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# Ex-Pharma Execs Arrested in Racketeering Scheme
- URL: https://www.fdaweb.com/ex-pharma-execs-arrested-in-racketeering-scheme/
- Published: 2016-12-09T12:00:00.000Z
- Updated: 2026-09-14T21:53:32.000Z
- Author: David McFarland
- Tags: Drugs, #legacy-id-D5137531

Several former pharmaceutical executives and managers at Insys Therapeutics were arrested 12/8 on charges that they led a nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers. The indictment alleges that former CEO **Michael L. Babich**, former sales VP **Alec Burlakoff**, former sales director **Richard M. Simon**, former national sales directors **Sunrise Lee** and **Joseph A. Rowan**, and managed markets VP **Michael J. Gurr**y conspired to bribe practitioners in various states, many of whom operated pain clinics, in order to get them to prescribe Subsys (fentanyl) for off-label pain use. Subsys is approved for treating cancer patients suffering intense episodes of breakthrough pain.

The indictment also alleges that the former executives conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. “They achieved this goal by setting up the ‘reimbursement unit’ which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers,” a [government release ](https://www.justice.gov/usao-ma/pr/pharmaceutical-executives-charged-racketeering-scheme?ref=fdaweb.com)says.

  
The racketeering and conspiracy to commit mail and wire fraud charges allow for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000, or twice the amount of pecuniary gain or loss, the government says.