United States v. Clough

• Decision Date: 23 October 2020
• Docket Number: No. 19-1621,19-1621
• Citation: 978 F.3d 810
• Parties: UNITED STATES, Appellee, v. Christopher CLOUGH, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

978 F.3d 810

UNITED STATES, Appellee,

v.Christopher CLOUGH, Defendant, Appellant.

No. 19-1621

United States Court of Appeals, First Circuit.

October 23, 2020

William E. Christie, Shaheen & Gordon, PA, Concord, NH, for appellant.

Scott W. Murray, United States Attorney, with whom Seth R. Aframe, Assistant United States Attorney was on brief, for appellee.

Before Howard, Chief Judge, Lynch, and Thompson, Circuit Judges.

THOMPSON, Circuit Judge.

In a pattern of drug company kickback schemes repeating through criminal prosecutions across the United States, a jury convicted Christopher Clough of violating federal laws by conspiring to receive, and of actually receiving, kickbacks from the pharmaceutical company Insys in exchange for prescribing its synthetic opioid Subsys.¹ Clough was one of the country's top-five prescribers of Subsys, and some of his patients suffered the unfortunate consequences of that ranking, including opioid addiction. Insys repaid Clough's prescribing diligence by giving him a place in the company's speaker program -- a perk that paid him nearly $50,000, often to "educate" non-existent audiences about the miracles of Subsys. On appeal Clough claims the government introduced insufficient evidence to support his convictions and that the government had the burden to prove that his conduct fell outside of the Anti-Kickback Statute's personal services safe harbor provision. And compounding this error, says Clough, was the district court's failure to instruct the jury about that same safe harbor provision. Finding no merit in Clough's arguments, we affirm.

BACKGROUND

Because Clough challenges the sufficiency of the evidence, "we will recite the facts in the light most compatible with the jury's verdict." United States v. Serunjogi, 767 F.3d 132, 135 (1st Cir. 2014) (citing United States v. Polanco, 634 F.3d 39, 40 (1st Cir. 2011) ). We summarize the facts to begin, adding more later as needed for our legal discussions.

Speaker for Hire

With disappointing profits following Subsys's initial release, Insys crafted a sham speaker program. This is how it worked. Company executives undertook to supercharge prescriptions of the expensive drug by finding "just one good doc[tor]" or physician assistant² in areas across the country willing to push its pharmaceutical without constraint. The scheme was simple; the more prescriptions that medical providers wrote for higher doses (which brought in sinful profits to Insys), the more meetings got scheduled in which Insys would pay providers like Clough to tout the phenomenal benefits of Subsys to other medical prescribers.³ All too often though, nobody showed up for these presentations. Yet, Insys still paid the speakers, thus "hook[ing]" them in the same way that Subsys threatened to hook patients. Clough concedes that the Insys speaker program was an illegal scheme designed to incentivize physicians and providers to prescribe Subsys. He just contends he kept free from the taint.

Natalie Levine,⁴ an Insys pharmaceutical representative who sold Subsys and who "pled guilty to a conspiracy with prescribers to [organize] sham speaker programs" with "kickbacks" for those prescribers, barely broke a sweat looping Clough, a licensed physician assistant, into the scheme. When the two met, Clough worked at PainCare, a pain management clinic located in Somersworth, New Hampshire.⁵ As it happened, in the summer of 2013, Clough inherited from a departing physician a patient who needed a refill of his prescription for Subsys. Because Clough had never prescribed the drug, PainCare invited Levine to attend Clough's first appointment with the patient to teach Clough how to navigate the complicated process of prescribing Subsys⁶ and of getting a specialty pharmacy to fill and dispense it. Moments after Clough approved and completed the Subsys refill (and while the patient was still in the room), Levine asked Clough if he would like to participate in the Insys paid speaker program. Clough jumped at the opportunity, but, as he explained, he wanted "doctor money."

Becoming an Insys Proselytizer to No One in Particular

Despite Clough's eagerness, Insys required medical providers to hand out multiple doses to multiple patients before approving the provider as a speaker. So, Clough went at it. Clough had already written a second prescription on the very same day, June 27, 2013, that he first voiced interest in becoming an Insys speaker. Once Levine informed him of Insys's prescription requirement, Clough accelerated his pace, writing thirty-two prescriptions in July, almost all for doses higher than the recommended starting amount.

Clough's whole-hearted embrace of Subsys did not escape Insys's notice. During a phone call in early August with Alec Burlakoff, Insys's Vice President of Sales, Burlakoff claimed he "could literally feel" Clough's enthusiasm about prescribing Subsys "coming through the phone;" this, even though Clough had almost certainly not had any follow-up visits with patients to whom he had prescribed the drug only a few weeks prior. Weeks into doling out Subsys, Clough had yet to lead any speaker programs. So Burlakoff stepped in and ordered Insys to provide Clough with substantial speaker opportunities. Those executing Burlakoff's demand, including Levine's boss, Jeffrey Pearlman, testified that the directive from the higher ups indicated clearly that "Clough was on board with the speaker programs and [with] Insys's way of using him" to drum up prescriptions. Indeed, it was Insys's strategy to "throw[ ] it in [the providers'] face[s]" that they would get "X [speaker] programs for X dollars" in speaker's fees.

On August 16, 2013, Clough signed the standard "Speaker Agreement" provided by Insys to its participating medical providers. That agreement contains an express clause disclaiming any whiff of a notion that Insys would induce Clough to write more prescriptions in exchange for providing him with more speaker opportunities at $1,000 a pop.⁷ Yet Insys sales representatives, including Levine, testified to a separate unwritten but clearly understood side deal -- "kind of just like a little contract, but not an actual piece of paper contract" -- by which Insys paid medical providers speakers' fees in exchange for prescriptions. The number of prescriptions was the "only factor" in how Insys allocated those events, and Levine stated that Clough knew as much. Once Clough put his signature on the Speaker Agreement, he upped his prescription ante, meting out Subsys to an increasing number of patients in increasing dosages, sometimes without ever informing his patients of the prescription or the substantial risks associated with the drug, let alone telling them about his financial interest in the success of Subsys.⁸

Speaking to No One in Particular

Between September 2013 and October 2014, Clough participated in approximately one Insys speaker program per week, earning himself about $49,303 in fees.⁹ If the event turned out to be a no-show, Clough's contract with Insys formally mandated that the program be cancelled resulting in no payment to the speaker. Informally though, Insys executives preferred for the events, all of which got booked in high-end restaurants, not to be cancelled so as to keep prescribers hooked on the money. For a majority of the dinners for which Insys paid Clough, Levine gave Clough notice in advance that no other providers had RSVP'd to attend. But none of the dinners were kiboshed. Instead, Clough provided Levine with the names of other medical providers, mostly his colleagues, and then forged their signatures on a sign-in sheet, which concealed the illegitimacy of the sham speaking engagement, and which gave cover to Insys to pay Clough without appearing to violate the Anti-Kickback Statute. Multiple medical providers with whom Clough had worked, including his ex-wife with whom he was going through a divorce at that time, testified that they never attended events for which their names appeared on Clough's sign-in sheets.

Trial with an Audience of 12

Following an investigation into this scheme, Clough was charged with one count of conspiracy to accept kickbacks for prescribing drugs paid for by a federal health care program in violation of 18 U.S.C. § 371 and seven counts of accepting such kickbacks in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b). During the six-day trial that ensued, Clough properly moved for judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29, arguing "that there's not enough [evidence] to proceed to the jury." The court reserved judgment allowing the case to go to a New Hampshire jury which found Clough guilty of all charges. Thereafter, the district court denied Clough's Rule 29 motion and imposed sentence.¹⁰ And here we are.

DISCUSSION

Before us Clough advances arguments which boil down to two overarching claims of error: (1) the government did not present sufficient evidence to prove that he participated in a conspiracy to receive kickbacks, or to prove that he accepted those kickbacks in exchange for prescribing Subsys; and (2) the district court committed plain error by not (sua sponte) instructing the jury about a safe harbor provision within the Anti-Kickback Statute. Neither argument convinces.

1. Sufficiency of the Evidence

Defendants who challenge the sufficiency of the evidence journey a road well-traveled. Because Clough moved for a judgment of acquittal at trial asserting the same arguments below as here, he, as lawyers say, preserved the argument for appeal, and we accordingly review his appeal as if we were the first court to examine the question (i.e. de novo). See United States v. Acevedo-Hernández, 898 F.3d 150, 161 (1st Cir. 2018). To answer Clough's sufficiency challenge, we look at the evidence in the light most favorable to the verdict. See id. From there, we determine whether any reasonable jury, using common sense inferences based on their life experiences and knowledge, "could...