the former executives had conspired to defraud health insurance providers that didn’t approve payments for Subsys when physicians prescribed the drug to cancer-free patients.
Insys executives achieved this by establishing a division dedicated to securing prior approval from insurance providers and pharmacy benefit managers.
The suspects were arraigned on December 8, 2016, and will appear at the U.S. District Court in Boston on an undisclosed date. Babich and his employees have been charged with conspiracy to commit racketeering, conspiracy to commit wire and mail fraud, and conspiracy to violate the Anti-Kickback Law.
The charges carry a sentence of no longer than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the amount of monetary gain or loss.
This is not the first time Insys has suffered legal trouble. In 2016 alone, it faced state charges in Illinois and federal charges in New York related to a kickback scheme, a class-action lawsuit filed by shareholders after a series of false statements, and fraud charges which led to a guilty plea.
In a statement, Carmen Ortiz, U.S. Attorney for the District of Massachusetts, assured the public that corporate greed will not compromise patient safety and hopes that the charges will send a stern message in America’s fight against the epidemic.