Manager of An Arizona-based Pharmaceutical Company Sentenced for Violating the Anti-Kickback Statute

Manager of An Arizona-based Pharmaceutical Company Sentenced for Violating the Anti-Kickback Statute

U.S. Attorney John H. Durham for Connecticut’s District announced that Jeffrey Pearlman, age 53, from Edgewood, New Jersey, was convicted, on 2nd December 2020, for taking part in a kickback conspiracy linked with fentanyl spray prescriptions. Janet Bond Arterton, United States District Judge, sentenced Jeffrey Pearlman to three years of supervised release.

According to the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), the court proceeding was conducted through videoconference.

As per the court documents and attestation submitted in court, between September 2012 and November 2015, Jeffrey Pearlman was an employee at Insys Therapeutics, a pharmaceutical company based in Arizona that made and sold Subsys. Subsys is a fentanyl-based sublingual spray authorized by the Food and Drug Administration only for managing the breakthrough pain in cancer patients.  Initially, the company employed Jeffrey Pearlman as sales personnel and afterward promoted him to the District Sales Manager position. While as District Sales Manager, Jeffrey Pearlman had a responsibility to manage the firm’s sales personnel who called on certified healthcare givers in Connecticut, New Jersey, New York, and Rhode Island.

An investigation discovered that Insys Therapeutics sales representatives, like Jeffrey Pearlman and the sales personnel he supervised, were persuading medical professionals around the nation to write Subsys over other similar drugs by paying the medical professionals to participate in multiple bogus Speaker Programs. The Speaker Programs were typically hosted at classy restaurants and were allegedly intended to gather certified healthcare experts with the capacity to write Subsys prescriptions and educate them concerning the medication.  In reality, the Speaker Programs were typically a mere gathering of co-workers and friends, and most of the attendees never had the ability to direct Subsys prescriptions, and no learning took place.  The program’s Speakers were reimbursed a fee that ranged between 1,000 USD to multiple thousand dollars for attending these expensive dinners.  On some occasions, the Speaker Programs’ sign-in sheets were fabricated to make it look like the programs had the right audience of healthcare specialists.

In 2013, Jeffrey Pearlman joined a dinner hosted at a New Haven restaurant where Heather Alfonso, an Advanced Practice Certified Nurse who worked at Comprehensive Pain and Headache Treatment Center in Derby at the time, was reimbursed a speaker pay although no extra healthcare specialists were in attendance, and no presentation about Subsys conducted

In a meeting that took place between Pearlman and Alfonso in the spring of 2013, Jeffrey Pearlman informed the provider that the more the Subsys prescriptions that Alfonso directed, the more Speaker Programs events Jeffrey Pearlman could give.  In June 2013, when these Subsys prescriptions were not primarily being directed as premeditated, Jeffrey Pearlman sent an email to Natalie Levine, an Insys sales personnel responsible for calling on Heather Alfonso, and repeated that per the “verbal deal” Jeffrey Pearlman had agreed with Alfonso, Heather Alfonso was supposed to direct more Subsys prescriptions or Jeffrey Pearlman was going to have a tremendous strain in justifying more Speaker programs events.

Because of this conspiracy, Medicare Part D programs approved payment for about 400 Subsys pills prescribed by Heather Alfonso, resulting in millions of dollars of losses.  Jeffrey Pearlman individually profited from this conspiracy via exaggerated quarterly bonuses he obtained that were according, in large part, to the sales outcomes of the sales personnel he supervised.

Jeffrey Pearlman pleaded guilty on 8th August 2018 to one conspiracy count to breach the anti-kickback Act after his arrest on 29th September 2016.

Heather Alfonso and Natalie Levine confessed to related accusations.  Natalie Levine was convicted on 24th June 2019 to three years of supervised sentence, plus six months of home detention. Heather Alfonso was convicted on 26th November 2019 to a three-year probation sentence.

Numerous other people linked with Insys Therapeutics and medical specialists involved in this kickback conspiracy have been indicted and convicted in additional Districts across the nation.  On 2nd May 2019, a Boston federal jury found John N. Kapoor, Insys Therapeutics’ founder and ex-Executive Chairman, and four-other previous Insys executives liable for the racketeering scheme.  John Kapoor was convicted on 23rd January 2020 to 66 months in federal prison.

In June 2019, Insys Therapeutics consented to reimburse a total of 225 million U.S. dollars to resolve criminal and civil inquiries of the company.

The HHS (United States Department of Health and Human Services)  – Office of the Inspector General (OIG) and the Federal Bureau of Investigation carried out the investigation in the District of Connecticut, with the help from the DEA (Drug Enforcement Administration) Tactical Diversion Squad (TDS).  United States Assistant Attorney Douglas P. Morabito, United States Assistant Attorney Sarah P. Karwan, and United States Assistant Attorney Richard M. Molot prosecuted this case.

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