6 ex-pharma executives arrested in U.S. in fentanyl bribe case

Six former Insys Therapeutics Inc executives and managers were arrested on Thursday on charges that they engaged in a nationwide scheme to bribe U.S. 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 probes involving Insys' drug Subsys.

Others charged included Alec Burlakoff, an ex-vice presidentof 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.

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Babich's attorney, Wick Sollers, said Babich would plead notguilty when he is arraigned at a later date to charges thatinclude conspiracy to commit racketeering.

Anthony Pacheco, Rowan's lawyer, called the allegations"unproven." Attorneys for Gurry and Burlakoff did not respond torequests for comment. Lawyers for the other defendants could notbe identified.

Subsys, launched in 2012, is a spray approved for managingpain in cancer patients that contains fentanyl, a highlyaddictive and regulated synthetic opioid. Insys has reportedearning $329.5 million US in net revenue from Subsys in 2015.

As authorities have sought to combat a national epidemic ofopioid abuse, Subsys has become the subject of several federaland state investigations amid allegations that the drug wasmarketed and sold to non-cancer patients.

"I hope that today's charges send a clear message that wewill continue to attack the opioid epidemic from all angles,
whether it is corporate greed or street-level dealing," saidU.S. Attorney Carmen Ortiz of Boston.

Insys did not respond to requests for comment.

The indictment alleged Babich, 40, and four other defendantsdevised 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 andspeaker fees, the indictment said.

The indictment said Babich and Gurry also created a schemeto mislead insurers, who were reluctant to approve payment forSubsys for patients without cancer, into authorizing payment forthe drug.

The case follows charges filed in Massachusetts, New York,Connecticut and Alabama against at least five other former Insysemployees.

In August, Illinois' attorney general sued Insys, accusingit of deceptively marketing and selling Subsys to doctors foroff-label uses. That lawsuit followed a $1.1 million settlementwith 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.