May 6, 2019

Insys executives found guilty in bribery case related to opioid epidemic

Daily Briefing

    A federal jury on Thursday found five former Insys Therapeutics executives, including founder and former CEO John Kapoor, guilty of racketeering charges in a rare criminal case that accused drug company executives of contributing to the opioid epidemic.

    Your top resources for combatting the opioid epidemic in one place

    Background

    Kapoor in October 2017 was indicted and arrested on charges that he allegedly provided kickbacks to physicians for prescribing the company's potent fentanyl opioid Subsys. In addition to Kapoor, the federal indictment listed several other defendants, including:

    • Former Insys VP Michael Gurry;
    • Former Insys national sales director Richard Simon; and
    • Former Insys regional sales directors Sunrise Lee and Joseph Rowan.

    The indictment alleged those individuals, and others at Insys, offered bribes to doctors so they would write a significant number of prescriptions for Subsys, even though the drug is intended only to treat cancer patients with severe pain. Most individuals who were prescribed Subsys did not have cancer, according to the indictment.

    In addition, the indictment alleged that Kapoor and others conspired to mislead and manipulate insurers so they would cover Subsys when it was prescribed to individuals who did not have cancer.

    Executives convicted

    The jury found Kapoor guilty on charges of conspiracy to commit racketeering and convicted Simon, Lee, Rowan, and Gurry on related charges.

    Two other former Insys executives—former CEO Michael Babich and former vice president of sales Alec Burlakoff—previously pled guilty in the case and testified against their colleagues.

    Under the charges, Kapoor and his former colleagues could face up to 20 years in prison. However, they likely will receive a lesser sentence because Kapoor and his colleagues are first-time offenders, the Associated Press reports.

    Beth Wilkinson, a lawyer for Kapoor, said she and Kapoor were disappointed with the verdict. "Four weeks of jury deliberations confirm that this was far from an open-and-shut case," she said in a statement, adding, "We will continue to fight to clear [Kapoor's] name."

    Jackie Marcus, a spokesperson for Insys, said the verdict was not representative of Insys' mission, but rather reflected the "actions of a select few former employees of the company."

    Implications

    According to the New York Times, the verdict of this trial "is a sign of the accelerating effort to hold pharmaceutical and drug distribution companies and their executives and owners accountable in ways commensurate with the devastation wrought by the prescription opioid crisis."

    For example, state attorneys general in Massachusetts and New York have brought lawsuits against Purdue Pharma, as well as members of the Sackler family who own the company, and last month federal authorities filed felony drug trafficking charges against Rochester Drug Cooperative, a major pharmaceutical distributor, and two executives. The charges claim Rochester shipped tens of millions of oxycodone and fentanyl products to pharmacies illegally distributing the drugs.

    Andrew Lelling, the United States attorney in Massachusetts who pursued the Insys case, said, "Just as we would street-level drug dealers, we will hold pharmaceutical executives responsible for fueling the opioid epidemic by recklessly and illegally distributing these drugs, especially while conspiring to commit racketeering along the way."

    Richard Ausness, a law professor at the University of Kentucky, said charging these executives with criminal racketeering "raises the stakes by a lot. This could be the tip of the iceberg as far as drug company misconduct is concerned" (Owens, "Vitals," Axios, 5/3; Bowden, The Hill, 5/2; AP/Modern Healthcare, 5/2; Emanuel/Thomas, New York Times, 5/2; Herper, STAT News, 5/2).

    Access our resources on the opioid epidemic

    The opioid epidemic is a complex, multi-dimensional public health problem. Use this list of helpful resources on how hospitals and health systems can play a role to treat opioid addiction and prevent further increase in opioid abuse.

    Access our Opioid Resources Here

    X
    Cookies help us improve your website experience. By using our website, you agree to our use of cookies.