Anthem Blue Cross v. Insys Therapeutics: Is This the Shape of Things to Come?

| | Evidence Based Medicine, Utilization Review

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This Summer, Anthem Blue Cross sued Insys Therapeutics, makers of Subsys. Subsys is the spray version of the powerful opiate fentanyl. The causes of action included unfair business practices, fraud, negligent misrepresentation, unjust enrichment and civil conspiracy. You may recall that Subsys, which is Insys’ only drug, is only approved by the FDA for breakthrough cancer pain. This is the type of cancer pain that is spontaneous and directly related to cancer symptoms. Anything else would be considered “off label” use.

Specifically, the lawsuit alleges that Insys devised a scheme to get around Anthem’s prior authorization system, and the scheme included falsifying medical records and posing as medical professionals when needed. The suit alleges that Anthem had to ultimately pay over $19 million more than it should have had Insys refrained from unfair, fraudulent and misleading conduct. But the lawsuit goes beyond the mere dollars Anthem expended. It also alleges that Subsys put Anthem health members at risk, who, in some cases, suffered damages in the form of opioid addiction and in some cases death.

Looking deeper at the lawsuit, we can see that Anthem claims that Insys developed a “reimbursement unit” within Insys to help Subsys prescribing doctors process claims. The participating doctors were often given “speaking fees” to speak at various gatherings promoted by Insys. The lawsuit alleges that the top 10 prescribers were collectively paid more than $870,000 in speaker fees in 2013 and 2014 alone. ProPublica has a web page dedicated to this information.

In addition, the complaint alleges that members of the reimbursement unit, from July of 2013 to October of 2016, would call Anthem’s PBM, Express Scripts, and claim they were with the prescriber’s office. They would then read a paragraph designed to mislead Express Scripts into thinking the patient had “breakthrough cancer pain” by describing the patient’s pain as “breakthrough pain.” In addition, the caller would confirm with Express Scripts a list of tried and failed medications in order to qualify the patient for Subsys.

A unique feature of the complaint is that it specifically references the numerous criminal complaints that have been brought by state and federal agencies against both “pill mill” doctors and Insys employees who were allegedly part of the reimbursement unit. UR Nation believes that these criminal documents will likely aid Anthem in proving their case against Insys.

But the question remains: Is this the shape of things to come? UR Nation’s answer is probably not. The reason we don’t expect major health insurance companies will be filing these types of lawsuits on a regular basis is twofold. First, the alleged conduct in the Anthem lawsuit are so outrageous that the conduct is unlikely something other companies, especially the larger companies like Purdue, Johnson and Johnson and Teva, engaged in. In other words, the outrageous nature of the facts alleged are probably germane to this case.

Second, in his Managed Care Matters blog, Joe Paduda suggested insurance companies may have a case against opioid manufacturers and distributors. Purdue, for example, has apparently retained Shelia Birnbaum of New York law firm Quinn Emanuel, to attempt to settle all lawsuits with respect to the opioid litigation. Called the “Queen of Torts,” Birnbaum is internationally known as an expert in defending multi-billion dollar companies in large tort litigation. If the major drug companies and their distributors are looking for a global settlement of all opioid claims, the health insurance companies (and workers’ comp carriers) may want to add themselves as plaintiffs. Joining in an existing lawsuit and seeking to be part of a global settlement would be easier than the type of lawsuit Anthem has filed.

The bottom line is this appears to be another sordid chapter in the unfolding opioid crisis. UR Nation believes this is quickly becoming a sad chapter in American history.

Tom Swiatek

Tom Swiatek

As Assistant Vice President of Regulatory Services, General Counsel, and Editor in Chief of UR Nation, Tom Swiatek draws on his experience as an insurance attorney on both the general liability side, as well as on workers’ compensation matters. As a California Workers’ Compensation Section Member, Tom is leading the discussion with respect to the regulatory challenges and opportunities facing the workers’ compensation system.