Federal prosecutors in Mobile secured a fourth guilty plea today in a sweeping case ultimately targeting two local doctors for recklessly prescribing widely abused painkillers in a conspiracy to commit health care fraud.
According to the plea, Dr. Xiulu Ruan “developed a certain affection” for Natalie Reed Perhacs after the two met while Perhacs worked for a medical supply company in South Alabama in late 2012. Investigators determined Ruan and his medical partner, Dr. John Patrick Couch, had become “high volume” and “important” prescribers of a drug called Subsys, which provides an instantaneous mist of the highly-potent narcotic fentanyl to relieve breakthrough cancer pain.
“At certain points during 2012 and 2013, Dr. Ruan was the #1 prescriber of Subsys in the entire United States,” the plea reads. “Dr. Ruan and Dr. Couch broadly prescribed Subsys off-label to non-cancer patients, and to certain non-cancer patients whose health insurance providers continued paying for the drug.”
The plea agreement claims Ruan secured a job for Perhacs as a sales representative for “Company A,” a supplier of Subsys, in early 2013. “Company A” also employed Ruan and Couch as paid speakers to promote the drug to other prescribers. It also states Perhacs’ “primary responsibility at Company A was to increase the volume of Subsys prescribed by Dr. Ruan and Dr Couch,” a position that paid a base salary of just $40,000, but netted her more than $700,000 in commissions between April 2013 and May 2015.
Between late April 2012 and May 2015, both doctors wrote 2,684 prescriptions for Subsys, all of which were filled C&R Pharmacy, which was also owned by the doctors. Meanwhile, Company A “paid the doctors hundreds of thousands dollars in speaking fees,” according to the plea.
Perhacs’ LinkedIn profile and FDA information regarding Subsys suggest “Company A” is Insys Therapeutics, Inc., based in Chandler, Arizona. Perhacs waived arraignment today and pleaded guilty to conspiracy to violate the anti-kickback statute. The maximum penalties are five years imprisonment, a $250,000 fine, probation of three years, court costs and “any restitution the court finds is appropriate.” She is scheduled for sentencing Aug. 16.
In December, nurse Bridgette Williams Parker and nurse practitioner Thomas Justin Palmer, pleaded guilty to “knowingly and willingly” prescribing controlled substances “outside the usual course of professional practice or not for a legitimate medical purpose.” In a separate part of the conspiracy, last October, pharmacist Christopher Manfuso admitted to paying the doctors more than $2.5 million in kickbacks over a three year period.
Both Ruan and Couch have pleaded not guilty. Jury selection in the case is scheduled to begin in July.