Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of GORDON FREEDMAN for participating in a scheme to receive bribes and kickbacks in the form of fees for sham educational programs (“Speaker Programs”) from Insys Therapeutics, Inc. (“Insys”) in exchange for prescribing millions of dollars’ worth of Subsys, a potent fentanyl-based spray manufactured by Insys, among other offenses. The jury convicted FREEDMAN today on three counts, following a three-week trial before the U.S. District Judge Kimba M. Wood.
U.S. Attorney Geoffrey S. Berman stated: “Today’s conviction, in addition to the prior guilty pleas in this case of four other prominent Manhattan doctors, underscores that this Office will hold any physician accountable when that physician’s medical judgment is compromised by the corrupting influence of money. As a jury of his peers has now found, Dr. Gordon Freedman sold out his patients by prescribing a powerful and dangerous fentanyl opioid in exchange for bribes from the pharmaceutical company that manufactured that drug.”
As reflected in the Indictment, documents previously filed in the case, and evidence introduced at trial:
Insys manufactured Subsys, a powerful painkiller approximately 50 to 100 times more potent than morphine. The FDA approved Subsys only for the management of breakthrough pain in cancer patients. Prescriptions of Subsys typically cost thousands of dollars each month, and Medicare and Medicaid, as well as commercial insurers, reimbursed prescriptions written by FREEDMAN.
In or about August 2012, Insys launched a “Speakers Bureau,” purportedly aimed at educating practitioners about Subsys. In reality, however, Insys used its Speakers Bureau to induce doctors to prescribe large volumes of Subsys by paying them Speaker Program fees. At each Speaker Program, speakers were supposed to conduct a slide presentation for other health care practitioners regarding Subsys. However, many of the Speaker Programs led by the speakers paid by Insys were predominantly social affairs where no educational presentation about Subsys occurred. Attendance sign-in sheets for the Speaker Programs were frequently forged by adding the names and signatures of health care practitioners who had not actually been present.
FREEDMAN was a doctor certified in pain management and anesthesiology who owned a private pain management office on Manhattan’s Upper East Side. FREEDMAN, who was also an Associate Clinical Professor at a large hospital in Manhattan (“Hospital-1”), received approximately $308,600 in Speaker Program fees from Insys in exchange for prescribing large volumes of Subsys.
In March 2013, a Regional Sales Manager for Insys sent an email to FREEDMAN informing him that he would receive more Speaker Programs in the coming months because Insys wanted prescriptions of Subsys to increase, and urging FREEDMAN to put more patients on Subsys. FREEDMAN responded, in part, “Got it,” and significantly increased his Subsys prescriptions in the following months, during which he received approximately $33,600 in Speaker Program fees.
In 2014, FREEDMAN’s prescriptions of Subsys rose even further, and he was the fourth-highest prescriber of Subsys nationally in the final quarter of 2014, accounting for approximately $1,132,287 in overall net sales of Subsys in that quarter alone. During 2014, FREEDMAN was the highest-paid Insys Speaker in the nation, receiving approximately $143,000.
FREEDMAN, 59, who resides in Mount Kisco, New York, was found guilty of one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum term of five years in prison, one count of violating the Anti-Kickback Statute, which carries a maximum term of 10 years in prison, and one count of conspiracy to commit honest services wire fraud, which carries a maximum term of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. FREEDMAN is scheduled to appear for sentencing before Judge Wood on March 19, 2020.
Mr. Berman praised the investigative work of the FBI, and thanked HHS OIG and the New York City Police Department for their participation in the investigation.
