Drug Sales Manager Sentenced In Kickback Scheme With CT Ties

NEW HAVEN, CT — A New Jersey drug company manager was sentenced to three years of probation for his role in a kickback scheme related to fentanyl spray prescriptions that included fraud in Connecticut, according to a statement from federal prosecutors. Jeffrey Pearlman, 53, of Edgewood, NJ, was accused of inducing medical practitioners around the country to prescribe his company's drug--Subsys--over others by paying them to participate in phony "speaker programs."

From 2012 to 2015, Pearlman was employed by Insys Therapeutics, an Arizona-based pharmaceutical company that manufactured and sold Subsys, a fentanyl-based sublingual spray that was approved by the Food and Drug Administration solely for the management of breakthrough pain in cancer patients.

As district sales manager, Pearlman was responsible for managing the company’s sales representatives who called on licensed healthcare providers in Connecticut, New York, New Jersey and Rhode Island.

Pearlman helped organize "speaker programs," which were purportedly designed to gather licensed healthcare professionals who had the capacity to prescribe Subsys and educate them about the drug.

But according to prosecutors, the events were usually just a gathering of friends and coworkers, most of whom did not have the ability to prescribe Subsys and no educational component took place.

"Speakers" were paid a fee that ranged from $1,000 to several thousand dollars for attending these dinners.

In 2013, Pearlman attended a dinner at a New Haven restaurant where Heather Alfonso, who at the time was an Advanced Practice Registered Nurse at Comprehensive Pain and Headache Treatment Center in Derby, was paid a speaker fee even though no other healthcare professionals were present and no presentation of Subsys took place.

In a meeting with Alfonso in 2013, Pearlman told her that the more prescriptions of Subsys that she wrote, the more speaker programs Pearlman could provide, prosecutors said in a statement.

As a result of this scheme, Medicare Part D plans authorized payment for nearly 400 Subsys prescriptions written by Alfonso, causing millions of dollars of losses.

Pearlman personally profited from this scheme through inflated quarterly bonuses he received that were based, in large part, on the sales results of the sales representatives he managed.

Pearlman was arrested in 2016 and pleaded guilty to one count of conspiracy to violate the anti-kickback law in 2018.

Several other individuals affiliated with Insys Therapeutics, and medical practitioners involved in this kickback scheme, have been charged and convicted in other Districts across the U.S.