(Adds comments from Babich attorney and Rowan attorney, other
attorneys did not respond or could not be identified, updates
By Nate Raymond
Dec 8 Six former Insys Therapeutics Inc
executives and managers were arrested on Thursday on charges
they engaged in a nationwide scheme to bribe doctors to
unnecessarily prescribe a drug containing the opioid fentanyl,
U.S. prosecutors said.
Michael Babich, the Arizona-based drugmaker's former chief
executive officer, and others were charged with participating in
a conspiracy in which bribes were disguised as marketing event
and speaker fees.
The case is the latest involving Subsys, a spray approved
for managing pain in cancer patients that contains the synthetic
opioid fentanyl, as authorities try to stem a nationwide
epidemic of opioid abuse.
The indictment filed in federal court in Boston said beyond
the bribes, Babich and another defendant also created a scheme
to mislead insurers, which were reluctant to pay for Subsys for
patients without cancer.
Shares of Insys were down 11.87 percent, or $1.27, to close
at $9.43 on the NASDAQ on Thursday. Insys said it is cooperating
in various investigations and is committed to complying with
laws and regulations governing its products and business.
Babich's attorney, Wick Sollers, said Babich would plead not
guilty when he is arraigned at a later date to charges that
include conspiracy to commit racketeering.
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.
Anthony Pacheco, Rowan's lawyer, called the allegations
"unproven." Attorneys for Gurry and Burlakoff did not respond to
requests for comment. Lawyers for the other defendants could not
As authorities have sought to combat 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.
The case followed charges filed in Massachusetts, New York,
Connecticut and Alabama against at least five other former Insys
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 Bill Trott,
Lisa Shumaker and Andrew Hay)