Insys Therapeutics' John Kapoor found guilty in fentanyl bribery case - News Coverage

Insys Therapeutics’ John Kapoor found guilty in fentanyl bribery case

BOSTON — The billionaire founder of the pharmaceutical company Insys Therapeutics and four other top executives were found guilty on Thursday of racketeering in a scheme that involved giving bribes and kickbacks to physicians to prescribe large amounts of a fentanyl spray to patients who didn’t need the painkiller.

After 15 days of deliberations, a jury in Boston federal court reached a verdict in the first-of-its-kind nationwide opioid conspiracy case, finding the CEO and founder John Kapoor of the Arizona-based company guilty of conspiracy charges of racketeering. 

Also found guilty  were: Richard M. Simon, the company’s former national director of sales; Sunrise Lee and Joseph A. Rowan, both regional sales directors; and former Vice President of Managed Markets, Michael J. Gurry.

The case in the U.S. District Court of Massachusetts – in which the Justice Department first made indictments in 2016 – is considered the first in federal court involving executives of an opioid manufacturing company. 

It centered on a fentanyl-based pain medication called Subsys, a powerful and potentially dangerous narcotic that is intended to treat patients with cancer suffering from intense pain. 

Two other co-conspirators, Michael Babich, the former CEO of the company, and Alec Burlakoff, former vice president of sales, had already pleaded guilty to charges. Both testified against his former colleagues in the trial, which took place over two months. 

Federal prosecutors argued that practitioners between 2012 and 2015 provided patients large numbers of Subsys prescriptions – including to non-cancer patients –  in exchange for kickbacks and bribes from the Insys executives.

The bribes took “different forms,” according to prosecutors, but were usually disguised as fees that the company paid the physicians for marketing events. The government cited in-person meetings, telephone calls and texts to inform sales representatives that the key to sales was using speaker program series to pay practitioners to prescribe the fentanyl spray. 

The high-profile verdict comes amid other cases being prosecuted nationally stemming from a surge in opioid use and overdose deaths. 

In a push to drive sales of the drug, the company even had a rap video produced for their sales team that featured a giant dancing bottle of Subsys that Burlakoff was shown to be wearing at the end.

“I love titration, yeah, that’s not a problem,” the rap song in the video goes, referring to the process of increasing doses. “I got new patients and I got a lot of them.”

The bribes varied for each of the 10 practitioners referenced in the complaint, but exceeded $100,000 or even $200,000 for some of them.

The government also alleged that the company leaders defrauded health insurance companies, which they said were reluctant to approve the payments for patients who didn’t have cancer.

Prosecutors said company employees – at the direction of Babich and Gurry – carried out that part of the scheme from a call center at the company’s corporate offices. Sales representatives and other workers disguised the identity and location of their employer and lied about  patients’ diagnoses, the type of pain being treated and the patient’s course of treatment with other medication, prosecutors said. 

The physicians who prescribed the Subsys to non-cancer patients practiced in Alabama, Michigan, Florida, Texas, Illinois, Florida, New Hampshire, Connecticut and Arkansas. 

Federal prosecutors called nearly 40 witnesses to the stand during the trial with the defense bring fewer witnesses and as they made their case over two days. 

Kapoor, 75, was at one time found to have a net worth of $2.4 billion by Forbes. But his net worth fell to $1.75 billion in 2017 amid the indictments of Insys executives. 

 

Contributing: Associated Press

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