NY Doctor Gets 5 Years in Prison for Pharma Bribery, Kickback Scheme

Dr. Jeffrey Goldstein is about to serve a prison term of up to 57 months after engaging in a pharmaceutical kickback scheme. The drug in question is known as Subsys, a fentanyl-based spray that’s used to treat pain in cancer patients. The manufacturer, Insys Therapeutics, has seen its fair share of legal troubles as well. Goldstein also served as a public speaker for the company, promoting medication to some of the country’s most vulnerable patients.

A Dangerous Game

The NY doctor was one of five to be charged in the Insys kickback scheme back in 2018. They accepted bribes, luxury dinners, expensive nights out, and even lap dances in exchange for speaking on behalf of the company and prescribing Subsys, according to prosecutors. The indictment refers to these speaking engagements as “sham educational programs.” Instead of educating providers and patients, the authorities said the doctors used these events to receive payments for prescribing the drug.

For his part in the scheme, Goldstein pleaded guilty on Aug. 16 of 2019 to conspiring to violate the anti-kickback statute, which forbids providers from prescribing medication in exchange for financial gain.

The FDA has approved fentanyl for pain treatment in cancer patients, but the CDC warns these drugs can be up to 50 to 100 times more powerful than traditional painkillers, like morphine.

Prosecutors say Goldstein became a speaker for Insys in April 2013. Before that, he only wrote eight prescriptions for Subsys. After joining the program, he wrote 97 prescriptions for the fentanyl-based drug over the next four months alone. Overall, he received $196,000 for his participation in the program.

The indictment says the company also used expensive dinners and parties to incentivize Goldstein to write prescriptions, including a $595.74 tab at a casino in Connecticut, a $2,095.51 Christmas party for his staff, and a $4,100 tab at a Manhattan strip club where the doctor reportedly received lap dances.

Pleading for Mercy

John Kapoor, the billionaire founder of Insys Therapeutics, is currently serving his 5-plus-year prison sentence for creating the kickback program. It was part of an aggressive ad campaign to sell as much of the drug as possible. Insys even made rap-style commercials featuring a dancing Subsys can to promote the drug to cancer patients. 

Assistant U.S. Attorney Nathaniel Yeager commented on the crime after the charges came down against Kapoor. “He was the principal leader, who personally approved, and thereafter enforced, the corrupt strategies employed throughout the conspiracy,” Yeager said. “This crime would not have happened, could not have happened, without John Kapoor. It was, in almost every way, Kapoor’s crime.”

Goldstein could have served up to 33 years in prison for violating the anti-kickback statute, as well as for aggravated identity theft and wrongful disclosure of individually identifiable health information. Kapoor and his conspirators asked providers to falsify information to trick insurance companies into paying for the drug.

Goldstein’s lawyers, Marc Agnifilo and Jacob Kaplan, asked the court for a 15-month jail sentence in early 2020. Once COVID-19 set in, they asked the court to let Goldstein stay at home on probation so he could be with his family. Records show Goldstein worked as a driver for Lyft and Uber after losing his medical license. They also argued that their client should get a lower sentence because he volunteered at the Red Cross during the pandemic.

“By focusing only on deterring other doctors from committing future crime, the sentence did not reflect the outstanding character of Mr. Goldstein and his lifetime of good works, including his performing over 10,000 COVID tests during the pandemic and his volunteering hundreds of hours with the Red Cross,” Agnifilo told the court on Tuesday. “He is a wonderful father and husband, and also someone who has consistently given back to society. The world should know that, and it should have been reflected in the sentence.”

Goldstein has now been sentenced to up to 57 months in jail.

In both cases, lawyers for the defendants asked the court to judge them on their entire lives, not just their involvement in the kickback scheme, but prosecutors argued that the charges aren’t just about punishing corrupt providers; they’re about preventing these kinds of crimes in the future.

“It’s about making the next pharma company think twice about its sales tactics and think hard about its basic responsibility as a corporate entity and about not victimizing the public so it can make more money,” U.S. Attorney Andrew Lelling said.