A string of former Insys Therapeutics executives were handed prison sentences for their roles in an opioid kickback scheme involving its highly addictive painkiller, Subsys.
Prosecutors said Insys executives used pharmacy data to identify physicians who prescribed high volumes of opioids and bribed physicians with speaking engagements. Subsys sales amounted to $240 million in 2016 alone.
Here is a timeline of events:
2012
Insys launched Subsys, a fentanyl under-the-tongue spray to manage recurring cancer pain. A 30-day supply of Subsys can cost up to $30,000.
2015
Former Connecticut nurse practitioner Heather Alfonso pleaded guilty to charges of federal antikickback laws. Prosecutors said she received speaking payments of $83,000 and prescribed $1.6 million worth of Subsys, primarily to patients who were not diagnosed with cancer. In November 2019, Ms. Alfonso was sentenced to three years of probation and ordered to pay $2.5 million in restitution.
2016
Natalie Reed Perhacs, a former Insys sales representative, pleaded guilty to conspiracy to violate antikickback statutes in a case involving Xiulu Ruan, MD, and John Couch, MD, of Physicians' Pain Clinic of Alabama in Birmingham. Despite earning a base salary of $40,000, prosecutors claimed Ms. Perhacs made more than $700,000 between April 2013 and May 2015. Ms. Perhacs also avoided prison and was sentenced to five years of probation in April 2018.
2018
In November 2018, Alec Burlakoff, former vice president of sales for Insys, pleaded guilty to a single count of racketeering conspiracy. Mr. Burlakoff agreed to cooperate with prosecutors in their case against Insys' founder John Kapoor and five other co-defendants. In January 2020, he was sentenced to 26 months in prison.
Mr. Burlakoff also hired exotic dancer Sunrise Lee as a sales executive to help woo physicians and boost prescriptions of Subsys, according to Bloomberg Law. Ms. Lee later oversaw one-third of the company's sales team and in January 2020 was sentenced to one year in prison in for her role in the scheme.
In May 2018, Michael Frey, MD, a former physician at Fort Myers, Fla.-based Advanced Pain Management & Spine Specialists pleaded guilty to defrauding Medicare and Tricare. Prosecutors said Dr. Frey collected fees from Insys executives between 2013 and 2015 for participating in "largely bogus" speaker event programs. In February 2019, he received an 18-month prison sentence.
In August 2018, Insys agreed to pay $150 million to settle U.S. Department of Justice claims against it.
2019 to 2020
In December 2019, a Manhattan jury convicted Gordon Freedman, MD, of accepting more than $300,000 from Insys. The payments were described as speaker fees but found to be bribes. The jury also found Dr. Freedman, the fourth-highest prescriber of Subsys in 2014, of violating honest services wire fraud.
In January 2020, former Insys CEO Michael Babich was sentenced to 30 months in prison for his role in the kickback scheme. Prosecutors said Mr. Babich engaged in daily calls with Mr. Kapoor and other executives in the scheme and tracked sales of Subsys.
Michael Gurry a former Insys vice president was sentenced to 33 months in prison, while former regional sales manager Joseph Rowan got 27 months and former national sales director Richard Simon got 33 months.
Prosecutors sought a 15-year sentence on Jan. 23 for Mr. Kapoor, who they labeled as the "fulcrum" of the kickback scheme. In the lengthiest sentencing of all former Insys executives, Mr. Kapoor received 66 months in prison and was ordered to pay a $250,000 fine.