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Former CEO pleads guilty to fentanyl spray kickback scheme

Opioid Executive Conspiracy Charges
Posted at 12:31 PM, Jan 10, 2019
and last updated 2019-01-10 14:31:49-05

BOSTON — The former chief executive of a company that produces a potentially addictive fentanyl spray pleaded guilty Wednesday to scheming with his colleagues to bribe doctors into increasing prescriptions to boost sales.

Former Insys Therapeutics CEO Michael Babich also agreed to cooperate with federal prosecutors who are preparing to go to trial in Boston later this month against the Chandler, Arizona-based company’s wealthy co-founder, John Kapoor, and other executives.

Prosecutors say Kapoor, Babich and others conspired to pay kickbacks to doctors in the form of speaking fees to get them to prescribe the powerful opioid painkiller to more people and in higher doses while the opioid epidemic raged.

The speaking events were billed as opportunities for other doctors to learn about the drug, but were “often poorly attended and merely used as an excuse for participants and his or her friends to have a free meal and drinks paid for by Insys,” Assistant U.S. Attorney Fred Wyshak told the judge.

Prosecutors say Insys executives also bribed doctors by moving their office’s employees onto the Insys payroll and hiring their friends or relatives. Several doctors have already been convicted of accepting kickbacks in exchange for prescribing the drug meant for cancer patients, often to people who didn’t need it.

Babich, 42, is the latest Insys executive to agree to cooperate with prosecutors in the hopes of getting a lesser sentence. Former sales executive Alec Burlakoff pleaded guilty in November and is also expected to testify at the trial, which begins Jan. 28 and is expected to last several months.

An attorney for Babich declined to comment after the hearing, citing a gag order the judge has imposed on both sides in the case.

An email was sent Wednesday to an attorney for Kapoor. His previous lawyer said Kapoor looks forward to fighting the charges and believes he will be vindicated.