U.S. and 5 States Add Their Support to Lawsuit Filed by The Employment Law Group against Insys Therapeutics

The Employment Law Group® law firm today welcomed the intervention of the U.S. Department of Justice and five U.S. states in a previously secret lawsuit that the firm filed on behalf of whistleblower Maria Guzman against Insys Therapeutics, Inc. (NASDAQ: INSY).

The newly unsealed case reveals the central role played by Ms. Guzman in the government’s years-long pursuit of Insys for illegally marketing a dangerous opioid spray named SUBSYS. The resulting probe has led to a series of convictions, guilty pleas, and indictments of doctors and former Insys executives — including the company’s billionaire founder, John Kapoor, who was indicted in 2017 on federal racketeering charges.

The Employment Law Group® law firm filed the case in 2013 with close help from the Law Office of Mark Allen Kleiman, making it the earliest effective complaint against Insys under the federal False Claims Act for the company’s promotion of SUBSYS. The FCA rewards individuals for blowing the whistle on fraud against U.S. taxpayers — in this case, via illegal reimbursement requests to Medicare and Medicaid — but keeps their lawsuits under wraps while prosecutors investigate the claims.

The complaint, now unsealed, was filed by The Employment Law Group on behalf of Ms. Guzman, a former Insys salesperson; on behalf of the U.S. government; and, as amended, on behalf of two dozen states and the District of Columbia. It laid bare a nationwide scheme by Insys to defraud Medicare and Medicaid by inducing doctors, via kickbacks that ranged from cash to favors to sex, to prescribe large doses of SUBSYS for federally insured patients who never should have received the opioid drug, a potent form of fentanyl that’s designed to be sprayed beneath the tongue of people who suffer from extreme pain due to cancer. Ms. Guzman was fired after objecting to the potentially deadly scheme.

SUBSYS has been named as a primary suspect in more than 900 deaths reported to the U.S. Food and Drug Administration over a five-year period, according to a recent analysis by The Palm Beach Post.

In federal court filings unsealed today, the U.S. government and five U.S. states said they would take over litigation of the major part of Ms. Guzman’s action, specifically including her claims against Insys for kickbacks; for off-label marketing of SUBSYS; and for false claims about patients’ conditions. Subject to a stay in the case, Ms. Guzman remains free to pursue her retaliation claim against Insys, as well as claims of individual liability against Mr. Kapoor and two other former Insys executives under the federal False Claims Act and its state equivalents.

The most recent version of the complaint, filed in 2016 by The Employment Law Group, alleges violations of federal law and local laws in 24 states plus the District of Columbia. California, Indiana, New York, North Carolina, and Virginia all have opted to become actively involved in the case, while most of the remaining states plus D.C. have said that Ms. Guzman may continue litigating on their behalf. A full list of the involved states, and their status in this case, is available as part of a lengthier release on The Employment Law Group’s Web site.

“Ms. Guzman is no longer the hidden hero of the Insys investigation,” said David L. Scher, a principal of The Employment Law Group. “Now everyone knows that she was an early warrior against fentanyl abuse, taking action to save lives long before ‘opioid crisis’ became a household phrase — even at the price of her own job.”

A fuller version of this release, including more details on the case, is available here.

Case Information

United States ex rel. Guzman v. Insys Therapeutics, Inc.
No. CV 13-5861
U.S. District Court for the Central District of California, Western Division
Original complaint filed on August 12, 2013

About The Employment Law Group

The Employment Law Group® law firm represents whistleblowers and other employees who stand up to wrongdoing in the workplace. Based in Washington, D.C., the firm takes cases nationwide. More information about The Employment Law Group and its attorneys is available at https://www.EmploymentLawGroup.com.

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