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UPDATE 1-Ex-Insys CEO's wife pleads guilty in U.S. to opioid kickback scheme

(Adds details on case, background on investigation)

July 11 (Reuters) - A former Insys Therapeutics Inc sales representative who is married to its former chief executive pleaded guilty on Tuesday to engaging in a scheme to pay kickbacks to medical practitioners to prescribe a drug containing the opioid fentanyl.

Natalie Levine, who worked at the Arizona-based drugmaker from 2013 to 2014, entered her plea in federal court in Hartford, Connecticut, to one count of conspiring to violate a federal anti-kickback statute, U.S. prosecutors said.

The plea marked the latest development in the ongoing investigations of Insys related to Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a highly addictive and regulated synthetic opioid.

Federal prosecutors in Boston in December announced charges against six former Insys executives and managers, including Levine's husband, former Chief Executive Michael Babich, in connection with a scheme to bribe doctors to prescribe Subsys.

Prosecutors said Babich and others led a conspiracy to bribe medical practitioners to unnecessarily prescribe Subsys to non-cancer patients through payments disguised as marketing event and speaker fees. They have pleaded not guilty.

Insys has said it is working toward a settlement with the U.S. Justice Department. Several other people affiliated with Insys have also faced charges in various states.

Levine's lawyer, Thomas Gallagher, had no immediate comment. Babich's lawyer and representatives for Insys did not respond to requests for comment.

Prosecutors said that during her time as a sales representative, Levine used a sham speaker program to pay a Connecticut nurse, a New Hampshire physician's assistant and a Rhode Island doctor to prescribe Subsys.

While Insys ostensibly designed the speaker program to educate healthcare professionals about Subsys, its primary purpose was in fact to reward healthcare providers who prescribing large amounts of Subsys.

Prosecutors said the three medical providers earned thousands of dollars in kickbacks through the speaker events, which were usually just a gathering of friends and co-workers at high-end restaurants, prosecutors said.

Under a plea deal, Levine, a resident of Scottsdale, Arizona, agreed not to appeal any sentence of 4-3/4 years in prison or less. U.S. District Judge Michael Shea scheduled her sentencing for Oct. 5.

The charges against Levine came after a Connecticut nurse, Heather Alfonso, pleaded guilty in 2015 to having received kickbacks to prescribe Subsys.

Federal prosecutors in Connecticut have also charged a former Insys district manager, Jeffery Pearlman, for engaging in a kickback scheme. He has pleaded not guilty. (Reporting by Nate Raymond in Boston; editing by Chris Reese and Jonathan Oatis)