Drug Company Manager Admits Role In Kickback Scheme

NEW HAVEN, CT — An Edgewood, NJ man admitted to his role in a drug kickback scheme that paid prescribing physicians "speaking fees" if they prescribed his company's drug.

Jeffrey Pearlman, 51, worked at Insys Therapeutics, which sold Subsys, a fentanyl-based sublingual spray for breakthrough pain in cancer patients. He was hired as a sales representative and worked his way up to district sales manager, according to the U.S. Attorney District of Connecticut office.

Pearlman admitted through a guilty plea that they would hold speaker programs at high-end Connecticut restaurants and elsewhere. Usually no speaking took place at the events which were a collection of friends and co-workers, but the "speaker" would get paid $1,000 to several thousand dollars.

Pearlman told a health care provider that the more Subsys prescriptions he wrote the more speaker programs he could provide. He instructed a sales representative to contact the provider when the provider prescribed less of the drug.

Medicare Part D authorized nearly 400 prescriptions for Subsys made by the health care provider, resulting in millions of dollars of losses to the government. Pearlman got inflated quarterly bonuses thanks to the large amount of sales he managed.

Pearlman pleaded guilty to one count of conspiracy to violate the anti-kickback law, an offense that carries a maximum term of imprisonment of five years and a fine of up to $250,000.

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