On October 23, the 1st Circuit upheld a criminal conviction against Christopher Clough, a physician assistant accused of overprescribing the opioid Subsys in exchange for kickbacks in violation of the Anti-Kickback Statute. Clough unsuccessfully challenged the sufficiency of the prosecution’s evidence, with the appellate court ultimately ruling that the jury reasonably determined that Clough indisputably received almost $50,000 in illegal kickbacks over the course of a year.
According to the judge, Insys created Subsys, a synthetic opioid that is “delivered into the body by means of a spray under the tongue…that the FDA approved for…patients who experience extreme ‘breakthrough pain’…with major risks including slowed breathing, sedation, and addiction.” After initially disappointing sales of Subsys, Insys created a speaker program that would pay money to medical providers, like Clough, in order to incentivize providers to write more prescriptions. The judge explained that the speaker program, while claiming to be a program designed to educate the medical community about the benefits of Subsys, paid speaker fees to providers, including Clough, at a rate of $1,000 per engagement, regardless of whether or not the sessions had a single attendee. In fact, the court noted, when no attendees were present at the engagements, Clough forged the signatures of others, including his ex-wife.
A jury convicted Clough of both conspiring to accept kickbacks and actually accepting kickbacks via the “sham speaker program” in violation of federal law. The Anti-Kickback Statute prohibits one from conspiring to receive and/or simply receiving financial gains via the sale of drugs that are paid for by assistance with federal dollars. The circuit judge explained that to prove conspiracy to violate the Anti-Kickback Statute, “the government…needed to prove that Clough conspired with Insys to receive illegal remuneration (the kickback payments through the speaker’s program) as an inducement and in exchange for his prescribing Subsys to his patients.” Clough argued that the government proved no such conspiracy since he had signed an express agreement that contained a clause saying that participation in the speaker’s program “will not be based upon the volume or value of any business generated between speaker and Insys with respect to Insys products.”
The judge held that such a clause did not, in it itself, disclaim the existence of a conspiracy. The court stated that while a conspiracy can be proven with an express agreement, it can also be proven by circumstantial evidence and/or inferred by Clough’s words and actions. In this case, the opinion elaborated, the evidence presented to the jury showed that while receiving speaker engagements, Clough wrote more than 100 prescriptions for opioids, despite having written almost none prior; testimony from multiple staff at Insys proffering that despite the express contract to the contrary, there existed the “understood side deal” that was “kind of just like a little contract, but not an actual piece of paper contract”; and even evidence showing that Insys staff helped Clough falsify the insurance paperwork to expedite the prescriptions, with one notable example being that a few patients reported not knowing they had been prescribed Subsys until the medication arrived in their mailbox. All in all, the court proclaimed, the jury reasonably inferred that Clough engaged in a kickback conspiracy as the evidence showed that “Clough’s aberrant behavior was not reminiscent of a physician assistant prescribing based on need, but rather of a drug pusher—one who voluntarily furthered the conspiracy by knowingly and willfully enriching Insys at the expense of the U.S. Government in exchange for kickbacks through sham speaking engagements.”
The court then moved to the second charge of whether Clough did not just conspire to, but in fact received kickbacks in violation of the Anti-Kickback Statute. The court explained that while the “Anti-Kickback Statute criminalizes any kickback knowingly and willingly offered, paid, solicited, and received in exchange for…prescribing a drug for which a federal healthcare program has picked up the check,” it does contain a safe harbor provision. The safe harbor provision states that the Anti-Kickback Statute is not violated when a program, such as the speaking engagements provided to Clough, do not “compensate based on the number of prescriptions written by Clough for ‘which Medicare, Medicaid, or other federal health care programs’ pay.” The court summarily concluded that the jury also reasonably ascertained a conviction on this count, as the evidence used to prove the conspiracy also directly proved that, despite the written agreement containing the disclaiming clause, “the actual relationship between Insys and Clough…fell outside of the safe harbor provision because the payments from Insys to Clough were ‘determined in a manner [that] took into account the volume’ of prescriptions that he wrote.”
The court ended the opinion by affirming the convictions against Clough from the trial court on both counts of violating the Anti-Kickback Statute. The lower court sentenced Clough to four years imprisonment, two years supervised release post-confinement, and a $700,000 fine.
