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Defendant Sentenced for Racketeering Scheme
BOSTON – In a shocking turn of events, Michael Babich, the former CEO and President of Insys Therapeutics, has been sentenced to 30 months in prison for his role in a racketeering scheme that bribed practitioners to prescribe Subsys, a fentanyl-based pain medication.
The scheme, which took place from May 2012 to December 2015, involved Babich and others bribing practitioners, many of whom operated pain clinics, to induce them to prescribe Insys’ fentanyl-based pain medication, Subsys, to patients often when medically unnecessary.
Babich, 43, of Scottsdale, Ariz., pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud and one count of mail fraud in January 2019 and agreed to cooperate with the government.
During his testimony, Babich described the inner workings of the conspiracy in detail, revealing that the defendants used pharmacy data to identify practitioners who either prescribed unusually high volumes of rapid-onset opioids or had demonstrated a capacity to do so.
The defendants then bribed and provided kickbacks to the practitioners to increase the number of new Subsys prescriptions, and to increase the dosage and number of units of Subsys. The success of the scheme was measured by comparing the net revenue earned from targeted practitioners with the total value of bribes and kickbacks paid.
United States Attorney Andrew E. Lelling and Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak, and David G. Lazarus prosecuted the case for Lelling’s Health Care Fraud Unit. The investigation was conducted by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of the Inspector General, and other agencies.
Babich’s sentence is a stark reminder of the consequences of participating in racketeering schemes and the importance of holding individuals accountable for their actions.
Key Facts
- State: Massachusetts
- Category: Drug Trafficking|Fraud & Financial Crimes|Violent Crime|White Collar Crime
- Source: DOJ Press Release â†â€â€
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