Former Pharmaceutical Company Employees Arrested For Participating In Fentanyl Kickback Scheme
Pharmaceutical Sales Representatives And Managers Paid Thousands Of Dollars To Doctors In Exchange For Prescribing Of Millions Of Dollars’ Worth Of Fentanyl
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced that JONATHAN ROPER, a former District Manager at a pharmaceutical company (“Pharma Company-1”), and FERNANDO SERRANO, a former sales representative at Pharma Company-1, were charged today with violating the Anti-Kickback Statute in connection with their participation in a scheme to pay doctors thousands of dollars to participate in sham educational programs in order to induce the doctors to prescribe millions of dollars’ worth of a fentanyl-based sublingual spray manufactured by Pharma Company-1 (the “Fentanyl Spray”). ROPER was arrested this morning by FBI agents on Long Island, and SERRANO was arrested this morning by FBI agents in New Jersey. They will be presented before U.S. Magistrate Judge Kevin N. Fox in Manhattan this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “Fentanyl is an incredibly dangerous and highly addictive drug that is finding its way into, and destroying, too many lives in our communities. Because of its deadly power, its legitimate prescription faces significant and severe restrictions. Yet, as alleged, former drug company employees Jonathan Roper and Fernando Serrano corruptly induced doctors to prescribe millions of dollars’ worth of Fentanyl through thousands of dollars in kickbacks disguised as phony educational programs. As alleged, Roper and Serrano helped feed this devastating surge of opioid addictions by tapping into another age-old addiction, greed.”
FBI Assistant Director Diego Rodriguez said: “This case should be something the medical industry and the general public should pay close attention to because it’s one of the reasons we’re experiencing an epidemic of overdoses and deaths in this country. Not only did the defendants in this case allegedly bully sales reps into pushing this highly addictive drug, they paid doctors to prescribe it to patients. The more prescriptions written, the more money the doctors made. Instead of seeing a way to help people who are dealing with extreme pain, they allegedly saw a huge payday that potentially put people’s lives in danger.”
HHS OIG Special Agent in Charge Scott J. Lampert said: “We expect drug company representatives to be part of the prescription drug abuse solution – not part of the problem, as alleged in this case. We will continue to investigate kickback arrangements, which can undermine impartial medical decision-making and worsen the overuse of opioids in this country.”
According to allegations in the Complaints unsealed today in Manhattan federal court:
Fentanyl is a synthetic opioid that is classified as a Schedule II controlled substance and is approximately 100 times more potent than morphine as an analgesic. Because of the risk of misuse, abuse, and addiction associated with prescription products like the Fentanyl Spray, only doctors who have enrolled in a mandated U.S. Food and Drug Administration (“FDA”) program and completed necessary training are permitted to prescribe the Fentanyl Spray.
Pharma Company-1’s Fentanyl Spray was approved by the FDA in or about January 2012, solely for the management of breakthrough pain in cancer patients who are already receiving and who are tolerant to opioid therapy for their underlying persistent pain. The Fentanyl Spray is the only FDA-approved product that Pharma Company-1 currently has on the market. Pharma Company-1 reported approximately $330 million in net revenue from the Fentanyl Spray in 2015.
In order to market the Fentanyl Spray, Pharma Company-1 established a program purportedly to educate healthcare professionals about the Fentanyl Spray (the “Speaker Program”). Doctors selected as speakers at these Speaker Programs by Pharma Company-1 (“Speakers”) were compensated for purportedly providing educational presentations to a peer-level audience of healthcare professionals using a preapproved PowerPoint presentation. In reality, however, many of the Speaker Programs that ROPER and SERRANO organized and attended were predominantly social gatherings at high-end restaurants in Manhattan that involved no education regarding the Fentanyl Spray and no slide presentation at all. Many of the Speaker Programs also lacked an appropriate audience of healthcare professionals. In order to make these Speaker Programs appear legitimate, sign-in sheets for these Speaker Programs – including Speaker Programs organized by ROPER and SERRANO – were frequently forged by adding the names and signatures of doctors to sign-in sheets who had not, in fact, been present at the Speaker Program. Repeat attendees were also commonplace at Speaker Programs organized by SERRANO. In numerous instances, all of the attendees at Speaker Programs organized by SERRANO had previously attended Pharma Company-1 Speaker Programs. Because all legitimate Speaker Programs required use of the same preapproved slide presentation, there was no educational purpose for healthcare professionals to attend Speaker Programs on a repeated basis.
While employed at Pharma Company-1, ROPER and SERRANO were each involved in organizing Speaker Programs for two Manhattan-based doctors (“Doctor-1” and “Doctor-2”), among other doctors. Doctor-1 and Doctor-2 were frequently the purported Speakers at sham Speaker Programs that were social in nature and lacked an educational component. Doctor-1 and Doctor-2 were highly compensated by Pharma Company-1 for acting as Speakers. In 2014 alone, Doctor-1 and Doctor-2 received over $147,000 and $112,000, respectively, in Speaker Program fees. During this same time period, Doctor-1 and Doctor-2 were also two of the largest prescribers of the Fentanyl Spray in the United States. In 2014 alone, Doctor-1 and Doctor-2 prescribed, respectively, over $3 million and over $2 million worth of the Fentanyl Spray that was reimbursed by various private insurance companies, and over $1 million worth of the Fentanyl Spray that was reimbursed by Medicare.
It was well understood among Pharma Company-1 employees that doctors were selected as Speakers in order to induce these doctors to prescribe large quantities of the Fentanyl Spray, and ROPER explicitly instructed the sales force he supervised that this was the case. For example, on or about May 6, 2014, ROPER sent an email to certain sales representatives in which he expressed displeasure that certain doctors who were Speakers were not prescribing sufficient quantities of the Fentanyl Spray:
Where is the ROI [Return on Investment]??!!! All prescribers from this team that are on this list are [Pharma Company-1] speakers. We invest a lot of time, $, blood, sweat, and tears on “our guys” and help spreading the word on treating BTCP [breakthrough cancer pain]. We hire only the best of the best to be apart [sic] of our speaker bureau and dropping script counts is what we get in return?
This is a slap in the face to all of you and is a good indication as to why NONE of you are climbing in the rankings this quarter. DO NOT be afraid to set your expectations and make them crystal clear as to what they are before, during, and after HIRING these priviliged [sic] set of docs who are fortunate enough to be a part of the best speaker bureau in the market in the world of BTCP [breakthrough cancer pain]. Please handle this immediately as funding will not be given out to anymore [sic] “let downs” in the future. Thanks.
ROPER decided which doctors would be allocated Speaker Programs in the sales territory that included New York City. ROPER instructed one sales representative that a Speaker would receive fewer Speaker Programs in the future because ROPER was not pleased with the quantity of Fentanyl Spray prescriptions this doctor was writing. ROPER informed the sales representative that he wanted to hit the doctor “in his pocket” in order to try to cause the doctor to start writing more Fentanyl Spray prescriptions. ROPER also once instructed this same sales representative to offer cash to a medical professional in order to induce this medical professional to prescribe the Fentanyl Spray.
ROPER, 37, of Commack, New York, and SERRANO, 30, of Manalapan, New Jersey, are each charged with one count of conspiracy to violate the Anti-Kickback Statute and one count of violating the Anti-Kickback Statute. Each of the two counts carries a maximum term of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.