Ex-pharma CEO gets over 2 years in prison for bribery scheme

PHILIP MARCELO

BOSTON (AP) — The former head of a drug company was sentenced Wednesday to two and a half years in federal prison in a bribery and kickbacks scheme that prosecutors say helped fuel the opioid crisis.

Michael Babich, a Scottsdale, Arizona, resident who was CEO of Insys Therapeutics, was sentenced Wednesday in Boston federal court after pleading guilty to conspiracy and fraud and serving as a key witness for prosecutors.

Employees for Arizona-based Insys paid millions of dollars in bribes to doctors nationwide to overprescribe Subsys, a powerful, addictive fentanyl-based painkiller for cancer patients, prosecutors argued.

They said the company paid doctors fees for participating in sham speaking events. It also misled insurers to get payment for the drug, which cost as much as $19,000 a month, prosecutors said.

The case was considered the first to hold an opioid maker and its executives criminally liable for a nationwide drug crisis that has claimed nearly 400,000 lives over two decades.

Prosecutors had sought two years in prison for Babich in recognition for his cooperation. Babich's lawyers had argued for no jail time.

As CEO, Babich had closely communicated with other company executives on the scheme before he was fired in 2015, about a year before he and others were arrested, prosecutors have said. He changed his plea to guilty shortly before his case went to trial.

Sunrise Lee, a former regional sales director at the Arizona company, was also sentenced Wednesday to a year and a day in prison.

Lee, the Bryant City, Michigan resident, was also ordered to serve three years of probation and pay restitution and forfeiture amounts to be determined later.

Prosecutors had sought a six-year prison sentence for Lee, who they say managed nearly a third of the company’s sales force as she rose through the company ranks.

Lawyers for Lee, a former exotic dancer, had sought no prison time, arguing she was the victim of a pharmaceutical industry that exploited "models and cheerleaders with no background in science" in order to sell drugs to “lonely" and "overworked” doctors.

Babich and Lee are among seven former company leaders being sentenced this month.

The company's former national sales director and its former vice president received nearly three years in federal prison. Another former regional sales director was sentenced to more than two years.

The proceedings wrap up Thursday when company founder John Kapoor and former vice president of sales Alec Burlakoff are sentenced.