Opioid maker Insys paid kickbacks to physician assistant, jury hears

CONCORD, N.H. (Reuters) – A former Insys Therapeutics Inc sales representative now married to the drugmaker’s ex-CEO said on Wednesday she arranged to have a physician assistant in New Hampshire receive kickbacks to prescribe patients its addictive fentanyl spray.

The testimony came at the start of the trial in federal court in Concord, New Hampshire, of Christopher Clough, a physician assistant who prosecutors say accepted nearly $50,000 from Insys in exchange for prescribing its powerful opioid pain drug, Subsys.

The trial could provide a glimpse into some of the evidence prosecutors will use in next month’s trial of six former Insys executives and managers, including John Kapoor, a onetime billionaire who was the company’s founder and chairman.

Prosecutors say they conspired to pay kickbacks to doctors and others like Clough by paying them fees to participate in “sham” speaker programs ostensibly meant to educate medical professionals about the drug. Clough, 45, has pleaded not guilty.

Among Wednesday’s witnesses was Natalie Babich, the former Insys sales representative and wife of former Insys Chief Executive Michael Babich. The former CEO faces trial along with Kapoor. Both men have pleaded not guilty.

Natalie Babich testified pursuant to a cooperation agreement after pleading guilty to conspiring to pay kickbacks in 2017.

Babich said she had been seeking a “big fish” to write Subsys prescriptions when she met Clough in 2013. Immediately after he wrote his first prescription, she asked him if he would want to become a paid speaker, Babich testified.

“Right away he just said to me, ‘sure, I’ll be a speaker, but I want doctor money’,” she said.

Babich said she made clear to Clough that the speaker programs were a reward for prescribing Subsys, an under-the-tongue spray meant for cancer patients that contains fentanyl, an opioid 100 times stronger than morphine.

Clough frequently got paid for being a speaker at dinners with her with no attendees, Babich said.

Patrick Richard, Clough’s lawyer, in his opening statement said his client had no idea Insys was trying to bribe medical practitioners like himself, and that he prescribed Subsys to patients at his pain clinic believing it was a good treatment.

“This isn’t a case about individual greed but corporate greed,” he said.

In August, Insys said it had agreed to settle a related U.S. Justice Department probe for at least $150 million. It resolved a probe by New Hampshire’s attorney general focused on payments to Clough for $3.4 million in 2017.