Doctor tied to Insys opioid kickback probe gets prison term

DETROIT (Reuters) - A Michigan doctor linked to a federal investigation into allegations that Insys Therapeutics Inc paid kickbacks to medical practitioners to prescribe its flagship opioid product was sentenced on Monday to 32 months in prison.

FILE PHOTO: 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

Gavin Awerbuch, 59, was sentenced by U.S. District Judge Arthur Tarnow in Detroit after admitting that he wrote prescriptions for Insys’ fentanyl-based cancer pain medication Subsys for non-legitimate uses and committed health care fraud.

“It’s simply impossible to say how sorry I am,” Awerbuch said in court.

Awerbuch is one of several doctors whose interactions with Insys have formed the basis of an indictment brought by federal prosecutors in Boston against several former company executives, including billionaire founder John Kapoor.

Prosecutors have accused Kapoor, ex-Insys Chief Executive Michael Babich and five other former executives and managers of conspiring to bribe doctors to prescribe Subsys and to defraud insurers into paying for it.

They have pleaded not guilty. Insys has said it may need to pay at least $150 million to resolve the U.S. Justice Department’s probe.

Prosecutors said Awerbuch operated a pain management clinic in Saginaw, Michigan, and was once the largest prescriber nationally of Subsys to people covered by Medicare, the government healthcare program for the elderly and disabled.

Prosecutors said Awerbuch began prescribing Subsys after the U.S. Food and Drug Administration in 2012 approved the drug, an under-the-tongue spray intended to treat cancer pain that contains fentanyl, an addictive synthetic opioid.

According to authorities, Awerbuch wrote prescriptions for Subsys to patients for no legitimate medical purpose and billed insurers and Medicare for unnecessary neurological tests.

Insys executives, meanwhile, used a sham speaker program to pay Awerbuch $138,435 in kickbacks to prescribe Subsys, the Boston indictment alleges.

“Dr. Awerbuch was already a wealthy and prominent physician,” Assistant U.S. Attorney John Neal said in court. “There was no need for Dr. Awerbuch to accept kickbacks from drug manufacturers.”

He was arrested in 2014 and pleaded guilty in 2016. While Awerbuch faced up to 87 months in prison, Neal recommended 52 months given Awerbuch’s assistance in the Insys investigation.

Tarnow, however, was moved by Awerbuch, a first-time offender whose volunteerism and charitable generosity were mentioned repeatedly by his attorneys.

“It is puzzling to me because you apologized but you didn’t need to do this,” Tarnow told Awerbuch. “This crime was not a function of need but a function of want.”

Awerbuch must also pay $4.1 million in restitution and fines.

Reporting by Steve Friess in Detroit; Editing by Leslie Adler