Ex-Insys saleswomen plead guilty in U.S. to drug kickback schemes

(Reuters) - Two former Insys Therapeutics Inc sales representatives including the wife of its ex-chief executive pleaded guilty on Tuesday to engaging in schemes to pay kickbacks to medical practitioners to prescribe a drug containing the opioid fentanyl.

Natalie Levine, who worked at the Arizona-based drugmaker from 2013 to 2014, plead guilty in federal court in Hartford, Connecticut, to conspiring to violate a federal anti-kickback statute, prosecutors said.

Karen Hill, a sales representative who became the company’s district manager for the Miami region, pleaded guilty in federal court in Mobile, Alabama to conspiring to violate the same anti-kickback law, court records show.

The pleas came amid ongoing investigations of Insys related to Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a highly addictive and regulated synthetic opioid.

Federal prosecutors in Boston in December announced charges against six former Insys executives and managers, including Levine’s husband, former Chief Executive Officer Michael Babich, in connection with the probes.

Prosecutors said Babich and others led a conspiracy to bribe medical practitioners to unnecessarily prescribe Subsys to non-cancer patients through payments disguised as marketing event and speaker fees. They have pleaded not guilty.

Insys has said it is working toward a settlement with the U.S. Justice Department. Several other people affiliated with Insys also face charges.

Levine’s lawyer had no immediate comment. Lawyers for Hill and Babich and representatives for Insys did not respond to requests for comment.

In Levine’s case, prosecutors said she used a sham speaker program to pay a Connecticut nurse, a New Hampshire physician’s assistant and a Rhode Island doctor to prescribe Subsys.

While Insys ostensibly designed the speaker program to educate healthcare professionals about Subsys, its primary purpose was to reward healthcare providers who prescribed Subsys, prosecutors said.

They said the medical providers earned thousands of dollars in kickbacks through the speaker events, which were usually just a gathering of friends and co-workers at high-end restaurants, prosecutors said.

According to court papers, Hill admitted to facilitating kickbacks through the same speaker program to two Alabama doctors, Xiulu Ruan and John Couch, and Florida medical practitioners to prescribe Subsys.

Ruan and Couch were sentenced in May to 21 and 20 years in prison, respectively, after being convicted on charges related to their operation of what prosecutors called a massive “pill mill.”

Both Levine and Hill face a maximum of five years in prison when they are sentenced.

Reporting by Nate Raymond in Boston; editing by Jonathan Oatis and Lisa Shumaker