Former Big Pharma Execs Arrested For Massive Fentanyl Kickback Conspiracy

By Kelly Burch 12/14/16

The former execs are accused of bribing doctors and intentionally misleading insurance companies for profit. 

Subsys Fentanyl Spray
Photo via Fusion/YouTube

Big Pharma has largely avoided legal culpability for the opioid crisis, but last week six executives of a company that manufactures fentanyl were arrested on charges that they conspired to deceive insurance companies and bribed doctors to prescribe the opiate. 

The federal indictment, which was filed in Massachusetts, says that executives at Insys Therapeutics pushed doctors to prescribe their fentanyl spray Subsys for uses that were not approved.

According to a report by Fusion, a whistleblower at Insys said that the company led insurance companies to believe that patients had cancer when they did not. Earlier this year, lower-level Insys employees were arrested on similar charges

To support its habit, the company also developed relationships with doctors who had a reputation for prescribing medications irresponsibly. According to the indictment, the company intentionally targeted a doctor whose office had been referred to as a “very shady pill mill.” The doctor later became a top prescriber of Subsys, Fusion reported. 

Insys reportedly gave doctors kickbacks for prescribing, using tactics like paying a doctor to give a speech at an event that had no attendees. In turn, the company expected a high rate of prescriptions from the doctors on its payroll. 

The federal indictment cited emails between the executives that showed a corrupt culture at the company. 

“We cannot go a single day without a prescription from … [the doctor]. I do not want to hear excuses, we pay good money here,” one executive wrote in an email about a doctor who was prescribing less Subsys, according to the court filings. 

On the same day that the executives were indicted, a report from the Centers for Disease Control and Prevention found that overdose deaths caused by synthetic opioids rose 73% in 2015. According to the CDC, most of the deaths were fentanyl related.

The actions of the Insys executives “contributed to the growing opioid epidemic and placed profit before patient safety,” according to a statement by Harold H. Shaw, Special Agent in Charge of the FBI’s Boston office. 

The executives arrested were Michael Babich, 40, the former chief executive of Insys Therapeutics; Alec Burlakoff, 42, the former Vice President of Sales; Richard M. Simon, 46, the former National Director of Sales; former Regional Sales Directors Sunrise Lee, 36, and Joseph A. Rowan, 43; and former Vice President of Managed Markets, Michael J. Gurry, 53, according to Forbes

In response to the charges, Insys released this statement: “The charges against individuals discussed in the DOJ press release relate to previously disclosed investigations. Insys continues to cooperate with all relevant authorities in its ongoing investigations and is committed to complying with laws and regulations that govern our products and business practices."

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.