opioid lawsuit

Scottsdale doctor to pay back $400K in deal with AG

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PHOENIX — A Scottsdale doctor will pay more than $400,000 to settle charges that he took so-called “speakers fees” from a now-defunct company to increase the number of opioid prescriptions he was writing.

Without admitting guilt, Dr. Steve Fanto agreed to the deal to be dismissed from a wide-ranging lawsuit filed in 2017 by Attorney General Mark Brnovich against Insys Therapeutics. The suit was filed over what the state said were the practices of the Chandler firm of using unfair and deceptive marketing practices designed to pad company profits at the expense of patient safety.

That, according to the attorney general's office, was part of a nationwide scheme to deceive patients, doctors and insurers about the safety of Subsys, its sublingual spray form of the powerful opioid fentnyl.

Insys has since pleaded guilty to federal criminal charges, filed for bankruptcy and ceases to exist. A case remains pending against John Kapoor, the company’s founder and former president.

But the lawsuit also went after Fanto and two other doctors, charging they took hundreds of thousands of dollars of sham educational speaker fees from Insys in exchange for increasing the number of prescriptions he wrote for Sybsys. Brnovich said that violated the state's Consumer Fraud Act.

According to the lawsuit, Fanto accepted at least 78 payments with a combined total of at least $250,980 from the company.

In the deal announced Wednesday, Fanto denies the allegations but agreed to enter into a consent judgment “solely in order to compromise disputed claims, and to avoid the expense and uncertainty of further litigation.”

Aside from having to surrender all of the money he got from Insys, the agreement also requires Fanto to pay $152,000 in civil penalties.

He also is barred from receiving any future compensation from the manufacturer of any pharmaceutical drug or medical device while holding a license to practice medicine in the state. But the deal still allows him or his staff to accept food and beverage items as long as the total value throughout the year does not exceed $300.

Brnovich got similar settlements earlier this year against two pain-management doctors, Dr. Nikesh Seth of Scottsdale and Dr. Sheldon Gingerich of Tucson. That deal required the pair to pay more than $500,000 to settle the lawsuit.

In announcing the lawsuit in 2017, Brnovich said the three doctors were responsible for 64% of the nearly $51.9 million in Sybsys sales in Arizona during a five-year period.

And he said that was directly related to the speakers fees they received.

According to the attorney general, the three doctors collectively wrote about nine Subsys prescriptions per month before they started getting money from Insys. When the checks started, he said, that figure leaped up to about 62 prescriptions a month.

The state had previously reached a $9.5-million settlement with Alec Burlakoff, the former vice president of sales for Insys, consisting of $5.2 million he collected in company stock and another $4.3 million in civil penalties.

There also was a $2 million settlement with Michael Babich, the company's former CEO, who agreed to pay at least $2 million to settle allegations related to his role in the scheme to prescribe more opioids.

In filing suit, Brnovich said that Insys promoted Subsys in ways designed to increase general sales, while ignoring health concerns.

He said the U.S. Food and Drug Administration had approved Subsys only to manage “breakthrough pain in cancer patients 18 years of age and older who are receiving and tolerant to around-the-clock opioid therapy for their underlying persistent cancer pain.”

At the same time, Brnovich said, the FDA-required label said the drug should not be used for things like postoperative pain and for headaches and migraines. But he said Insys ignored all that to promote sales.

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