June 6, 2017 / 4:42 PM / 2 years ago

Ex-Insys employee to plead guilty to scheme involving opioid drug

BOSTON (Reuters) - Prosecutors probing sales of a fentanyl-based drug made by Insys Therapeutics Inc INSY.O say a former company manager accused of conspiring to defraud insurers into paying for the painkiller has agreed to plead guilty and cooperate with authorities.

Elizabeth Gurrieri, a former manager of reimbursement services for Arizona-based Insys, will plead guilty to one count of wire fraud conspiracy, prosecutors said in a letter filed in Boston federal court on Monday.

The filing is part of the criminal case against six ex-Insys executives and managers including former Chief Executive Michael Babich, who prosecutors say participated in a scheme to bribe doctors to prescribe the drug, Subsys.

Gurrieri would become the second former Insys employee nationally to plead guilty in connection with Subsys, an under-the-tongue spray containing fentanyl, a highly addictive and regulated synthetic opioid.

The Queen Creek, Arizona resident’s agreement to cooperate came as Insys works to reach a settlement with the U.S. Justice Department in connection with the investigation.

Gurrieri’s lawyer did not respond to requests for comment. Insys declined to comment. It has said it is has been working to improve its compliance practices and is cooperating with authorities.

Prosecutors alleged in December that Babich and others led a conspiracy to bribe medical practitioners to unnecessarily prescribe Subsys through payments disguised as marketing event and speaker fees.

Other defendants include former Insys vice presidents Alec Burlakoff and Michael Gurry; former national sales director Richard Simon; and former regional sales directors Sunrise Lee and Joseph Rowan. All six have pleaded not guilty.

The case against Gurrieri related to what prosecutors said was a push by Insys to get insurers to cover the expensive price of Subsys, which in 2013 cost about $2,340 for 60 units.

According to a separate criminal complaint, Gurrieri and others at Insys directed fraudulent schemes to deceive insurers and pharmacy benefit managers in order to obtain payment authorization for Subsys.

The complaint said Insys employees were taught to mislead insurers about the diagnosis of patients and whether they had tried and failed other preferred medications.

Gurrieri also instructed employees to claim a cancer diagnosis regardless of the patient’s history or whether Subsys was prescribed for a use not approved by the U.S. Food and Drug Administration, the complaint said.

The cases in U.S. District Court, District of Massachusetts, are U.S. v. Babich et al, No. 16-cr-10343, and U.S. v. Gurrieri, No. 17-cr-10083.

Reporting by Nate Raymond in Boston; Editing by Steve Orlofsky

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