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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Wednesday, June 26, 2019

Manhattan Doctor Pleads Guilty To Accepting Bribes And Kickbacks From Pharmaceutical Company In Exchange For Prescribing Fentanyl Drug

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that TODD SCHLIFSTEIN, a doctor who practiced in Manhattan, pled guilty today to conspiracy 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.  SCHLIFSTEIN pled guilty before U.S. Magistrate Judge Sarah Netburn.  The case is assigned to U.S. District Judge Kimba M. Wood.

U.S. Attorney Geoffrey S. Berman said:  “As he admitted today, Todd Schlifstein prescribed patients a powerful fentanyl drug in exchange for bribes and kickbacks from the drug’s manufacturer.  This case shows that doctors who let illegal payments corrupt their medical judgment will be held accountable.”

According to the allegations contained in the Indictment against SCHLIFSTEIN 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 SCHLIFSTEIN.

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.

SCHILFSTEIN’s Participation in the Scheme

SCHLIFSTEIN, a doctor certified in physical medicine and rehabilitation, worked at a medical office in Manhattan.  From in or about March 2014 until in or about September 2015, SCHLIFSTEIN received approximately $127,100 in Speaker Program fees from Insys in exchange for prescribing large volumes of Subsys.  SCHLIFSTEIN became approximately the 19th-highest prescriber of Subsys nationally in the second quarter of 2015, accounting for approximately $593,373 in total net sales of the drug during that quarter.

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SCHILFSTEIN, 50, of New York, New York, pled guilty to one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  SCHLIFSTEIN is scheduled to be sentenced by Judge Wood on September 26, 2019.

Mr. Berman praised the investigative work of the Federal Bureau of Investigation, and thanked the Department of Health and Human Service’s Office of 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 and David Abramowicz are in charge of the prosecution.

Press Release Number: 
19-200
Updated June 26, 2019