.w '.~,''f..: ,~, nr}.r~_~... 'r Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 1 of 37 Page ID #:825 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 .'~+qw'.-i'~ 13`.:.'F:'\"`- ',. n` _,. ~ ., t at!^".r:?~. — ._ ~ rn:~.^f!'y ~ e~y-. '1 " fir. ~- CHAD A. READLER Acting Assistant Attorney General, Civil Division NICOLA T. HANNA United States Attorney DOROTHY A. SCHUUTEN Assistant United States Attorney Chief, Civil Division DAVID K. BARRETT Assistant United States Attorney Chief, Civil Fraud Section DAVID M. HARRIS Assistant United States Attorney Deputy Chief, Civil Fraud Section JOHN E. LEE(CBN 128696) Assistant United States Attorney 300 N. Los Angeles Street, Room 7516 Los Angeles, California 90012 Tel: (213_) 894-3995 Fax: 213) 894-7819 Emai : john.lee2(a~usdoj.gov MICHAEL D. GRANSTON PATRICIA L. HANOWER DAVID T. COHEN Attorneys, Civil Division United States De~~alment of Justice P.O. Bo Ben Franklin Station Washington, D.C. 20044 Telephone: 202)307-0136 Facsimile: (. 02)616-3085 E-mail: david.t.cohen@usdoj.gov Attorneys for the United States of America ~ filE~ CLERK, U.S: DISTRICT CENT AL DISiRIC Of CRL~f4RtVIA .~ UNITED STATES DISTRICT COURT 19 FOR THE CENTRAL DISTRICT OF CALIFORNIA UNITED STATES OF AMERICA ex Yel 22 [UNDER SEAL], 24 Plaintiffs], v. 25 [iTNDER SEAL], 26 Defendant[s]. 27 28 o~Punr WESTERN DIVISION 21 23 URT APR i 3 ZOifl. 18 20 -, No. CV 13-5861 JLS(AJWx) UNITED STATES'COMPLAINT IN INTERVENTION [FILED UNDER SEAL PURSUANT TO THE FALSE CLAIMS ACT,31 U.S.C. §§ 3730(b)(2) AND (3)] Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 2 of 37 Page ID #:826 ~ IGI ~ ~ y ~. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 CHAD A. READLER Acting Assistant Attorney General, Civil Division NICOLA T. HANNA United States Attorney DOROTHY A. SCHOUTEN Assistant United States Attorney Chief, Civil Division DAVID K. BARRETT Assistant United States Attorney Chief, Civil Fraud Section DAVID M. HARRIS Assistant United States Attorney Deputy Chief, Civil Fraud Section JOHN E. LEE(CBN 128696) Assistant United States Attorney 300 N. Los Angeles Street, Room 7516 Los Angeles, California 90012 Tel:(213)894-3995 Fax:(213)894-7819 Email: john.lee2 usdoj.gov MICHAEL D. GRANS ON PATRICIA L. HANOWER DAVID T. COHEN Attorneys, Civil Division United States De artment of Justice P.O. Box ~61 Ben Franklin Station Washington, D.C. 20044 Telephone: (202)307-0136 Facsimile: (202)616-3085 E-mail: david.t.cohen@usdoj.gov Attorneys for the United States of America 18 19 ~~PR 13 2018 UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA 20 WESTERN DIVISION 21 UNITED STATES OF AMERICA ex rel. 22 [UNDER SEAL], No. CV 13-5861 JLS(AJWx) 23 UNITED STATES' COMPLAINT IN INTERVENTION 24 Plaintiffs], v. 25 [UNDER SEAL], 26 Defendant[s]. 27 28 [FILED UNDER SEAL PURSUANT TO THE FALSE CLAIMS ACT,31 U.S.C. §§ 3730(b)(2) AND (3)] Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 3 of 37 Page ID #:827 10 11 12 13 14 15 16 CHAD A. READLER Acting Assistant Attorney General, Civil Division NICOLA T. HANNA United States Attorne DOROTHY A. SCH~UTEN Assistant United States Attorney Chief, Civil Division DAVID K. BARRETT Assistant United States Attorney Chief, Civil Fraud Section DAVID M.HARRIS Assistant United States Attorney Deputy Chief, Civil Fraud Section JOHN E. LEE(CBN 128696) Assistant United States Attorney 300 N. Los Angeles Street, Room 7516 Los Angeles, California 90012 Tel:(213)894-3995 Fax:(213)894-7819 Email:john.lee2 usdoj.gov MICHAEL D. GRANS ON PATRICIA L. HANOWER DAVID T. COHEN Attorneys, Civil Division United States De artment of Justice P.O. Box ~61 Ben Franklin Station Washington, D.C. 20044 Telephone: 202) 307-0136 Facsimile: (02)616-3085 E-mail: david.t.cohen@usdoj.gov Attorneys for the United States of America 17 UNITED STATES DISTRICT COURT 18 FOR THE CENTRAL DISTRICT OF CALIFORNIA 19 WESTERN DIVISION 20 21 22 23 24 25 26 UNITED STATES OF AMERICA; the No. CV 13-5861 JLS(AJWx) STATES of CALIFORNIA,DELAWARE, FLORIDA,GEORGIA,HAWAII, UNITED STATES' COMPLAINT IN ILLINOIS,INDIANA,LOUISIANA, INTERVENTION MICHIGAN, MINNESOTA, MONTANA, [FILED UNDER SEAL PURSUANT NEVADA,NEW HAMPSHIRE,NEW TO THE FALSE CLAIMS ACT,31 JERSEY,NEW MEXICO,NEW YORK, NORTH CAROLINA,OKLAHOMA, U.S.C. §§ 3730(b)(2) AND (3)] RHODE ISLAND,TENNESSEE,TEXAS, and WASHINGTON; COMONWEALTHS of MASSACHUSETTS and VIRGINIA, and the DISTRICT OF COLUMBIA ex rel. MARIA GUZMAN, 27 Plaintiffs, 28 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 4 of 37 Page ID #:828 1 2 3 v. INSYS THERAPEUTICS,INC.; MICHAEL BABICH,an individual; ALEC BURLAKOFF,an individual; and DOES 1 through 15, 4 Defendants. 5 6 7 8 UNITED STATES OF AMERICA ex rel JOHN DOE and ABC,LLC, Plaintiffs, 9 v. 10 INSYS THERAPEUTICS,INC.; ALEC BURLAKOFF; and MICHAEL L. BABICH, 11 12 No. CV 14-3488 JLS(AJWx) Defendants. 13 14 15 UNITED STATES OF AMERICA ex rel. TORGNY ANDERSSON, 16 Plaintiff, 17 v. 18 19 No. CV 14-9179 JLS(AJWx) INSYS THERAPEUTICS,INC., Defendant. 20 ~' 21 22 23 24 25 26 L7NITED STATES OF AMERICA ex Yel. ALLISON ERICKSON and SARA LUEKEN, No. CV 16-2956 JLS(AJWx) Plaintiffs, v. INSYS THERAPEUTICS,INC., Defendant. 27 28 3 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 5 of 37 Page ID #:829 1 2 3 4 5 6 7 8 UNITED STATES OF AMERICA ex rel. JANE DOE and the States of CALIFORNIA,COLORADO, CONNECTICUT,DELAWARE, FLORIDA,GEORGIA,HAWAII, ILLINOIS,INDIANA,IOWA, LOUSIANA, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MONTANA,NEVADA, 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, No. CV 16-7937 JLS(AJWx) 9 Plaintiffs, 10 11 12 INSYS THERAPEUTICS,INC. and LINDEN CARE LLC, 13 Defendants. 14 15 16 COMPLAINT IN INTERVENTION OF THE UNITED STATES 17 ~ L INTRODUCTION 18 1. This is an action brought by the United States of America (United States) to 19 recover treble damages and civil penalties under the False Claims Act, 31 U.S.C. 20 §§ 3729-3733, and to recover damages under the common law theory of payment by 21 mistake and unjust enrichment. 22 2. Fentanyl is a powerful, but highly addictive, opioid painkiller. Defendant 23 Insys Therapeutics, Inc.(Insys) is the manufacturer of Subsys, a sublingual spray form 24 of fentanyl. In 2012, Subsys was approved by the Food and Drug Administration(FDA) 25 for the treatment of persistent breakthrough pain in adult cancer patients who are already 26 receiving, and tolerant to, around-the-clock opioid therapy. 27 28 3. Since 2012, Insys has knowingly offered and paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. Many of these Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 6 of 37 Page ID #:830 1 kickbacks have taken the form of speaker program payments for speeches to physicians 2 that were, in fact, shams. Insys has also hired prescribers' relatives and friends in order 3 to induce prescriptions of Subsys. Insys has also provided prescribers with lavish meals 4 and entertainment to induce them to prescribe Subsys. 5 6 4. Insys has knowingly caused Medicare and other federal health care programs to pay for Subsys for uses for which it was not covered. Insys has done this by 7 (1) encouraging physicians to prescribe Subsys in situations where it was not medically 8 reasonable and necessary based on patients' medical conditions (i.e., because a patient 9 did not have cancer), and (2) by misrepresenting patients' medical diagnoses to Medicare 10 Part D Plan Sponsors or Pharmacy Benefits Managers in order to obtain reimbursement 11 for Subsys. 12 5. Insys' conduct has violated the Anti-Kickback Statute, 42 U.C.S. § 1320(a)- 13 7b(b)(1)(A), and the False Claims Act, 31 U.S.C. §§ 3729-3733. Federal health 14 programs have suffered tens of millions of dollars in damages due to Insys' misconduct. 15 II. 16 JURISDICTION AND VENUE 6. This Court has jurisdiction over the subject matter ofthis action pursuant to 17 28 U.S.C. §§ 1331 and 1345 because this action is brought by the United States as a 18 plaintiff pursuant to the False Claims Act. 19 7. This Court may exercise personal jurisdiction over the Defendant pursuant 20 to 31 U.S.C. § 3732(a) because that section authorizes nationwide service of process and 21 because the Defendant has transacted business in the Central District of California. 8. 22 Venue is proper in the Central District of California pursuant to 31 U.S.C. 23 § 3732(a) and 28 U.S.C. §§ 1391(b) and 1395(a) because the Defendant has transacted 24 business within this district, maintained employees within the district, made sales within 25 the district, and/or committed violations of 31 U.S.C. § 3729 within this district. 26 III. 27 28 PARTIES 9. The United States brings this action on behalf of the Department of Health and Human Services(HHS)and the Centers for Medicare &Medicaid Services(CMS), Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 7 of 37 Page ID #:831 1 on behalf of the Medicare program; and the Defense Health Agency, on behalf of the 2 TRICARE program. 3 4 5 10. Defendant Insys Therapeutics, Inc., is a pharmaceutical manufacturer that is incorporated in Delaware, with headquarters in Chandler, Arizona. 1 1. In August 2013, Relator Mia Guzman filed the first of these consolidated 6 actions, United States, et al., ex rel. Guzman v. Insys Therapeutics, Inc., et al., 13-cv- 7 5861 JLS(AJWx)(C.D. Cal.), pursuant to the qui tam provisions of the False Claims 8 Act, 31 U.S.C. § 3730(b). At the time, she was a resident of Virginia and a former Insys 9 employee. 10 12. In October 2013, Relator Torgny Anderson filed the second of these 11 consolidated actions, United States ex rel. Anderson v. Insys Therapeutics, Inc., 14-cv- 12 9179 JLS(AJWx)(C.D. Cal.), pursuant to the qui tam provisions of the False Claims 13 Act, 31 U.S.C. § 3730(b). The case was filed in the District of Massachusetts and 14 subsequently transferred to this district. At the time, he was a resident of Missouri and a 15 current employee of Insys. 16 13. In May 2014, Relators Christopher Connors and PRAPOMA,LLC 17 (PRAPOMA)filed the third of these consolidated actions, United States ex rel. John Doe 18 and ABC,LLC v. Insys Therapeutics, Inc., et al., 14-cv-3488 JLS(AJWx)(C.D. Cal.), 19 pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. § 3730(b). At the 20 time, Mr. Connors was a resident of New Jersey and a former employee of Insys. 21 PRAPOMA was a limited liability corporation based in Delaware that was formed for 22 the purpose of bringing this qui tam action. PRAPOMA's managing member was the 23 NHCA Group, LLC, whose principal was John Mininno. 24 14. In March 2015, Relators Allison Erickson and Sara Lueken filed the fourth 25 of these consolidated actions, United States ex rel. Erickson and Lueken v. Ins 26 Therapeutics, Inc., 16-cv-2956 JLS(AJWx)(C.D. Cal.), pursuant to the qui tam 27 provisions of the False Claims Act, 31 U.S.C. § 3730(b). At the time, they were both 28 residents of Minnesota and employees ofPrime Therapeutics, a Pharmacy Benefits Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 8 of 37 Page ID #:832 1 Manager that processed Medicare Part D claims for the Medicare program. The case 2 was filed in the Eastern District of Pennsylvania and subsequently transferred to this 3 district. 4 15. In October 2016, Relator Melina Spalter filed the fifth of these consolidated 5 actions, United States ex rel. Jane Doe, et al. v. Insys Therapeutics, Inc. and Linden Care 6 LLC, 16-cv-7937 JLS(AJWx)(C.D. Cal.), pursuant to the qui tam provisions of the 7 False Claims Act, 31 U.S.C. § 3730(b). At the time, she was a resident of New Jersey 8 and a former Insys employee. 9 IV. 10 THE MEDICARE PROGRAM 16. The Medicare program was established in 1965 pursuant to amendments to 11 Title XVIII of the Social Security Act,42 U.S.C. § 1395 et seq. The Medicare program 12 is a health care benefit program that provides basic health insurance coverage to certain 13 disabled persons as well as to individuals 65 years or older. Medicare is a "federal 14 health care program" under Title 42, United States Code, Section 1320a-7b(~ and a 15 "health care benefit program" under Title 18, United States Code, Section 1347. 16 17. Medicare is funded by the federal government and administered by CMS, 17 which is part of HHS. Persons enrolled in the Medicare program are hereinafter referred 18 to as "beneficiaries." 19 18. In 2003, Congress passed the Medicare Prescription Drug, Improvement, 20 and Modernization Act(MMA),Pub. L. 108-173, 117 Stat. 2066, which established a 21 voluntary prescription drug benefit program for Medicare enrollees known as Medicare 22 Part D. An individual is eligible to enroll in Part D if the individual lives in the service 23 area of a Part D plan and is entitled to Medicare benefits under Part A or enrolled under 24 Part B. 42 U.S.C. § 1395w-101(a)(3)(A); 42 C.F.R. § 423.30(a). 25 19. Medicare Part D coverage is not provided within the traditional Medicare 26 program model. Medicare Part D is based on a private market model. Medicare 27 contracts with private entities known as Part D Plan "Sponsors" to administer 28 prescription drug plans. A Part D Sponsor may be a prescription drug plan, a Medicare 7 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 9 of 37 Page ID #:833 1 Advantage organization that offers a Medicare Advantage prescription drug plan(MA- 2 PD plan), a Program ofAll-inclusive Care for the Elderly(PACE)organization offering 3 a PACE plan including qualified prescription drug coverage, or a cost plan offering 4 qualified prescription drug coverage. 42 C.F.R. § 423.4. 20. 5 6 Medicare beneficiaries who wish to receive Part D benefits must enroll in a Part D Plan offered by a Part D Plan Sponsor. 21. 7 Many Part D Plan Sponsors contract with other companies, including 8 companies known as Pharmacy Benefits Managers(PBMs),to assist with the 9 administration of Part D Plans. Many Part D Plans require prior authorization for 10 specified drugs in order for the drug to be reimbursable. To grant prior authorization, the 11 Plan Sponsor or PBM often communicates with the prescriber to confirm the 12 beneficiary's diagnosis and need for the drug. 22. 13 14 Once a prescription has been approved and filled, the Plan Sponsor or PBM transmits claims data to CMS through a Prescription Drug Event(PDE)record. 15 23. The Medicare Part D Program only covers drugs that are used for a 16 medically accepted indication, which means a use that is approved under the Food, Drug, 17 and Cosmetic Act, or a use which is supported by one or more citations included or 18 approved for inclusion in one of the specified compendia: American Hospital Formulary 19 Service Drug Information, United States Pharmacopoeia-Drug Information (or its 20 successor publication), or DrugDex (hereinafter referred to collectively as the 21 Compendia). 42 U.S.C. § 1395w-102(e)(1)& (e)(4); 42 U.S.C. §1396r-8(g)(1)(B)(i) & 22 (k)(6); 42 C.F.R. § 423.100. 24. 23 Part D Plan Sponsors are only authorized to approve payment for Subsys 24 for Medicare Part D beneficiaries if Subsys is prescribed for a medically accepted 25 indication, as defined above. 26 V. 27 28 THE TRICARE PROGRAM 25. TRICARE (formerly CHAMPUS)is a managed health care program established by the Department of Defense. 10 U.S.C. §§ 1071-1110. TRICARE Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 10 of 37 Page ID #:834 1 ~ provides health care benefits to eligible beneficiaries, including active duty service 2 members, retired service members, and their dependents. 26. 3 TRICARE regulations define off-label use ofFDA-approved drugs as "[a] 4 use other than an intended use for which the prescription drug... is legally marketed 5 under the Federal Food, Drug, and Cosmetic Act or the Public Health Services Act," 6 including "any use that is not included in the approved labeling" of the drug. 32 C.F.R. 7 ~ § 199.2. 27. 8 9 The TRICARE program does not cover off-label uses of drugs unless such off-label use is proven medically necessary and safe and effective by medical literature, 10 national organizations, or technology assessment bodies. See C.F.R. 11 § 199.4(g)(15)(i)(A)(Note). 12 VI. THE LAW 13 A. The False Claims Act 14 28. The False Claims Act provides for the award oftreble damages and civil 15 penalties for, inteY alia, knowingly presenting or causing to be presented false or 16 fraudulent claims for payment to the United States and for knowingly making or using 17 false records or statements material to false or fraudulent claims paid by the United 18 States. 31 U.S.C. § 3729(a)(1). 19 20 21 22 23 24 29. The False Claims Act provides, in pertinent part, that a person who: (a)(1)(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;[or] (a)(1)(B) 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 25 less than $5,500 and not more than $11,000, as adjusted by the Federal 26 Civil Penalties Inflation Adjustment Act of 1990(28 U.S.C. 2461 note; 27 Public Law 104-410), plus 3 times the amount of damages which the 28 Government sustains... . D Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 11 of 37 Page ID #:835 1 ~ 31 U.S.C. § 3729. 2 30. For purposes of the False Claims Act, 3 (1) the terms "knowing" and "knowingly"— 4 (A)mean that a person, with respect to information— 5 (i) has actual knowledge of the information; 6 (ii) acts in deliberate ignorance of the truth or falsity of the information; or 7 8 (iii) acts in reckless disregard of the truth or falsity of the information; and 9 10 11 (B)require no proof of specific intent to defraud[.] 31 U.S.C. § 3729(b)(1). 12 13 31. The standard of proof under the False Claims Act is preponderance of the evidence. 31 U.S.C. § 3731(d). 14 B. The Anti-Kickback Statute 15 32. The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), arose out of 16 Congressional concern that payoffs to those who can influence health care decisions 17 would result in goods and services being provided that are medically unnecessary, of 18 poor quality, or potentially harmful to a vulnerable patient population. To protect the 19 integrity of federal health care programs from these difficult-to-detect harms, Congress 20 enacted a per se prohibition against the payment of kickbacks in any form, regardless of 21 whether the particular kickback gave rise to overutilization or poor quality of care. The 22 statute was first enacted in 1972, and was strengthened in 1977, 1987, and 2010 to 23 ensure that kickbacks masquerading as legitimate transactions did not evade its reach. 24 See Social Security Amendments of 1972, Pub. L. No. 92-603, §§ 242(b) and (c); 42 25 U.S.C. § 1320a-7b, Medicare-Medicaid Antifraud and Abuse Amendments,Pub. L. No. 26 95-142; Medicare and Medicaid Patient and Program Protection Act of 1987, Pub. L. 27 No. 100-93; Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 28 1 19. 10 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 12 of 37 Page ID #:836 1 33. The Anti-Kickback Statute prohibits any person or entity from offering, 2 making or accepting payment to induce or reward any person for referring, 3 recommending or arranging for federally-funded medical services, including services 4 provided under the Medicare program. In pertinent part, the statute provides: 5 (b) Illegal remuneration .. . (2) 6 whoever knowingly and willfully offers or pays any 7 remuneration (including any kickback, bribe, or rebate) directly or 8 indirectly, overtly or covertly, in cash or in kind to any person to 9 induce such person— ~ ~ ~ 10 11 (B) to purchase, lease, order or arrange for or 12 recommend purchasing, leasing or ordering any good, 13 facility, service, or item for which payment maybe made in 14 whole or in part under a Federal health care program, 15 shall be guilty of a felony and upon conviction thereof, shall be fined 16 not more than $25,000 or imprisoned for not more than five years, or 17 both. 18 ~ 42 U.S.C. § 1320a-7b(b). 19 34. The scienter element of the Anti-Kickback Statute is established by 20 showing that "one purpose" of the remuneration at issue was to induce referrals, even if 21 the remuneration also had other purposes that were legitimate. See United States v. Kats, 22 871 F.2d 105, 108 (9th Cir. 1989); see also United States v. Borrasi, 639 F.3d 774, 782 23 (7th Cir. 2011); United States v. McClatchev, 217 F.3d 823, 835 (10th Cir. 2000); 24 United States v. Davis, 132 F.3d 1092, 1094 (5th Cir. 1998); United States v. Greber, 25 760 F.2d 68(3d Cir. 1985). In 2010, Congress clarified the scienter standard under the 26 Anti-Kickback Statute by adding the following language to the statute: "With respect to 27 violations of this section, a person need not have actual knowledge of this section or 28 specific intent to commit a violation ofthis section." 42 U.S.C. § 1320a-7b(h). 11 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 13 of 37 Page ID #:837 1 2 3 35. Compliance with the Anti-Kickback Statute is a material condition of payment by the Medicare program. 36. In 2010, Congress amended the Anti-Kickback Statute through the Patient 4 Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119(2010), to 5 clarify that any claim "that includes items or services resulting from a violation" of the 6 Anti-Kickback Statute constitutes a false or fraudulent claim under the False Claims Act. 7 42 U.S.C. § 1320a-7b(g); see also, United States ex rel. Hutcheson v. Blackstone 8 Medical, Inc., 647 F.3d 377 (1st Cir. 2011); United States v. Rowan, 517 F.3d 449(7th 9 Cir. 2008). 10 37. Violation of the Anti-Kickback Statute can also subject the perpetrator to 11 exclusion from participation in federal health care programs and civil monetary 12 penalties. 42 U.S.C. § 1320a-7(b)(7) and 42 U.S.C. § 1320a-7a(a)(7). 13 VII. SUBSYS 14 38. 15 16 Fentanyl is a powerful, but highly addictive, opioid painkiller. Subsys is a liquid formulation offentanyl that is applied under the tongue as a .sublingual spray. 39. In early 2012, Subsys was approved by the FDA for the management of 17 breakthrough pain in cancer patients 18 years of age and older who are already receiving, 18 and tolerant to, around-the-clock opioid therapy, for their underlying persistent cancer 19 pain. In other words, the FDA determined that Subsys could be marketed and distributed 20 legally for the purpose of treating adult cancer patients who are already taking opioids to 21 treat their cancer pain, but have found the other opioids to be insufficient to treat 22 instances of breakthrough pain. The FDA has never approved the use of sublingual 23 spray fentanyl by patients who are not suffering from cancer. Also, the Compendia do 24 not support the use of Subsys by patients who are not suffering from cancer. The FDA- 25 approved label for Subsys states that it is contraindicated for opioid non-tolerant patients 26 and for the management of acute or postoperative pain. The label warns that the drug 27 poses risks of misuse, abuse, addiction, overdose, and serious complications, including 28 fatal respiratory depression, due to medical errors. The label carries a "boxed warning," 12 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 14 of 37 Page ID #:838 1 which is the strictest warning the FDA uses on drug labels, and is designed to call 2 attention to serious or life-threatening risks. 3 4 40. Because Subsys has not been approved for uses other than the treatment of breakthrough cancer pain in opioid-tolerant patients, and because such uses are not 5 ' supported by the Compendia, Subsys is not reimbursable by Medicare or TRICARE 6 7 unless a patient has cancer and is opioid-tolerant. 41. Subsys falls within a category of drugs known as Transmucosal Immediate 8 Release Fentanyl(TIRE)products. As a condition of approval, the FDA requires that all 9 TIRE drugs be subject to a class-wide Risk Evaluation and Mitigation Strategy(BEMs). 10 The TIRE-BEMs Access Program was designed to mitigate the risks of misuse, abuse, 11 addiction, overdose, and serious complications due to medication errors, associated with 12 the use of TIRE medications. The program imposes a number of restrictions and training 13 and reporting obligations on prescribers, pharmacists, and others involved in the 14 prescription and distribution of TIRE products. 15 42. Subsys has also been designated as a "Schedule II" controlled substance 16 under the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended, 17 21 U.S.C. §§ 801-971, otherwise known as the Controlled Substances Act. Drugs are 18 designated as Schedule II drugs based on a determination that they have a high potential 19 for abuse. Schedule II drugs, including Subsys, are subject to a number of legal 20 restrictions. 21 VIII. THE DEFENDANT'S MISCONDUCT 22 23 24 A. Insys Has Paid Kickbacks to Potential Prescribers to Induce Them to Prescribe Subsys 43. Since 2012, Insys has operated a "speaker program" through which it has 25 paid Subsys prescribers to give speeches about Subsys to physicians and other healthcare 26 professionals. Insys has pretended that these presentations were intended to provide 27 potential Subsys prescribers with substantive medical information about the drug. In 28 reality, many of these events have been mere pretexts for paying thousands of dollars in 13 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 15 of 37 Page ID #:839 1 sham speaking fees to prescribers for the purpose of inducing them to prescribe Subsys. 2 Many of these speeches have been attended only by the prescriber's own office staff, by 3 close friends who attended multiple presentations, or by people who were not medical 4 professionals and had no legitimate reason for attending. Many of the "speeches" have 5 not involved any actual substantive presentation by the purported "speaker." The events 6 have often been held in expensive restaurants. 7 44. Insys has also provided kickbacks to prescribers in other forms. These 8 include jobs for the prescribers' relatives and friends, visits to strip clubs, and lavish 9 meals and entertainment. 10 45. Insys provided these kickbacks to prescribers knowingly and willfully, in 11 violation of the Anti-Kickback Statute. These kickbacks rendered false, within the 12 meaning of the False Claims Act, the claims for payment that were submitted to federal 13 health care programs for Subsys prescriptions that were written by kickback recipients 14 subsequent to their receipt of the kickbacks. As such, Insys caused the submission of 15 false claims to federal health care programs. 16 46. The following paragraphs describe illustrative examples of the kickbacks 17 that Insys has provided. This is not intended as a complete or comprehensive list of the 18 kickbacks that Insys has paid. 1. 19 20 21 22 47. Drs. John Patrick Couch and Xiulu Ruan Drs. John Patrick Couch and Xiulu Ruan operated a physician practice in Mobile, Alabama called Physician's Pain Specialists of Alabama (PPSA). 48. Between 2012 and 2015, Insys paid Dr. Ruan at least $170,000 in speaking 23 fees, and it paid Dr. Couch at least $100,000 in speaking fees. Upon information and 24 belief, many of the events for which Insys paid Dr. Ruan and Dr. Couch were in fact 25 shams. 26 49. Natalie Perhacs was an Insys Sales Representative who worked with Drs. 27 Couch and Ruan. In February 2016, Ms. Perhacs pleaded guilty to criminal charges that 28 included the payment of illegal kickbacks to Drs. Couch and Ruan on behalf of Insys. In 14 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 16 of 37 Page ID #:840 1 the Factual Resume submitted in support of her plea, Ms. Perhacs admitted that she 2 scheduled approximately one speaker program per week for Drs. Couch and Ruan, but 3 that "for a majority of the speaker programs, Dr. Ruan and Dr. Couch either(1) 4 repeatedly spoke to the same prescribers about Subsys,(2)spoke to just the PPSA staff 5 about Subsys, or(3) did not speak about Subsys at all." 6 50. In February 2017, following aseven-week federal criminal trial, a jury in 7 Alabama found Drs. Couch and Ruan guilty of several federal criminal offenses, 8 including (1)illegally prescribing fentanyl and other opioid drugs outside the usual 9 course of professional practice and not for a legitimate medical purpose, and (2) 10 accepting kickbacks from Insys. In May 2017, they were sentenced to 20 and 21 years 11 in prison, respectively. 12 51. Since 2012, Medicare has paid over $3 million for Subsys that was 13 prescribed by Dr. Couch. For example, between July 1, 2013 and May 18, 2015, Dr. 14 Couch wrote 26 Subsys prescriptions for Patient # M 1, a Medicare beneficiary.l 15 Medicare ultimately paid more than $369,000 for these 26 prescriptions. 16 52. Since 2012, TRICARE has paid over $2.2 million for Subsys that was 17 prescribed by Dr. Couch. For example, between October 2012 and May 2015, Dr. 18 Couch wrote 30 Subsys prescriptions for Patient #T1, a TRICARE beneficiary. 19 TRICARE ultimately paid over $250,000 for these 31 prescriptions. 20 53. Since 2012, Medicare has paid over $1.4 million for Subsys that was 21 prescribed by Dr. Ruan. For example, between July 31, 2012 and March 24, 2015, Dr. 22 Ruan wrote 33 Subsys prescriptions for Patient # M2,a Medicare beneficiary. Medicare 23 ultimately paid more than $124,000 for these 33 prescriptions. 24 25 54. Since 2012, TRICARE has paid over $2.6 million for Subsys that was prescribed by Dr. Ruan. For example, between Apri12013 and May 2015, Dr. Ruan 26 27 28 1 Patient identities are not provided here to protect patient privacy. Upon entry of an appropriate protective order, the United States will p~rovide the Defendant with a list identifying the names of the patients described in this Complaint. 15 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 17 of 37 Page ID #:841 1 wrote 38 Subsys prescriptions for Patient #T2, a TRICARE beneficiary. TRICARE 2 ultimately paid more than $279,000 for these 39 prescriptions. 2. 3 4 Heather Alfonso Heather Alfonso is an Advanced Practice Registered Nurse who practiced 55. 5 in Derby, Connecticut. Between January 2013 and March 2015, Insys paid Ms. Alfonso 6 approximately $83,000 in speaking fees for more than 70 dinner programs. 7 Upon information and belief, many of the events for which Insys paid Ms. 56. 8 Alfonso were in fact shams, attended only by Insys representatives and/or Ms. Alfonso's 9 friends and office staff, and involving little or no substantive presentation by Ms. 10 11 Alfonso. 57. In June 2015, Ms. Alfonso entered a criminal guilty plea, admitting that she 12 accepted kickbacks from Insys in violation of the Anti-Kickback Statute, 42 U.S.C. 13 § 1320a-7b(b). 14 58. Natalie Levine was an Insys Sales Representative who worked with Ms. 15 Alfonso. In July 2017, Ms. Levine entered a criminal guilty plea, admitting that she 16 conspired to violate the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), in connection 17 with her work at Insys. 18 59. Between 2013 and 2015, Medicare paid over $1.2 million for Subsys that 19 was prescribed by Ms. Alfonso. For example, between March 17, 2014 and January 6, 20 2015, she wrote 9 Subsys prescriptions for Patient # M3, a Medicare beneficiary. 21 Medicare ultimately paid more than $102,000 for these 9 prescriptions. 22 60. Between October 2013 and May 2014, Ms. Alfonso wrote 7 Subsys 23 prescriptions for Patient #T3, a TRICARE beneficiary. TRICARE ultimately paid more 24 than $111,000 for these prescriptions. 3. 25 26 27 61. Dr. Gavin Awerbuch Dr. Gavin Awerbuch was a neurologist who practiced at various locations in Michigan. 28 16 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 18 of 37 Page ID #:842 1 62. Insys paid Dr. Awerbuch over $89,000 to give over 70 speeches on behalf 2 ofthe company. He was generally paid $1,600 per event. Many of these events were 3 duplicative and pretextual. At least five individuals went to three or more of his 4 ~ presentations. 5 6 63. Dr. Awerbuch made his first speech for Insys in October 2012. In the six months preceding this speech, he wrote an average of less than 13 Subsys prescriptions per month. In the six months after this speech, he averaged approximately 118 Subsys 8 9 prescriptions per month. 64. In November 2016, Dr. Awerbuch pleaded guilty to felony charges of 10 healthcare fraud and unlawful distribution of Subsys. On February 26, 2017, he was 11 sentenced to 32 months in prison and ordered to pay $4.1 million in restitution and fines. 12 65. Between 2012 and his arrest in 2014, Medicare paid over $6 million for 13 Subsys that was prescribed by Dr. Awerbuch. At that time, he was the most prolific 14 prescriber of Subsys for Medicare beneficiaries in the country. For example, between 15 March 22, 2013 and May 5, 2014, he wrote 23 Subsys prescriptions for Patient # M4,a 16 Medicare beneficiary. Medicare ultimately paid more than $129,000 for these 23 17 prescriptions. 18 66. Since 2012, TRICARE has paid over $84,000 for Subsys that was 19 prescribed by Dr. Awerbuch. For example, between February 2013 and Apri12014, he 20 wrote 10 Subsys prescriptions for Patient #T4, a TRICARE beneficiary. TRICARE 21 ultimately paid more than $54,000 for these 10 prescriptions. 4. 22 23 67. Dr. Jerrold Rosenberg Dr. Jerrold Rosenberg is a physiatrist who practiced in Providence, Rhode 24 Island. Between 2013 and 2015, Insys paid Dr. Rosenberg more than $167,000 in 25 speaking fees. 26 27 68. Between June 2012 and September 2013, Insys employed Dr. Rosenberg's son as a sales representative. 28 17 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 19 of 37 Page ID #:843 1 69. In October 2017, Dr. Rosenberg pleaded guilty to health care fraud and 2 conspiracy to receive kickbacks in violation of the Anti-Kickback Statute. Dr. 3 Rosenberg admitted that he took unlawful kickbacks from Insys. In March 2018, he was 4 sentenced to 51 months in federal prison. Dr. Rosenberg has also agreed to pay more 5 than $750,000 in restitution to health insurers, including the Medicare Part D Program. 6 70. Since 2012, Medicare paid over $666,000 for Subsys that was prescribed by 7 Dr. Rosenberg. For example, between February 19, 2013 and August 28, 2014, he wrote 8 15 Subsys prescriptions for Patient # M5,a Medicare beneficiary. Medicare ultimately 9 paid more than $55,000 for these 15 prescriptions. 10 11 5. 71. Dr. Parveen Khanna Dr. Parveen Khanna was a pain management specialist who practiced in 12 Jacksonville, Florida. Between 2012 and 2015, Insys paid Dr. Khanna between $1,000 13 and $2,000 per event to give speeches on behalf ofthe company. In all, Insys paid her 14 over $68,000 in speaking fees. 15 72. Many of the events for which Insys paid Dr. Khanna were shams, with no 16 physicians or other potential Subsys prescribers present. Many of these events were 17 attended only by Insys representatives and/or Dr. Khanna's office staff. Many were held 18 at expensive restaurants. Other events for which Dr. Khanna was paid were actually 19 short visits to pharmacies, during which Dr. Khanna did little more than determine 20 whether the pharmacy stocked Subsys. 21 73. Karen Hill was the Insys Sales Representative that worked with Dr. 22 Khanna. In July 2017, Ms. Hill pleaded guilty to one count of Conspiracy to Violate the 23 Anti-Kickback Statute in connection with her work at Insys. 24 74. Between 2013 and 2016, Medicare paid over $700,000 for Subsys that was 25 prescribed by Dr. Khanna. For example, between February 4, 2014 and January 15, 26 2016, she wrote 23 Subsys prescriptions for Patient #M6,a Medicare beneficiary. 27 Medicare ultimately paid $331,865.50 for these 23 prescriptions. 28 75. Since 2012, TRICARE has paid over $938,000 for Subsys that was Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 20 of 37 Page ID #:844 1 prescribed by Dr. Khanna. For example, between August 2012 and Apri12014, she 2 wrote 20 Subsys prescriptions for Patient #T5, a TRICARE beneficiary. TRICARE 3 ultimately paid more than $133,000 for these 20 prescriptions. 4 5 6. 76. Dr. Judson Somerville Dr. Judson Somerville is an anesthesiologist who practiced in Laredo, 6 Texas. In 2013 alone, Insys paid Dr. Somerville over $67,000 in speaker fees. These 7 fees ranged from $1,600 to $2,400 per event. 8 77. Most of the speeches for which Insys paid Dr. Somerville were attended by 9 a small group of repeat attendees. Medical Assistant R.F. attended at least sixteen of his 10 speeches, and Medical Assistant E.G. attended at least fourteen of his speeches. Medical 11 Assistants D.L., D.S., and R.M., and Drs. M.M., R.P., J.S., J. A-B., and E.N., each 12 attended at least five of his speeches. 13 78. In December 2013, the Texas Medical Board ordered Dr. Somerville to stop 14 prescribing painkillers after it found that he had authorized employees to hand out pre- 15 signed prescriptions to patients, and that three of his patients had died in 2012 of drug 16 overdoses. 17 79. In 2013, Medicare paid over $600,000 for Subsys that was prescribed by 18 Dr. Somerville. For example, between May 21, 2013 and November 8, 2013, Dr. 19 Somerville wrote 4 Subsys prescriptions for Patient # M7,a Medicare beneficiary. 20 Medicare ultimately paid more than $64,000 for these 4 prescriptions. 21 80. Since 2012, TRICARE has paid more than $353,000 for Subsys that was 22 prescribed by Dr. Somerville. For example, between February and December 2013, Dr. 23 Somerville wrote 12 Subsys prescriptions for a Patient #T6, a TRICARE beneficiary. 24 TRICARE ultimately paid more than $222,000 for these 12 prescriptions. 25 26 7. 81. Dr. Alexander Wein ~arten Dr. Alexander Weingarten is a physician who specializes in anesthesiology 27 and pain management. He is also a co-Medical Director of Comprehensive Pain 28 Management Associates, atwo-physician group that operates at several locations in New 19 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 21 of 37 Page ID #:845 1 2 York City and Long Island. 82. Between 2012 and 2015, Insys paid Dr. Weingarten over $200,000 in 3 speaking fees. Dr. Weingarten was paid between $1,600 and $3,000 per speech for 4 approximately 80 speeches. Many of these events were held at restaurants. At least 5 seven were held in Comprehensive Pain Management Associates' own offices. 6 83. Many of the speeches for which Insys paid Dr. Weingarten were shams, 7 attended by only Dr. Weingarten's own office staff or a small circle of frequent guests. 8 One Doctor of Osteopathy, with initials J.B., attended at least 16 of Dr. Weingarten's 9 speeches. L.M., who was identified in different documents as a Medical Assistant, Legal 10 Secretary, and Office Manager, attended at least 15 speeches; Dr. H.F. and Physician 11 Assistant L.M. each attended at least 10 speeches; Dr. A.K. attended at least 8 speeches; 12 and Medical Assistant/Office Managers D.R. and J.U. each attended at least 6 speeches. 13 84. Since 2012, Medicare has paid over $3.5 million for Subsys that was 14 prescribed by Dr. Weingarten. For example, between June 21, 2013 and December 7, 15 2015, he wrote 26 Subsys prescriptions for Patient # M8, a Medicare beneficiary. 16 Medicare ultimately paid more than $221,000 for these 26 prescriptions. 17 85. In May 2012, Dr. Weingarten wrote two Subsys prescriptions for Patient 18 #T7, a TRICARE beneficiary. TRICARE paid more than $1,600 for these two 19 prescriptions. 8. 20 21 86. Dr. Thomas Whitten Dr. Thomas Whitten is a pain management specialist practicing in 22 Greensburg, Pennsylvania. Between 2013 and 2015, Insys paid Dr. Whitten over 23 $100,000 to give approximately 40 speeches. 24 87. Many of the speeches for which Insys paid Dr. Whitten were in fact shams. 25 At least four of his speeches were attended only by members of his own office staff. For 26 at least nine of Dr. Whitten's speeches, Dr. R.M. was the only attendee who was not on 27 Dr. Whitten's office staff. Dr. M.G., along with two members of his own office staff, 28 attended at least 9 of Dr. Whitten's speeches. At least five of Dr. Whitten's speeches 20 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 22 of 37 Page ID #:846 1 ~ were attended by an Esthetician/Cosmetologist and a Physician's Assistant who worked 2 ~ for a plastic surgery practice. 3 88. Upon information and belief, Insys hired Dr. Whitten's daughter to work as 4 ~ an Insys Sales Representative in 2014, shortly after she graduated college. 5 , 89. Since 2013, Medicare has paid over $4 million for Subsys that was 6 ~ prescribed by Dr. Whitten. For example, between March 25, 2014 and December 27, 7 2017, he wrote 51 Subsys prescriptions for Patient # M9,a Medicare beneficiary. 8 ~ Medicare ultimately paid more than $1.1 million for these 51 prescriptions. 9 10 9. 90. Dr. Steven Chun Dr. Steven Chun is a physician who practices in association with Sarasota 1 1 ~ Pain Associates in Bradenton, Florida. Between 2012 and 2015,Insys paid Dr. Chun 12 over $270,000 in speaking fees. Insys paid Dr. Chun between $2,400 and $3,000 per 13 speech for more than 60 speeches. 14 91. Many of the speeches for which Insys paid Dr. Chun were in fact shams 15 attended by a small group of repeat attendees. For example, Pharmacist V.D. attended at 16 least 16 of his speeches, Dr. M.G. attended at least 11, Pharmacy Assistant A.N. attended 17 at least 9, Advanced Practice Registered Nurse S.P. attended at least 8, and a number of 18 other individuals attended multiple speeches. Many of Dr. Chun's speeches did not 19 include any physician attendees. Many of his speaking events were held in expensive 20 restaurants. 21 92. Since 2013, Medicare has paid over $9 million for Subsys that was 22 prescribed by Dr. Chun. For example, between June 4, 2013 and December 18, 2017, he 23 wrote 59 Subsys prescriptions for Patient # M10,a Medicare beneficiary. Medicare 24 ultimately paid more than $1.4 million for these 59 prescriptions. 25 93. Between November 2013 and May 2016, Dr. Chun wrote Subsys 26 prescriptions for three TRICARE beneficiaries. TRICARE paid over $19,000 for these 27 prescriptions. One of these, dispensed in December 2013, was for Patient #T8. 28 TRICARE paid over $4,000 for this prescription. 21 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 23 of 37 Page ID #:847 1 2 10. 94. Dr. Gordon Freedman Dr. Gordon Freedman is a physician certified in pain management and 3 anesthesiology who practices in New York City. Between 2012 and 2015, Insys paid 4 Dr. Freedman over $280,000 to give more than 60 speeches regarding Subsys. 5 95. Many of Dr. Freedman's speaking events were duplicative and pretextual. 6 For example, a Nurse Practitioner with initials M.R. attended at least three of Dr. 7 Freedman's speaking events, and was the only attendee who was not an Insys employee 8 at two ofthem. Pharmacists L.P. and B.C., and physicians J.N. and S.B., each attended 9 at least three of Dr. Freedman's speaking events. 10 11 96. Jonathan Roper and Fernando Serrano were two of the Insys employees who worked with Dr. Freedman. In May 2017, Mr. Serrano pleaded guilty to multiple 12 federal crimes, including violation of the Anti-Kickback Statute, in connection with his 13 work at Insys. In August 2017, Mr. Roper pleaded guilty to multiple federal crimes, 14 including violation of the Anti-Kickback Statute, in connection with his work at Insys. 15 97. In March 2018, Dr. Freedman was one offive physicians indicted by a 16 federal grand jury in the Southern District of New York on charges that included 17 violation of the Anti-Kickback Statute and conspiracy to violate the Anti-Kickback 18 Statute, in connection with their participation in the Insys speaker program. 19 98. Since 2013, Medicare has paid over $2.9 million for Subsys that was 20 prescribed by Dr. Freedman. For example, between June 11, 2014 and November 22, 21 2017, Dr. Freedman wrote 45 Subsys prescriptions for Patient # M11, a Medicare 22 beneficiary. Medicare ultimately paid more than $864,000 for these 45 prescriptions. 1 1. 23 24 99. Dr. Jeffrey Goldstein Dr. Jeffrey Goldstein is doctor of osteopathic medicine who practices in 25 New York City. Since 2013, Insys has paid Dr. Freedman over $180,000 in speaking 26 fees to give more than 30 speeches. 27 100. Many of Dr. Goldstein's speaking events were duplicative and pretextual. 28 For example, at least four of the speeches that he gave on behalf of Insys were attended 22 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 24 of 37 Page ID #:848 1 solely by members of his own office staff. Dr. J.B., who was on Dr. Goldstein's staff, 2 attended three of Dr. Goldstein's speaking events. Dr. R.J attended at least three of his 3 speaking events. 4 5 6 101. Jonathan Roper and Fernando Serrano, discussed above, were two ofthe Insys employees who worked with Dr. Goldstein. 102. In March 2018, Dr. Goldstein was one of five physicians indicted by a 7 federal grand jury in the Southern District of New York, on charges that included 8 violation of the Anti-Kickback Statute and conspiracy to violate the Anti-Kickback 9 Statute, in connection with their participation in the Insys speaker program. 10 103. Since 2013, Medicare has paid over $2.6 million for Subsys that was 11 prescribed by Dr. Goldstein. For example, between May 13, 2013 and July 7, 2016, Dr. 12 Goldstein wrote 34 Subsys prescriptions for Patient # M12, a Medicare beneficiary. 13 Medicare ultimately paid more than $620,000 for these 34 prescriptions. 14 15 12. Dr. Bart Gatz 104. Dr. Bart Gatz is an anesthesiologist who practices in Greenacres, Boynton 16 Beach, and other locations in Florida. Between 2012 and 2015,Insys paid Dr. Gatz over 17 $229,000 in speaking fees. Upon information and belief, many of the speeches for 18 which Dr. Gatz was paid were actually shams. 19 105. On or about January 18, 2013, Dr. Gatz was taken to a strip club in 20 Scottsdale, Arizona by two Insys executives, Alec Burlakoff and Joe Rowan. The next 21 day, Mr. Burlakoff texted a colleague, saying "Went fantastic last night. Bart and I got 22 back around 4 am. He had to have had one of the best nights of his life." Several days 23 later, Dr. Gatz sent a text to Mr. Rowan stating,"Thank you for the best weekend in 24 years!!!" 25 106. Upon information and belief, Insys also provided Dr. Gatz with lavish 26 meals and at least one trip to a shooting range. Upon information and belief, in 2012, 27 Insys provided Thanksgiving dinners for Dr. Gatz' entire office staff. 28 107. Since 2012, Medicare has paid over $3.3 million for Subsys that was 23 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 25 of 37 Page ID #:849 1 prescribed by Dr. Gatz. For example, between December 30, 2013 and Apri120, 2015, 2 he wrote 22 Subsys prescriptions for Patient # M13,a Medicare beneficiary. Medicare 3 ultimately paid more than $421,000 for these 22 prescriptions. 4 5 6 7 108. On February 14, 2013, Dr. Gatz dispensed a Subsys prescription for Patient #T9, a TRICARE beneficiary. TRICARE paid more than $6,200 for this prescription. 13. Dr. Jeffrey Kesten 109. Dr. Jeffrey Kesten is a physician who practiced at the Red Rocks Center for 8 Rehabilitation in Golden, Colorado. Between 2012 and 2015, Insys paid Dr. Kesten 9 over $290,000 to give over 100 speeches. Insys paid Dr. Kesten between $2,400 and 10 $4,700 per speech. 11 1 10. Many of the speeches for which Insys paid Dr. Kesten were, in fact, shams. 12 A significant number ofthem were attended only by members of his own office staff at 13 the Red Rocks Center for Rehabilitation. Most of the individuals who attended Dr. 14 Kesten's speeches were office staff and other individuals who were not authorized to 15 prescribe Subsys. 16 1 11. Since 2013, Medicare has paid over $3.8 million for Subsys that was 17 prescribed by Dr. Kesten. For example, between January 13, 2014 and March 30, 2016, 18 he wrote 31 Subsys prescriptions for Patient # M14,a Medicare beneficiary. Medicare 19 ultimately paid more than $400,000 for these 31 prescriptions. 20 21 14. Dr. Paul Wand 1 12. Dr. Paul Wand is a neurologist who practices in association with the Brain 22 Healing Center of America in Coral Springs, Florida (the Brain Healing Center). 23 Between 2013 and 2015, Insys paid Dr. Wand over $84,000 to give more than 50 24 speeches. Many of these speeches were given at restaurants. 25 1 13. Many of the speeches for which Insys paid Dr. Wand were shams. At least 26 two of his speeches were attended solely by members of the staff at the Brain Healing 27 Center, including a marriage therapist, a medical assistant, and an office manager. At 28 least seven of his speeches were attended only by pharmacy staff. A number of 24 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 26 of 37 Page ID #:850 1 individuals attended more than one of his speeches. 2 1 14. Since 2013, Medicare has paid over $2 million for Subsys that was 3 prescribed by Dr. Wand. For example, between April 28, 2015 and April 8, 2016, he 4 wrote 14 Subsys prescriptions for Patient # M15, a Medicare beneficiary. Medicare 5 ultimately paid more than $162,000 for these 15 prescriptions. 1 15. Between May 2013 and August 2015, Dr. Wand dispensed 70 separate 6 7 Subsys prescriptions for two TRICARE beneficiaries. One of them, Patient #T 10, 8 received 57 Subsys prescriptions from Dr. Wand,for which TRICARE paid $392,000. 15. 9 10 Christopher Clough 1 16. Christopher Clough was a Physician Assistant who practiced in 11 Somersworth, New Hampshire. Between 2013 and 2014, Insys paid Mr. Clough more 12 than $40,000 to give more than 30 speeches. 13 1 17. Many of the speeches for which Insys paid Mr. Clough were actually 14 shams. Many,if not most, ofthem were attended solely by members of his own office 15 staff. 16 118. In 2015, the New Hampshire Board of Medicine reprimanded Mr. Clough 17 for overprescribing opioid drugs and permanently barred him from prescribing opioid 18 19 20 21 drugs in the future. 1 19. In March 2017, Mr. Clough was indicted based on federal charges that he accepted illegal kickbacks from Insys. Those charges are currently pending. 120. In 2013-14, Medicare paid almost $2 million for Subsys that was prescribed 22 by Mr. Clough. For example, between July 30, 2013 and August 29, 2014, he wrote 17 23 Subsys prescriptions for Patient # M16, a Medicare beneficiary. Medicare ultimately 24 paid more than $223,000 for these 17 prescriptions. 25 121. Between July 2013 and February 2015, Mr. Clough wrote 26 separate 26 prescriptions for Patient #T11, a TRICARE beneficiary. TRICARE has paid more than 27 $595,000 for these prescriptions. 28 25 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 27 of 37 Page ID #:851 1 2 16. Dr. Steve Fanto 122. Dr. Steve Fanto was a physician who practiced in Scottsdale, Arizona. In 3 July 2017, Dr. Fanto signed an interim consent agreement with the Arizona Medical 4 Board suspending his ability to engage in the practice of medicine in the State of 5 Arizona. The suspension was based on interim findings of fact that Dr. Fanto had 6 improperly prescribed opioid drugs, including Subsys, for several of his patients. 7 123. Between 2012 and 2015, Insys paid Dr. Fanto more than $230,000 to give 8 more than 70 speeches. Insys paid Dr. Fanto between $2,400 and $4,700 per speech. 9 Many of the speeches for which Insys paid Dr. Fanto were actually pretextual or 10 11 duplicative. 124. A number of individuals attended more than one of Dr. Fanto's speaking 12 events. In addition, attendance at his speaking events was often padded with individuals 13 who had no ability to prescribe Subsys, including medical assistants, office managers, 14 receptionists, clerks, students, a phlebotomist, a massage therapist, a lab collector, a 15 hearing instrument specialist, a radiation therapist, a dentist, and a "sanitation" specialist. 16 125. For example, on June 12, 2015, Dr. Fanto met with eleven medical 17 assistants and office staff personnel at the Sedona office of Arizona Oncology. No 18 physicians were in attendance. On July 17, 2015, he held a second event at the same 19 office. Only one physician was present, and eight of the attendees from the first 20 presentation also attended the second presentation. Insys paid Dr. Fanto $4,700 per 21 event for these two meetings. 22 126. Since 2012, Medicare has paid almost $2.7 million for Subsys that was 23 prescribed by Dr. Fanto. For example, between April 16, 2014 and March 16, 2016, he 24 wrote 27 Subsys prescriptions for Patient # M17, a Medicare beneficiary. Medicare 25 ultimately paid more than $534,000 for these 27 prescriptions. 26 127. Since 2012, TRICARE has paid over $4.5 million for Subsys that was 27 prescribed by Dr. Fanto. Over $4 million of this was for just three patients, each of 28 whom received more than 40 Subsys prescriptions, worth between $1.2 million and $1.5 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 28 of 37 Page ID #:852 1 million, from Dr. Fanto. For example, between February 2014 and May 2017, Dr. Fanto 2 wrote 44 Subsys prescriptions for Patient #T12, a TRICARE beneficiary. TRICARE has 3 paid $1.5 million for these 44 prescriptions. 4 17. Dr. Edward Lubin 5 128. Dr. Edward Lubin is a physician who practices at several locations in 6 Florida. Between 2013 and 2015, Insys paid Dr. Lubin over $120,000 to give more than 7 20 speeches. 8 9 129. Many of the speeches for which Insys paid Dr. Lubin were actually shams. Most of his speaking events were conducted at pharmacies, even though pharmacists 10 cannot prescribe Subsys. At least one of his speeches was attended only by a colleague 11 from his own office. One physician attended at least three of his speeches. 12 130. Since 2013, Medicare has paid over $2.9 million for Subsys that was 13 prescribed by Dr. Lubin. For example, between April 21, 2014 and December 8, 2015, 14 he wrote 24 Subsys prescriptions for Patient # M18, a Medicare beneficiary. Medicare 15 ultimately paid more than $236,000 for these 24 prescriptions. 16 131. Since 2012, TRICARE has paid over $1.2 million for Subsys that was 17 prescribed by Dr. Lubin. For example, between April 2014 and October 2016, he wrote 18 31 Subsys prescriptions for Patient #T13, a TRICARE beneficiary. TRICARE 19 ultimately paid more than $352,000 for these 31 prescriptions. 20 21 18. Dr. Nilesh Jobalia 132. Dr. Nilesh Jobalia was an anesthesiologist in Hamilton, Ohio. In November 22 2017, the State Medical Board of Ohio permanently revoked Dr. Jobalia's medical 23 license, based in part on a finding that he had improperly prescribed certain opioid drugs. 24 The Board's findings did not expressly address his prescriptions of Subsys. 25 26 133. Between 2013 and 2015, Insys paid Dr. Jobalia more than $90,000 to give over 20 speeches. Insys paid him $1,600 per speech. 27 134. Many of the speeches for which Insys paid Dr. Jobalia were actually shams. 28 For example, one speech was attended only by two medical assistants and a psychologist 27 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 29 of 37 Page ID #:853 1 with a PhD, one was attended by a single medical assistant, one was attended by a single 2 ~ pharmacist, and one was attended by a single physician's assistant. 3 135. Since 2012, Medicare has paid approximately $1.6 million for Subsys that 4 ~ was prescribed by Dr. Jobalia. For example, between February 7, 2014 and October 11, 5 2017, he wrote 32 Subsys prescriptions for Patient # M19, a Medicare beneficiary. 6 ~ Medicare ultimately paid more than $620,000 for these 32 prescriptions. 7 8 136. Between February and July 2014, Dr. Jobalia wrote 6 Subsys prescriptions for Patient #T14, a TRICARE beneficiary. TRICARE paid over $14,000 for these 9 ~ prescriptions. 19. 10 Dr. Gre~ry Gerber 11 137. Dr. Gregory Gerber is a physician who practices in Sandusky, Ohio. 12 Between 2012 and 2015,Insys paid Dr. Gerber over $130,000 to give approximately 39 13 speeches. 14 138. Many of the speeches for which Insys paid Dr. Gerber were duplicative or 15 pretextual. For example, at three of Dr. Gerber's events, Dr. C.B was the only physician 16 in attendance. Some of Dr. Gerber's events did not include any physicians. Attendance 17 at Dr. Gerber's events was padded with individuals who had no ability to prescribe 18 Subsys, including office managers, billing clerks, receptionists, medical assistants, a 19 specimen processor, and a radiology technician. 20 139. Since 2013, Medicare has paid more than $1.8 million for Subsys that was 21 prescribed by Dr. Gerber. For example, between October 9, 2013 and September 13, 22 2015, he wrote 19 Subsys prescriptions for Patient # M20, a Medicare beneficiary. 23 Medicare ultimately paid more than $218,000 for these 19 prescriptions. 24 25 26 B. Insys Focused Its Marketing of Subsys on Patients Who Did Not Have Cancer 140. As discussed in Section VII, above, Subsys is only approved by the FDA 27 for the management of breakthrough cancer pain. The FDA has never approved Subsys 28 for the treatment of pain inpatients who do not have cancer. Use of Subsys, a sublingual Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 30 of 37 Page ID #:854 1 fentanyl spray, by persons who do not have cancer is not supported by the Compendia. 2 Nevertheless, Insys has targeted its marketing efforts for Subsys to promote the drug to 3 ~ treat patients who do not have cancer. 4 141. Most of the physicians that Insys has paid to participate in its speaker 5 program were in specialties other than oncology. Only a very small percentage of the 6 attendees at Insys' speaker program events were oncologists. 7 142. Insys management repeatedly urged its sales force to encourage physicians 8 to prescribe Subsys for patients who were suffering from pain that was not cancer- 9 related. 10 143. For example, at a national sales meeting held by the company in Apri12013, 11 Insys executive Karen Hill spoke with the audience about "how to throw something out 12 to a doctor without sounding off-label." At the same meeting, Insys executive Dan 13 Tondre told the audience,"When a patient's in pain and it's a severe pain ... is it 14 different they have cancer pain ... or is it different they got, like, back pain .... That's 15 the whole point, pain is pain." 16 144. At another national sales meeting, held by the company in or about 2014, 17 ~ Alec Burlakoff told the company's sales force: 18 [t]hese [doctors] will tell you all the time, well, I've only got like eight 19 patients with cancer. Or, I only have, like, twelve patients that are on a 20 rapid-onset opioids [sic]. Doc,I'm not talking about any of those patients. I 21 don't want any of those patients. That's, that's small potatoes. That's nothing. 22 That's not what I'm here doing. I'm here selling [unintelligible] for the 23 breakthrough pain. If I can successfully sell you the [unintelligible] for the 24 breakthrough pain, do you have a thousand people in your practice, a 25 thousand patients, twelve ofthem are currently on a rapid-onset opioids 26 [sic]. That leaves me with at least five hundred patients that can go on this 27 drug. 28 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 31 of 37 Page ID #:855 1 2 145. In August 2013, Regional Sales Manager Richard Simon sent the following text to an Insys sales representative: 3 I need confirmation from YOU that you had a conversation with ... 4 [the practitioner] where he will not ONLY promote for cancer patients. If he 5 does this he will single handedly take down the whole company. He MUST 6 creatively share how docs write this product everywhere. Please get back to 7 me ASAP with confirmation that he will share with our other speakers how 8 effective ... [the Fentanyl Spray] will be to treat ALL BTP [Breakthrough 9 Pain]. 10 146. As a result of Insys' marketing efforts, most of the federal beneficiaries who 11 have used Subsys were not being treated for cancer when they received their Subsys 12 prescriptions. 13 14 15 C. Insys Lied to Insurers In Order to Persuade Them to Approve Reimbursement for Subsys Prescriptions 147. As discussed above, many insurers, including most Medicare Part D Plans, 16 will not provide reimbursement for Subsys unless the beneficiary has received prior 17 authorization for his or her Subsys prescription. There are a number of medical factors 18 that are material to insurers' decisions on whether to reimburse for Subsys, including (1) 19 whether the patient has cancer,(2) whether the patient is opioid tolerant (i.e., whether the 20 patient is currently taking opioids on a daily basis), and (3) whether the patient is 21 suffering from dysphagia, or difficulty swallowing. (Dysphagia is relevant because 22 Subsys is a sublingual spray, and may be easier to take than pill forms of fentanyl for 23 patients with dysphagia.) 24 148. In order to increase Subsys sales, Insys established an internal unit, 25 sometimes referred to as the Insys Reimbursement Center or IRC, dedicated to 26 facilitating the process of obtaining prior authorization of Subsys prescriptions. 27 28 149. In many instances, IRC employees lied or made deliberately misleading statements to Part D Sponsors andlor PBMs responsible for evaluating or approving 30 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 32 of 37 Page ID #:856 1 Medicare claims, about material facts in order to obtain federal reimbursement for 2 Subsys prescriptions that otherwise would not have been approved. IRC employees 3 frequently lied about their employer, falsely claiming that they were employed by the 4 physician or nurse practitioner that had prescribed Subsys. Also, IRC employees 5 frequently lied or made deliberately misleading statements about patients' medical 6 conditions in order to obtain insurance authorization that otherwise would have been 7 denied. 8 9 10 150. Between early 2013 and mid-2015, the IRC was headed by Elizabeth Gurrieri. In June 2017, Ms. Gurrieri pleaded guilty to one count of conspiracy to commit wire fraud in connection with her work at the IRC. 11 151. The following subparagraphs describe illustrative examples offalse 12 representations that Insys made in order to obtain prior approval of Subsys prescriptions 13 for federal beneficiaries. This is not intended as a complete or comprehensive list of the 14 false representations that Insys made. 15 A. Patient #1 obtained Medicare Part D coverage through Horizon 16 Medicare Blue TotalCare. On February 26, 2014, an Insys employee who 17 identified herself as Tracy spoke on the phone with a PBM employee about a 18 Subsys prescription for Patient #1. In that call, Tracy falsely represented or 19 implied (1)that she was calling from the office of Patient #1's prescriber, Dr. 20 Amer Syed;(2)that Patient #1 had cervical cancer, and (3)that Patient #1 would 21 be using Subsys along with Oxycontin. All of these representations were false. 22 The next day, February 27, 2014, the PBM approved a payment of $3,394.57 for 23 Subsys for Patient #l. Between February and December 2015, the Medicare 24 program paid more than $53,000 for Subsys for Patient #1. 25 B. Patient #2 obtained Medicare Part D coverage through Blue Cross 26 Blue Shield of Florida B1ueMedicare Regional PPO. On April 14, 2014, an Insys 27 employee who identified herself as Alisa spoke on the phone with a PBM 28 employee about a Subsys prescription for Patient #2. In that call, Alisa falsely 31 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 33 of 37 Page ID #:857 1 represented or implied (1)that she was calling from the prescriber's office, and (2) 2 that Patient #2 had cancer. Both of these representations were false. The next 3 day, April 15, 2014, the PBM approved Patient #2's Subsys prescription. 4 Between April and July, 2014, the Medicare program paid more than $8,000 for 5 Subsys for Patient #2. 6 C. Patient #3 obtained Medicare Part D coverage through B1ueMedicare 7 I~(PDP). On May 14, 2014, an Insys employee who identified herself as Alyssa 8 spoke on the phone with a PBM employee about a Subsys prescription for Patient 9 #3. In that call, Alyssa falsely represented or implied that Patient #3 had cancer. 10 This representation was false. The next day, April 15, 2014, the PBM approved 11 Patient #3's Subsys prescription. Between Apri12014 and March 2015, the 12 Medicare program paid more than $56,000 for Subsys for Patient #3. 13 D. Patient #4 obtained Medicare Part D coverage through Blue Cross 14 Medicarel~ Basic(PDP)by HISC -Blue Cross Blue Shield of Oklahoma. On 15 June 19, 2014, an Insys employee who identified herself as Alyssa spoke on the 16 phone with a PBM employee about a Subsys prescription for Patient #4. In that 17 call, Alyssa falsely represented or implied that Patient #4 had cancer. The PBM 18 made payments for Subsys for Patient #4 on behalf of Medicare on June 26, July 19 10, and July 14, 2014. The Medicare program paid more than $22,000 for Subsys 20 for Patient #4. Patient #4 died on or about July 20, 2014 due to complications 21 from Chronic Obstructive Pulmonary Disease(COPD). 22 E. Patient #5 obtained Medicare Part D coverage through Clearstone 23 PDP Group MedicareBlue I~ PDP. On September 8, 2014, an Insys employee 24 who identified herself as Ricki spoke on the phone with a PBM employee about a 25 Subsys prescription for Patient #5. In that call, Ricki falsely represented or 26 implied(1)that she was calling from the office of Patient #5's prescriber; and (2) 27 that Patient #5 had breakthrough cancer pain. Both ofthese representations were 28 false. The same day, September 8, 2014, the PBM approved Patient #5's Subsys 32 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 34 of 37 Page ID #:858 1 prescription. The Medicare program subsequently paid more than $40,000 for 2 Subsys for Patient #5. 3 F. Sarah Fuller was a Medicare beneficiary who received a Subsys 4 prescription from a physician, Dr. Vivienne Matalon, in January 2015. (Ms. 5 Fuller's full name is included here because her identity, and the events described 6 in this paragraph, have already been publicly disclosed, as noted below.) Shortly 7 thereafter, an Insys employee who identified herself as Gina called Ms. Fuller's 8 PBM in order to obtain approval for Ms. Fuller's prescription. Gina falsely 9 represented to the PBM that she was "with" Dr. Matalon's office. Through a 10 series of artful and misleading responses, Gina led the PBM representative to 11 believe that Ms. Fuller was suffering from breakthrough cancer pain, when in 12 reality Ms. Fuller did not have cancer at all. The PBM approved Ms. Fuller's 13 prescription. Between January 8, 2015 and March 21, 2016, the Medicare 14 program paid more than $211,000 for Subsys for Ms. Fuller. Ms. Fuller died of a 15 drug overdose in March 2016. The January 2015 conversations between Gina and 16 representatives of Ms. Fuller's PBM were recorded, and were publicly revealed in 17 a report issued by Senator Claire McCaskill of the U.S. Senate Homeland Security 18 & Governmental Affairs Committee on September 6, 2017. A copy of the report, 19 and an audio recording of the phone calls, can be found at the following link: 20 https://www.mccaskill.senate.gov/media-center/news-releases breaking-mccaskill- 21 opioid-investigation-releases-first-report-detailing-systemic-manipulation-of- 22 prior-authorization-process-by-insys-therapeutics-. 23 FIRST CAUSE OF ACTION 24 (False Claims Act: Presentation of False Claims) Zs X31 u.s.c. § 3~29(a)(1)(A)) 26 27 28 152. Plaintiff incorporates by reference all paragraphs of this complaint set out above as if fully set forth herein. 153. Defendant Insys knowingly presented, or caused to be presented, materially 33 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 35 of 37 Page ID #:859 1 false and fraudulent claims for payment or approval to the United States, including 2 (1) claims for reimbursement by Medicare Part D Plan Sponsors and TRICARE that 3 were materially false and fraudulent because they were for services ordered or prescribed 4 by persons to whom Insys had paid kickbacks in violation of the Anti-Kickback Statute, 5 and (2) claims for reimbursement by Medicare Part D Plan Sponsors and TRICARE that 6 were materially false and fraudulent because they were for patients that were not 7 1 covered. 154. Said claims were presented with actual knowledge of their falsity, or with reckless disregard or deliberate ignorance of whether or not they were false. 10 SECOND CAUSE OF ACTION 11 (False Claims Act: Using False Statements to Get False Claims Paid) 12 X31 u.s.c. § 3~29(a)(i)(B)) 13 155. Plaintiff incorporates by reference all paragraphs of this complaint set out 14 ~ above as if fully set forth herein. 15 156. Defendant Insys made, used, and caused to be made or used, false records 16 or to get false or fraudulent claims paid and approved by the United States. Defendant 17 Insys' false certifications and representations were made for the purpose of getting false 18 or fraudulent claims paid, and payment of the false or fraudulent claims was a reasonable 19 and foreseeable consequence of the Defendant's statements and actions. 20 21 157. The false certifications and representations made and caused to be made by Defendant Insys were material to the United States' payment of the false claims. 22 158. Said false records or statements were made with actual knowledge of their 23 falsity, or with reckless disregard or deliberate ignorance of whether or not they were 24 false. 25 THIRD CAUSE OF ACTION 26 (Payment by Mistake) 27 28 159. Plaintiff incorporates by reference all paragraphs of this complaint set out above as if fully set forth herein. 34 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 36 of 37 Page ID #:860 1 2 3 160. This is a claim for the recovery of monies paid by the United States to Defendant Insys (directly or indirectly) as a result of mistaken understandings of fact. 161. The United States paid Defendant Insys for claims submitted by Defendant 4 Insys for prescriptions that were written by physicians and nurse practitioners who had 5 financial relationships prohibited by the Anti-Kickback Statute, without knowledge of 6 material facts, and under the mistaken belief that Defendant Insys was entitled to receive 7 payment for such claims when it was not. The United States also paid Defendant Insys 8 for Medicare and TRICARE claims that had been approved based on false factual 9 representations by Insys employees regarding patients' medical conditions and histories. 10 The United States' mistaken belief was material to its decision to pay Defendant Insys 11 for such claims. Accordingly, Defendant Insys is liable to make restitution to the United 12 States of the amounts of the payments made to it in error by the United States. 13 FOURTH CAUSE OF ACTION 14 (Unjust Enrichment) 15 16 17 162. Plaintiff incorporates by reference all paragraphs of this complaint set out above as if fully set forth herein. 163. As a consequence of the acts set forth above, Insys was unjustly enriched at 18 the expense of the United States in an amount to be determined which, under the 19 circumstances, in equity and good conscience, should be returned to the United States. 20 21 164. The United States claims the recovery of all monies by which Insys has been unjustly enriched. 22 PRAYER FOR RELIEF 23 WHEREFORE,the United States demands and prays that judgment be 24 25 entered in its favor against Defendant Insys as follows: 1. On the First and Second Counts, under the False Claims Act, for the amount 26 of the United States' damages, trebled as required by law, and such civil penalties as are 27 authorized by law, together with all such further relief as maybe just and proper. 28 2. On the Third Count, for payment by mistake, for the damages sustained 35 Case 2:13-cv-05861-JLS-AJW Document 64 Filed 04/13/18 Page 37 of 37 Page ID #:861 1 ~ and/or amounts by which Defendant Insys was paid by mistake, or by which Defendant 2 ~ Insys retained illegally obtained monies, plus interest, costs, and expenses, and for all 3 ~ such further relief as maybe just and proper. 4 3. On the Fourth Count, for unjust enrichment, for the amount by which Insys 5 ~ was unjustly enriched. 6 7 8 9 10 11 12 Dated: April 13, 2018 Respectfully submitted, CHAD A. READLER Acting Assistant Attorney General Civil Division NICOLA T. HANNA United States Attorney DOROTHY A. SCHUUTEN Chief, Civil Division DAVID K. BARRETT Chief, Civil Fraud Section DAVID M. HARRIS Deputy Chief, Civil Fraud Section Assistant United States Attorneys 13 14 15 MICHAEL D. GRANSTON PATRICIA L. HANOWER DAVID T. COHEN Attorneys, Civil Division United States Department of Justice 16 17 18 JOHN E. LEE Assistant United States Attorney 19 Attorneys for the United States of America 20 21 22 23 24 25 26 27 28 36