Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that JEFFREY GOLDSTEIN, a doctor who practiced in New York, New York, was sentenced today in Manhattan federal court to 57 months in prison for conspiring to violate the Anti-Kickback Statute, in connection with a scheme to prescribe Subsys, a potent fentanyl-based spray, in exchange for bribes and kickbacks from Subsys’s manufacturer, Insys Therapeutics. GOLDSTEIN previously pled guilty, on August 16, 2019, before U.S. Magistrate Judge Henry B. Pitman, and was sentenced today by U.S. District Judge Kimba M. Wood.
U.S. Attorney Audrey Strauss said: “Jeffrey Goldstein, an Upper East Side Manhattan doctor, prescribed Subsys, a powerful fentanyl opioid, in return for nearly $200,000 in bribes from the drug’s manufacturer, Insys Therapeutics. Goldstein put his own patients at risk in order to satisfy his own greed, and will now spend time in federal prison for recklessly prescribing this highly addictive and powerful opioid. This sentence sends a loud and clear signal to the medical community that if you take bribes in return for prescribing, you will be prosecuted to the full extent of the law and risk significant prison time.”
According to the allegations contained in the Indictment against GOLDSTEIN and filings in related proceedings:
The Insys Speakers Bureau
Subsys, which is manufactured by Insys, is 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 GOLDSTEIN.
In or about August 2012, Insys launched a “Speakers Bureau,” a roster of doctors who would conduct programs (“Speaker Programs”) purportedly aimed at educating other practitioners about Subsys. In reality, Insys used its Speakers Bureau to induce the doctors who served as speakers to prescribe large volumes of Subsys by paying them Speaker Program fees. Speakers were supposed to conduct an educational slide presentation for other health care practitioners at each Speaker Program. In reality, many of the Speaker Programs 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.
Goldstein’s Participation in the Scheme
GOLDSTEIN was a doctor of osteopathic medicine who owned a private medical office on the Upper East Side. GOLDSTEIN received approximately $196,000 in Speaker Program fees from Insys in exchange for prescribing large volumes of Subsys. After GOLDSTEIN began prescribing a competitor painkiller, Insys pressured him to stop doing so and switch patients back to Subsys, which GOLDSTEIN did.
GOLDSTEIN also received other items of value from Insys in order to induce him to prescribe. For example, Insys employees took GOLDSTEIN and Todd Schlifstein, who co-owned a private medical office with GOLDSTEIN, to a Manhattan strip club where Insys spent approximately $4,100 on a private room, alcoholic drinks, and “lap dances” for GOLDSTEIN and Schlifstein. GOLDSTEIN also arranged for Insys to pay for the annual holiday party for his private medical office.
In 2014, GOLDSTEIN was approximately the fifth-highest-paid Insys Speaker nationally. He was the sixth-highest prescriber of Subsys in the last quarter of 2014, accounting for approximately $809,275 in overall net sales of Subsys in that quarter.
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In addition to the prison sentence, GOLDSTEIN, 51, of New Rochelle, New York, was sentenced to two years of supervised release and ordered to forfeit $196,600.
GOLDSTEIN was one of five Manhattan doctors convicted for participating in the Subsys bribery conspiracy. Todd Schlifstein was convicted upon a guilty plea and sentenced by Judge Wood on October 28, 2019, principally to a term of two years in prison. Alexandru Burducea was convicted upon a guilty plea and sentenced by Judge Wood on January 27, 2020, principally to a term of 57 months in prison. Dialecti Voudouris was convicted upon a guilty plea and sentenced by Judge Wood on March 5, 2020, principally to time served. Gordon Freedman was convicted following a jury trial in December 2019 and is scheduled to be sentenced before Judge Wood on July 8, 2021.
Ms. Strauss praised the investigative work of the Federal Bureau of Investigation, and thanked the U.S. Department of Health and Human Services, Office of the Inspector General, for its participation in the investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Noah Solowiejczyk, David Abramowicz, and Katherine Reilly are in charge of the prosecution.
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