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 Jeffrey Pearlman, 49, was charged in a criminal complaint filed in
federal court in New Haven, Connecticut, becoming the latest
individual to face prosecution in connection with probes involving
Insys' drug Subsys.
Prosecutors did not identify Insys by name, but a LinkedIn profile
for Pearlman showed he worked at Insys from 2012 to 2015, and the
description of his employer by authorities matched that of the
Arizona-based pharmaceutical company.
Following his arrest, Pearlman was released after a court hearing on
a $200,000 bond, prosecutors said.
Scott Resnik, a lawyer for Pearlman, said his client "intends to
defend against the current charges and looks forward to having his
case adjudicated in the court system."
An Insys spokeswoman did not respond to requests for comment.
The charges come as Insys faces a number of state and federal
investigations involving Subsys as U.S. authorities seek to combat a
national epidemic of opioid abuse.
Subsys, launched in 2012, is a spray approved for managing pain in
cancer patients that contains fentanyl, a highly addictive and
regulated synthetic opioid. It generated $329.5 million in net
revenue in 2015.
Prosecutors said Pearlman and sales representatives he managed
induced doctors, advanced practice registered nurses and physicians'
assistants to prescribe Insys' fentanyl spray by paying them to
participate in sham "speaker programs."
Speaker fees ranged from $1,000 to several thousands of dollars,
prosecutors said. One Connecticut healthcare provider who
participated in these sham programs earned $83,000 in kickbacks to
prescribe Insys' fentanyl spray, prosecutors said.
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As a result of the scheme, federal healthcare programs incurred
millions of dollars in losses, prosecutors said.
The case is the latest against an individual tied to Insys and
Subsys.
In June, federal prosecutors in Manhattan brought charges against
two former Insys employees, Jonathan Roper and Fernando Serrano, for
engaging in a similar kickback scheme involving speaker fees. They
have pleaded not guilty.
In August, Illinois' attorney general sued Insys, accusing it of
deceptively marketing and selling Subsys to doctors for off-label
uses. That lawsuit remains pending.
Insys shares fell 5 percent to close at $12.08 on Nasdaq.
(Reporting by Nate Raymond in New York; Editing by Matthew Lewis and
Richard Chang)
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