Physician assistant faces U.S. trial over Insys opioid kickbacks

[December 12, 2018]  By Nate Raymond

(Reuters) - A former physician assistant is set to face trial in New Hampshire on Wednesday over charges he accepted kickbacks from Insys Therapeutics Inc <INSY.O> to prescribe a highly addictive fentanyl spray the drugmaker produced.

A federal jury in Concord, New Hampshire, will hear opening statements in the trial of Christopher Clough, whose case could provide a glimpse into some of the evidence prosecutors plan to use in the upcoming trial of six former Insys executives and managers.

Both cases stem from what prosecutors say was a wide-ranging scheme overseen by Insys executives including John Kapoor, a onetime billionaire who was its founder and chairman, to pay medical practitioners kickbacks to prescribe its powerful opioid, Subsys.

Prosecutors contend Clough accepted nearly $50,000 in fees from Insys from 2013 to 2014 to act as a speaker at events ostensibly meant to educate healthcare professionals about Subsys but which were actually shams.

Clough, 45, has pleaded not guilty to receiving kickbacks.

A years-long investigation led to the indictment of Kapoor and former Chief Executive Michael Babich, who will both face trial in Boston federal court in January on charges they conspired to bribe doctors to prescribe Subsys.

Prosecutors have said they plan to introduce evidence about Clough at that trial. Kapoor, Babich and their four co-defendants have pleaded not guilty to racketeering conspiracy.

Insys in August said it had agreed to pay at least $150 million to resolve a related U.S. Justice Department probe. In 2017, Insys paid $3.4 million to resolve a probe by New Hampshire's attorney general centered on its payments to Clough.

The cases, brought amid a U.S.-wide epidemic of opioid addiction, center on Subsys, an under-the-tongue spray that contains fentanyl, an opioid 100 times stronger than morphine.

A box of the Fentanyl-based drug Subsys, made by Insys Therapeutics Inc, is seen in an undated photograph provided by the U.S. Attorney's Office for the Southern District of Alabama. U.S. Attorney's Office for the Southern District of Alabama/Handout via REUTERS

The U.S. Food and Drug Administration approved Subsys in 2012 for treating sudden increases in pain in cancer patients.

Prosecutors said Insys sought to encourage medical professionals to prescribe Subsys to patients who did not have cancer by paying them speaker fees as a reward for writing prescriptions for the drug.

Prosecutors said that before Clough was stripped of his medical license, he was the biggest prescriber of Subsys in New Hampshire and wrote more than 700 prescriptions for the spray.

Potential trial witnesses include Natalie Babich, a former Insys sales representative who is married to Michael Babich and who pleaded guilty in 2017 to conspiring to pay kickbacks to, among others, Clough.

(Reporting by Nate Raymond in Boston; Editing by Alexia Garamfalvi and Matthew Lewis)

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