Investigation of opioid maker Insys Therapeutics reaches Kansas
An Arizona company paid an Overland Park pain doctor more than $200,000 over three years to promote its new opiate in presentations to medical practitioners.
Now, federal prosecutors have accused six former leaders of the company of handing out speaking gigs to doctors for prescribing Subsys, a concentrated fentanyl spray approved for cancer patients in severe pain. The former executives of Insys Therapeutics, including its CEO, were indicted in December.
The Overland Park doctor, Steven Simon of The Pain Management Institute, is not accused in the fraud and racketeering indictment — and in an interview with The Star, he denied he was part of the alleged Insys scheme.
However, a federal investigation into the company has now extended into Kansas. A section of the company’s most recent quarterly report, titled “Investigations of Physicians,” says U.S. attorney’s offices in several states including Kansas have sent the company subpoenas “regarding specific physicians that we have interacted with in those states.”
A spokesman for the U.S. Attorney’s office in Kansas said he could neither confirm or deny an investigation in Kansas.
According to publicly available data examined by The Star, Simon was the top-paid Subsys speaker in Kansas — and only seven practitioners nationwide were paid more. And from 2013 to 2015, a database compiled by ProPublica shows, his clinic wrote most of the Medicare Part D Subsys prescriptions in the state.
Medicare Part D is a government program that pays for prescriptions for the elderly and disabled. It tracks the medications it pays for, which amount to about one-fourth of all prescriptions written in the United States.
In a two-hour interview with The Star at his attorney’s office, Simon said he has not been contacted by any federal agents looking into Insys.
The doctor said he was aware of the indictments but didn’t experience any of the illegal bribes or kickbacks described in the indictment.
“Did anybody in the organization ever offer me anything like that? Absolutely not,” Simon said. “From my own experience, my relationship with Subsys or Insys the company was virtually the same as with any other company I dealt with. It was professional.”
The federal data compiled by ProPublica show that Insys paid Simon $221,000 to promote Subsys from 2013 to 2015. Over three years, he received a total of 66 speaking checks that ranged from $1,000 to $6,100 each. He was also paid thousands for food and lodging.
According to the data, only three Kansas doctors other than Simon and his partner Srinivas Nalamachu received payments for speaking in the Subsys program. None received more than $30,000, and all now practice in other states.
Nalamachu, who received about $90,000 over those three years, said he is a researcher who rarely sees patients and never personally prescribed Subsys.
Nalamachu said he bought the pain clinic from Simon in March 2016 and barred Simon and the nurse practitioners who work there from prescribing fast-acting oral or nasal fentanyl products like Subsys. Nalamachu said he was concerned about society’s growing opioid epidemic.
“I have implemented a lot of new policies to make sure that safety is our first priority,” Nalamachu said.
The U.S. Food and Drug Administration approved Subsys in 2012 specifically for severe “breakthrough” cancer pain and included a warning that it was addictive and a risk for overdose and serious complications.
Ten medical professionals are listed in the Insys indictment as co-conspirators who helped promote Subsys. They are identified only by the state in which they are licensed: Alabama, Michigan, Florida, Texas, Illinois, Indiana, Connecticut, New Hampshire, Florida and Arkansas.
Federal prosecutors said the 10 often wrote Subsys prescriptions for people who did not have cancer and then conspired with Insys officials in a “reimbursement unit” to write insurance claims that made it appear patients had cancer. The former executives have pleaded not guilty.
But a Michigan doctor pleaded guilty to health care fraud in November after billing Medicare for almost $7 million worth of Subsys and using the proceeds to buy collectibles like rare stamps, coins and baseball cards.
Two Alabama doctors found guilty in February in the Insys kickback scheme were forced to pay back the government $5 million and forfeit a fleet of 20 luxury cars, including two Ferraris and two Lamborghinis.
Compared to them, Simon wasn’t writing as many Subsys prescriptions.
But only six medical practitioners in Kansas filed 10 or more claims for Subsys in 2013, 2014 and 2015, and four of them worked at Simon’s clinic.
Simon filed $200,000 to $215,000 worth of Subsys Medicare Part D claims each year from 2013 to 2015.
His office’s total climbed steadily each year as nurse practitioners joined him in writing prescriptions. In 2014, two of his nurses wrote an additional $474,000 worth. In 2015, three of them wrote $611,000 worth.
The only other Kansas practitioners to file more than 10 Medicare Part D claims for Subsys from 2013 to 2015 were Stewart Grote, an internal medicine doctor in Lansing, and Karissa Hoeme, a physician assistant in Manhattan.
Grote wrote about $189,000 worth of Subsys claims in 2013, and Insys paid him about $9,000 for consulting, food, lodging and travel.
“We were educating patients on how to use the medications for chronic cancer pain,” Grote said.
The Kansas State Board of Healing Arts suspended Grote’s medical license in 2014 for a litany of professional failings, including unsafe opioid prescribing. His license has since been reinstated, but he’s no longer able to prescribe controlled substances.
Grote said he had not been contacted about the Insys investigation and otherwise had no comment.
Hoeme wrote $133,000 worth of Subsys claims in 2015. She now practices in Colorado, but she’s also still licensed in Kansas and Missouri. There’s no record in another ProPublica database of her receiving money from Insys, and she had no negative marks on her professional license.
Reached by phone at her new practice, she said she prescribed the drug while working at a pain clinic in Manhattan but had no relationship with Insys and had not heard from any investigators.
Simon said most of the Subsys prescriptions he wrote were for cancer patients, but he also prescribed it “off-label” to patients who didn’t have cancer, which is his right as a physician.
Doctors are allowed to prescribe drugs for uses the FDA has not approved them for, but insurance companies generally are reluctant to cover the cost of those prescriptions.
“There was a time when I did, yes,” Simon said, referring to such off-label prescriptions. “We specified for the GI (gastrointestinal) patients. These patients didn’t have cancer. We don’t do that now. We stopped doing that in 2014, as a matter of fact. We decided as a clinic, it’s not where we wanted to be. I think it was 2014 pretty much, when we stopped it.”
Simon then said that he possibly prescribed Subsys to non-cancer patients until mid-2015, and the group included a patient with a spinal cord injury in addition to those with gastrointestinal ailments.
But he said it was always done in the patient’s best interest and within the law.
Simon has a long history of speaking to promote a number of drugs made by several companies. He was Kansas’ top-paid pharmaceutical industry speaker from 2013 to 2015, taking in more than $1 million in speaking fees and related travel expenses.
He said the money doesn’t factor into his prescribing decisions. But according to a ProPublica database, Simon’s average prescription price in 2014 was $261 — almost twice that of any other Kansas doctor in pain or rehabilitation medicine.
The Star previously examined Simon’s work as one of the country’s top-paid physician speakers for Movantik, an AstraZeneca drug that treats opioid-induced constipation. Simon was paid almost $200,000 to speak about that medication, which bioethicists said presented a conflict of interest because he was also advising patients about whether to take opioids.
Such arrangements between doctors and pharmaceutical companies are legal, as long as there’s no explicit trade of speaking fees for prescriptions. But organizations like the American College of Physicians discourage them, and studies show they change physicians’ prescribing patterns and drive up health care costs.
The allegations against Insys come at a time of intense scrutiny for the opioid industry. Opioid medications are considered the gold standard for relieving the pain of a terminal illness or surgery, but the Centers for Disease Control and Prevention cautions against using them for extended periods to treat chronic pain because of their strong potential for addiction.
Still, prescribing opioids for those situations remains common practice as many states grapple with frequent overdoses and deaths.
U.S. Sen. Claire McCaskill, a Democrat from Missouri, has requested information from Insys and four other drugmakers as part of a congressional investigation into an opioid crisis that has taken 200,000 lives nationwide in the last 15 years.
In a letter to the company CEOs, McCaskill said there’s evidence the industry is “fostering addiction as a central component of its business model.” She cited a class-action lawsuit in which a former Insys sales representative reportedly described the company’s sales tactics as: “Start them high and hope they don’t die.”
Federal prosecutors say that the speaking program was the main tool Insys used to push more and higher doses of Subsys onto the market. Company executives, according to the indictment, gave sales reps explicit instructions that the paid speeches should be given to doctors who prescribed the most Subsys and those who slipped on their prescribing should lose speeches — a “quid pro quo” that amounted to bribery.
Randy Hood is an attorney for McGowan, Hood & Felder, a South Carolina law firm that is preparing a lawsuit on behalf of a woman who says she was harmed by improper Subsys prescribing. He said he believes the legal battles over Subsys are just beginning.
“I think this is the tip of the iceberg,” Hood said.
According to his curriculum vitae from 2012, Simon was also a speaker trainer for Insys, “responsible for teaching presentation skills and pharmacology for products.”
“Due to his effectiveness as a physician educator, he was asked to and did assist other physicians to learn to present the slide deck in a FDA compliant, informative, educational manner,” Simon’s attorney, Frankie Forbes, said via email. “He did so for Insys as he has for multiple other companies and that particular chemical through the years.”
The Insys indictment states that the company’s drug reps paid some of the 10 co-conspirators speaking checks for dinners where no one showed up except company employees. Simon said that was never the case for him.
“We never had a program where no one attended,” Simon said. “Unfortunately, I remember we had one program where one person attended. I have had zeroes at other programs I’ve done, but never for Subsys. We always had people there.”
A history of pharmaceutical connections
Simon, born in 1947, began his work life four decades ago in Missouri as a pharmacist, the family business. But he ran afoul of the Missouri Board of Pharmacy in 1976 after he pleaded no contest to federal drug charges, specifically distribution of methaqualone (quaaludes) and dl-amphetamines. He received a $5,000 fine and a suspended prison sentence.
In the recent interview with The Star, Simon said he “made a bad decision” and was fortunate the punishment was not harsher.
“A U.S. District judge not known for his leniency decided to give me a chance,” Simon said.
The Board of Pharmacy tried to suspend his license, but Simon sued. His attorneys argued that the no contest plea and the suspended sentence did not amount to a criminal “conviction,” and therefore the board had no grounds for suspension.
The case ultimately went to the Missouri Court of Appeals, which found in Simon’s favor.
He then went to medical school at Ross University in the Caribbean, and after he completed his education, he returned to the Kansas City area and applied for a physician’s license with the Kansas State Board of Healing Arts in 1984.
Applications for those licenses now ask whether the applicant has been arrested or charged with a crime. But at the time, they only asked about felony convictions.
“There is no conviction, and that’s the way the board looked at it, as well,” Paul Katz, a lawyer who represented Simon at the time, told The Star.
After getting his license, Simon embarked on what has become a three-decade career in rehabilitation and pain medicine in Kansas City. He was medical director of the Mid America Rehabilitation Hospital from 1989-1994 and 1999-2001. During the interview with The Star, he teared up while talking about some of the patients he helped there.
After moving into outpatient pain medicine, Simon published research on rapid-onset opioids like Subsys and became a sought-after speaker for the pharmaceutical industry.
Simon has had speaking agreements with at least a dozen companies, according to a financial disclosure attached to a continuing medical education presentation on the website MedScape. He said the events pull him away from his practice, but he does them because he likes to educate.
“How I’ve always looked at it is this: If I treat 20 patients a day or 20-couple patients a day, I’m treating 20-couple patients,” Simon said. “But if I do a dinner and I’m talking to 12, 15 physicians, and each one of those physicians sees 20 patients a day, now I have a chance to improve the lot of all of those patients, and that’s worthwhile.”
As Simon took in the pharmaceutical money, he was also writing more and pricier prescriptions than his peers, according to ProPublica’s Medicare Part D claims database.
In 2014, Simon’s 6,326 Medicare Part D claims were more than all 43 other Kansas doctors in either pain medicine or physical medicine and rehabilitation.
His average prescription cost of $261 compared to an average of $81 per prescription for all other Kansas pain doctors and $112 per prescription for rehab doctors. Only one of the 109 Missouri doctors in those subspecialties had a higher average than Simon.
Simon’s Medicare Part D total cost of $1.65 million that year was more than three times that of any of his Kansas peers.
Simon said it was his patient mix, not his pharmaceutical payments, that made his prescriptions stand out. His clinic has become the last resort for people in the area who have tried other medications and not gotten pain relief, he said.
“We began using these drugs because they worked,” Simon said. “Again, we were the salvage clinic.”
Eric Campbell, a professor at the Harvard School of Medicine’s Center for Bioethics, said that given all the studies that show otherwise, arguing that pharmaceutical payments don’t cause doctors to prescribe drugs made by the companies that are paying them is “akin to arguing gravity doesn’t exist.”
That’s true even when there isn’t an explicit quid pro quo like the one alleged in the Insys case, said Campbell, who stressed he was speaking for himself and not Harvard. And he said it’s a fine line.
“Promotional speaking is a perfect vehicle to basically provide doctors funding for their prescribing activities,” said Campbell.