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Insys Executives Will Be Sentenced This Month


— January 16, 2020

Insys execs are scheduled to be sentenced in landmark opioid case.


Sentencing of executives at Insys Therapeutics for their involvement in instigating the opioid crisis is scheduled to begin this month.  After a ten-week trial centered primarily around Insys’ powerful fentanyl drug, Susbsys, and half a month of jury deliberations, CDEO John Kapoor and four co-defendants were ultimately found guilty of racketeering conspiracy in May of last year.  The trial and outcome served as a landmark case in prosecuting pharmaceutical executives involved in shady business practices.

Following the trial, U.S. Attorney Andrew E. Lelling said, “Today’s convictions mark the first successful prosecution of top pharmaceutical executives for crimes related to the illicit marketing and prescribing of opioids.  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.”

In a rare move, the government used the Racketeer Influenced and Corrupt Organizations Act (RICO), approved in 1970, to go after the executives.

Insys Executives Will Be Sentenced This Month
Photo by National Cancer Institute on Unsplash

“Any time criminal RICO is applied to something that would appear to be a legitimate business or enterprise, it’s always somewhat unusual,” said Brad Bailey, a Boston criminal defense attorney and former federal and state prosecutor.  It is not commonplace to go after executives for racketeering.  Bailey added, “That’s always unusual.  That’s always an attention grabber.  The big issue is the use of racketeering charges, which had been originally designed to go after the Mafia.”

But, the charges were appropriate in this case, according to Dr. Andrew Kolodny of Brandeis University.  He said, “For corporations to be able to kill people in their pursuit of profit and simply pay a fine is not adequate.  Otherwise, it could be seen as the cost of doing business.”

Court records indicated Kapoor and the four others “funneled millions of dollars in kickbacks and bribes to prescribers to get them to prescribe the Insys drug, Subsys.”  The drug had been initially approved by the FDA only to treat cancer-related pain, but it was being sold to patients without cancer or who had suffered from cancer and recovered long ago.

Michael Babich, former Insys chief executive, cut a deal with prosecutors.  Following his guilty plea to conspiracy to commit mail fraud and wire fraud and to mail fraud, he said he “felt the company owned several doctors who had received thousands of dollars from Insys to prescribe Subsys, and he didn’t want them to prescribe other competing fentanyl products,” documents indicate.

Federal prosecutors argued that from 2012 to 2015, the company initiated a sham “speakers’ program” in which physicians were paid for “speaking” if they wrote a lot of prescriptions for Subsys, even if nobody showed up to the lectures. Kapoor’s defense attorneys argued that he was “unaware of the illegal activities.”

U.S. District Judge Allison Burroughs wrote in her ruling, “The Court only very reluctantly disturbs a jury verdict but finds it necessary to do so here.  She overturned the jury’s finding that the defendants violated the Controlled Substances Act but denied the defendants’ request for a new trial.

Prosecutors recommended that Kapoor be sentenced to fifteen years in prison and terms between six and eleven years for the other former Insys executives – Michael Gurry, Richard Simon, Joseph Rowan and Sunrise Lee.  It is unclear whether the sentencing recommendations will be followed.

Sources:

Ex-Drug Company Execs Face Reckoning in Opioid Bribery Case

Pharmaceutical Executives Face Prison Time In Case Linked To Opioid Crisis

Insys Execs Have Shown Complete Disregard for Subsys Patients

Government Goes After Insys Executives Using RICO

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