDA are considered off-label marketing or "misbranding" proscribed by 5 the FDA. See 21 U.S.C. §§ 33 l(a)- (b), 352(a), (f). Additional proscribed marketing 6 7 8 9 activity includes any attempts by a pharmaceutical sales representative to solicit discussions with physicians concerning off-label use. 68. Strong policy reasons exist for strict regulation of off-label marketing. Off- 10 11 label promotion bypasses the FDA's strict review and approval process and removes the 12 incentive to obtain definitive clinical study data showing the efficacy and safety of a 13 product and, accordingly, the medical necessity for its use. 14 15 69. Pursuant to the Food, Drug and Cosmetics Act ("FDCA"), 21 U.S.C. §§ 301 16 et seq., the FDA strictly regulates the content of direct-to-physician product promotion 17 and drug labeling information used by pharmaceutical companies to market and sell 18 19 20 21 FDA-approved prescription drugs. 70. The FDA interprets "labeling" in its regulations broadly to include items that are "l) descriptive of a drug; 2) supplied by the manufacturer or its agents; and 3) 22 23 intended for use by medical personnel." 21 C.F.R. § 202.1. The FDCA defines both 24 misleading statements and the failure to reveal material facts in a label or product 25 labeling as "misbranding." 21 U.S.C. § 32l(n). Labeling includes, among other things, 26 27 28 Complaint 20 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 22 of 101 Page ID #:22 1 brochures, booklets, detailing pieces, literature, reprints, sound recordings, exhibits and 2 3 4 5 audio visual material. 21 C.F.R. § 202.1(1)(2). 71. FDA regulations deem "advertising" to include advertisements in published journals, magazines, newspapers and other periodicals, and broadcast through media such 6 7 as television, radio, and telephone communications systems. See 21 C.F.R. § 202.l(I)(l). 8 Courts have consistently held that oral statements made by a company's sales 9 representative relating to a pharmaceutical product constitute commercial advertising or 10 11 12 13 promotion. See Abbott Labs. v. Mead Johnson &Co., 971 F.2d 6, 7 (ih Cir. 1992) (interpreting Lanham Act). 72. Pharmaceutical promotional and marketing materials and presentations 14 15 lacking in fair balance or that are otherwise false or misleading "misbrand" a drug in 16 violation of the FDCA, 21 U.S.C. §§301, 321,331,352, 17 (e)(7); 21 C.F.R. § 1.21. 360b, 371; C.F.R. § 202.l(e)(6), 18 19 20 21 73. Such violations occur where promotional marketing materials and presentations (i.e. advertisements) for an FDA approved drug, among other things: a. Minimize, understate, or misrepresent the side effects, contraindications 22 and/or effectiveness of the drug; 23 24 b. 25 Overstate or misrepresent the side effects, contraindications, and/or effectiveness of competing drugs; 26 27 28 Complaint 21 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 23 of 101 Page ID #:23 1 C. 2 Expressly or implicitly promote uses, dosages or combination usage of the drug that are not contained in the FDA approved labeling (i.e., off- 3 label uses); 4 5 d. Fail to reveal material facts with respect to consequences that may result 6 from the use of the drug as recommended or suggested in the 7 advertisement; 8 9 e. Contain representations or suggestions, not approved or permitted in the 10 labeling, that the drug is better, more effective, useful in a broader range 11 12 of conditions or patients, safer, or has fewer, or less incidence of, or less 13 serious side effects or contraindications than demonstrated by substantial 14 evidence or substantial clinical experience; Present information from a 15 16 study in a way that implies that the study represents larger or more 17 general experience with the drug than it actually does; 18 19 f. idea; and/ or 20 21 Use a quote or paraphrase out of context to convey a false or misleading g. Are otherwise false, misleading or lacking in fair balance in the 22 presentation of information about the drug being marketed or any 23 competing drug. 24 25 See 21 C.F.R. § 202.l(e)(4)(5)(6), and (7). 26 27 28 Complaint 22 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 24 of 101 Page ID #:24 1 74. Oral statements and written materials presented at industry-supported 2 activities, including lectures and teleconferences, provide evidence of a product's 3 4 intended use. If these statements or materials promote a use inconsistent with the 5 product's FDA-approved labeling, the drug is misbranded, as the statements and 6 7 8 9 materials fail to provide adequate directions for all intended uses. 75. Whether the promotion of off-label uses occurs directly or indirectly, the facts related to this promotion may establish the existence of misbranding. "A drug is 10 11 misbranded if, inter alia, its labelling fails to bear 'adequate direction for use,' 21 U.S.C. 12 §352(f), which FDA regulations define as 'directions under which the lay[person] can use 13 a drug safely and for the purposes for which it is intended."' US. ex rel. Polansky v. 14 15 Pfizer, Inc., 822 F.3d 613, 615 (2d Cir. 2016) (Citing 21 C.F.R. §201.5). The "intended 16 use" of a drug is determined by the expressions of those legally responsible for labelling 17 them, as well as "the circumstances surrounding the distribution of the [drug]." Id. Where 18 19 20 21 accumulated circumstances and impressions lead a factfinder to determine that a drug is intended for an off-label use, the drug is misbranded, with civil and criminal consequences outlined by 21 U.S.C. § 333. 22 23 24 25 76. In sum, the FDA's regulat01y regime protects patients and consumers by ensuring the drug companies do not promote drugs for uses other than those found to be safe and effective by an independent, scientific, governmental body-the 26 27 28 Complaint 23 FDA. Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 25 of 101 Page ID #:25 1 IV. THE DRUG 2 77. 3 4 INSYS manufactures and markets Subsys throughout the United States, and has done so since January 2012, when the FDA approved Subsys for sale. 5 78. The FDA approved Subsys, a Schedule II opioid medication, for its only 6 7 8 indication: the management of breakthrough cancer pain ("BTcP") in opioid-tolerant adults. 9 10 11 79. The ideal treatment for BTcP is a "strong, short-acting opioid medication that works quickly and lasts about as long as a breakthrough pain episode." 1 Fentanyl, an 12 opioid roughly 100 times as potent as morphine, provides the strength needed to treat 13 BTcP, and Subsys' spray delivery allows the patient to absorb the drug much more 14 15 quickly than would be possible with a pill or lozenge. 80. 16 17 Subsys has a high potential for abuse and addiction, and its misuse can cause death from respiratory depression. 18 81. 19 Due to its status as a dangerous "TIRF" (Transmucosal Immediate Release 20 Fentanyl) drug, the FDA approved Subsys for a specific indication, explained by its 21 labeling information, and mandated that patients, prescribing physicians, and distributing 22 23 pharmacies comply with a "REMS" (Risk Evaluation and Mitigation Strategy). 24 25 26 27 1 Farrar J Et al. Oral transmucosal fentanyl citrate: randomized, double-blinded, placebo-controlled trial for treatment of breakthrough pain in cancer patients. J Natl Cancer Inst.1998;90:611-616. Available at: https://www.oncolink.org/support/side-effects/pain-management/overview-of-pain/fact-sheet-breakthrough-pain (Last Visited: October 4, 20 I 6). 28 Complaint 24 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 26 of 101 Page ID #:26 1 82. Despite these restrictions, its limited indication for cancer patients, and 2 3 stagnant growth in other TIRF sales, Subsys revenue jumped to $462 million in 2015. 4 Prescriptions for Subsys grew to 49,063 and, since late 2014, Subsys has been the most 5 prescribed TIRF drug (with approximately 48% market share). The majority of 6 7 prescriptions written by doctors during this period were for off-label uses rather than the 8 FDA-approved BTcP indication. These off-label uses included, but were not limited to, 9 the use of Subsys for non-cancer chronic pain, post-operative pain, and headaches. 10 A. 11 83. 12 13 14 15 16 FDA-Approved Indication The FDA approved the promotion of Subsys "for management of breakthrough pain in cancer patients 18 years of age or older who are already receiving and who are tolerant to opioid therapy for their underlying persistent cancer pain." 2 (See page 1 of Subsys label) 17 18 19 20 21 22 23 24 25 26 27 2 Subsys label. Available at: http://www.accessdata.fda.gov/drugsatfda _docs/label/20 I 2/202788s000lbl.pdf 28 Complaint 25 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 27 of 101 Page ID #:27 1 filGHLIG!ITS OF l'R£SCRlllING INFO&\L-\TIO:'> Theu highlighu do it.ot btclude all the ln!onu.adon needed to use SliBSYS s~eff ud cITttth'ely. S~c full prescribing ln.formatlon for Sl,1lSYS. SUBSYsn 1 (fcutanyl sublingu:tl spr.iy), en Initi:Jl U.S. Approv:d: 1968 2 3 WAR'\"ING: RISK OF RESPffiATORY DEPRESSIO:S-, MEDICATION ERRORS, ABVSE POTE.'\"Il.\L Sf".tfull presc:n1n•ng ilf/om1ationfer complA!fgbox.td wanting. 4 • Due-to the risk of fatnl n:spintoty dcprcs:sion, SUBS\"$ is cont~indicatcd in opioid non-toler:tnt patients (1) and in management of acute ar postop1CATIONSA.'\"DUSAGr SL13SYSi!i an opfoid agoniU fo.diutcd for the managementofbreal:throogh pain iu cancer patients JS years of age .md older wh.oare alre;,dyreceiving .ind who are tolerant to opioid therapy for theirut1dedyingpemttent catu:er pam...Patients mun re.mainen around-the-clod: opioids:w~ tilhng Sl,13S\"S.(1) Limitationsof Use: onlyto p:rtients~uroltcdin the TIRF REMS SUBSYS maybed~ 9 10 -------------Most common .ad\·etseteadiom dw:ingtrcatmc::t(frequency~%}: \-omititl!, namta, co:utipation..dy$pnt:a,and s:omnolu.c.c.(6.1) cont2cc fnsys or Tbenpentics, In~ at J.SSS-978-2797or-f'DA.at l..SOO-FDA-1088 lt.'K'n.'-fdll..godHU!dWa.tt:h. -------DRUGL'\:-XERACTIONs------• Boxed Warning 2nd Waroiagi :mdPrecautions (5.4, 7) ----USElNSPECIFJCPOPULATION,,_ ____ _ • Sliety and eft'ectiveneu in pedi:i.triepatiett.Ubelow lS yem of:&geha.\•ecot beeo <>lobllil:ed.(S.4) • AdministerSUBSYS wiih caution to pMientswithliver 01'. kidney dysfuoction. (8.6) S« 17 for PAllE\:'T COUNSELING D-"FO!BL-\TIOXand Medkation To npon S'GSPECTED AD'"ERSERE.-\CTIONS, Guide. Relistd: 112012 ACCEss~~- OSAG.£A.'\"D..\Dlll1\"JSTRATIO~• • Patients.mutt ttqutl'e acd u:st ar:ound~thc-¢loc1: opioi~ whentaking 11 SUBSYS.(I) • !n.~i,ldo,. ofSu13SYS: 100 mcg. • In.dt\'iduallytitra.teto a.tclua.bte dose that provides adequate :m..i..Igesfa using 12 a shlgle SUB SYS do,epcr1.,rcl1broug.h cancerpainq,faodc. (2) • No more tbac twodoscsc..u:.be u1:eo.~ brea1.1hrough painepi~. (2.2) • Wait :rtlcMt 4 houn before treating an.otherepu.odeof breakthroughpain ·,,ilh SUBSYS. (23) 13 14 15 a. 84. • Lin1itconsumptionto follf'Ol' fewer dOlel ~rd.1y once::.ue.:essfuldost il found. (2.3) -----DOSAGE FORMS&'\"J>STRL-.;GIB<>----• Sublingual spray ic 100 mcg, 200 mcg, .:100mcg, 600 mcg. 800 mcg ~ge (3) •-gth•. Thus, the approval specifies a population of patients - adult cancer sufferers 16 17 who have become opioid-tolerant from managing persistent pain - and an indication - 18 break.through cancer pain. Any other use of the drug, because of a difference in 19 20 21 22 population or indication, is off-label. 85. The FDA also determined that Subsys should only be prescribed by "pain specialists who are knowledgeable of and skilled in the use of Schedule II opioids to treat 23 cancer pain." (See page 4 of Subsys Label) 24 25 26 27 28 Complaint 26 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 28 of 101 Page ID #:28 1 l INDICATlONS A:'<1> USAGE Sl113SYS i,; indicatedfor the lllllI!agement of breakthroughpainin adult cancer patientswho are alreadyrooeitingand whoare tolerantto around-the-doc!: opioidtherapyfor their underl,ing persi,tenlcancerpain. Patientsconsidered opioidtolerantare those who are takingaround-the-clod:medicinecorui,ting of at least 60 mg of oral molJlbinedaily,at least25 mcg oftran Healthcareprofessionals\\no prrucribeSu1lSYSon an outpatientbasis must enrollin the TIRFREMSACCESSprogramand comply\\ith the requirements of the REMSto ensuresafe use of S1JBSYS. [see Warningsand Precautions (5.10)] 10 11 As \\1thall opioids,the ,afety of patientsusing suchproduc!3io dependenton health care profrusionahprescribingthemin strict confomlitywiththeir appro,-edlabeling\\1thmpect to patientselection,dosing,andproper conditionsfor use. 12 13 2.1 Initial Dose IndividuallytitrateSu13SYSto a do,e thatprovide, adequateanalgesiaand minimize, aideeffects.The initialdoseofSUBSYSto treat episodesof breal:throughcancerpain i, always 100mcg,.\\lien prescribing, do not mitch patients on• mtg per mcg basis from any other oral transmucosal fentanyl product to Su13SYSas SUBSYSi, not equivalenton a mcg per mcg bash \\1thany otherfentanylproduct[see War11ing; a,,d Pn,caut/on:.(5.2)and (lJ.J)]. ClinicalPhanna&o!ogy 14 15 16 Prestnce an initialtitrationsupplyof 100mcg SUBSYSunits,\\ilich limits1he numberof units in the home duringtitration. 17 Avoidprescribinga higherdoseuntilpatient!ha,·e used ap all units to pre1;ezit confmionand possibleorerdose. 2.2 Dose Titration 18 19 20 a. 86. Page4 of16 The FDA-approved label expressly provides that Subsys is contraindicated 21 22 to post-surgical pain, migraine headaches, and dental pain. The label states: "Do not use 23 SUBSYS: [ ... ]for short-term pain that you would expect to go away in a few days, such 24 as: pain after surgery; headache or migraine; dental pain." (Subsys Label) (emphasis 25 26 original). 27 28 Complaint 27 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 29 of 101 Page ID #:29 1 2 3 87. In order to prevent potentially fatal side effects, and to reduce the risk of misuse and abuse, the FDA demanded that prescribing physicians limit patients to the 4 lowest effective dose of the drug. This was to be achieved through "titration," a process 5 by which patients begin taking the drug at 100 Meg, and may step up the dosage in 6 7 hundred microgram increments (maximum of two doses in any breakthrough pain 8 episode or four-hour period, whichever is longer). While the highest dose of Subsys is 9 1600 Meg, according to studies included in the FDA-approved label, BTcP is well 10 11 12 managed in approximately 25% of patients at 400 Meg or less. B. 13 TIRF-REMS Distribution Protocol 88. Due to the dangers associated with this class of drugs, the FDA required that 14 15 Subsys and the other five FDA-approved "Transmucosal Immediate Release Fentanyl" 16 (TIRF) products be accessed only through a Risk Evaluation and Mitigation Strategy 17 (REMS) program. The FDA refers to this protocol as TIRF-REMS. 18 89. 19 20 TIRF-REMS is intended to educate "prescribers, pharmacists, and patients on the potential for misuse, abuse, addition, and overdose" of TIRF drugs. 21 90. In order to comply with TIRF-;REMS, prescribers and pharmacists must first 22 23 enroll in the program. 91. 24 25 The REMS program requires that prescribers and pharmacists review educational materials on the class of drugs and pass an online "Knowledge Assessment" 26 27 exam. 28 Complaint 28 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 30 of 101 Page ID #:30 1 92. The prescriber and pharmacist must then read and sign a "Prescriber [or 2 Pharmacist] Enrollment Form," which lists the risks associated with TIRF drugs and 3 4 requires the parties to acknowledge their responsibilities associated with prescribing and 5 dispensing such a drug. The forms require the signing party to certify, in multiple ways, 6 7 8 that they will comply with the labelling and TIRF-REMS protocol in prescribing and dispensing Subsys other TIRFs. 9 The TIRF REMSAccessProgram:PrescriberEnrollmentForm 10 The Transmucosal Immediate Release Fentanyl (TIRF) REMS Access Program Prescriber Enrollment Form 11 12 www.TIBFREMSaccess.com. For real.time processing of enrollment. please go to To submit this form via fax, please complete all required fields below and fax pages 1, 2 and 3 to 1-866-822-1487. Please note, you must review the TIRF REMS Access Education Program and successfully complete the Knowledge Assessment to complete enrollment. If you have not completed the Knowledge Assessment online, please include it with this enrollment form. You will receive enrollment confirmation via email or fax. 13 14 1 understand 1hat TIRF medicines are only available through the TIRF REMS (Risk Evaluation and Mitigation Strategy) Access program and that I must comply with 1he program requlrements. In addition, I acknowledge1hat 15 r 16 I havereviewedthe TIRFREMSAccessEducaUon Program,indudingthe Full Prescribinglnrormationfor each TIRFmedicine,and I havecompleletlthe Knov~edge AssessmentI understandtile responsibleuse condttions fl"lrTIAF .......,.,:.. :na~ ........1 tho ~L- .... ~nrl honafjk: nf ,.$,, .. ,.,.,,:,.. ....... 1,..1.t lh,.. .......... 2. l understandlhat TIRFmedicinescan be abusedand !hat this risk shouldbe consideredWhenprescribingor dispensingTIRF medicinesin situationswhereI am concernedaboutan increasedrisk or misuse,abuse,or 17 n11-•..#--- .. , .. _,.. :-'o-..: ....... , 18 3. I understandthat TIRFmedicinesare indicaledonlyfor the managementor breakthroughpainin paUenlswilh cancer,who are alreadyreceiving,andw110 are tolerantto, around-lhe-clockopioidlherapyfor their underlying 19 for use in opioidnon-tolerantpatients,and !tr. Tl?.Fmecidnes,pease see M ?teseribi.vfn(orm~. 28 Complaint 29 mdtldingSOXEDWARNINGS Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 31 of 101 Page ID #:31 1 The TIRFREMSAccessProgram:IndependentOutpatientPharmacyEnrollmentForm 2 The Transmucosal Immediate Release Fentanyl (TIRFJREMS Access Program Independent Outpatient Pharmacy Enrollment Form 3 For real-time processing of enrollment, please go to www.TlRFREMSaccess.com. 4 To submit this fonn via fax, please complete all required fields below and fox pages 1, 2, 3 and 4 to 1-866-822-1487. Please note, you must review the TIRF REMS Access Education Program and successfully complete the Knowledge Assessment to complete enrollment. If you have not completed the Knowledge Assessment online, please include it with this enrollment form. You will receive enrollment confirmation via email or fax. 5 6 I understand that TIRF medicines are only available through the TIRF REMS (Risk Evaluation and Mitigation Strategy) Access program and that I must comply with the program requirements. In addition, as the designated authorized independent outpatient pharmacy representative. I acknowledgethat 7 1. I have reviewedthe TIRF REMS Access EducationProgram,and I have completedthe Knowledge AssessmenlI understandthe ris~.sandbenefrtsassociated;vith TIRFmedicinesand Iharequirementsoflfle TIRF REMSAccess rooramfor harmacies. 2. I vnllensureIha! all pharmacystaffwho participateIn dispensingTIRFmedicinesare educaledon the risks associatedwith TIRFmedicinesand the requirementsof the TIRF REMSAccessprogram,as describedin the TIRF REMSAccessEducationProgram.Thistrainingshouldbe documentedand ls subjectto audit 3. I understandthatconvertingpaUentsfromoneTIRFmedicinelo a differentTIRFmedicinemustnot be done on a microgram-per-microgram basis.I understandthat TIRF medicinesare not interchangeable with each other, regardlessor route of administration,and that conversionmay resuHin fatal overdose,unless conversionls doneIn accordanceWithlabeledproduct-specific conversionrecommendations (referto lhe list of currently approved TIRF products located on !he TIRF REMS Access website at www.TIRFREMSaccess.comffirfUI/Productlist). Note,a brandedTIRFmedicineand its specificgeneric product(s)are interchangeable. 4. I understandthat TIRFmedicinesare contraindicated for usein opioidnon-tolerantpatients. un erstan at t e in ,a mg ose or me ,ones or pauens Is owes ose. un ess Individualproduct labels provide product-specificconversionrecommendations. and I understandthat patientsmustbe mraledindMdually. 6. I understandllie Importanceof discussingthe lisk.sand benemsof TIRFmedicineswith patientsand their caregivers,and in particulartM Importanceof laking the drug as prescribed,not sharingwith others,and properdisposal. un erstan that e produc-spe 1c e 1caon ui emus e giVen o he patientor t e1rcaregrverea lime a TIRFmedicineis dispensed. 8. I understandthata TIRFmedicinewillnot be dispensedwithoutverifyingthroughour pharmacymanagement system Iha! llie prescriberand pharmacyare enrolled and active, and tha1the patient has nol been inactivatedin 1heprogram. 9. I understandthatALLTIRFmedicineprescriplions. regardlessof the methodof paymen~mustbe processed throughour pharmacymanagement system. 10. I understandthat all dispensinglocationsmustbe enrolledIn the TIRF REMSAccessprogramto dispense TIRFmedicines. 11 I understandthat TlRFmedicinescan onlybe obtainedfromwholesalersldislributois Iha!are enrolledin the TIRF REMSAccessprogram. PharmacistName•(pleaseptint):_________ _ 8 9 10 11 s... 12 13 14 15 16 17 18 19 20 21 94. 95. Prior to submitting a prescription for filling by a pharmacy, the physician must discuss and have signed by the patient a Patient-Prescriber Agreement Form, which 22 23 24 25 also lists the risks and responsibilities associated with the drug. 96. TIRF prescribers and pharmacies must re-enroll every two years, and may only have their TIRF prescriptions filled through pharmacies certified to do so. 26 27 28 Complaint 30 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 32 of 101 Page ID #:32 1 V. INSYS' OFF-LABEL MARKETING SCHEME 2 97. INSYS waged a multi-pronged approach to build Subsys' market share, 3 4 5 including direct and affirmative off-label promotion to potential prescribers. 98. INSYS' campaign bore success, gaining Subsys roughly 50% market share 6 among TIRF drugs only two years after its FDA approval, though more than 80% of 7 8 9 Subsys prescriptions cited off-label uses. 99. Although expressly contraindicated, INSYS promotes Subsys for post- 10 11 surgical pain, resulting in off-label prescriptions. INSYS also promotes Subsys for 12 musculoskeletal pain, fibromyalgia, neck pain, and back pain, all of which are off-label. 13 Subsys has not been shown to be either safe or effective for these conditions. In fact, 14 15 16 17 prescribing opioids for back and neck pain is often harmful and may ultimately lead to increased pain, dysfunction, and disability. I 00. Relator expressed concerns to sales managers on several occasions, 18 19 20 21 regarding the over-prescription of Subsys to non-Cancer patients who may have been better served by a less dangerous and less addictive analgesic. On one occasion, Relator told her Sales Manager, SM #1, that she wanted to increase her sales, but feared the 22 23 24 25 consequences for patients whose opioid-tolerance and potential for addiction might increase unnecessarily. SM #1 responded incredulously, stating: "They are already addicts." Rather than treat Relator's concerns about potential over-prescription seriously, 26 27 SM # 1 dismissed those concerns and advised Relator to behave more sexually toward 28 Complaint 31 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 33 of 101 Page ID #:33 1 pain-management physicians, to stroke their hands while literally begging for 2 prescriptions. SM #1 advised Relator to ask physicians to prescribe Subsys as "a favor." 3 4 SM # 1 told Relator that these patients would not get worse as a consequence of 5 unnecessarily taking Subsys, that they were already addicts and their prospects were 6 therefore essentially rock-bottom. 7 8 101. INSYS encourage its sales staff, including Relator, to advise doctors to start 9 patients on high doses of Subsys and push existing patients to "titrate up" to higher levels 10 11 12 of medication usage and maintain their use round-the-clock, rather than as a response to breakthrough instances of pain. 13 102. In spite of the unnecessary dangers posed to non-cancer patients, INSYS 14 15 instructed its sales staff to enroll new prescribers in the TIRF-REMS program and lavish 16 them with constant attention, free meals and other remuneration in order to increase 17 Subsys prescriptions to pain management patients. 18 19 20 21 A. Promotion of Subsys for Off-Label Indications 103. From Subsys' approval in 2012, INSYS promoted the drug for off-label indications, by targeting pain management specialists and internists and neurologists 22 23 24 25 with the majority of its sales staff and reserving a smaller (now defunct) sales wing for calling on oncologists. 104. Upon beginning work at INSYS in 2014, Relator received marketing 26 27 materials referencing only cancer patients, yet she was advised during training that 28 Complaint 32 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 34 of 101 Page ID #:34 1 oncologists do not tend to prescribe pain management drugs, and that she should find a 2 general prescriber of TIRFs and "live in their office," in order to educate an internist or 3 4 5 pain-management physician about prescribing Subsys for an off-label use. 105. Relator received further advice as to which practice specialties and 6 7 physician personality types she should target. INSYS sales trainers provided four targets, 8 besides internists: "(l) Physiatrists (PM&R (Pain Management and Rehabilitation)); (2) 9 Anesthesiologists; (3) Neurologists (neuropathic pain/migraine); and (4) Psychiatrists." 10 11 106. INS YS sales staff targeted prescribers of other TIRF drugs (including 12 Cephalon's Actiq) for the sale of Subsys, despite the fact that sales representatives knew 13 many of those physicians prescribe TIRF drugs for off-label uses. By the close of 2014, 14 15 approximately 80% of Subsys prescriptions were filled for off-label uses. 16 107. As an incentive to its sales force, INSYS offered bounties of between $500 17 and $800 for each instance in which the sales representative was successful in having a 18 19 20 21 patient switch to Subsys from another TIRF drug. INSYS paid this bounty irrespective of the type of use for which the drug was prescribed. 108. During her time at IN SYS, Relator found that oncologists began to shy 22 23 24 25 away from prescribing Subsys for BTcP, as the drug had developed a stigma. Physicians associated Subsys with INSYS' unscrupulous sales practices and considered its indication for cancer pain a mere pretext for its actual intended use, off- label pain 26 27 management for opioid addicts. 28 Complaint 33 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 35 of 101 Page ID #:35 1 109. Relator was advised to offer free Subsys for non-cancer patients where 2 necessary to ensure coverage for the drug by payors, including government healthcare 3 4 programs. In doing so, INSYS informed Relator that (1) authorization would be more 5 likely after three months to a year of use, and (2) the patient would grow dependent on 6 7 8 9 the medication during that time, ensuring a long prescribing relationship. B. INSYS Advised Prescription of Off-Label Doses of Subsys 110. INSYS sales staff, led by management, consistently sought to increase 10 11 12 13 revenue through promoting (1) medically unnecessary high doses of Subsys, and (2) the prescription of Subsys for continuous, rather than emergency, use. 111. INSYS sales managers lectured sales staff, repeatedly, that the key to 14 15 making more money was successfully encouraging physicians and patients to use higher 16 doses of Subsys. Quite simply, the higher the Subsys dose, the more revenue generated 17 by INSYS and, therefore, greater sales commissions to be earned by Subsys' sales 18 19 representatives. Notably, INSYS' compensation structure is unique in that sales 20 representatives earn relatively low salaries (i.e., $40,000 per year) while maintaining the 21 right to generate substantially more income through incentive-laden commissions. 22 23 24 25 112. Subsys' FDA-approved labeling states that new patients are to begin using Subsys in 100 Meg increments. (Subsys Label). 113. However, INSYS sales staff stressed to physicians that the 100 Meg dose 26 27 was ineffective for all but 4% of patients. (See Subsys Dose Chart). Sales staff were 28 Complaint 34 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 36 of 101 Page ID #:36 1 taught to disregard the fact that the entry titration dose is intended to be small, and thus 2 3 safe, and instead instructed to convince physicians to double the entry dose, so that 4 patients would immediately "feel the drug working." Sales managers complained that the 5 100 Meg initial dose risked causing patients to think the drug ineffective. As such, they 6 7 disregarded the label and promoted the off-label dose. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 114. In fact, INSYS sales representatives were instructed to recommend beginning patients on a 200 Meg dose. One sales manager advised relator that some 28 Complaint 35 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 37 of 101 Page ID #:37 1 patients begin at a 400 Meg dose. In line with INSYS policy, sales representatives, 2 including Relator, advised prescribers to begin at 200 Meg and expect an increase to at 3 4 least 400 Meg through titration during the first month of use. INSYS directed Relator 5 and other sales representatives advised titration to an eventual dosage between 600 Meg 6 and 1600 Meg. 7 8 9 115. Sales managers directed sales representatives, including Relator, to advise patients directly that they should begin at 200 Meg, wait 30 minutes, and repeat the same 10 11 dose if still in pain. Representatives were to advise patients that they should increase to 12 the next dose (in 200 Meg increments) after four hours and try again if symptoms 13 remained. This contradicts Subsys' label, which states "When you are first prescribed 14 15 Subsys, your healthcare provider will start you with the lowest strength medicine, and 16 change that dose until you and your healthcare provider find the right dose for you." 17 116. Further, INSYS sales staff advised physicians and patients that patients 18 19 20 21 should manage the titration without informing the treating physician of dosing changes during the titration process. This directly contradicts Subsys' label. 117. Joe Rowan, INSYS' Director of Sales for the East Coast, advised sales 22 23 24 25 representatives, including Relator, that patients should be pushed to a baseline dosage of 400-800 Meg, in hopes that continued use would increase the baseline toward 1600 Meg. He lectured, during a sales meeting, that sales representatives would make their bonuses 26 27 by the patient titrating closer and closer to 1600 Meg. 28 Complaint 36 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 38 of 101 Page ID #:38 1 118. In meetings and on "ride-along" drives with other sales staff, Relator was 2 3 encouraged to inform doctors and patients that an average effective dose was between 4 600 and 1600 Meg. According to studies included in the drug's FDA label, however, 5 breakthrough pain is managed in approximately 25% of patients at 400 Meg or fewer. 6 7 8 9 C. Use of IRC to Authorize Insurance Reimbursement for Off-Label Uses 119. In order to ensure authorization of payment for a Subsys prescription by a patient's insurer and the drug's dispensing by a pharmacy, INSYS provided its sales 10 11 staff with a Patient Authorization & Referral ("Prior Authorization") form, the ability 12 to provide as much as a year of free Subsys to establish a pattern of use, an INSYS 13 Reimbursement Center ("IRC")to persuade insurers, and a pattern appeal letter, to be 14 15 16 17 provided to the physician in the event of denial. Each of these methods breached FDA regulations. 120. INSYS employs a group known as the "INSYS Reimbursement Center," 18 19 20 21 ("IRC") to communicate with pharmacies and insurers on behalf of the doctor and patient, to ensure authorization and dispensing of Subsys. According to Relator, sales representatives understood that IRC staff are known to do whatever is necessary, 22 23 24 25 including lying, to ensure prior authorization for Subsys prescriptions. 121. At the outset of a sales relationship, INSYS sales representatives attempt to enroll healthcare providers in the INSYS Patient Services Center, by providing 26 27 HIP AA waivers for likely Subsys patients to the IRC. Once this has occurred, the sales 28 Complaint 37 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 39 of 101 Page ID #:39 1 representative supplies the potential prescriber with INSYS Prior Authorization forms, 2 documents which, when filled with doctor and patient specific information and 3 4 signatures, allows the IRC to attempt to gain prior authorization. Finally, the 5 physician, like the pharmacy which will eventually fill the prescription, must enroll in 6 7 the TIRF-REMS access program, by taking an online exam and signing liability 8 waivers, all intended to mitigate the risks associated with prescribing drugs like 9 Subsys. 10 11 12 13 122. Once a physician qualifies to prescribe Subsys and writes a prescription to do so, the IRC' s prior authorization mechanism unfolds in the following manner: a. INSYS' sales representative provides a partially pre-populated INSYS 14 Prior Authorization form to patient, and assists in its completion. 15 16 b. Prescribing physician completes the Prior Authorization form and returns 17 it to IN SYS' sales representative. 18 19 c. INSYS' sales representative or physician's office staff faxes the form to IRC. 20 21 d. IRC staff contact the relevant Medicare Part D insurer ( or other insurer) 22 and plead INSYS' case for reimbursement of the cost of Subsys. 23 24 e. If the insurer agrees to reimburse, the drug is dispensed. 25 f. If the insurer refuses to reimburse, INSYS provides up to a year of free 26 Subsys to the patient. After months of Subsys use by the patient, during 27 28 Complaint 38 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 40 of 101 Page ID #:40 1 which time the patient has likely become dependent on the drug, INSYS 2 re-submits the request for reimbursement, citing the three months of use. 3 4 Relator reports that this regularly worked, that INSYS won 5 reimbursement by providing three months of free product, recouping its 6 outlay in the process. 7 8 9 123. Upon information and belief, this process has afforded INSYS a radically higher rate of insurer authorization than corresponding figures for any of the five other 10 11 12 13 TIRF drugs now sold. 124. During Relator's initial training, Relator's field sales trainer, Sales Representative #1 ("SR #1 ") showed Relator folders she had prepared for individual 14 15 physicians, containing pre-populated prior authorization forms. Later, Sales 16 Representative #2 (SR #2), another of Relator's local colleagues, showed Relator 17 prepopulated forms up close. Relator and her colleagues pre-populated the form 18 19 (below) at the lines with filled in squares: "Diagnosis: Other chronic pain," 20 "Diagnosis: chronic pain syndrome," "Patient is Opioid Tolerant," and "Strength: 200 21 Meg." That is, INSYS sales staff pre-populated the form with off-label indications and 22 23 an off-label initial dosage. 24 25 26 27 28 Complaint 39 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 41 of 101 Page ID #:41 1 2 3 4 . - . ti,, -~ ~. - 5 •' J 6 -- - ~~ ·-- - - . 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 125. On October 13, 2014, Relator-Plaintiff, feeling uncomfortable about the 23 24 25 26 process, asked SR #1 if she was permitted to fill out the prior authorization form on behalf of the patient or physician, and received a text in return, stating, "No, but yes." Pursuant to this instruction by an INSYS representative, Relator met with patient and 27 28 partially filled out the prior authorization form for the doctor. Complaint 40 -- Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 42 of 101 Page ID #:42 1 126. When the prior authorization process was not successful, INSYS 2 3 instructed its sales staff to provide physicians an appeal letter, to be filled out and 4 forwarded to IRC for submission to the insurer. This letter (below) does not mention 5 cancer. Rather, it provides a general scheme by which someone with any foreseeable 6 7 8 off-label intended used might argue that they should have the drug authorized by their msurer. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 127. Where neither prior authorization nor appeal succeeded, INSYS instructed 27 28 and permitted Relator to provide free Subsys to a given patient for up to three months. Complaint 41 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 43 of 101 Page ID #:43 1 128. INSYS sales mangers advised sales staff to bargain with physicians leery 2 3 4 of undergoing the authorization process. As Relator noted during her training, "Give us 1 wk-Doesn't 5 get approved we will give pt free meds." 129. Relator provided free medication to patients for up to a year. During that 6 7 8 9 time, the IRC attempted prior authorization again to increase the likelihood that the prescription claims would be paid including by government healthcare programs. D. Evasion ofTIRF-REMS 10 11 130. Fentanyl's deadly potency motivated the FDA to mandate that prescribers 12 and pharmacists enroll in TIRF-REMS prior to putting TIRF drugs in the hands of 13 patients. TIRF-REMS requires prescriber/pharmacist accreditation and forces prescribers 14 15 and pharmacists to pass an exam and make a series of certifications in order to become 16 accredited. INSYS' sales managers instructed sales staff to enroll physicians in TIRF- 17 REMS, a necessary predicate to prescribing Subsys. To assist in this effort, sales staff 18 19 20 21 continually circulated "cheat sheets" with TIRF-REMS educational assessment answers, to relieve potential prescribers of their duty to read the TIRF-REMS website and to ensure that the prescriber would be qualified. 22 23 24 25 131. INS YS assigned Relator a territory with only a few physicians who were qualified to write scripts for Subsys under the TIRF-REMS program. 132. Given the requirement that prescribing physicians comply with TIRF-REMS 26 27 by enrolling in the program, taking the exam, and signing the acknowledgment, INSYS 28 Complaint 42 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 44 of 101 Page ID #:44 1 management instructed sales staff to "do whatever it takes" to enroll potential prescribers 2 in the program. 3 4 5 133. These efforts included supplying prescribers and their staff with "cheat sheets". Relator learned of the "cheat sheets" from Sales Representative #3 ("SR #3"). 6 7 Relator received the answers from a colleague on a sheet of notebook paper and gave that 8 paper to office staff, considering it common practice. A copy of one such "cheat sheet" is 9 illustrated below: 10 11 12 13 14 15 16 17 18 19 20 21 22 134. As a result ofINSYS' distribution of the answers to the test, INSYS caused 23 24 physicians to circumvent the educational requirement of the TIRF-REMS program which 25 was intended to ensure that prescribers understood the dangerous potential downsides to 26 opioid prescriptions, particularly for unintended uses. 27 28 Complaint 43 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 45 of 101 Page ID #:45 1 2 3 135. The educational component was designed to ensure that physicians would write prescriptions for Subsys responsibly and protect patients against injury. 136. If the United States had known that physicians were making false 4 5 certifications to the TIRF-REMS program, the Government Healthcare Programs would 6 7 8 9 not have paid for prescriptions written by them. E. INSYS' Off-Label Promotion Amounted to Misbranding 137. INSYS misbranded Subsys by advising doctors to prescribe high doses, to 10 11 prescribe for off-label uses, and to prescribe to non-cancer patients. These actions 12 manifested an "intended use" separate from that approved by the FDA, one which 13 Subsys' label directions fail to render safe by a lay user. 14 15 138. A drug is misbranded if its labelling fails to provide "adequate directions for 16 use." 21 U.S.C. § 352(f). Adequate directions are those which will allow a lay patient to 17 safely use the drug for its "intended use." 21 C.F.R. §201.5. 18 19 20 21 139. A drug's "intended use" is that use manifested by those who label and distribute it. 21 C.F.R. § 201.6. 140. With respect to Subsys, INSYS sent its sales staff to "live" in the offices of 22 23 24 25 internists, physiatrists who do not focus on cancer-pain treatment, neurologists, and psychiatrists. Of the twenty sales representatives at Relator's initial training, only four were tasked with marketing Subsys (at that time INSYS' only approved drug) to 26 27 oncologists. The remaining sales representatives were hired to the "Pain Management" 28 Complaint 44 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 46 of 101 Page ID #:46 1 wing of the sales staff. During the course of Relator's employ, INSYS joined the 2 oncology and pain management wings. 3 4 5 , 141. The result, unsurprisingly, was off-label prescriptions. The off-label Subsys uses amounted to approximately 80 to 90% of the drug INSYS sold. 6 7 142. INSYS facilitated this off-label promotion by hiring additional sales staff to 8 find new prescribers. When Relator was hired, she received an "expansion territory." 9 That is, other sales representatives in Relator's territory gave up work with two to four 10 11 TIRF-REMS qualified prescribers, and Relator began selling to those physicians. INSYS 12 provided Relator a list of physicians in her area which included many internal medicine 13 practitioners mislabeled as oncologists, and tasked Relator with selling to them as well. 14 15 16 17 By handing out new territories to new sales reps without existing prescribers, INSYS encouraged them to promote the message which resulted in off-label prescriptions. 143. With most prescriptions not written for the Subsys indication, INSYS has 18 19 20 21 expanded the list of intended uses for Subsys to include non-cancer pain and postoperative pain, among other uses. 144. Further, INSYS expanded the type of pain for which the drug was used, 22 23 24 25 from BTcP, to breakthrough pain in non-cancer patients, to persistent pain. The expansion to persistent pain raised revenues dramatically, as it led to the use of Subsys every four hours, independent of the scale of pain the patient felt at any given time. Thus, 26 27 28 Complaint 45 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 47 of 101 Page ID #:47 1 INSYS turned Subsys, an analgesic roughly 100 times as powerful as morphine, into a 2 3 4 5 maintenance opioid, like OxyContin or Oxycodone. 145. This amounts to misbranding by INSYS as Subsys' FDA-approved label does not provide adequate directions for these uses. Neither the label nor any TIRF- 6 7 REMS documentation provide information which will allow a lay patient to safely use 8 the drug for these purposes. In fact, the label clearly indicates that the drug is 9 contraindicated for use of the drug for migraines, post-operative pain, and dental pain. 10 11 The label states, "If the patient experiences greater than four breakthrough pain episodes 12 per day, the dose of the maintenance (around-the-clock) opioid used for persistent pain 13 should be re-evaluated." INSYS' misbranding rendered this precaution inert, and serves 14 15 16 17 as clear evidence of the substitution of a different, dangerous use for the original FDAapproved indication. 146. Relator was instructed to hand out materials concerning the use of Subsys 18 19 20 21 to all patients regardless of indication. For the majority of these patients, the marketing materials and label did not apply. Patient #1, as discussed later in more detail, was the patient of a prescriber that Relator called upon. Patient #1 did not have 22 23 24 25 cancer and received twice the FDA-approved starting dose of Subsys. 147. INSYS misbranded Subsys by promoting it for off-label uses for which it would assuredly be used as a maintenance medication. Subsys' approval for BTcP, and 26 27 INSYS' promotion of the drug for chronic, non-cancer pain, coupled with INSYS' 28 Complaint 46 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 48 of 101 Page ID #:48 1 assistance of physicians who prescribed the drug for continuous use, rather than "As 2 3 4 5 Needed", created a situation in which the drug's labeling could not provide adequate instructions to ensure the safety of its intended uses. F. Improper Payment by Government Healthcare Programs 6 7 148. INSYS' off-label marketing efforts caused potentially hundreds of 8 thousands of prescriptions to be improperly paid for by Government Healthcare 9 Programs. 10 11 149. In the Medicaid Program, States will not receive FFP ("Federal Financial 12 Participation") if a drug, as prescribed, is not for a medically acceptable use. FFP is 13 available to states only for "covered outpatient drugs." 42 U.S.C. § 1396b(i)(10). As a 14 15 result, States' own laws and pharmacy regulations require that drugs must be used for a 16 medically accepted use and therefore fit the definition of a covered outpatient drug. 17 "Covered outpatient drugs" do not include drugs that are used for a medical indication 18 19 20 21 which is not a medically accepted indication. 42 U.S.C. § 1396r-8(k)(3). 150. A medically accepted indication is defined as a use "which is approved under the Federal Food Drug and Cosmetic Act" ("FDCA") or which is "supported by 22 23 24 25 one or more citations included or approved for inclusion" in specified drug compendia. 42 U.S.C. § 1396r-8(k)(6). 42 U.S.C.§ 1396r-8(g)(l)(B)(I) identifies the compendia to be consulted: American Hospital Formulary Service Drug Information; United States 26 27 28 Complaint 47 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 49 of 101 Page ID #:49 1 Pharmacopeia-Drug Information; the DRUGDEX Information System; and the peer- 2 reviewed medical literature. 3 4 151. Medicare Part A generally pays for inpatient services for eligible 5 beneficiaries in hospital, hospice and skilled nursing facilities, as well as some home 6 7 healthcare services. 42 U.S.C. §§ 1395e - 42 U.S.C. §§ 1395i-5. Prescription drugs are 8 covered under Medicare Part A only if they are administered on an inpatient basis in a 9 hospital or similar setting, and are "reasonable and necessary." 10 11 152. Medicare Part B pays for some types of prescription drugs that are not 12 administered in a hospital setting, and that are "reasonable and necessary." 42 U.S.C. 13 § 1395k(a); 42 U.S.C. § 1395x(s)(2); 42 C.F.R. §405.517. These typically include drugs 14 15 administered by a physician or other provider in an outpatient setting, some orally 16 administered anti-cancer drugs and antiemetics, and drugs administered through durable 17 medical equipment such as a nebulizer. 42 U.S.C. § 1395k(a); 42 U.S.C. § 1395x(s)(2); 42 18 19 20 21 C.F.R. §405.517. 153. The Medicare Part D drug benefit program covers all drugs that are considered "covered outpatient drugs" under 42 U.S.C. § 1396r-8(k). 22 23 24 25 154. The off-label uses discussed herein are not supported by "clinical research that appears in peer-reviewed medical literature," and could not, under any circumstances, be determined to be "medically accepted as safe and effective" or 26 27 28 Complaint 48 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 50 of 101 Page ID #:50 1 "reasonable and necessary" for such uses. Claims for such off-label uses were therefore 2 not covered by Medicare either. 3 4 5 155. INSYS was aware that the natural and probable consequence of its promotion of off-label uses of Subsys was that health care providers would submit claims 6 7 8 9 for payment to Government Healthcare Programs for the off-label use. 156. Notwithstanding this knowledge, INSYS illegally, vigorously, and without any thought to the possible negative health effects to which it subjected patients, 10 11 promoted these off-label uses. INSYS was aware that its illegal promotion did in fact 12 result in false claims to these and other government payors for the off-label uses. INSYS 13 was aware that its promotion activities were a substantial factor in producing the claims. 14 15 157. When LINDEN CARE and other pharmacies and healthcare providers 16 submitted claims based upon a physician's prescription for Subsys for off-label uses, the 17 claims they submitted were false because such off-label uses were not supported by a 18 19 20 21 citation in one of the Drug Compendia specified by 42 U.S.C. § 1396r-8(g)(l)(B)(I), (Medicaid) not supported by "peer-reviewed medical literature," and could not, under any circumstances, be determined to be "medically accepted generally as safe and effective 22 23 24 25 "or "reasonable and necessary." (Medicare) and not covered by other Government Healthcare Programs, See, e.g., TRICARE Policy Manual 6010.47-M, Chapter 7, Section 7.1 (B) (2) (March 15, 2002); CHAMPVA Policy Manual, Chapter 2, Section 22.1, Art. 26 27 II (A)(2) (June 6, 2002). 28 Complaint 49 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 51 of 101 Page ID #:51 1 158. INSYS' off-label marketing directly and proximately caused the off-label 2 3 prescribing for which these claims to government healthcare programs were filed. INSYS 4 caused the submission of these claims, since healthcare providers submitted Pharmacy 5 Claim Forms and CMS-1500 Forms to Government Healthcare Programs, and the states 6 7 submitted Form CMS-64 to the Federal Government, all claiming reimbursement for 8 Subsys for such off-label uses. 9 VI. INSYS' KICKBACK SCHEME 10 11 159. From the moment Subsys entered the TIRF market, INSYS made clear to its 12 sales staff that the drug would be sold by paying physicians for off-label prescriptions 13 through sham "speaker" programs, in-kind donations, and other forms of illegal 14 15 kickbacks. 16 160. At Relator's initial training, INSYS sales trainers educated her and her 17 colleagues on how to identify potential prescribers as those to whom "money talks." 18 19 20 21 When questioned as to what this meant, trainers stated that the way to generate prescriptions was to sign up and pay speakers. 161. In order to find these physicians, Relator was directed to search public 22 23 24 25 disclosure data for those doctors who had accepted high speaking fees for presentations on behalf of fentany 1 and other opioids. 162. In sales trainings, INSYS taught sales staff to classify physicians according 26 27 to their perceived willingness to receive money for prescriptions. 28 Complaint so Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 52 of 101 Page ID #:52 1 163. INSYS sales managers taught sales staff to color code doctors, "green" 2 3 being the most likely to accept kickbacks, ''yellow" less so, and "red" unlikely, on the 4 basis of personality traits. During Relator's field training, she learned to associate the 5 likelihood of physicians becoming prescription writers with the dollar amounts attributed 6 7 to them on propublica.org. 164. When sales districts failed to generate large numbers of new prescriptions, 8 9 INSYS classified them as "low performing," and teamed them with "high performing" 10 11 districts. Sales managers from "high performing" districts instructed sales staff from 12 "low performing" districts to buy prescriptions by arranging for individuals to act as paid 13 speakers on behalf of Subsys. 14 165. INSYS management participated in, encouraged, and authorized the 15 16 unlawful payment of illegal kickbacks to physicians and pharmacists. 17 166. INSYS' kickback scheme had several components, including, but not limited 18 19 20 to: a. Paying prescribing physicians sham "speaking" fees to reward prescribers 21 of Subsys for off-label uses; 22 23 b. Adding or removing presenters from speaking engagements based upon their propensity to prescribe Subsys; 24 25 c. Performing unpaid office work in prescribing physicians' offices, for the 26 purpose of inducing prescriptions for off-label uses; and 27 28 Complaint 51 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 53 of 101 Page ID #:53 1 d. Paying unauthorized speakers with restaurant and retail gift cards to reward 2 Subsys prescriptions. 3 4 5 167. At Relator's initial training, directed by Alec Burlakoff, INSYS' Director of Sales, trainers told trainee sales representatives to find three to five doctors for routine 6 7 8 9 visits, as well as one doctor who "wants you around at all times." 168. Burlakoff also lectured Relator and her colleagues to do whatever it took to be around the doctors, including providing office work at no cost. Relator and other 10 11 sales representatives were trained to tell doctors to focus on identifying patients while 12 ensuring the doctor that the sales representative will "run" the patient with the staff and 13 pharmacy. 14 15 169. Alec Burlakoff, exhorted sales staff, including Relator, to do office work for 16 potential prescribers including, for example, faxing documents related to prescription 17 authorizations .. 18 19 20 21 170. INSYS also promoted sham "speaker" programs to improperly pay doctors and pharmacists to convince other doctors and pharmacists to prescribe Subsys for offlabel uses. 22 23 24 25 171. Relator attended several "speaker" programs where no presentation was ever made yet the "speaker" was paid by INSYS. 172. For example, at 7:00 PM on October 2, 2014, Relator attended a speaker 26 27 dinner at a popular steakhouse near her sales territory. Four sales representatives - 28 Complaint 52 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 54 of 101 Page ID #:54 1 2 3 Relator, SR #1, SR #2, and SR #3 - attended along with four physicians -Doctor #2, Doctor #3, and two physicians whose names are not known. Though Doctor #2 received 4 payment from INSYS for providing a presentation, he did not provide one. Rather, the 5 meeting, held in a noisy steakhouse, consisted of dinner table discussion between the 6 7 physicians and sales representatives present. The event was a sham, an excuse to pay 8 Doctor #2 a large speaking fee in remuneration for his prescriptions and to buy dinner 9 for the others present. 10 11 173. According to probublica.org, Doctor #2 accepted $46,482.00 in speaking 12 fees, food and beverage, and travel and lodging on behalf of Subsys' promotion between 13 August 2013 and the end of 2014. INSYS reported payments to Doctor #2 the 14 15 surrounding the evening of the steakhouse dinner: 16 a. $127 in food and beverages on October 1, 2014; 17 b. $124 in food and beverage on October 2, 2014; 18 19 20 21 c. $203 in travel and lodging on October 2, 2014; and d. $1900, $3200, and $3200 in Promotion Speaking/Other on October 6, 2014. 174. According to propublica.org, Doctor #3 accepted $28,854.00 in speaking 22 23 24 25 fees, food and beverage, and travel and lodging on behalf of Subsys' promotion between August 2013 and the end of 2014. INSYS reported a payment of $124 for food and beverage for Doctor #3 on October 2, 2014, the day of the steakhouse dinner. The 26 27 following spreadsheets compare the events for which Doctor #2 (first picture) and 28 Complaint 53 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 55 of 101 Page ID #:55 1 Doctor #3 (second picture) received payment from INSYS during the months of 2 September and October 2014. 3 4 5 ~Format·• 6 cupboard r. Fant r;, " Nutnber ;,, 5tylts Ctlh A34 7 1JManufacturer 8 9 10 11 12 13 14 15 16 17 18 19 a. Dateof Payment 2 .JINSYSTherapeuticsInc 3 !iNSYS TherapeuticsInc 4 ilNSYSTherapeutrcsInc S··]!NSYSTherapeuticsInc ·6.... hNSYSTherapeutlcsInc -;···!INSYSTherapeutlcs Inc ·~jtNSYSTherapeuticsInc ..g..J1NSYSTherapeuticsInc 10 )INSYS TherapeuticsInc llilNSYS TherapeuticsInc 1i.1msvs TherapeutfcsInc 13 . . 14···jlNSYS TherapeuticsInc 1.i.j1NsvsTherapeuU~ Inc 1.6.JINSVS TherapeuticsInc 17 jlNSYSTherapeuticsInc 1~T1NSYS TherapeuticsInc 19 INSYS TherapeuUcsInc Therapeij!ics.lnc Therapeutics.Inc TherapeuticsInc TherapeuUcsInc TherapeuticsInc TherapeuticsInc INSYS TherapeuticsInc 27 ·!INSYS TherapeuticsInc zii"i INSYS TherapeuticsInc 2fjiINSYSTherapeuticsInc 30... INSVS TherapeutrcsInc. 1 .3..1..JINSYS TherapeuticsInc 32 i1NSYSTherapeuti!Slnc 33~l1NSYS Thera etrticsInc Natureof Payment 9/3/20l.4 food and Beverage 9/4/2014. Food and Beverage 9/9/2014 Non-consultingSpeakingFee 9/17/2014 Food and Beverage 9/18/2014·Food and Beverage 9/23/2014,Food and Beverage 9/23/2014 ·Non-ConsultingSpeakingFee 9/23/2014 Non-ConsultingSpeakingFee 9i29/201Hood and Bev~,.;,ge 9/30/2014'Non-Consulting5peaklngFee 10/1/2014 Food and severag,f DollarsPaid 72 77.3 1900 90 77.75 99.6 3200 1900 B.5.47 1900 126.59 10/2/2014:Travel end Lodging 203.15 l0/6/2014iNon-Consuliingspeaklng Fee 3200 1oi6/W14:Non-ConsultlngSpeaklngFee 3200 10/6/201.4 .No.n-Consullln)!Speaklng Fee 1900 10/13/2014 Food and Bever~ge · 99.6 lO/i6/20f4· Non-ConsultintSpeakingFee· 1900· 10/16/26;t~'Non,ConsultlngSpeaklng·Fee 1900 10/18/2014Travel and Lodging 162.41 l0/23/2oi4 Food and Bever~g~ 24.8 l0/23/2014°Food and Beverage 99.6 · 10/24/2014;Traveland L~dglng 53,34 10/2.4/ioi4'.Travel and Lodging 7.57..82 10/25/2014 Food and Beverage 423.09 10/25/2014:Food and Beverage 125.68 10/27 /2014\Non-.ConsultlngSp_eaktng Fee '.950 10/27/2014, Non-ConsultingSpeakingFee i~oo l0/i8/2<>i4:Food and Beverage 95.25 10/28/201.4 :food and Beverage 9.39 10/so/2oi4 Foodandaeverage 62.42 10/31/2014,Non-Consultin 5 eakln Fee 3750 r,.. ~==::;:,=:.=1:~., ..·:.=..~======~"'=W...~, ..... --;,f;:,;r;=.==~-...~..::.r:t'~==: 20 21 22 23 24 25 26 27 28 Complaint 54 Edihnu Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 56 of 101 Page ID #:56 1 2 ~.. :::=... tt•,Av 3 Girp1lcrntd !'; 4 ,A,c+!_A_~,____ illNSYSTheri ~}Nsvs Theri ~-··j'INSVS Ther, 6 5 , INSVSTher; 6:j·\ INSVSThm 7 7 INSYSThen S-irNSVSTher< 10 iJNSYS Ther, 8 11]1NSYSTher. 12 jiNSYSThert b. 1~::ilNSYS Ther, 14,,fNSYSTher, 15....1NSYSTher, : !General !g~ Fill• A!ignmrot :; 'g:;~::§ .. '. F&!conditionalfo,maHing" $ .. % , ~C5.;0~ Numht-1 §IJFo,rnata~Tahte" [[iCellStyles• ~Fo,mat• Cells ~ /, :! B --~liw%=·=.~;U&~~~=i~~f~=··=•-~· ~---D---~---~--~~ 1 !ManufactwDateof Payment 5 9 For;t ~;. ·Drug !l/3/2014 subsys 9/3/2014 Subsys ·9/9/2014 Sub,iys 9/15/2014:Subsys 9/15/2014. Subsys 9/22/2014 ·subsys 10/l/2014•Subsys ;Nature-of Payment 10/14/2014,Subsys 10/16/201<1:subsys 10/20/2014.Subsys 10/27/2014 Subsys 10/2.8/2014 subsys 10/30/2014 Subsys 'Foodand Beverage Foodand Beverage Foodand Beverage FOOd .ind Beverage •Non-Consulting Speaking. Fee •Foodand Beverage INon-Cons.ultlng SpeakingFee Food Non-ConsulUngspeakingFee· Foodand Beverage Non-ConsultingSpeakingFee Foodand.Beverage Non-consulting Speaking.Fee Fee 1.92· 4.99 119.01. 1900· 13.31· 1900• 8.49 49.17 1900 n,s: 1900 103,68 1900 10 11 175. Relator observed that INSYS used its "speaker" programs as a conduit to 12 pay doctors for prescribing Subsys, plain and simple. Relator witnessed sales staff and 13 other INSYS personnel eliminate physicians from approved lists of paid speakers when 14 15 they failed to prescribe sufficient amounts of Subsys. For example, SR #3 explained to 16 Relator that he had previously arranged for Doctor #4 to receive payments to speak on 17 behalf of Subsys, beginning upon its FDA approval, but that Doctor #4 did not "play 18 19 ball" by writing prescriptions for the drug. SR #3 handed offINSYS' relationship with 20 Doctor #4 to Relator, given the lack of prescriptions. Doctor #4 told Relator that SR #3 21 informed him he had to write prescriptions for the drug, in return for the speaking fees 22 23 24 INSYS had paid him. 176. Another form of illegal kickbacks involved IN SYS' use of gift cards. 25 26 27 Relator was encouraged to give gift cards to prescribing physicians to encourage them to continue to prescribe Subsys. Specifically, SM #1, who formerly worked as an INSYS 28 Complaint 55 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 57 of 101 Page ID #:57 1 sales representative, explained how she and other sales representatives were able to carry 2 3 out this scheme. SM #1 told Relator how to purchase gift cards at local delicatessens 4 whose owners she knew, and how to induce store owners to create fraudulent receipts for 5 the value of the purchase price of the cards, which instead showed purchases of coffee 6 7 and other sundries which might be permissibly dropped at physicians' offices. SM #1 8 then submitted the fraudulent receipts for reimbursement by INSYS and used the cards to 9 pay illegal and untraceable kickbacks to physicians prescribing Subsys. SM #1 informed 10 11 Relator that she used her business relations manager, BRM # 1, to physically transact 12 kickbacks like these on many occasions. After several INSYS sales staff were arrested in 13 early 2016, SM #1 asked an INSYS attorney, during a conference call regarding the 14 15 16 17 arrests, "Are BRMs going to be protected, as well?" 177. INSYS colleagues advised Relator, repeatedly, that these practices were encouraged by upper management and that INSYS sales managers had engaged in the 18 19 20 21 same schemes before getting promoted. 178. For example, SR #1, a sales representative who took Relator on some of her "ride along" sales calls at the beginning of her employ, advised Relator to search public 22 23 24 25 disclosure data for physicians who received the largest amounts of money from drug manufacturers to speak on behalf of oxycodone, morphine, and fentany 1 in her sales area. SR # 1 advised that this was a good method of finding physicians interested in making 26 27 extra money through INSYS' sham speaker programs. As she put it, this search would 28 Complaint 56 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 58 of 101 Page ID #:58 1 answer the questions, "Does money talk to them?" SR #1 and other sales staff repeatedly 2 3 4 advised Relator that signing a physician on to receive payment for speaking engagements would lead to prescriptions by that physician. 5 179. Similarly, during a sales meeting in Arizona, SM #2, an INSYS sales 6 7 representative (later a sales manager) providing training at the event, advised sales 8 representatives that speakers would write prescriptions in return for speaking fees. When 9 asked for clarification on how the two were related, SM #2 said, slowing her speech for 10 11 emphasis, "Just get speakers." 180. On information and belief, Relator avers that the complained of illegal 12 13 kickback schemes were national in scope. 14 15 16 17 A. Pricing Violations 181. Pharmaceutical manufacturers participating in Medicaid programs must rebate to the states a certain statutorily-prescribed portion of the price of drugs 18 19 purchased by each Medicaid program in each state. See 42 U.S.C. § 1396r-8(a)(l). 20 Manufacturers do this because the Medicaid statute, 42 U.S.C. §§ 1396a-u, permits the 21 federal government to partially reimburse states only for drugs purchased from 22 23 24 25 manufacturers who have agreed to pay statutorily specified rebates to those states. See 42 U.S.C. § 1396r-8. Thus, pharmaceutical manufacturers that want their drugs available to Medicaid beneficiaries under the Medicaid program enter into a Rebate 26 27 28 Complaint 57 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 59 of 101 Page ID #:59 1 2 3 4 5 Agreement with the Department of Health and Human Services ("HHS") Secretary to provide rebates. See 42 U.S.C. §1396r-8(a)(l). 182. The Rebate Agreement requires manufacturers to submit a Quarterly Report (Form CMS-367). The Quarterly Report includes information regarding each 6 7 of the manufacturers' "Covered" Drugs, including such information as its "Average 8 Manufacturer Price" ("AMP"), "Baseline AMP," and its "Best Price." Based upon this 9 information, HHS, through its component agency, The Centers for Medicare & 10 11 12 13 Medicaid Services ("CMS"), then tells the states how much rebate the state is entitled to collect with respect to each drug. 183. INSYS entered into a Rebate Agreement with HHS. In that Agreement, 14 15 INSYS agreed to comply with 42 U.S.C. § 1396r-8, and hence: 16 a. Agreed to report its Best Price, inclusive of cash discounts, free goods 17 contingent upon any purchase requirements, volume discounts and 18 rebates, etc.; 19 20 b. Agreed that it would determine its Best Price based upon its AMP, 21 calculated as "net sales divided by numbers of units sold, excluding free 22 goods (i.e., drugs or any other items given away, but not contingent on 23 24 any purchase requirements)" and that it would include that in the 25 calculation, cash discounts and all other price reductions "which reduce 26 the actual price paid"; and, 27 28 Complaint 58 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 60 of 101 Page ID #:60 1 c. Agreed that the Best Price would not take into account nominal prices, 2 defined as prices that are less than 10 percent of the AMP in that quarter, 3 4 so long as the sale of product at a nominal price was not contingent on 5 any other sale. 6 184. After execution of this Agreement, INSYS reported its AMP and/or Best 7 8 Price in each quarter, to the Medicaid Program on an electronic form of Form CMS- 9 367. 10 11 12 13 185. In the instant case, Defendant failed to take into account the Kickbacks and free prescriptions it provided when reporting its Best Price. 186. As a result, INSYS's Best Price, for quarterly reports submitted since 14 15 2012, were inflated, which reduced the percentage difference between AMP and Best 16 Price, thereby reducing the rebate amount that Defendant ultimately paid to each state 17 Medicaid program. Defendant artificially inflated its Best Price, by calculating its 18 19 20 21 Best Price without taking into account its inducement activities described in this Complaint, which reduced the true cost of its drugs. Defendant knowingly set and reported its Best Price for these drugs at levels far higher than the actual Best Price, in 22 23 24 25 Form CMS-367, submitted quarterly to CMS since 2012. By doing so, Defendant has violated the Federal (and applicable state) False Claims Acts, by knowingly making, using, or causing to be made or used, a false record to conceal, avoid, or decrease an 26 27 obligation to pay or transmit money to federal and state governments. 28 Complaint 59 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 61 of 101 Page ID #:61 1 187. Under the Veterans Health Care Act of 1992 ("VHCA"), drug 2 3 manufacturers are required to enter a pricing agreement with the Secretary of HHS for 4 the section 340B Drug Pricing Program, and with the Department of Veterans Affairs 5 (VA) and other Department of Defense programs. 6 7 188. Once a labeler/manufacturer enters into such a pricing agreement, its 8 drugs are listed on the Federal Supply Schedule ("FSS"), a price list containing over 9 twenty-thousand pharmaceutical products. The VA and other Government Programs 10 11 depend on the FSS for most of its drug purchases, with the exception of several 12 national contracts awarded for specific drugs considered to be therapeutically 13 interchangeable. 14 15 189. Under the VHCA, drug manufacturers must comply with 38 U.S.C. § 16 8126. Subsection (a)(2) requires that "the price charged during the one-year period 17 beginning on the date on which the agreement takes effect may not exceed 7 6 percent 18 19 20 21 of the non-Federal average manufacturer price (less the amount of any additional discount required under subsection (c)) ...." 190. In the instant case, INSYS failed to take into account its inducements 22 23 24 25 when reporting the non-Federal average manufacturer price. INSYS therefore violated 38 U.S.C. §8126 causing damage to the VA program, and by not giving its best price as set forth in subsection (a)(2), INSYS became ineligible for Medicare and other 26 27 federal program reimbursement. 28 Complaint 60 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 62 of 101 Page ID #:62 1 VII. LINDEN CARE'S ILLEGAL DISTRIBUTION OF SUBSYS 2 3 A. Misbranding by Breach ofTIRF-REMS Protocol 4 191. LINDEN CARE misbranded Subsys by distributing it for contra-indicated 5 and off-label uses, distributing it at initial doses at least twice the FDA-approved limit, 6 7 and dispensing it for use six times daily, 150% of the FDA-approved limit. LINDEN 8 CARE's hardcopy labels, the sticker on a given package of pharmaceutical products, 9 contained directions directly contravening the product's FDA approved label. This 10 11 12 13 rendered the product unsafe for use. 192. LINDEN CARE is a TIRF-REMS enrolled pharmacy. A 2014 LINDEN CARE press release stated that "key to LINDEN CARE's success is the ability to provide 14 15 16 17 solutions for today's complex pain therapies requiring Risk Evaluation and Mitigation Strategies (REMS) such as [TIRFs] and extended release opioids." 193. It is believed and averred that from 2012 to the present LINDEN CARE was 18 19 20 21 one of the largest dispensers of Subsys nationwide. 194. This is how LINDEN CARE describes itself on its own website. "Linden Care is a full service pharmacy that can provide you with all the medications that your 22 23 24 25 doctor prescribes. Many of our patients face chronic pain and need a dedicated pharmacy to help them to help relieve the pain." Further, "Linden Care understands that today's insurance plans are often confusing. Our patient care representatives work with your 26 27 doctor and your insurance company to get you the medications you need. We offer prior 28 Complaint 61 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 63 of 101 Page ID #:63 1 2 authorizations and work closely with your doctor to give you best in class pharmacy service." 3 3 4 195. Clearly, with the advent of Subsys, LINDEN CARE fulfilled its mission of 5 dispensing Subsys for chronic pain patients and ensured that its representatives obtained 6 7 prior authorizations from insurers in order to receive government payment for off-label 8 use of Subsys. This is a group knowingly taking advantage of the opioid epidemic for 9 their own advantage. 10 196. Before being able to dispense Subsys and other TIRFs approved only for 11 12 cancer patients, enrolled pharmacies must comply with terms of TIRF-REMS program. 13 The FDCA provides the statutory justification for REMS programs, in 21 U.S.C. §355-1. 14 15 That section authorizes their use in drugs which stand a good chance of endangering the 16 public health, in order to deliver a worthwhile benefit. 21 U.S.C. §331 explains the 17 prohibitions of the FDCA, including the prohibition against misbranding. Failure of a 18 19 pharmacy to ensure compliance with TIRF-REMS, if it leads to a product which cannot 20 be used safely for its intended purpose, constitutes misbranding. TIRF-REMS imposes a 21 duty on pharmacists to counsel patients, and provides resources for them to do so. During 22 23 24 enrollment in TIRF-REMS Access, they agree to educate their staff, and they certify that they understand the terms of the program. 25 26 27 3 Linden Care, LLC Website, Available at: https://www.lindencare.com/ (Last Visited: October 6, 2016). 28 Complaint 62 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page ------ 64 of 101 Page ID #:64 1 197. The TIRF-REMS Enrollment Form requires that pharmacists certify, among 2 other things, that: 3 4 a. 5 They will ensure that their staff "are educated on the risks associated with TIRF medicines and the requirements of the TIRF-REMS Access 6 program;" 7 8 b. 9 They understand TIRF drugs to be "contraindicated for use in opioid nontolerant patients;" 10 11 c. They "understand that the initial starting dose for TIRF medicines for all 12 patients is the lowest dose, unless individual product labels provide 13 product-specific conversion recommendations ... ;" 14 15 d. They will discuss "the risks and benefits of TIRF medicines with patients 16 and caregivers, and in particular the importance of taking the drug as 17 prescribed, not sharing with others, and proper disposal." 18 19 20 21 198. Subsys' label concurs with the TIRF-REMS requirements, stating, in the "Indications and Usage" section: a. Patients must require and use around-the-clock opioids when taking 22 SUBSYS; 23 24 25 b. Initial dose of SUBSYS: l00mcg; c. Individuals titrate to a tolerable dose that provides adequate analgesia 26 using a single SUBSYS dose per breakthrough cancer pain episode; 27 28 Complaint . 63 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 65 of 101 Page ID #:65 1 d. No more than two doses can be taken per breakthrough pain episode; e. Wait at least 4 hours before treating another episode of breakthrough pain 2 3 with SUBSYS; 4 5 f. Limit consumption to four or fewer doses per day once successful dose is 6 found. 7 199. The titration instruction, above, indicates that a move to the next highest 8 9 dosage is warranted if the patient is unsuccessful at managing breakthrough pain. A 10 11 successful dose for patients limits consumption to four or fewer doses per day, however. 12 As such, if patients require more than four doses per day to treat breakthrough pain, the 13 answer is not more Subsys, but more around-the-clock opioids. As the label states, "If the 14 15 patient experiences greater than four breakthrough pain episodes per day, the dose of the 16 maintenance (around-the-clock) opioid used for persistent pain should be reevaluated. In 17 addition, if pain worsens, re-evaluate the patient for changes in the underlying condition." 18 200. LINDEN CARE breached the TIRF-REMS protocol with respect to Subsys 19 20 21 by: a. Dispensing Subsys for contra-indicated and off-label uses, without · 22 discussing the drug or its safe usage with patients; 23 24 b. Dispensing "initial staiiing doses" of 200 Meg, rather than the mandated 25 initial maximum dosage of 100 Meg; 26 27 28 Complaint 64 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 66 of 101 Page ID #:66 1 c. Dispensing Subsys with directions to consume the drug six times daily, 2 independent of pain. 3 201. 4 5 6 7 8 9 Because LINDEN CARE misbranded a pharmaceutical product, and that product was paid for through government insurance, a violation of the FCA has occurred. B. Repeated Breach of the Controlled Substances Act ("CSA") 202. The Controlled Substances Act ("CSA"), 21 U.S.C. §801 et sec, regulates the manufacture, importation, possession, use and distribution of controlled substances. 10 11 The CSA relies upon rules and definitions contained in the Food Drug and Cosmetics Act 12 ("FDCA"), 21 U.S.C. §301 et seq. Chapter II of Title 21 of the Code of Federal 13 Regulations ("CFR") covers controlled substances regulation by the Drug Enforcement 14 15 16 17 Administration and the Department of Justice, and gives regulatory life to the CSA and FDCA with respect to controlled substances. 203. LINDEN CARE violated the CSA each time it dispensed or distributed a 18 19 20 21 Schedule II controlled substance without a valid prescription as required under the statute and accompanying regulations. Each instance was a violation of21 U.S.C. § 842(a)(l). 204. The CSA renders it unlawful for "a prescription drug as determined under 22 23 24 25 the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 301 et seq.], [to] be dispensed without the written prescription of a practitioner,"21 U.S.C. 829(a). This provision applies to Schedule II opioids, including Subsys, and also mandates that paper receipts be 26 27 retained by the pharmacy. 28 Complaint 65 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 67 of 101 Page ID #:67 1 205. "A pharmacist may dispense directly a controlled substance listed in 2 3 Schedule II that is a prescription drug [ ... ] only pursuant to a written prescription signed 4 by the practitioner, except as provided in paragraph (d) of this section. A paper 5 prescription for a Schedule II controlled substance may be transmitted by the practitioner 6 7 or the practitioner's agent to a pharmacy via facsimile equipment, provided that the 8 original manually signed prescription is presented to a pharmacist for review prior to the 9 actual dispensing of the controlled substance [.] 21 C.F.R. § 1306.1 l(a). 10 11 206. Relator avers that LINDEN CARE dispensed Subsys on behalf of Patient #1, 12 discussed below, on the basis of faxed prescriptions and without first receiving the paper 13 prescription, on at least six occasions. 14 15 16 17 207. Further, Relator avers that those prescriptions carried instructions for use which misbranded the medication and led to the patient's death. 208. "The responsibility for the proper prescribing and dispensing of controlled 18 19 20 21 substances is upon the prescribing practitioner, but a corresponding responsibility rests with the pharmacist who fills the prescription." 209. 21 C.F.R. § 1306.04(a). "The pharmacist filling a written or emergency oral prescription for a 22 23 24 25 controlled substance listed in Schedule II shall affix to the package a label showing date of filling, the pharmacy name and address, the serial number of the prescription, the name of the patient, the name of the prescribing practitioner, and directions for use and 26 27 28 Complaint 66 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 68 of 101 Page ID #:68 I 2 cautionary statements, if any, contained in such prescription or required by law." 21 C.F.R. § 1306.14(a). 3 4 210. LINDEN CARE violated both the spirit and the letter of the CSA by 5 enabling the practitioner to order narcotics, and pharmacists to dispense these narcotics, 6 7 without confirmation that a practitioner had exercised his/her medical judgment about 8 whether these controlled substances were issued for a legitimate medical purpose and 9 appropriate in form, strength and quantity for the resident. This occurred each time 10 11 LINDEN CARE received a faxed prescription for Patient #1 's Subsys, and dispensed the 12 drug without first receiving the original, signed prescription from her physician's office. 13 21 C.F.R. §1304.04(±)(1) - (2); 21 C.F.R. §1306.ll(a). LINDEN CARE violated the CSA 14 15 each time it dispensed or distributed a Schedule II controlled substance without a valid 16 prescription as required under the statute and accompanying regulations. Each instance 17 was a violation of21 U.S.C. § 842(a)(l). 18 19 211. After dispensing Schedule II drugs without a valid prescription, LINDEN 20 CARE then caused claims for these drugs to be submitted to the Medicare program. 21 LINDEN CARE did so notwithstanding that it knew or recklessly disregarded the fact 22 23 24 25 that: (i) Schedule II controlled substances could not be legally dispensed without a valid prescription; (ii) Linden Care's pharmacists were dispensing Schedule II controlled substances without a valid prescription; and (iii) drugs dispensed without a valid 26 27 prescription are not payable under Medicare Part D. As a direct, proximate and 28 Complaint 67 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 69 of 101 Page ID #:69 1 foreseeable result of Linden Care's dispensing of Schedule II drugs without a valid 2 3 prescription, LINDEN CARE knowingly caused false claims to be submitted to the 4 Medicare program and made or caused false statements to be made that were material to 5 such claims. 6 7 8 9 VIII. DEATH BY SUBSYS: OVERDOSE OF PATIENT #1 212. Through her work at INSYS, Relator interacted with the Patient and Physician described below, and learned the following facts, which exemplify INSYS' 10 11 off-label promotion and misbranding of Subsys and its use of kickbacks to promote the 12 drug, as well as LINDEN CARE's misbranding of the drug and repeated breach of the 13 TIRF-REMS protocol and the CSA. 14 15 213. Patient #1 met Doctor #1 for an initial consultation on August 13, 2014, 16 related to pain associated with degenerative disc disorder, kidney stones, migraines, 17 fibromyalgia, and assorted other illnesses. Patient #1 bore injuries from two car 18 19 20 21 accidents, and, as a consequence of chronic pain, grew dependent on the opioids she had taken for several years. 214. Doctor #1 practices internal medicine, diabetic management, holistic 22 23 24 medicine, and weight control. She does not advertise an expertise or accreditation in either oncology or pain management. 25 26 27 28 Compl~int 68 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 70 of 101 Page ID #:70 1 215. INSYS trained and instructed Relator to use various techniques to promote 2 3 4 Subsys to Doctor #1, including invitations to multiple speaker programs and dinners with Relator's regional sales manager. 5 216. Further, in compliance with the training she received from INSYS, Relator 6 7 made regular trips to Doctor #1 's office, dropping off breakfast and lunch and boxes of 8 coffee for the staff, and attempting to convince the Doctor #1 to prescribe Subsys to one 9 of her patients. As Relator noted in a Business Plan she drafted for her sales manager, 10 11 12 Doctor #1 was an "A" target, and Relator did the following: "weekly visits/staff and Dr. aware of benefits of Subsys and is looking for appropriate patient types ... " 13 217. In December, 2014, Doctor #1 found what she and INSYS considered to be 14 15 16 17 an "appropriate patient type," a patient without cancer, who suffered from "chronic, intractable pain." Doctor # 1 contacted Relator and scheduled a meeting with Patient # 1. A. INSYS' Complicity 18 19 218. INSYS, through Relator and its IRC, (1) advised Doctor #1 to prescribe 20 Subsys at an improperly high introductory dosage and with improper instructions for 21 use, (2) advised Patient #1 to change doses during titration without consulting her 22 23 24 25 physician, and (3) pre-populated the prior authorization form with off-label indication and off-label dose. 219. On January 5, 2015, Doctor #1 saw Patient #1 for medication monitoring, 26 27 and noted in Patient #1 's records the order of two prescriptions of Subsys 200 Meg, to 28 Complaint 69 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 71 of 101 Page ID #:71 1 be taken "every four hours for a script of 30 units, second script for 120 units[.]" 2 3 Doctor #1 arranged for Patient #1 and her father to meet with Relator immediately 4 after this consultation, for instruction on the use of Subsys. At this time, Doctor # 1 and 5 Patient #1 executed a TIRF REMS Patient-Prescriber Agreement Form, a necessary 6 7 predicate to the authorization and dispensation of the Subsys prescriptions. 220. Relator met with Patient #1 and her father that same day. Doctor #1 did 8 9 not join them. At the meeting, Relator provided a partially completed INSYS 10 11 Reimbursement Center Patient Authorization & Referral Form ("Prior Authorization 12 Form"), to which Patient #1 's father added Patient #1 's name, date of birth, gender, 13 social security number, address, and phone number. Though Relator never filled this 14 15 section out for a patient, she was advised by her sales manager at the time, SM #3, that 16 other sales representatives did so, but that they made sure that the handwriting looked 17 different to avoid detection by regulators. Relator pre-populated the dosage line, 18 19 checking the box for 200 Meg, and the indication section, checking boxes for "patient 20 is opioid tolerant", "other chronic pain," and "chronic pain syndrome." (See form at ,r 21 123). 22 23 24 25 221. The standard INSYS prior authorization form lists both approved and offlabel medical diagnoses among its rationales for prescribing Subsys. One of the potential diagnosis is even contraindicated on the label. Subsys' FDA-approved label 26 27 contraindicates "post-operative pain," yet INSYS' prior authorization form includes 28 Complaint 70 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 72 of 101 Page ID #:72 1 2 "Post-laminectomy syndrome," also known as Failed Back Syndrome (FBS). FBS is a catch-all diagnosis for patients whose pain persists after spinal surgery. When 3 4 questioned regarding this, Relator was unaware that a contraindicated diagnosis 5 appeared on the form, but explained that her training by INSYS was so focused on 6 7 sales, rather than the consultative services emphasized by other pharmaceutical sales 8 departments, that she and her colleagues received little to no explanation of the 9 diagnoses for which the drug was contraindicated. 10 11 222. Relator also instructed Patient #1 on the use of Subsys and INSYS' 12 recommended method of titration for determining effective dosage. Relator handed 13 marketing materials to Patient #1, including (1) a brochure titled "Are Your Patients 14 15 16 17 Getting Relief From Their Breakthrough Cancer Pain?" (hereinafter the "BTcP Brochure") and (2) the Titration Process and Schedule booklet. 223. In the course of educating Patient #1 on the use of Subsys, as directed by 18 19 INSYS management, Relator advised Patient #1 and her father that neither the 100 20 Meg dose nor the 200 Meg dose would have the desired effect, that she would need to 21 "titrate up" to her minimum effective dose. Ultimately, INSYS sales representatives 22 23 were trained to make sure their prescriptions reached doses of 400 Meg or higher 24 through titration, as IN SYS circulated a daily report of prescriptions below 400 Meg, 25 to serve as a list of doctors in need of "education" from sales representatives on proper 26 27 dosing. 28 Complaint 71 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 73 of 101 Page ID #:73 1 224. The BTcP Brochure is targeted at prescribers. Relator received no 2 3 direction from INSYS management on what to do with marketing materials during 4 patient meetings, so she used them to educate the patients on the use of the drug. The 5 BTcP Brochure provides instructions on how to "titrate up" to an effective pain relief 6 7 dosage. Relator used the brochure, as well as the titration guide, along with notes she 8 took during her week of training. She showed Patient #1 a chart from the BTcP 9 Brochure which states that a majority of patients achieve an effective dose of Subsys 10 11 between 600 Meg and 1600 Meg, and advised the patient to begin use of Subsys by 12 taking a 200 mcg dose upon having her first pain episode. Relator advised Patient #1 13 that if pain remained after thirty minutes, she could take another 200 Meg dose. 14 15 16 17 Relator further advised, based on her limited training, that Patient #1 should double the dose, taking 400 Meg, after four hours elapsed. 225. Relator's advice to Patient # 1 regarding her initial dosage was 18 19 20 21 undoubtedly off-label promotion. Relator, based on INSYS training, led Patient #1 to believe that a 100 mcg dose would have no effect on her pain, though the 100 mcg dose is the only FDA approved initial dosage. INSYS, in fact, instructed Relator and 22 23 24 25 her colleagues that the FDA-approved 100 Meg dose was below the threshold of what any opioid-tolerant adult would benefit from, and that the patient population would cease using the drug if they were not able to feel its effects more dramatically, by 26 27 beginning with the 200 mcg dose. 28 Complaint 72 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 74 of 101 Page ID #:74 1 226. Relator's advice to Patient #1 regarding the alteration of dosage during 2 3 titration is further evidence of IN SYS' systemic off label promotion of Subsys. At the 4 direction of IN SYS management, Relator advised Patient # 1 to change her own dosage 5 on the basis of her relative pain levels during titration, without contacting her 6 7 physician prior to or after the change. INSYS instructed Relator and her colleagues to 8 do this during their initial training. In doing so, INSYS trained its employees to 9 directly contradict Subsys' FDA-approved label, which tells patients to contact their 10 11 prescribing physician before altering their dosage. The FDA-approved label advises 12 patients to take this precaution because of the severity of the drug's side-effects, which 13 include death. 14 15 227. When Relator showed Patient #1 a BTcP brochure containing a chart 16 claiming that 3 out of 4 patients achieve an effective dose between 600 mcg and 1600 17 mcg, she was also following INSYS policy. By providing this information to patients, 18 19 INSYS prepared patients to be unsatisfied by the initial dose. This sales protocol 20 approaches what micro-economists call "price framing." When sales people "price 21 frame" they present higher than expected prices to a potential purchaser, in order to 22 23 raise the purchaser's perception of what an acceptable price would be. When INSYS 24 sales staff advised patients and physicians that the FDA-approved 25 dose would be imperceptible, they pushed patients to consume higher and higher doses 26 27 of a dangerous and addictive opioid. 28 Complaint 73 100 Meg starting Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 75 of 101 Page ID #:75 1 2 228. After Relator's meeting with Patient #1, Doctor #1 's office staff faxed copies of the prescriptions to LINDEN CARE Pharmacy, and Relator submitted the 3 4 parties' Patient-Prescriber Agreement Form and Prior Authorization Form to INSYS' 5 Reimbursement Center ("IRC") representatives on proper dosing. 6 7 229. On January 8, 2015, Envision Pharmaceutical Services (now 8 "EnvisionRx") authorized Medicare reimbursement for Prescription# 2080916- 9 0lN/D, one hundred and twenty units of Subsys 200 Meg spray, written on behalf of 10 11 12 13 Patient #1 by Doctor #1. LINDEN CARE dispensed the prescription to Patient #1 that same day, without first receiving the original prescription from Doctor #1. LINDEN CARE priced the 20 day, 120 dose prescription of Subsys at approximately $6,667.60. 14 15 16 17 Patient #1 was responsible for $6.60 and EnvisionRx paid $5,509.52. 230. EnvisionRx, the Medicare Part D insurer responsible for either authorizing or refusing reimbursement for Patient's Subsys, requires a journal article 18 19 20 21 for off-label prescriptions. INSYS' Reimbursement Center handled all contract between IN SYS staff and EnvisionRx, so Relator has no information on what was said or provided by INSYS to ensure reimbursement, however Relator does recall that sales 22 23 24 25 staff agreed that certain members of the IRC staff had better results than others. 231. Patient #1 received approval for an exception from Envision because of the prior authorization form. This is the only method for gaining approval where a 26 27 patient seeks to use the drug for an off-label purpose. 28 Complaint 74 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 76 of 101 Page ID #:76 1 2 232. EnvisionRx's Medicare Part D Eldercare plan served as the Third Party Payor for the transaction. 3 4 233. Between January 26, 2015 and March 21, 2016, Doctor #1 drafted, 5 EnvisionRx authorized, and LINDEN CARE dispensed seventeen additional Subsys 6 prescriptions for Patient #1, each for 600 Meg spray, nine (9) of these for one hundred 7 8 and twenty (120) doses and the remaining eight (8) prescriptions for one hundred and 9 eighty (180) doses. 10 234. Befitting her training by INSYS, Relator did not mention to Patient #1 the 11 12 label's limitation to only patients with BTcP. Rather, she provided Patient #1 13 directions for using Subsys, and guided her to begin at the 200 Meg dose and begin 14 15 16 titrating up without first consulting the prescribing physician, Doctor #1. In doing so, Relator behaved as trained and directed by INSYS management. 17 235. Patient #1 continued to take a 600 mcg dose until her death. The 18 19 20 21 22 prescription was initially for a 20-day supply with a quantity of 120. On August 25, 2015, and thereafter, the prescription was for a 30-day supply with a quantity of 180. B. LINDEN CARE's Complicity 236. When LINDEN CARE received Patient #1 's first prescription for Subsys, 23 24 25 26 the dosage and wording should have immediately raised a red flag with pharmacists on duty. Patient's #1 's physician (Doctor #1) prescribed the 200 mcg dosage, in direct contravention of the product's FDA approved label and the TIRF-REMS guidelines, both 27 28 of which mandate an initial 100 mcg dose in an effort to allow patients to titrate up to Complaint 75 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 77 of 101 Page ID #:77 1 their optimal dosage safely. Despite certifying that it would start all patients at the lowest 2 3 4 5 dose, LINDEN CARE dispensed Patient #1 her first prescription of Subsys at twice that dosage. 237. When LINDEN CARE received Patient #1 's second prescription for Subsys, 6 7 it again acceded to the written directions unlawfully and without question or complaint. 8 LINDEN CARE dispensed 600 mcg Subsys spray to Patient #1, despite the fact that 9 Subsys' label recommends a 400 mcg dose. Further, and even more troubling, LINDEN 10 11 CARE distributed the drug for an off-label use - "Chronic Intractable Pain" - and 12 without proper directions in the memo line of the prescription. The prescription's 13 hardcopy label states, "Use 1 Spray Under Tongue Every Four Hours." It does not say 14 15 "PRN," or "As Needed." Rather, the label instructed Patient #1 to use Subsys as a 16 maintenance opioid. The directions on the hardcopy label came, verbatim, from the 17 handwritten prescription Doctor #1 's staff faxed to LINDEN CARE. Thus, the treating 18 19 physician prescribed Subsys with patently improper and unsafe directions for use, 20 INSYS' IRC forwarded said those directions to the pharmacy, and then LINDEN CARE 21 dispensed the drugs to Patient # 1 with no apparent scrutiny or oversight. 22 23 24 25 238. No pharmacist should have dispensed the second prescription - and certainly no TIRF-REMS certified pharmacist - because it was not prescribed as needed - a serious medication error. LINDEN CARE failed to satisfy its duty, under TIRF-REMS, the 26 27 28 Complaint 76 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 78 of 101 Page ID #:78 1 2 FDCA, and the CSA, to guard against prescription errors, especially with respect to drugs so dangerous as Subsys and other TIRFs. 3 4 5 239. LINDEN CARE dispensed Patient #1 's second prescription for Subsys on January 26, 2015, and two additional prescriptions, also for 600 mcg Subsys, on February 6 27 and March 26, before adding the language "As Needed" to Patient's fifth prescription 7 8 on April 17, 2015. A review of Doctor #l's prescription pad reveals what was apparent 9 with the January 26, 2015 prescription, that LINDEN CARE employees merely 10 transcribed whatever the physician wrote, independent of whether these directions were 11 12 inherently dangerous and contrary to those approved by the FDA and taught by the TIRF- 13 REMS Access program. 14 15 16 17 240. On May 28, 2015, LINDEN CARE again failed to include any "As Needed" language. 241. Even when, on September 22, 2015, Doctor #1 's prescription pad memo 18 19 stated "PRN," LINDEN CARE's hardcopy label failed to include the "As Needed" 20 language. To the contra1y, the label stated, "Use 1 Spray Under Tongue Eve1y 4 Hours." 21 242. Incredibly, based on the prescription written by the Doctor #1 and filled by 22 23 24 25 LINDEN CARE, Patient #1 could consume a 600 mcg dose of Subsys every four hours, every day, independent of what pain she felt or did not feel. Her physician and pharmacist, alike, advised her to do so. This is because, rather than raise the dosage of 26 27 Patient's maintenance opioid, or change the maintenance opioid, the prescribing 28 Complaint 77 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 79 of 101 Page ID #:79 I physician prescribed enough Subsys for Patient to consume it six times daily. Patient #1, 2 3 4 5 an opioid addict suffering from severe, chronic pain, set an alarm clock each night, to make sure that she took the scheduled dose that fell in the middle of her sleep schedule. 243. TIRF-REMS, like Subsys' label, states that the drug should not be 6 7 8 9 prescribed for more than four daily doses. Subsys is not a maintenance opioid. It is a powerful analgesic, one which can easily kill patients who abuse it. 244. Patient #1 's Subsys prescription, filled by LINDEN CARE, directed her to 10 11 12 13 abuse the drug, which led to her death. 245. On October 30, 2015, Virtua West Jersey Hospital ("Virtua Voorhees") admitted and discharged Patient #1 from its Emergency Department, where Patient #I 14 15 16 17 presented with chest pain. At the time of discharge, Patient# 1's treating physician advised her to "wean her medications down." 246. On January 17, 2016, Virtua Voorhees admitted and discharged Patient #1 18 19 from its Emergency Department, where Patient #1 presented with a wound on her left leg. 20 On discharge, Patient #1 's treating physician noted the following: "Pt somnolent but 21 arousable on exam; pt took 600 mcg offentanyl in the exam room; after arousing pt she 22 23 24 25 requested something additional for pain; explained at this time given somnolence explained to pt that it was not appropriate at this time." 247. Doctor #1 met with Patient #1 on January 18, 2016, the day following her 26 27 final visit to Virtua Voorhees' Emergency Department. On that date, Doctor #1 28 Complaint 78 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 80 of 101 Page ID #:80 1 prescribed additional medication, noting: "Med admin: Subsys 600 mcg q 4, #180 doses, 2 3 OxyContin 10 mg q 12 #60, no evidence of substance abuse or aberrant behavior 4 activities of daily living the patient can function with medications njrx eked and 5 confirmed." 6 248. On March 25, 2016, Patient #1 's boyfriend woke to find her dead on the 7 8 couple's bedroom floor. Subsequent toxicology reports caused her death to be ruled 9 accidental, the result of adverse effects of drugs. Patient # 1's blood contained high levels 10 11 12 13 offentanyl and norfentanyl (the prime fentanyl metabolite). 249. LINDEN CARE abrogated its duty to ensure that no extra medication was dispensed to Patient #1. LINDEN CARE also failed to educate both patient and 14 15 prescriber, as it certified would occur. These failures began with the first prescription 16 LINDEN CARE filled for Patient #1, and continued until her death, eighteen 17 prescriptions and $250,544.62 in Medicare copayments later. 18 19 20 21 250. In sum, LINDEN CARE dispensed nine Subsys prescriptions to Patient #1 which failed to include any "As Needed" language. These labels directed the patient to use the drug every four hours, independent of pain. 22 23 24 25 251. The preceding facts demonstrate that LINDEN CARE lacked a competent compliance program during the period of January 26, 2015 and March 21, 2016, the time between Patient's first prescription of Subsys and her death from its misuse. It is 26 27 28 Complaint 79 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 81 of 101 Page ID #:81 1 believed and, therefore, averred that LINDEN CARE's failures as detailed herein were 2 systemic in nature. 3 252. 4 5 By failing to comply with TIRF-REMS, and submitting its bills to government healthcare programs for repayment, LINDEN CARE committed eighteen 6 7 8 9 FCA violations with respect to Patient # 1, alone. 253. Relator believes and, therefore, avers that her experience with calling on Doctor #1 and the resulting prescriptions to Patient #1 were illustrative of Defendants 10 11 12 13 INSYS' and LINDEN CARE's unlawful marketing, sale, and dispensing of Subsys on a nationwide basis. IX. CONCLUSION 14 15 254. Defendant INSYS willfully promoted Subsys for off-label uses, and paid 16 kickbacks to physicians in order to increase the revenues it received from Government 17 Healthcare Programs. LINDEN CARE acted willingly and in concert with INSYS and, in 18 19 20 21 doing so, Defendants engaged in a systemic fraudulent scheme that caused physicians to neglect the welfare of their patients and expand the use and abuse of a highly addictive and potent form of fentanyl. Upon information and belief, the illegal and unjust activities 22 23 of Defendants continue unabated. 24 25 26 27 28 Complaint 80 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 82 of 101 Page ID #:82 1 COUNT ONE Violations of the False Claims Act, 31 U.S.C. § 3729(a)(l)(A) 2 3 4 5 255. Relator-Plaintiff restates and incorporates each and every allegation above as if the same were fully set forth herein 6 256. 7 8 The False Claims Act, 31 U.S.C. § 3729(a)(l)(A), provides in relevant part that any person who: 9 knowingly presents, or causes to be presented, a false or · fraudulent claim for payment or approval. .. 10 11 is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 ... plus three times the amount of damages which the Government sustains because of the act of the person. 12 13 14 15 16 257. By virtue of the acts described above, Defendants knowingly presented, or 17 caused to be presented, false or fraudulent claims for payment or approval of Subsys, or 18 19 treatments involving Subsys, to officers, employees or agents of the United States 20 government. Defendants knew that these claims for payment or approval were false or 21 fraudulent, or were deliberately ignorant of the truth or falsity of the claims, or acted in 22 23 24 25 reckless disregard for whether the claims were true or false. 258. The United States, unaware of Defendants' false or fraudulent representations, and the falsity or fraudulence of claims presented or caused to be 26 27 28 Complaint 81 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 83 of 101 Page ID #:83 1 presented by Defendants, has paid and continues to pay the false claims submitted that 2 3 would otherwise not have been allowed. 4 259. The United States has made and will make payment upon false and 5 fraudulent claims presented by Defendants and thereby have and will continue to suffer 6 7 damages. The United States is entitled to full recovery of the amounts paid to Defendants 8 by the Government Healthcare Programs pursuant to the submission of false claims, 9 which Defendants presented or caused to be presented. 10 11 12 13 14 15 260. Relator-Plaintiff believes and avers that she is an original source of the facts and information upon which this action is based. COUNT TWO Violations of the False Claims Act, 31 U.S.C. § 3729(a)(l)(B) 261. Relator-Plaintiff restates and incorporates each and every allegation above as 16 17 18 19 if the same were fully set forth herein. 262. The False Claims Act, 31 U.S.C. § 3729(a)(l)(B), provides in relevant part that any person who: 20 knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim ... is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 ... 21 22 23 24 plus three times the amount of damages which the Government sustains because of the act of the person. 25 26 27 263. By virtue of the acts described above, Defendants knowingly made and/or used, or caused to be made or used, false records and/or statements material to false or 28 Complaint 82 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 84 of 101 Page ID #:84 1 fraudulent claims for payment or approval of Subsys, or treatments involving Subsys, to 2 3 officers, employees or agents of the United States government, and continues to make, 4 use or cause false records and statements to be made or used to get false or fraudulent 5 claims paid or approved by the United States. 6 264. 7 The United States, unaware of the falsity of the records and/or statements 8 caused to be made and used by Defendants, and in reliance on the accuracy thereof, have 9 paid and approved, and continue to pay and approve, claims that were ineligible for 10 11 12 reimbursement and would not have been paid or approved if any part of the truth were known. 13 265. The amounts of the false or fraudulent claims caused by Defendants to be 14 15 submitted to the United States were material. 266. As a direct and proximate consequence of Defendants' conspiratorial 16 17 conduct, the United States has suffered significant, material financial damages in an 18 19 amount to be proved at trial. COUNT THREE Violations of the False Claims Act, 31 U.S.C. § 3729(a)(l)(G) 267. Relator-Plaintiff restates and incorporates each and every allegation above as 20 21 22 23 if the same were fully set forth herein. 24 268. 25 26 The False Claims Act, 31 U.S.C. § 3729(a)(l)(G), provides in relevant part that any person who: 27 28 Complaint 83 --------------------------~----- Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 85 of 101 Page ID #:85 1 knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government ... 2 3 4 5 8 is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 ... plus three times the amount of damages which the Government sustains because of the act of the person. 9 269. By virtue of the acts described above, Defendants knowingly concealed 6 7 10 11 and/or knowingly and improperly avoided an obligation to pay or transmit money or 12 property to the Government for improper reimbursements the Government has provided 13 for the use of Subsys, in violation of 31 U.S.C. § 3729(a)(l)(G). 14 270. As a direct and proximate consequence of Defendants' conduct, the United 15 16 States has suffered significant, material financial damages in an amount to be proved at 17 trial. 18 COUNT FOUR Violations of the California False Claims Act California Government Code § 12651 et seq. 19 20 21 271. Relator-Plaintiff restates and incorporates each and every allegation above as 22 23 24 25 if the same were fully set forth herein. 272. This is a claim for treble damages and penalties under the California False Claims Act. 26 27 28 Complaint 84 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 86 of 101 Page ID #:86 1 273. Cal. Gov't Code § 1265 l(a) provides liability for the costs of a civil action, a 2 3 4 civil penalty ofup to $10,000 and treble damages for all damages sustained by the state for any person who- 5 ( 1) knowingly presents, or causes to be presented, to an officer or employee of the state or of any political subdivision thereof, a false claim for payment or approval; 6 7 9 (2) knowingly makes, uses, or causes to be made or used a false record or statement to get a fal~e claim paid or approved by the state or any political subdivision; 10 *** 11 (8) is a beneficiary of an inadvertent submission of a false claim, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the state or the political subdivision within a reasonable time after discovery of the false claim. 8 12 13 14 15 16 17 274. By virtue of the acts described above, Defendants knowingly presented, or caused to be presented, false or fraudulent claims to the California State Government for 18 19 20 21 payment or approval and has knowingly made, used, or caused to be made or used, false records and statements, and omitted material facts, to induce the government to approve and pay such false and fraudulent claims. 22 23 275. 24 25 26 Specifically, Defendants have: • caused false claims to be presented to the State of California, • knowingly made, used or caused to be made or used false records or statements to get false claims paid, and, 27 28 Complaint 85 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 87 of 101 Page ID #:87 1 • 2 3 276. failed to disclose the existence of the false claims and statements it has caused to be presented. Each representation or certification of compliance with the applicable laws 4 5 and regulations by medical professionals and treating facilities while using Subsys, as 6 well as each claim presented or caused to be presented for reimbursement of treatments 7 involving Subsys, represents a false or fraudulent record or statement. Each claim for 8 9 10 11 reimbursement of treatment involving the non-medically accepted uses submitted to a State-funded health insurance program represents a false or fraudulent claim for payment. 277. Compliance with applicable Medicare, Medi-Cal and various other Federal 12 13 14 15 and State laws was a condition of payment of claims submitted to the California State Government. 278. The California State Government, unaware of the falsity of the records, 16 17 18 19 statements, and claims made, or caused to be made by Defendants, paid and continues to pay the claims that would not be paid but for Defendants' false statements and representations concerning the use of Subsys. 20 21 22 23 279. By reason of Defendants' acts, the California State Government has been damaged, and continues to be damaged, in substantial amounts to be determined at trial. 280. The State of California is entitled to the maximum penalty for each and 24 25 26 every false or fraudulent claim, record, or statement made, used, presented, or caused to be made, used, or presented by Defendants. 27 28 Complaint 86 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 88 of 101 Page ID #:88 1 281. Relator-Plaintiffbelieves and avers that she is an "original source" of the 2 3 4 5 facts and information on which this action is based. 282. This Court is requested to accept supplemental jurisdiction of this related state claim as it is predicated upon the exact same nexus of facts as the federal claim, and 6 7 8 merely asserts separate damage to the State of California in the operation of its Medi-Cal program. 9 COUNT FIVE Violations of the Colorado Medicaid False Claims Act C.R.S.A. § 25.5-4-304 et seq. 10 11 12 13 283. Relator-Plaintiff restates and incorporates each and every allegation above as if the same were fully set forth herein. 14 15 16 17 284. This is a claim for treble damages and penalties under the Colorado Medicaid False Claims Act. 285. Colorado Medicaid False Claims Act, C.R.S.A. § 25.5-4-305, in pertinent 18 19 part provides for liability for any person who (a) Knowingly presents, or causes to be presented, to an officer or employee of the state a false or fraudulent claim for payment or approval; 20 21 22 23 (b) Knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim; 24 *** 25 (f) Knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the state in connection with the "Colorado Medical Assistance Act", or knowingly conceals or 26 27 28 Complaint 87 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 89 of 101 Page ID #:89 1 knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state in connection with the "Colorado Medical Assistance Act"; 2 3 4 286. By virtue of the acts described above, Defendants knowingly presented, or 5 caused to be presented, false or fraudulent claims to the Colorado State Government for 6 7 payment or approval and has knowingly made, used, or caused to be made or used, false 8 records and statements, and omitted material facts, to induce the government to approve 9 and pay such false and fraudulent claims. 10 11 287. 12 13 Specifically, Defendants have: • caused false claims to be presented to the State of Colorado, • knowingly made, used or caused to be made or used false records or statements to get false claims paid, and, • failed to disclose the existence of the false claims and statements it has caused to be presented. 14 15 16 17 288. Each representation or certification of compliance with the applicable laws 18 19 20 21 and regulations by medical professionals and treating facilities while using Subsys, as well as each claim presented or caused to be presented for reimbursement of treatments involving Subsys, represents a false or fraudulent record or statement. Each claim for 22 23 reimbursement of treatment involving the non-medically accepted uses submitted to a 24 State-funded health insurance program represents a false or fraudulent claim for payment. 25 26 27 28 Complaint 88 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 90 of 101 Page ID #:90 1 289. Compliance with applicable Medicare, Medicaid and various other Federal 2 3 4 5 and State laws was a condition of payment of claims submitted to the Colorado State Government. 290. The Colorado State Government, unaware of the falsity of the records, 6 7 statements, and claims made, or caused to be made by Defendants, paid and continues to 8 pay the claims that would not be paid but for Defendants' false statements and 9 representations concerning the use of Subsys. 10 11 12 13 291. By reason of Defendants' acts, the Colorado State Government has been damaged, and continues to be damaged, in substantial amounts to be determined at trial. 292. The State of Colorado is entitled to the maximum penalty for each and every 14 15 16 17 false or fraudulent claim, record, or statement made, used, presented, or caused to be made, used, or presented by Defendants. 293. Relator-Plaintiff believes and avers that she is an "original source" of the 18 19 20 21 facts and information on which this action is based. 294. This Court is requested to accept supplemental jurisdiction of this related state claim as it is predicated upon the exact same nexus of facts as the federal claim, and 22 23 24 merely asserts separate damage to the State of Colorado in the operation of its Medicaid program. 25 COUNT SIX Violations of the Connecticut False Claims Act C.G.S.A. § 2-274 et seq. 26 27 28 Complaint 89 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 91 of 101 Page ID #:91 1 295. Relator-Plaintiff restates and incorporates each and every allegation above as 2 3 4 5 if the same were fully set forth herein. 296. This is a claim for treble damages and penalties under the Connecticut False Claims Act, C.G.S.A § 2-274 et seq. 6 297. 7 C.G.S.A. § 2-275 in pertinent part provides for liability as follows: 8 (a) No person shall: 9 ( 1) Knowingly present, or cause to be presented, a false or fraudulent claim for payment or approval under a stateadministered health or human services program; 10 11 (2) Knowingly make, use or cause to be made or used, a false record or statement material to a false or fraudulent claim under a state-administered health or human services program; 12 13 14 *** 15 (8) Knowingly conceal or knowingly and improperly avoid or decrease an obligation to pay or transmit money or property to the state under a state-administered health or human services program. 16 17 18 19 298. By virtue of the acts described above, Defendants knowingly presented, or 20 21 caused to be presented, false or fraudulent claims to the Connecticut State Government 22 for payment or approval and has knowingly made, used, or caused to be made or used, 23 false records and statements, and omitted material facts, to induce the government to 24 25 26 approve and pay such false and fraudulent claims. 299. 27 Specifically, Defendants have: • caused false claims to be presented to the State of Connecticut, 28 Complaint 90 ,-. Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 92 of 101 Page ID #:92 1 • knowingly made, used or caused to be made or used false records or statements to get false claims paid, and, 2 3 • 4 5 6 7 failed to disclose the existence of the false claims and statements it has caused to be presented. 300. Each representation or certification of compliance with the applicable laws and regulations by medical professionals and treating facilities while using Subsys, as 8 9 10 11 well as each claim presented or caused to be presented for reimbursement of treatments involving Subsys, represents a false or fraudulent record or statement. Each claim for reimbursement of treatment involving the non-medically accepted uses submitted to a 12 13 14 15 State-funded health insurance program represents a false or fraudulent claim for payment. 301. Compliance with applicable Medicare, Medicaid and various other Federal and State laws was a condition of payment of claims submitted to the Connecticut State 16 17 18 19 Government. 302. The Connecticut State Government, unaware of the falsity of the records, statements, and claims made, or caused to be made by Defendants, paid and continues to 20 21 22 23 pay the claims that would not be paid but for Defendants' false statements and representations concerning the use of Subsys. 303. By reason of Defendants' acts, the Connecticut State Government has been 24 25 damaged, and continues to be damaged, in substantial amounts to be determined at trial. 26 27 28 Complaint 91 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 93 of 101 Page ID #:93 1 2 3 4 5 304. The State of Connecticut is entitled to the maximum penalty for each and every false or fraudulent claim, record, or statement made, used, presented, or caused to be made, used, or presented by Defendants. 3 05. Relator-Plaintiff believes and avers that she is an "original source" of the 6 7 8 9 facts and information on which this action is based. 306. This Court is requested to accept supplemental jurisdiction of this related state claim as it is predicated upon the exact same nexus of facts as the federal claim, and 10 11 12 merely asserts separate damage to the State of Connecticut in the operation of its Medicaid program. 13 COUNT SEVEN 14 Violations of the Delaware False Claims and Reporting Act 6 DEL. C. § 1201 et seq. 15 16 17 307. Relator-Plaintiff restates and incorporates each and every allegation above as if the same were fully set forth herein. 18 19 20 21 308. This is a claim for treble damages and penalties under the Delaware False Claims and Reporting Act. 309. The Delaware False Claims and Reporting Act, 6 Del Code Ann. 22 23 §120l(a)(l), provides for liability for any person who: knowingly presents or causes to be presented, directly or indirectly, to an officer or employee of the Government a false or fraudulent claim for payment or approval; ... shall be liable to the Government for a civil penalty of not less than $5,500 and not more than $11,000 for each act constituting a violation of this section, plus 3 times the amount of the actual damages 24 25 26 27 28 Complaint 92 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 94 of 101 Page ID #:94 1 2 which the Government sustains because of the act of that person. 3 310. The Delaware False Claims and Reporting Act, 6 Del. C. §1201(a)(2) 4 5 provides for liability for any person who: knowingly makes, uses or causes to be made or used, directly or indirectly, a false record or statement to get a false or fraudulent claim paid or approved; ... shall be liable to the Government for a civil penalty of not less than $5,500 and not more than $11,000 for each act constituting a violation of this section, plus 3 times the amount of the actual damages which the Government sustains because of the act of that person. 6 7 8 9 10 11 311. By virtue of the acts described above, Defendants knowingly presented, or 12 13 caused to be presented, false or fraudulent claims to the Delaware State Government for 14 payment or approval and has knowingly made, used, or caused to be made or used, false 15 records and statements, and omitted material facts, to induce the government to approve 16 17 18 and pay such false and fraudulent claims. 312. 19 Specifically, Defendants have: • caused false claims to be presented to the State of Delaware, 20 • knowingly made, used or caused to be made or used false records or statements to get false claims paid, and, 21 22 • failed to disclose the existence of the false claims and statements it has caused to be presented. 23 24 25 26 27 313. Each representation or certification of compliance with the applicable laws and regulations by medical professionals and treating facilities while using Subsys, as well as each claim presented or caused to be presented for reimbursement of treatments 28 Complaint 93 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 95 of 101 Page ID #:95 1 2 3 4 5 involving Subsys, represents a false or fraudulent record or statement. Each claim for reimbursement of treatment involving the non-medically accepted uses submitted to a State-funded health insurance program represents a false or fraudulent claim for payment. 314. Compliance with applicable Medicare, Medicaid and various other Federal 6 7 8 9 and State laws was a condition of payment of claims submitted to the Del ware State Government. 315. The Delaware State Government, unaware of the falsity of the records, 10 11 statements, and claims made, or caused to be made by Defendants, paid and continues to 12 pay the claims that would not be paid but for Defendants' false statements and 13 representations concerning the use of Subsys. 14 15 16 17 316. By reason of Defendants' acts, the Delaware State Government has been damaged, and continues to be damaged, in substantial amounts to be determined at trial. 317. The State of Delaware is entitled to the maximum penalty for each and every 18 19 20 21 false or fraudulent claim, record, or statement made, used, presented, or caused to be made, used, or presented by Defendants. 318. Relator-Plaintiffbelieves and avers that she is an "original source" ofthe 22 23 24 25 facts and information on which this action is based. 319. This Court is requested to accept supplemental jurisdiction of this related state claim as it is predicated upon the exact same nexus of facts as the federal claim, and 26 27 28 Complaint 94 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 96 of 101 Page ID #:96 1 2 merely asserts separate damage to the State of Delaware in the operation of its Medicaid program. 3 4 5 6 COUNT EIGHT Violations of the Florida False Claims Act FL. STAT. ANN.§ 68.081 et seq. 7 8 9 320. Relator-Plaintiff restates and incorporates each and every allegation above as 10 11 12 13 if the same were fully set forth herein. 321. This is a claim for treble damages and penalties under the Florida False Claims Act. 14 15 16 322. The Florida False Claims Act, Fla. Stat§ 68.082(2)(a)-(c) provide liability for any person who: 17 (a) Knowingly presents, or causes to be presented, to an officer or employee of an agency, a false or fraudulent claim for payment or approval; . . . Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by an agency; ... is liable to the state for a civil penalty of not less than $5,500 and not more than $11,000 and for treble the amount of damages the agency sustains because of the act or omission of that person. 18 19 20 21 22 23 (b) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by an agency; ... is liable to the state for a civil penalty of not less than $5,500 and not more than $11,000 and for treble the amount of damages the agency sustains because of the act or omission of that person. 24 25 26 27 28 Complaint 95 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 97 of 101 Page ID #:97 1 *** (g) Knowingly makes, uses, or causes to be made or used a false record or statement material to an obligation to pay or transmit money or property to the state, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state. 2 3 4 5 *** 6 is liable to the state for a civil penalty of not less than $5,500 and not more than $11,000 and for treble the amount of damages the agency sustains because of the act or omission of that person. 7 8 9 10 11 323. By virtue of the acts described above, Defendants knowingly presented, or caused to be presented, false or fraudulent claims to the Florida State Government for 12 13 payment or approval and has knowingly made, used, or caused to be made or used, false 14 records and statements, and omitted material facts, to induce the government to approve 15 and pay such false and fraudulent claims. 16 17 324. • 18 19 caused false claims to be presented to the State of Florida, • knowingly made, used or caused to be made or used false records or statements to get false claims paid, and, 20 21 • failed to disclose the existence of the false claims and statements it has caused to be presented. 22 23 Specifically, Defendants have: 325. Each representation or certification of compliance with the applicable laws 24 25 and regulations by medical professionals and treating facilities while using Subsys, as 26 well as each claim presented or caused to be presented for reimbursement of treatments 27 involving Subsys, represents a false or fraudulent record or statement. Each claim for 28 Complaint 96 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 98 of 101 Page ID #:98 1 reimbursement of treatment involving the non-medically accepted uses submitted to a 2 3 4 5 State-funded health insurance program represents a false or fraudulent claim for payment. 326. Compliance with applicable Medicare, Medicaid and various other Federal and State laws was a condition of payment of claims submitted to the Florida State 6 Government. 7 8 9 327. The Florida State Government, unaware of the falsity of the records, statements, and claims made, or caused to be made by Defendants, paid and continues to 10 11 12 13 pay the claims that would not be paid but for Defendants' false stateme~ts and representations concerning the use of Subsys. 328. By reason of Defendants' acts, the Florida State Government has been 14 15 16 17 damaged, and continues to be damaged, in substantial amounts to be determined at trial. 329. The State of Florida is entitled to the maximum penalty for each and every false or fraudulent claim, record, or statement made, used, presented, or caused to be 18 19 20 21 made, used, or presented by Defendants. 330. Relator-Plaintiff believes and avers that she is an "original source" of the facts and information on which this action is based. 22 23 24 25 331. This Court is requested to accept supplemental jurisdiction of this related state claim as it is predicated upon the exact same nexus of facts as the federal claim, and merely asserts separate damage to the State of Florida in the operation of its Medicaid 26 27 program. 28 Complaint 97 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 99 of 101 Page ID #:99 1 2 3 COUNT NINE Violations of the Georgia State False Medicaid Claims Act O.C.G.A. § 49-4-168 et seq. 4 5 6 7 8 9 332. Relator-Plaintiff restates and incorporates each and every allegation above as if the same were fully set forth herein. 333. This is a claim for treble damages and penalties under the Florida False 10 11 12 13 Claims Act. 334. The Georgia State False Medicaid Claims Act, O.C.G.A. § 49-4-168.l(a), specifically provides in part: 14 (a) Any person who: 15 ( 1) Knowingly presents or causes to be presented to the Georgia Medicaid program a false or fraudulent claim for payment or approval; 16 17 18 (2) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Georgia Medicaid program; 19 20 *** 21 (7) Knowingly makes, uses, or causes to be made or used a false record or statement material to an obligation to pay or transmit money or property to the state or local government, or knowingly conceals, knowingly and improperly avoids, or decreases an obligation to pay or transmit money or property to the state or a local government. 22 23 24 25 shall be liable to the State of Georgia for a civil penalty of not less than $5,500.00 and not more than $11,000.00 for each false or fraudulent claim, plus three times the amount of damages 26 27 28 Complaint 98 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 100 of 101 Page ID #:100 1 which the Georgia Medicaid program sustains because of the act of such person. 2 3 335. By virtue of the acts described above, Defendants knowingly presented, or 4 5 caused to be presented, false or fraudulent claims to the Georgia State Government for 6 payment or approval and has knowingly made, used, or caused to be made or used, false 7 records and statements, and omitted material facts, to induce the government to approve 8 9 10 and pay such false and fraudulent claims. 336. 11 Specifically, Defendants have: • caused false claims to be presented to the State of Georgia, • knowingly made, used or caused to be made or used false records or statements to get false claims paid, and, • failed to disclose the existence of the false claims and statements it has caused to be presented. 12 13 14 15 16 17 18 19 337. Each representation or certification of compliance with the applicable laws and regulations by medical professionals and treating facilities while using Subsys, as well as each claim presented or caused to be presented for reimbursement of treatments 20 21 involving Subsys, represents a false or fraudulent record or statement. Each claim for 22 reimbursement of treatment involving the non-medically accepted uses submitted to a 23 State-funded health insurance program represents a false or fraudulent claim for payment. 24 25 26 27 338. Compliance with applicable Medicare, Medicaid and various other Federal and State laws was a condition of payment of claims submitted to the Georgia State Government. 28 Complaint 99 Case 2:16-cv-07937-JLS-AJW Document 1 Filed 10/25/16 Page 101 of 101 Page ID #:101 1 2 3 339. The Georgia State Government, unaware of the falsity of the records, statements, and claims made, or caused to be made by Defendants, paid and continues to 4 pay the claims that would not be paid but for Defendants' false statements and 5 representations concerning the use of Subsys. 6 7 340. By reason of Defendants' acts, the Georgia State Government has been 8 damaged, and continues to be damaged, in substantial amounts to be determined at trial. 9 341. The State of Georgia is entitled to the maximum penalty for each and every 10 11 12 13 false or fraudulent claim, record, or statement made, used, presented, or caused to be made, used, or presented by Defendants. 342. Relator-Plaintiff believes and avers that she is an "original source" of the 14 15 16 17 facts and information on which this action is based. 343. This Court is requested to accept supplemental jurisdiction of this related state claim as it is predicated upon the exact same nexus of facts as the federal claim, and 18 19 20 merely asserts separate damage to the State of Georgia in the operation of its Medicaid program. 21 COUNT TEN Violations of the Hawaii False Claims Act HAW. REV. STAT.§ 661-21 et seq. 22 23 24 25 344. Relator-Plaintiff restates and incorporates each and every allegation above as if the same were fully set forth herein. 26 27 28 Complaint 100