2 doctors face up to 20 years in prison for running a $40 million opioid 'pill mill'

fentanyl heroin

Two Alabama doctors face up to 20 years in prison for running an opioid “pill mill” out of their two mobile clinics.

On Thursday Dr. Xiulu Ruan and Dr. John Patrick Couch were found guilty of over-prescribing addictive and sometimes deadly pain killers to their patients, receiving illegal kickbacks from drugmaker Insys Therapeutics, and engaging in insurance fraud.

The doctors were arrested back in 2015 in an ongoing, wide-ranging investigation called “Operation Pilluted,” federal law enforcement’s answer to the America’s precription drug epidemic.

Insys makes fentanyl, one of the opioids Couch and Ruan were pushing on patients who didn’t need them. In fact, it’s only supposed to be prescribed to cancer patients.

Other drugs the doctors pushed included oxycodone (brand name: Oxycontin), oxycodone hydrochloride (brand name: Roxicodone), oxymorphone (brand name: Opana), hydromorphone (brand name: Dilaudid), morphine, and methadone, according to the Department of Justice.

A big reason why this was all possible was because the doctors owned their own pharmacy called C&R Pharmacy. There, patients were able to fill prescriptions over and over again without anyone batting an eye. 

At the same time, doctors were ripping off health insurance companies by ordering patients to take unnecessary, expensive urine tests. They also would claim that doctors had seen patients when they had actually been seen by nurse practitioners. Claiming that a doctor had seen a patient made the session more expensive.

The entire two month trial wasn’t just about fraud either, it was about a culture of drug addiction. Not only were the patients being over-prescribed opioids, but employees at the clinics were also stealing them and taking them on the job too, according to the government’s complaint.

Both Ruan and Couch made around $40 million with this scam. They will now have to pay the government $5 million in cash and give up property purchased with their ill gotten gains. Ruan also forfeited 20 luxury sports cars including two Ferraris and two Lamborghinis, according to the WSJ. They will be sentenced sometime in May.

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Insisting on damage

There’s another feature of the drug industry on trial here too, and that’s the practice of pharmaceutical companies paying doctors to make speeches endorsing their products.

Back in February of 2016, an Insys sales rep named Natalie Perhacs pled guilty to paying kickbacks to Couch and Ruan. She disguised those payments as speaker fees as part of the company’s speakers bureau of doctors, and said she was under constant pressure from management to book the doctors for speaking engagements.

Perhacs also testified that company executives met with the doctors back in 2014.

A year later, a Connecticut nurse practitioner participating in the speakers bureau pled guilty to engaging in a similar kickback scheme with Insys.

Jonathan Roper (2nd L), a former Insys Therapeutics Inc district sales manager, and Fernando Serrano (C), a former sales representative at the company walk with Serrano’s lawyer, Jude Cardenas (R), out of federal court after they pleaded not guilty to engaged in a scheme to pay doctors kickbacks to prescribe a fentanyl-based drug the company sells, in Manhattan, New York, U.S., August 17, 2016. Others not identified. REUTERS/Nate RaymondAnd back in December, 10 former employees including the company’s former CEO, who met with Ruan and Couch, were arrested on charges of racketeering, paying kick backs, and insurance fraud.

For Insys, none of this over — not by a long shot. Here are a bunch of ongoing investigations the company disclosed in its annual report:

State Related Investigations. We have received CIDs from each of the Office of the Attorney General of the State of Arizona, ODOJ, the Attorney General of the Commonwealth of Massachusetts and the Office of the Attorney General of Illinois and we have also received a subpoena from the Chief Consumer Protection and Antitrust Division of the State of New Hampshire.

In addition, we understand that numerous physicians practicing in New Jersey have received subpoenas from the Department of Justice of the State of New Jersey in connection with these physicians’ interactions with our company. These CIDs and subpoenas request documents regarding Subsys, including our sales and marketing practices related to Subsys in the applicable state, as well as our patient services hub. We are cooperating with each of these investigations and have produced documents in response to these CIDs and related requests for information from each office.

Oh, and the company also received requests from the “USAO of Eastern District of Michigan, Rhode Island, Florida (Jacksonville), Connecticut, New Hampshire, Southern District of Alabama regarding specific physicians that we have interacted with in those states.”

So if you things are ugly now, just wait.

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