WASHINGTON – Federal prosecutors have arrested a former CEO and two former senior vice-presidents of a big pharmaceutical company based out of Phoenix, Arizona.
6 employees of Insys Therapeutics, which is publicly-traded on NASDAQ, have been charged with bribing doctors and doctoring a scheme to overprescribe Subsys, a fentanyl opioid product.
Fentanyl is the opioid involved in the Prince overdose earlier this year.
The six arrests follow the release of a Center for Disease Control report showing that opioid-related deaths grew by 75% and Heroin-related deaths now exceed gun homicides.
Here’s a summary of the allegations:
The indictment alleges that Michael L. Babich, 40, of Scottsdale, Ariz., the former CEO and President of the company; Alec Burlakoff, 42, of Charlotte, N.C., former Vice President of Sales; Richard M. Simon, 46, of Seal Beach, Calif., former National Director of Sales; former Regional Sales Directors, Sunrise Lee, 36, of Bryant City, Mich. and Joseph A. Rowan, 43, of Panama City, Fla.; and former Vice President of Managed Markets, Michael J. Gurry, 53, of Scottsdale, Ariz., conspired to bribe practitioners in various states, many of whom operated pain clinics, in order to get them to prescribe a fentanyl-based pain medication. The medication, called “Subsys,” is a powerful narcotic intended to treat cancer patients suffering intense episodes of breakthrough pain. In exchange for bribes and kickbacks, the practitioners wrote large numbers of prescriptions for the patients, most of whom were not diagnosed with cancer.
The indictment also alleges that the now former corporate executives charged in the case conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. They achieved this goal by setting up the “reimbursement unit” which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers.
Source: Justice Departmentwww.justice.gov/usao-ma/pr/pharmaceutical-executives-charged-racketeering-scheme