Policy & Medicine Compliance Update

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February 2021

Issue Summary:

For February, our focus is on opioids and, of course, recent the litigation and enforcement. We start our opioid coverage by highlighting some recent developments in the Insys opioid litigation that signal a shift in focus from manufacturers to physicians and pharmacies. Next examine the recent New Jersey settlement with John Kapoor, the founder of Insys. Finally, in this segment, we wrap up by hearing from Mitchell Hamline Health Law students about their ideas to address the ongoing opioid epidemic.

Shifting to litigation and enforcement, we first tackle the recent SpineFrontier case involving kickbacks to physicians and the company’s attempt to use a third-party conduit to shield those payments. Next, we examine the recent Biogen co-pay charity kickback and false claims settlement involving the Chronic Disease Fund, The Assistance Fund and Advanced Care Scripts. Continuing the same track, we next look at the Supreme Court’s rejection of Integra Med Analytic’s petition for certiorari and what it signals for whistleblower analytics firms. Finally, we conclude this month’s issue by reviewing the latest genetic testing false claims case involving AutoGenomics.

The Ongoing Insys Saga Enters a New Phase

Targeting Prescribing Physicians

By Robert N. Wilkey, Esq., Senior Staff Writer

Summary: The Insys kickback scheme’s fallout continues even though the cases against the company and its former executives have ended in settlements and convictions. Now the focus has shifted to the prescribers involved and New Jersey’s efforts to revoke the medical licenses of participating physicians is just the latest round in the continuing saga. Thus, 2021 looks to be another active year as federal and state authorities attempt to hold those seen as creating the opioid crisis accountable.

Opioids

Holding Corporate Executives Accountable

New Jersey Settles with Insys Therapeutics Founder, John Kapoor

By Dr. Seth B. Whitelaw, Editor

Summary: In January 2021, New Jersey announced a settlement with John Kapoor for his role in the Insys kickback scheme. The civil settlement follows Kapoor’s conviction on federal racketeering charges in 2019. While the size of the settlement is of limited utility in addressing the opioid epidemic in the state, it does signal that company executives face a potential onslaught of liability stemming from their corporation’s misdeeds.

Addressing the Opioid Crisis

A Student Perspective

By Dr. Seth B. WhitelawSummary: Last summer, students in a course on health care law and opioids at Mitchell Hamline were asked to consider possible solutions to address the ongoing opioid public health crisis. In the article, we highlight the proposals made by four of those students.

Litigation & Enforcement

Not the Final Frontier

The Government Unravels SpineFrontier’s Elaborate Kickback Scheme

By Gwendolyn A. Ball, Staff Writer and Dr. Seth B. Whitelaw, Editor

Summary: The case of SpineFrontier, Inc., and Impartial Medical Experts, LLC. involved an elaborate scheme by the owner and other executives to shield improper consulting payments and other inducements from enforcement scrutiny. It is an instructive case study for all life science compliance professionals.

The Co-pay Charity Fallout Continues

Biogen, Inc. Becomes the Latest to Settle with the DOJ

By Kaitlin Fallon Wildoner, Esq., Staff Writer

Summary: In mid-December 2020, Biogen, Inc. reached a $22 million settlement with DOJ surrounding claims that it allegedly used charitable foundations to illegally pay the co-pays of Medicare patients who were prescribed one of two Biogen drugs. This article outlines the settlement and confirms that the Government continues to scrutinize inappropriate behavior disguised as charity.

When Data is not Enough

U.S. Supreme Court denies Integra Med Analytics Petition

By Kirt Kraeuter, Staff Writer

Summary: The denial of Integra Med Analytics’ petition to the Supreme Court effectively ends its case against Baylor Scott & White Health. However, practical questions remain – what the future of professional whistleblower firms is, and what healthcare compliance professionals can do to prepare their organizations to answer statistics-based FCA allegations.

Genetic Testing Meets the False Claims Act

AutoGenomics Settles with the DOJ