The term “kickback” refers to when the recipient of illegally-obtained money “kicks back” a portion of his/her earnings to another person who helped him/her obtain that money. In other words, a kickback is a form of bribery. It is the providing of a commission to a person taking a bribe.
The medical industry has endured its fair share of kickback schemes.
Among the latest to have been found guilty of a kickback scheme is 53 year-old Jeffery Pearlman of Edgewood, New Jersey. As reported by the District of Connecticut branch of the United States Department of Justice last week, Pearlman has been sentenced to three years of probation for his participation in a kickback scheme involving fentanyl spray prescriptions.
Both court documents and statements made in court confirmed that Pearlman pulled off his scheme between September 2012 and November 2015. During that time, he was employed by Insys Therapeutics. The Arizona-based pharmaceutical company manufactures and sells Subsys, which is a fentanyl-based sublingual spray. The drug has been approved by the Food and Drug Administration solely for the management of breakthrough pain in cancer patients.
Pearlman was first hired by Insys Therapeutics as a sales representative.
He was later promoted to District Sales Manager. In that role, he was responsible for managing the company’s sales representatives who called on licensed healthcare providers in the states of Connecticut, New York, New Jersey and Rhode Island. An investigation discovered that Pearlman was using his sales representatives to encourage medical practitioners to prescribe Subsys over other similar medications.
The medical practitioners were paid to participate in hundreds of sham “Speaker Programs.” They were often held at high-end restaurants. At these Speaker Programs, licensed healthcare professionals are supposed to be educated about the drugs they have the authority to prescribe. The events coordinated by Pearlman, however, gathered friends and co-workers who did not have the ability to prescribe Subsys. No educational components took place.
The “Speakers” were paid large sums of money.
The fees ranged from $1,000 to several thousand dollars just for attending these dinners. “At times, the sign-in sheets for the Speaker Programs were forged to make it appear that the programs had an appropriate audience of healthcare professionals,” reports the DoJ. At one particular dinner in 2013, a speaker fee was paid out to a nurse who attended, even though no other healthcare professionals were present and no presentation of Subsys took place.
That nurse was Health Alfonso. Pearlman encouraged her to write as many prescriptions for Subsys as she could. When, in June 2013, it was found that the agreed upon number of prescriptions were not being met, Pearlman emailed Insys sales representative, Natalie Levine. She was responsible for calling on Alfonso to reiterate the need for the nurse to write more Subsys prescriptions. That way, Pearlman could justify more speaker programs to continue his scheme.
Pearlman was arrested on September 29, 2016.
According to the DoJ report, “on August 8, 2018, he pleaded guilty to one count of conspiracy to violate the anti-kickback law. Alfonso and Levine pleaded guilty to related charges. On June 24, 2019, Levine was sentenced to three years of probation, including six months of home confinement. On November 26, 2019, Alfonso was sentenced to three years of probation.”
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