Michael Babich, former CEO of Insys Therapeutics, will pay at least $2 million to settle allegations related to his role in an opioid scheme. The settlement involves a lawsuit filed by the Arizona Attorney General’s Office against Insys Therapeutics, several employees, and three Arizona doctors.
The Arizona Attorney General’s Office (AGO) alleged that they engaged in an unlawful plot to increase the sale of Insys’ flagship opioid medication Subsys.
In 2019, the AGO filed a second lawsuit against Insys’ founder and several former executives, including Mr. Babich, for engineering and engaging in that scheme.
The AGO alleged that Insys and its executives, including Mr. Babich, engaged in, directed, or authorized a quid pro quo arrangement with doctors where Insys paid the doctors as a reward for prescribing Subsys. The complaint further alleged that Insys and the executives engaged in, directed, or authorized a call center designed to ensure that insurance companies approved and paid for Subsys prescriptions by misrepresenting the patients’ medical information to the insurance companies.
If approved by the court, under the terms of the consent judgment, Mr. Babich will pay $2 million to the State, will cooperate fully with the State’s ongoing investigation into Insys Therapeutics and its executives, and will never sell or market pharmaceuticals in Arizona again. If Mr. Babich violates the terms of the agreement, he may be subject to over $600 million in additional penalties.