- Former Insys Therapeutics (INSY +4.9%) district sales manager Jeffery Perlman was arrested recently over charges of orchestrating illegal kickbacks to prescribers to goose sales of pain med Subsys (fentanyl sublingual spray). Mr. Perlman allegedly helped organize "educational" events at upscale restaurants featuring speakers who had experience with the drug.
- The speakers were paid fees of $1,000 and above for each event, but apparently didn't have to address the attendees. The events were merely social gatherings among friends and co-workers absent of any educational component. In order to disguise the events legitimate speaking programs, the sign-in sheets were forged, supposedly with Perlman's knowledge.
- A few months ago, Connecticut nurse Heather Alfonso pleaded guilty to accepting $83K in kickbacks from the company. She admitted that she prescribed Subsys to patients who were not suffering from cancer, the drug's approved indication. She is now a cooperating witness.
- Perlman worked at Insys from February 2013 to December 2015. Former CEO Michael Babich resigned in November 2015. Current chief Dr. John Kapoor announced his intention to leave several weeks ago as soon as a successor can be appointed.
- The company's dubious promotional practices were first exposed in an April 2015 by the Southern Investigative Reporting Foundation. A month later, two Mobile, AL-based pain specialists who were the top prescribers of Subsys were arrested on charges of illegal prescription drug distribution and conspiracy to commit healthcare fraud in order to increase insurance reimbursement.
- Previously: Insys Therapeutics off 17% on bearish article by investigative reporter (Dec. 3, 2015)