Former Insys CEO pleads guilty to conspiracy
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Former Insys CEO pleads guilty to conspiracy

Former Insys Therapeutics Inc., CEO Michael Babich pleaded guilty on Wednesday to charges related to conspiracy and mail fraud stemming from the sale of a fentanyl nasal spray, Subsys.

Babich and the other defendants, former Insys executives and managers, were charged in 2016 with conspiracy to commit racketeering, mail and wire fraud, and conspiracy to violate the anti-kickback law. The charges relate to Insys’s “nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud payers of the medication, including insurers.”

Former vice president of sales Alec Burlakoff has also pleaded guilty to one count of racketeering conspiracy. Babich was set to face trial on January 28 with the remaining defendants, including Insys founder and former chairman John Kapoor. It remains unclear if Babich will cooperate with prosecutors during the upcoming trial.

Subsys, a fentanyl-based nasal spray, is a “powerful narcotic intended to treat cancer patients suffering intense episodes of breakthrough pain.”

Though under new management, the company also faced great challenges for civil liability throughout the last year. The US Department of Justice announced in May that it joined a whistleblower lawsuit against Insys in an effort to combat the opioid crisis. In April the state of Kentucky sued several opioid manufacturers alleging that they “trivialized, mischaracterized, and failed to disclose” the “serious risk of addiction” inherent in the use of the high strength pain killers. The Navajo Nation also filed a lawsuit in April in the US District Court for the District of New Mexico Franchise Tax Board of California v. Hyatt seeking damages from 11 major opioid drug manufacturers, distributors, and pharmacies.