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The Supreme Court Denies Bids from Former Insys Leaders

— June 24, 2022

Insys executives claim they did not have medical knowledge of the dangerous effects of Subsys.

The U.S. Supreme Court has denied bids by Insys Therapeutics Inc. founder John Kapoor, 78, and a fellow former executive, Sunrise Lee, asking to overturn their convictions for conspiracy to bribe doctors to prescribe opioids and defrauding insurance companies.  Lee was a former regional sales director.  In 2019, the two were found guilty of racketeering conspiracy by federal jury in Boston.  Kapoor is currently serving five-and-a-half years behind bars and is the highest-level corporate executive to be convicted of crimes related to the opioid epidemic.

Kapoor and Lee were found guilty of orchestrating and participating in a scheme to bribe doctors by paying for them to act as speakers at sham events meant to educate practitioners about the company’s fentanyl spray, Subsys.  Following the 2019 trial, U.S. Attorney Andrew E. Lelling had 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.”

The Supreme Court Denies Bids from Former Insys Leaders
Photo by Ekaterina Bolovtsova from Pexels

Brad Bailey, a Boston criminal defense attorney and former federal and state prosecutor, pointed to how unusual it was to use a law traditionally reserved for non-corporate criminals to receive a conviction.

“Any time criminal RICO is applied to something that would appear to be a legitimate business or enterprise, it’s always somewhat unusual,” he said, adding, “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.”

However, U.S. Attorney Rachael Rollins, Boston’s top federal prosecutor, felt it was the right decision to make.  She said, “Real people suffered at the hands of these defendants, who put greed and lining their own pockets ahead of patient safety.  They remain convicted felons and justice has been served.”

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.

Kapoor’s attorneys then filed a petition in 2021 contending a non-physician could not be convicted of agreeing with a member of the medical community to illegally distribute drugs should that doctor believe he or she was acting in good faith.  However, the Boston-based 1st U.S. Circuit Court of Appeals upheld his conviction.

Following the most recent denial by the Supreme Court to overturn Kapoor and Lee’s convictions, Peter Horstmann, an attorney for Lee, said he was “very disappointed.”  His client has already completed a one-year sentence.’

Michael Babich, another former Insys chief executive, previously 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,” court documents indicate.


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