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Former “Big pharma” CEO pleads guilty to opioid kickback scheme

The former chief executive of Insys Therapeutics Inc., one of the pharmaceutical companies being sued by Schuyler County and other area municipalities over prescription painkillers, pleaded guilty on Wednesday (January 9) to participating in a nationwide scheme to bribe doctors to prescribe an addictive opioid medication.

Michael Babich, who resigned as the company’s CEO in 2015, pleaded guilty in federal court to conspiracy and mail fraud charges.  The government alleges that, from 2012 to 2015, Babich and others conspired to bribe doctors to prescribe Subsys, a prescription opiate for managing severe pain in cancer patients. 

Insys is one of the big pharmaceutical companies being sued by various New York State municipalities, including Schuyler County.  In May of last year, Schuyler County Attorney Steven Getman filed a nearly 250-page Summons and Complaint for damages to the County arising out of the fraudulent and negligent marketing and distribution of opiates in the County. 

“This plea is potential evidence to Schuyler County,” Getman said.  “A criminal conviction establishes guilt beyond a reasonable doubt and, in certain circumstances, can establish civil liability for fraudulent activity.”



“Under the plea, Insys paid doctors kickbacks in the form of fees to participate in speaker programs that were actually sham events,” Getman noted.  “The allegation that Insys created a sham ‘speaker program’ is part of our complaint.”

“Schuyler County’s lawsuit will move forward to seek reimbursement for expenses related to the opioid crisis as well as to provide the County with financial aid to fight addiction, overdoses, drug-related crimes and drug deaths,” Getman stated.

In 2017, the County Legislature voted to retain the firm of Napoli Shkolnik to work with Getman, as special counsel, to bring an action against the manufacturers and distributers of prescription opiates for damages to the County. 

According to Schuyler County Administrator Tim O’Hearn, that lawsuit was filed at no risk to the County, as Napoli Shkolnik will work on contingency basis that will cover all costs associated with the lawsuit.

“By going forward with litigation, the County Legislature hopes to lessen the burden to taxpayers and hold manufacturers and distributors responsible for their role in the opioid epidemic,” O’Hearn said.

Schuyler County is one of several New York municipalities filing lawsuits against the manufacturers and distributors of opioid pain killers.  At least 14 counties across New York are suing pharmaceutical companies for what they are claiming are deceptive marketing practices.

Also, in February 2018, New York State officials filed a lawsuit against Insys alleging that it deceptively promoted Subsys for unsafe uses and violated state law by downplaying drug’s addictive risks.

A complete copy of Schuyler County’s Summons and Complaint can be found here.

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