Commentary

5 Execs Face 20 Years For Racketeering Conviction In Opioid Case

A Boston jury yesterday found Insys Therapeutics founder John Kapoor and four of its former executives guilty of RICO conspiracy for bribing medical doctors with kickback schemes, food and even a lap dance to push its addictive fentanyl-based spray to patients who did not need it. 

They were also convicted of defrauding Medicare and private insurance carriers by setting up a bogus “Insys Reimbursement Center” dedicated to obtaining prior authorization for use of the drug by patients who were not actually suffering from cancer-related pain.

“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,’’ Andrew E. Lelling, U.S. attorney for the District of Massachusetts, says in a statement. 

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Indeed, “the jury’s verdict is likely to register in drugmakers’ board rooms. Companies including Teva Pharmaceutical Industries Ltd., Purdue Pharma LP, Johnson & Johnson and Endo International Plc are preparing to face trials over allegations by states and local governments that their sales campaigns fueled a crisis which is costing billions of dollars annually,” write  Janelle Lawrence, Riley Griffin and Jef Feeley for Bloomberg.

“Meanwhile, efforts to use the legal system to hold executives accountable for an epidemic that claims more than 100 Americans’ lives daily are gaining speed. The Sackler family, Purdue’s billionaire owners, is facing a new wave of lawsuits over its role in the marketing of OxyContin. They, like the companies, deny wrongdoing,” they add.

So did all of the defendants yesterday: besides Kapoor, Richard M. Simon, the former national director of sales; Sunrise Lee, a former regional sales director; Joseph A. Rowan, also a former regional sales director; and Michael J. Gurry, the former vice president of managed markets. Their lawyers “signaled plans to appeal,” reports Reuters’ Nate Raymond.

“Defense lawyers said their clients were railroaded by the real culprits: former co-workers who cut plea deals with prosecutors and testified for the government. They also said Insys was a bit player in the opioid crisis,”  Jonathan Saltzman and Maria Cramer write for the Boston Globe.

“At trial, the government relied heavily on internal e-mails and testimony by several former Insys employees who cooperated as a result of the plea deals or agreements granting them immunity,” they add.

The trial lasted 15 days. The defendants face up to 20 years in prison.

“Before a standing-room crowd of spectators, assistant U.S. Attorney Fred Wyshak Jr., head of Lelling’s public-corruption unit, immediately asked U.S. District Court Judge Allison D. Burroughs to place Kapoor on house arrest pending his sentencing, which was not immediately scheduled. Wyshak argued the India-born Kapoor’s vast wealth and foreign ties make him a flight risk,” Laurel J. Sweet reports for the Boston Herald.

“‘He has assets outside this country -- significant assets,’ Wyshak said.

“Burroughs refused, [saying] ‘Mr. Kapoor has shown up every day. He’s been nothing but respectful.’”

Most stories point out that Kapoor is a “former” billionaire.

“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,” Joey Garrison writes for USA Today.

“The company took concerted and unusual steps to drive sales of the drug, even having 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, Garrison adds.

“‘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.’”

“Michael Babich, who stepped down as Insys’ CEO in 2015, pleaded guilty to being involved in the scheme in January and became a cooperating witness for the prosecution,” Alex Lubben writes for Vice News.

“The trial was peppered with some pretty wild revelations. Babich testified that the company hired good-looking sales reps because they thought doctors didn’t want an ‘unattractive person to walk in their door.’”

Lee, the ex-regional sales manager, was a former exotic dancer who allegedly gave a lap dance to a doctor at a Chicago nightclub.

“‘They exaggerated an incident that, by all accounts, was probably pretty funny,’ her defense lawyer, Peter Horstmann, told jurors in his closing argument," Lawrence and Feeley reported for Bloomberg.

“The government bought it hook, line and sinker because it’s interesting,” Horstmann said. “But it’s not fair.”

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