By Nate Raymond
BOSTON (Reuters) - A former employee of Insys Therapeutics Inc pleaded guilty on Monday to having conspired to defraud insurers into paying for an expensive fentanyl-based drug that is at the heart of an investigation into the company.
Elizabeth Gurrieri, a former manager of reimbursement services for Arizona-based Insys, entered her plea in federal court in Boston to one count of wire fraud conspiracy as part of deal to cooperate with U.S. authorities.
Gurrieri's cooperation could result in her testifying at a later trial of six ex-Insys executives and managers, including former Chief Executive Michael Babich, who prosecutors say participated in a scheme to bribe doctors to prescribe the drug, Subsys.
Insys has been working toward a settlement with the U.S. Justice Department in a probe focused on Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a highly addictive and regulated synthetic opioid.
As U.S. authorities have sought to combat opioid abuse, Subsys has become the subject of federal and state investigations amid allegations that the drug was marketed and sold to non-cancer patients.
Prosecutors alleged in December that Babich and others led a conspiracy to bribe medical practitioners to unnecessarily prescribe Subsys through payments disguised as marketing event and speaker fees.
Other defendants include former Insys vice presidents Alec Burlakoff and Michael Gurry; former national sales director Richard Simon; and former regional sales directors Sunrise Lee and Joseph Rowan. All six have pleaded not guilty.
The case against Gurrieri related to what prosecutors said was a push by Insys to get insurers to cover the price of Subsys, which in 2013 cost about $2,340 for 60 units.
In court, Assistant U.S. Attorney Nathaniel Yeager said that Gurrieri from 2012 to 2015 worked with others to deceive insurers and pharmacy benefit managers to obtain payment authorization for Subsys.
"Ms. Gurrieri specifically directed employees to lie using a number different methods to mislead insurers," Yeager said.
In court papers, prosecutors said Insys employees were taught to mislead insurers about the diagnosis of patients and whether they had tried and failed other preferred medications.
Gurrieri also instructed employees to claim a cancer diagnosis regardless of the patient's history or whether Subsys was prescribed for a use not approved by the U.S. Food and Drug Administration, according to a criminal complaint.
The cases in U.S. District Court, District of Massachusetts, are U.S. v. Babich et al, No. 16-cr-10343, and U.S. v. Gurrieri, No. 17-cr-10083.
(Reporting by Nate Raymond in Boston; Editing by Leslie Adler)