Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that GORDON FREEDMAN, a doctor who practiced in New York, New York, was sentenced today in Manhattan federal court to 121 months in prison for participating in a scheme to receive bribes and kickbacks in the form of fees for sham educational programs (“Speaker Programs”) from pharmaceutical company Insys Therapeutics in exchange for prescribing millions of dollars’ worth of Subsys, a potent fentanyl-based spray manufactured by Insys, among other offenses (the “Insys Bribery Offenses”). FREEDMAN was convicted of the Insys Bribery Offenses following a jury trial. FREEDMAN was also sentenced to 210 months in prison, to run concurrently to the other sentence, for distributing oxycodone and fentanyl to a patient for no legitimate medical purpose (the “Diversion Offense”). That patient ultimately died of a fentanyl overdose from drugs FREEDMAN illegally prescribed him. FREEDMAN pled guilty to the Diversion Offense in December 2019.
FREEDMAN was sentenced by United States District Judge Kimba M. Wood.
U.S. Attorney Audrey Strauss said: “Dr. Gordon Freedman, a prominent Manhattan physician, allowed his medical judgment to be corrupted by hundreds of thousands of dollars in bribes that he accepted from Insys in return for prescribing Subsys, a potent fentanyl painkiller. These payments were made to appear like legitimate speaker program fees, but as the evidence at Freedman’s trial revealed, the speaker programs were a sham and were simply a way for Insys to line Freedman’s pockets. In addition, Freedman prescribed excessive quantities of oxycodone and fentanyl to one of his patients for no legitimate medical purpose. The patient overdosed and died from fentanyl prescribed by Freedman. Freedman will now be serving a long prison sentence for accepting bribes and prescribing medically unnecessary opioids.”
According to the allegations contained in the Indictments against FREEDMAN, the evidence presented in Court during the trial related to the Insys Bribery Offenses, and filings in related proceedings:
Insys manufactured Subsys, a powerful painkiller approximately 50 to 100 times more potent than morphine. The U.S. Food and Drug Administration (“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 the defendants. In or about August 2012, Insys launched a “Speakers Bureau,” purportedly aimed at educating practitioners about Subsys. In reality, however, Insys used its Speakers Bureau to induce doctors to prescribe large volumes of Subsys by paying them Speaker Program fees. At each Speaker Program, speakers were supposed to conduct a slide presentation for other health care practitioners regarding Subsys. However, many of the Speaker Programs led by the speakers paid by Insys were predominantly social affairs where no educational presentation 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.
FREEDMAN, a doctor certified in pain management and anesthesiology, owned a private pain management office on Manhattan’s Upper East Side and was an associate clinical professor at a large hospital in Manhattan (“Hospital-1”). FREEDMAN received approximately $308,600 in Speaker Program fees from Insys in exchange for prescribing large volumes of Subsys.
In March 2013, a Regional Sales Manager for Insys sent an email to FREEDMAN informing him that he would receive more Speaker Programs in the coming months because Insys wanted prescriptions of Subsys to increase, and urging FREEDMAN to put more patients on Subsys. FREEDMAN responded, in part, “Got it,” and significantly increased his Subsys prescriptions in the following months, during which he received approximately $33,600 in Speaker Program fees.
In 2014, FREEDMAN’s prescriptions of Subsys rose even further, and he was the fourth-highest prescriber of Subsys nationally in the final quarter of 2014, accounting for approximately $1,132,287 in overall net sales of Subsys in that quarter. During 2014, FREEDMAN was the highest-paid Insys Speaker in the nation, receiving approximately $143,000.
During the period in which FREEDMAN was receiving kickbacks from Insys, he was also distributing powerfully addictive prescription drugs to a particular patient (“Patient-1”) with no legitimate medical purpose. From in or about 2013 through in or about May 2017, FREEDMAN prescribed enormous quantities of oxycodone and fentanyl to Patient-1. For example, in 2013 alone, FREEDMAN prescribed Patient-1 approximately 85,427 oxycodone pills – an average of approximately 234 oxycodone pills per day – containing a total of approximately 2,422,435 mg of oxycodone. On or about April 13, 2017, FREEDMAN gave Patient-1 prescriptions for approximately 150 doses of a drug containing fentanyl, and for approximately 950 oxycodone pills containing approximately 30 mg of oxycodone per pill. On or about May 4, 2017, Patient-1 died of a fentanyl overdose after ingesting a quantity of the drug prescribed by FREEDMAN on or about April 13, 2017.
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In addition to the prison sentence, FREEDMAN, 61, of New York, New York, was sentenced to three years of supervised release, ordered to forfeit $308,600 and ordered to pay a total fine across the two cases of $75,000.
FREEDMAN 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. Jeffrey Goldstein was convicted upon a guilty plea and sentenced by Judge Wood on June 16, 2021, principally to a term of 57 months in prison.
Ms. Strauss praised the outstanding 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 cases are 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 prosecutions.
USAO - New York, Southern;
Department of Health and Human Services OIG