Mobile Pain Doctors Convicted After Seven-Week Trial
Mobile, AL – United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that a jury has convicted defendants Dr. Xiulu Ruan and Dr. John Patrick Couch of numerous felonies following a seven-week trial.
Prior to the execution of multiple search warrants by the FBI and DEA on May 20, 2015, Dr. Ruan and Dr. Couch jointly owned and operated two pain management clinics under the name Physicians Pain Specialists of Alabama (‘PPSA’) as well as C&R Pharmacy. Following an extensive joint investigation by both FBI-Mobile and DEA-Mobile, both doctors were charged with a litany of federal felony offenses, including RICO conspiracy, conspiracy to violate the Controlled Substances Act, substantive drug distribution offenses, conspiracies to commit wire fraud, mail fraud, healthcare fraud, and to violate the Anti-Kickback Statute, as well as money laundering. All charges stemmed from the defendants’ operation of PPSA and C&R Pharmacy.
During the seven-week trial, the United States presented evidence that Dr. Ruan and Dr. Couch utilized PPSA and C&R Pharmacy as a criminal enterprise to violate the Controlled Substances Act and to commit mail and wire fraud, in violation of the RICO Act. Specifically, the jury saw evidence that the defendants knowingly and willfully prescribed Schedule II and III Controlled Substances, including fentanyl, outside the usual course of professional practice and not for a legitimate medical purpose. The United States argued the defendants’ motive for this illegal prescribing was their own financial self-interest. The United States also argued that the defendants’ billing practices were systematically designed to unlawfully enrich the doctors.
Of particular importance in the trial were two brand name instant-release fentanyl drugs — Subsys and Abstral. Both Subsys and Abstral are only FDA-indicated for breakthrough cancer pain in opioid-tolerant adult patients. However, evidence showed that Dr. Ruan and Dr. Couch almost exclusively prescribed these drugs off-label for neck, back, and joint pain. The jury found that Dr. Ruan and Dr. Couch received illegal kickbacks from Insys Therapeutics, the manufacturer of Subsys, in exchange for the defendants prescribing massive quantities of this drug. Dr. Ruan and Dr. Couch were both among the top prescribers of Subsys in the entire United States. Evidence showed that Dr. Ruan began donating his Insys kickback payments the day after he received a copy of a criminal complaint from the Eastern District of Michigan against Dr. Gavin Awerbuch, another prolific Subsys prescriber who had been charged with receiving kickbacks from Insys. The United States argued that Dr. Ruan’s decision to donate his Insys money was done in an attempt to distance himself from the company.
With regard to Abstral, evidence showed that Dr. Ruan and Dr. Couch purchased approximately $1.6 million worth of stock in Galena Biopharma, the manufacturer of Abstral, and sought to manipulate the stock price by driving up Abstral sales. From the third quarter of 2013 through the 2014, Dr. Ruan and Dr. Couch were the number one and two prescribers of Abstral in the entire United States. During this same time period, nearly one out of every three Abstral prescriptions written in the U.S. were written by either Dr. Ruan or Dr. Couch.
As part of their criminal enterprise, Dr. Ruan and Dr. Couch owned C&R Pharmacy, which was co-located with one of the PPSA clinic locations. C&R Pharmacy would only fill prescriptions written by the doctors at PPSA, and Dr. Ruan and Dr. Couch split 75% of the profits that came in from the prescription drug reimbursements. Approximately 91% of the Subsys and Abstral prescriptions written by the defendants — which cost patients’ insurance anywhere between $1,000.00 to $24,000.00 per month — were filled at C&R Pharmacy.
The defendants also had a worker’s compensation dispensary, from which they directly filled prescriptions for patients receiving workers’ compensation benefits. The United States argued that the defendants’ scheme was designed to funnel prescriptions through PPSA and C&R Pharmacy, in order to reap large profits from the sale of these prescription medications.
The convictions of Dr. Ruan and Dr. Couch are a significant victory for the people of Alabama and the United States. The defendants’ actions were a clear threat to the health and safety of the community, and their convictions will help to hold them accountable for their crimes. The investigation and prosecution of this case was a collaborative effort between the United States Attorney’s Office for the Southern District of Alabama, the FBI, and the DEA. The United States will continue to work tirelessly to prosecute those who engage in corrupt practices and threaten the health and safety of our communities.
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Key Facts
- State: Alabama
- Category: Drug Trafficking|Fraud & Financial Crimes|Violent Crime
- Source: DOJ Press Release â†â€â€
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