A new report from the foundation that was one of the first to call into question Valeant's specialty pharmacy business has alleged that pharmaceutical company Insys Therapeutics has been falsifying records in order to get more of its painkiller, Subsys, in the hands of patients.

The report released Thursday by the Southern Investigative Reporting Foundation — titled "Murder Incorporated: Insys Therapeutics, Part I" — alleges that Insys used its prior authorization unit to mislead insurers into covering its Fentanyl-based painkiller by changing documents to say patient pain was caused by cancer.

Subsys is a spray-on painkiller that especially helps if a patient is unable to swallow. According to the report, it is 100 times stronger than morphine.

The only approved method of prescribing the drug was due to pain caused by cancer, but according to the report, patients experiencing anything from joint pain to military trauma were given the drug.

Since insurers would not cover any nonapproved uses, the company had the unit complete insurance paperwork — which is not uncommon in the industry — and change the reason for the prescription. In addition, members of the company's prior authorization unit would field calls from insurers asking about the prescriptions, using a prewritten script from management to convince insurers that the prescription was legitimate.

According to the report, this over-prescribing not only helped increased revenues for the company, but also had tragic effects for some patients.

"Lost in the cascade of prescriptions, however, is the human toll from peddling Subsys like a new piece of software or an improved detergent," said the report.

"Since the drug launched in January 2012, the FDAs Adverse Events Reporting System lists 203 deaths where medical providers fingered Subsys as the probable candidate for triggering an adverse reaction. Moreover, the pace of purported Subsys-related deaths is accelerating, with FAERS disclosing 52 deaths in the second quarter alone."

Story continues

We've reached out to Insys for comment and will update if we hear back.

Since the report, shares of Insys had dropped over 8% as of 1 p.m. ET.

Read the full report here »

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