Six ex-Insys executives arrested in U.S. in fentanyl bribe case
(Reuters) - Six former Insys Therapeutics Inc executives and managers were arrested on Thursday on charges that they engaged in a nationwide scheme to bribe doctors to prescribe a drug containing the opioid fentanyl, U.S. prosecutors said.
Michael Babich, the former CEO of the Arizona-based drug maker, was among five individuals charged in an indictment filed in federal court in Boston in the latest case to spill out of investigations involving Insys' drug Subsys.
Others charged included Alec Burlakoff, an ex-vice president of sales; Richard Simon, a former national sales director; former regional sales directors Sunrise Lee and Joseph Rowan; and Michael Gurry, a former vice president of managed markets.
Lawyers for Babich, who faces charges including conspiracy to commit racketeering, and three other defendants could not be immediately identified. Attorneys for Gurry and Burlakoff did not respond to requests for comment.
Subsys, launched in 2012, is a spray approved for managing pain in cancer patients that contains fentanyl, a highly addictive and regulated synthetic opioid. Insys has reported earning $329.5 million in net revenue from Subsys in 2015.
As authorities have sought to combat a national epidemic of opioid abuse, Subsys has become the subject of several federal and state investigations amid allegations that the drug was marketed and sold to non-cancer patients.
"I hope that today's charges send a clear message that we will continue to attack the opioid epidemic from all angles, whether it is corporate greed or street-level dealing," said U.S. Attorney Carmen Ortiz of Boston.
Insys did not respond to requests for comment. Its shares were trading at $8.90 on the NASDAQ on Thursday afternoon, down 16.91 percent, or $1.80.
The indictment alleged Babich, 40, and four other defendants devised a scheme to bribe medical practitioners to write large numbers of Subsys prescriptions, often to non-cancer patients.
The bribes were frequently disguised as marketing event and speaker fees, the indictment said.
The indictment said Babich and Gurry also created a scheme to mislead insurers, who were reluctant to approve payment for Subsys for patients without cancer, into authorizing payment for the drug.
The case follows charges filed in Massachusetts, New York, Connecticut and Alabama against at least five other former Insys employees.
In August, Illinois' attorney general sued Insys, accusing it of deceptively marketing and selling Subsys to doctors for off-label uses. That lawsuit followed a $1.1 million settlement with Oregon's attorney general resolving similar claims.
The case is U.S. v. Babich et al, U.S. District Court, District of Massachusetts, No. 16-cr-10343.
(Reporting by Nate Raymond in New York; Editing by Chris Reese and Bill Trott)
