Interviews with several former Insys sales representatives suggest the company, based in Chandler, Ariz., has aggressively marketed the painkiller, including to physicians who did not treat many cancer patients and by paying its sales force higher commissions for selling higher doses of the drug.
Under F.D.A. rules, manufacturers may market prescription drugs only for approved uses. But doctors may prescribe drugs as they see fit. Over the last decade, pharmaceutical companies have paid billions of dollars to settle claims that they encouraged doctors to use drugs for nonapproved treatments, or so-called off-label uses, to increase sales and profits.
Drug-safety experts said the range of medical professionals who appeared to be prescribing Subsys was troubling, particularly given concerns about the widespread use — and abuse — of narcotic painkillers. In December, Insys disclosed that it had received a subpoena from the federal health department’s Office of the Inspector General for documents related to its sales and marketing practices. The company has said it is cooperating with the investigation.
Marketing the drug off-label is a criminal offence and as the drug has near substitutes it will not be much if any loss to consumers if this company were closed.
The Feds are clearly interested having indicted a doctor who was allegedly prescribing large quantities of the drug off-label.
Can somebody please explain to me why this company is trading at 21 times historic earnings and almost 7 times historic sales? Because I don't quite get it.