Home > Free Essays > Business > Case Study > Insys Therapeutics in Fraudulent Marketing Scheme
Cite this

Insys Therapeutics in Fraudulent Marketing Scheme Case Study


Case Study: Insys Therapeutics

I consider the steps taken by Insys Therapeutics not ethical because the company not only misled healthcare providers and insurance companies concerning the proper use of their drug but also exposed consumers to danger.

The first ethical concept which can be applied to the case of Insys Therapeutics is Fairness and Honesty (BACW, p.44). Fairness and honesty are the integral components of business ethics and include general values. This ethical concern assumes the following laws and regulations are accepted in business (BACW, p. 44).

However, Insys Therapeutics was accused of engagement “in a fraudulent marketing scheme” to boost sales of Subsys, a mouth-stay variation of fentanyl which is used for severe cancer pain (Arizona Accuses). Because of this scheme, the health-insurer Anthem Inc. blames Insys Therapeutics for paying $19 million more for the drug than they were supposed to pay (Anthem Files).

Because Anthem was not the only company cooperating with Insys Therapeutics, the policy of the company disregards ethical principles of fairness and honesty. The statistics say that within recent decades, the number of overdose deaths because of opioids increased dramatically. The causes of high mortality include both illicit street drugs and prescription medications (Trial Reveals). The problem of dishonesty is not new in the United States.

Cheating begins in the school years and develops further. In the business sphere, dishonesty is also frequent. If dishonesty is revealed, someone has to take responsibility. In the case under analysis, Insys states that the company takes responsibility for the actions of its former employees. However, the company pleads not guilty in the fact that it “materially contributed to the opioid crisis in the state of Illinois or the Nation” (Arizona Accuses).

One more aspect of honesty and fairness to be considered in this case is connected with the disclosure of potential harm that can be caused by the use of a product (BACW, p. 47). Insys did not inform the consumers that the use of fentanyl for mild pain can be harmful and even lead to opium addiction.

The second concept to consider is that of Communications which often causes the rise of ethical concerns (BACW, p. 47). As for the case of Insys Therapeutics, it deals with false and misleading advertising or other deceptive actions. Arizona’s consumer-fraud suit claims that the company misled its customers, both healthcare providers, and insurers, concerning the appropriate use of this drug. Sybsys is an effective fast-acting mouth spray that is approved by the US Food and Drug Administration for cancer patients with severe pain. Consequently, it is widely prescribed by healthcare providers and purchased by insurers.

However, the company advertised Subsys as suitable to treat mild pain while it is a very strong opioid (Arizona Accuses). Fentanyl, an active ingredient of Subsys, is a synthetic opioid. Its misuse can have unwanted consequences such as an overdose or even death. Due to the active advertising and involvement of doctors into frauds, Medicare spending on Subsys increased by 76% as of 2015 (Fentanyl Billionaire). Communication is the stage of doing business which includes the exchange of information. Sometimes companies do not follow ethical principles. For example, they provide their customers or partners with invalid information. Nevertheless, companies should make honest and fair communication a part of their policy to attract customers and partners and provide their safety.

Finally, the ethical issue that is appropriate to the case of Insys Therapeutics is Business Relationships (BACW, p. 48). It is usually revealed in the treatment by businesspersons its customers and suppliers. The news reported that insurance company Anthem Inc. had filed “a civil suit alleging that drugmaker Insys Therapeutics Inc. engaged in “fraudulent schemes” to secure reimbursement for the company’s fentanyl painkiller Subsys” (Anthem Files). The suit also accuses Insys Therapeutics of involving some Arizona doctors in fraud through paying them for prescribing Subsys (Arizona Accuses). The investigation revealed the fact that other doctors profited from overprescribing painkillers.

Prosecutors alleged two doctors who cooperated with Insys and gave insurance companies wrong information concerning patients’ diagnoses to prescribe fentanyl (Trial Reveals). Another doctor from Alabama prescribed the painkiller within two years which was estimated at $4.9 million (Under Fire). However, the company faced large financial losses. Its former CEO was arrested which hurt both company’s image and its position in the market (Former Insys).

For example, shares of Insys decreased by 11.9% one day and 67% during the year (Former Insys). In case a company fails to lead decent business relationships, it can lose partners, customers, and a good name in general. The loss of efficient business relationships causes the decline of the company. Thus, it is useful for the company to consider various ethical issues in the contemporary competitive market to gain and retain a strong position and receive sustainable profit.

On the whole, I believe that the unethical actions of Insys Therapeutics were unacceptable. As drug producers, they bear a burden of responsibility for the quality of the product which, in turn, guarantees consumers’ safety.

Works Cited

Ferrell, O.C. Business. A Changing World. McGraw-Hill/Irwin, 2013.

Randazzo, Sara. “The Wall Street Journal. 2017. Web.

Walker, Joseph. “The Wall Street Journal. 2017. Web.

—. “The Wall Street Journal. 2016. Web.

—. “The Wall Street Journal. 2016. Web.

—. “The Wall Street Journal. 2017. Web.

This case study on Insys Therapeutics in Fraudulent Marketing Scheme was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Case Study sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

301 certified writers online

GET WRITING HELP
Cite This paper

Select a referencing style:

Reference

IvyPanda. (2020, November 11). Insys Therapeutics in Fraudulent Marketing Scheme. Retrieved from https://ivypanda.com/essays/insys-therapeutics-in-fraudulent-marketing-scheme/

Work Cited

"Insys Therapeutics in Fraudulent Marketing Scheme." IvyPanda, 11 Nov. 2020, ivypanda.com/essays/insys-therapeutics-in-fraudulent-marketing-scheme/.

1. IvyPanda. "Insys Therapeutics in Fraudulent Marketing Scheme." November 11, 2020. https://ivypanda.com/essays/insys-therapeutics-in-fraudulent-marketing-scheme/.


Bibliography


IvyPanda. "Insys Therapeutics in Fraudulent Marketing Scheme." November 11, 2020. https://ivypanda.com/essays/insys-therapeutics-in-fraudulent-marketing-scheme/.

References

IvyPanda. 2020. "Insys Therapeutics in Fraudulent Marketing Scheme." November 11, 2020. https://ivypanda.com/essays/insys-therapeutics-in-fraudulent-marketing-scheme/.

References

IvyPanda. (2020) 'Insys Therapeutics in Fraudulent Marketing Scheme'. 11 November.

More related papers