Two more former pharmaceutical executives will go to prison for conspiring to bribe doctors and nurses to prescribe a highly addictive opioid painkiller. One got a longer sentence than prosecutors wanted Wednesday, the other a shorter one than they desired.
Michael Babich, the erstwhile chief executive of Chandler, Ariz.-based Insys Therapeutics, and Sunrise Lee, a former regional sales director, were the fourth and fifth former employees of the firm to be sentenced to prison, since Jan. 13, for their roles in the scheme.
US District Court Judge Allison Burroughs sentenced Babich, 43, of Scottsdale, Ariz., to two years and six months behind bars. Prosecutors had recommended only two years because Babich pleaded guilty and testified for the government at last year’s closely watched trial in Boston.
The judge also sentenced Sunrise Lee, 40, a former stripper who became a regional sales director for Insys, to a year and a day in prison. That was far less than the six years prosecutors sought, which Burrough characterized as “heavy handed.”
Burroughs credited Babich for pleading guilty to conspiracy three weeks before the trial began last January and testifying against his former colleagues.
But, she said, he was more culpable than the other former executives she has sentenced, calling him one of three “co-architects” of the conspiracy to bribe doctors to prescribe an under-the-tongue fentanyl spray, Subsys, with payments disguised as speaking fees.
“I don’t think you were a model citizen,” Burroughs told Babich, after rejecting his lawyer’s recommendation of home confinement and community service.
Babich expressed remorse and said he was “in over my head” when he became CEO of Insys at age 35.
“I stand before you contrite and heartbroken,” he said.
Insys was founded and overseen by John N. Kapoor, a hard-driving one-time billionaire. He’s scheduled to be sentenced Thursday along with a second former high-ranking executive, Alec Burlakoff, who cut a plea deal with the government.
On Wednesday morning, Burroughs rejected prosecutors’ recommendation that she sentence Lee, who lives in Grand Rapids, Mich., to six years in prison. But she also rebuffed a claim by Lee’s lawyer, Peter Horstmann, that his client deserved no prison sentence and had been charged by the government merely to exploit what he called “salacious details” about her work as a stripper.
Horstmann contended in a court filing that Lee was exploited by others as well, not least the pharmaceutical industry.
When Insys executives plucked her from the world of “gentlemen’s clubs,” Horstmann wrote, it was merely the “next unethical but logical step” by an industry that routinely recruits attractive young women as sales representatives to woo doctors to prescribe drugs.
“While Big Pharma is quick to use women for their ability to sell products to lonely overworked physicians, the same women are easily dispatched and demonized when they are exposed for doing the exact job that they were hired to do,” Horstmann wrote.
On one occasion in 2012 while working at Insys, according to testimony at trial, Lee gave a doctor a lap dance at a Chicago night club to coax him to prescribe Subsys, a drug approved in 2012 to treat cancer pain.
Kapoor, Lee, and three other defendants were convicted in May of bribing doctors and nurses to prescribe Subsys to patients who didn’t need it and tricking insurers into paying for it. The convictions came in what was believed to be the first criminal trial of pharmaceutical executives who marketed a painkiller since the nation’s deadly opioid epidemic began.
Lee tearfully told the judge that she had no idea what she was doing at Insys was wrong.
Although Burroughs said that Lee had broken the law by participating in the bribery scheme, the judge cited Lee’s tough background and naivete about the pharmaceutical industry as mitigating factors.
Horstmann described Lee as the only client he had ever had whose photograph appeared “on the back of a milk carton,” an apparent reference to exploited or missing children that he declined to elaborate on.
“I’m going to sentence you to a period of incarceration,” Burroughs said, “but shorter than what the government is looking for.” She added, “Ms. Lee, take care of yourself. I have every confidence you will get through this.”
Prosecutors said at trial that the defendants ran Insys like mobsters, displaying “brazen audacity.” They pressured sales staff to persuade doctors to prescribe higher and costlier doses of Subsys, and got physicians to abandon their duty to “first, do no harm.” Most patients who were prescribed Subsys didn’t have cancer, according to the government, and some got addicted.
As part of the conspiracy, prosecutors said, eight doctors and medical practitioners got more than $1.1 million disguised as “speaking fees.” Insys also set up a reimbursement center where employees allegedly lied to health insurers about patients’ symptoms to get them to cover Subsys for people without cancer.
Before Wednesday, Burroughs had sentenced three other former Insys executives to roughly two to almost three years in prison, all considerably less than what prosecutors had recommended.
Jonathan Saltzman can be reached at email@example.com