Key employees at Insys Therapeutics, the maker of powerful opioid Subsys, pleaded guilty to violating anti-kickback laws Tuesday and Wednesday.
It’s part of an ongoing investigation that illustrates how Insys became the poster child for the evils of the opioid crisis and how some companies stopped at nothing to addict America.
The two employees are former sales reps Natalie Levine and Karen Hill. Levine, who is married to Insys’ former CEO Michel Babich, pleaded guilty in Connecticut on Tuesday, and Hill pleaded guilty in Alabama on Wednesday. Both women face up to five years in prison. The company’s stock is down around 5% on the news.
Levine admitted to paying off medical practitioners in order to get them to prescribe Subsys under the guise of a legal speakers program. The program, however, was a total scam.
The Speaker Programs, which were typically held at high-end restaurants, were ostensibly designed to gather licensed healthcare professionals who had the capacity to prescribe Subsys and educate them about the drug. In truth, the events were usually just a gathering of friends and co-workers, most of whom did not have the ability to prescribe Subsys, and no educational component took place. “Speakers” were paid a fee that ranged from $US1,000 to several thousand dollars for attending these dinners. At times, the sign-in sheets for the Speaker Programs were forged so as to make it appear that the programs had an appropriate audience of healthcare professionals.
Hill pleaded guilty to participating in the same sham speaker’s program which helped to facilitate a $US40 million opioid “pill mill” in Mobile, Alabama. That “pill mill” was a medical practice belonging to Dr. Xiulu Ruan and Dr. John Patrick Couch that overprescribed medication and engaged in insurance fraud. Both doctors have been sentenced to 20 and 21 years in prison respectively.
In June Elizabeth Gurrieri, a former manager of reimbursement services for Insys, pleaded guilty to wire fraud and conspiracy.
Things will likely get worse for Insys and other opioid-makers as the week goes on. According to Bloomberg, Attorney General Jeff Sessions is set to announce more measures to crackdown on fraudulent opioid insurance claims, as well as on fraud in opioid treatment centres, later this week. Hundreds of arrests will be carried out in cities around the country.
Federal prosecutors in Boston announced charges against half a dozen Insys executives back in December after years of reported shocking behaviour. Investigative journalist Roddy Boyd at the Southern Investigative Reporting Foundation (SIRF) has done fascinating work highlighting it.
In 2015, he reported that Sunrise Lee, Insys’ former central and later western sales region head, had no pharmaceutical sales experience before joining the company. Her previous employer was Rachel’s, a West Palm Beach strip club where she was a dancer.
“Doctors really enjoyed spending time with her and found Sunrise to be a great listener,” Insys’ national sales chief Alex Burlakoff told SIRF.
“She’s more of a ‘closer,'” he continued. “Often the initial contact [with a doctor] was made by another salesperson.”