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November 12, 2019
In the first successful prosecution of its kind, a jury found Insys Therapeutics founder John Kapoor and four co-defendants guilty of racketeering conspiracy. The verdict came Wednesday after 15 days of deliberation in a Boston court.
The federal government brought charges against Kapoor and his co-defendants for allegedly operating a nationwide bribery scheme. Insys Therapeutics is accused of paying doctors to prescribe their Fentanyl-based opioid medications to patients, as well as lying to insurance companies to ensure their expensive and extremely potent medication would be covered between 2012 and 2015. Fentanyl is heavily connected to the ongoing substance abuse epidemic, contributing to nearly half the opioid overdose deaths in 2018.
This case is the first time a high-level executive has been held culpable for contributing to the national opioid crisis. The guilt verdict sends a serious message to other pharmaceutical executives who are implicated in the opioid abuse epidemic. It may also strengthen cases against others facing similar charges.
U.S. Attorney Andrew E. Lelling states,
“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 10 week trial is a rare instance in which the federal government has brought criminal charges against corporate executives. Racketeering charges were initially intended to address criminal organizations such as the mafia. Boston criminal defense attorney and former federal prosecutor Brad Bailey suggests bringing these charges against Kapoor and his co-defendants implies the practices of Insys Therapeutics resemble those of an organized crime syndicate.
According to the 39 witnesses involved in court proceedings, Insys was a struggling company under intense pressure from Kapoor to succeed. Employees of the company reportedly targeted doctors with a record of ‘liberally prescribing opioids’, paying them large amounts of money to prescribe their medication, Subsys. Prosecutors allege this meant patients who did not need Subsys received prescriptions for the drug anyway.
Insys Therapeutics call center employees also made calls to insurance companies pretending to be from doctor’s offices and made up diagnoses in order for the prescriptions to be covered, costing insurance companies tens of thousands of dollars per month.
John Kapoor’s defense claims the Insys Therapeutics founder was unaware of illegal activity taking place within the company. His attorneys deflected blame to employees like Alec Burlakoff, the former VP of sales, who testified for the prosecution in hopes of a lighter sentence. Kapoor’s attorneys emphasized Burlakoff’s history of lying and his hatred for his former boss.
They also emphasized that Kapoor’s motive for developing the medication was to help people suffering from pain conditions after witnessing the pain of his now-deceased wife. His attorneys also called a witness to vouch for Subsys, stating that the medication significantly improved his pain following a car accident. However, this was not enough to convince jurors.
Insys Therapeutics is struggling under the wake of its legal troubles. With an agreement to pay $150 million to end investigations by the Justice Department and a newly placed CEO in chief financial officer Andrew Long, Insys’s future is uncertain.
Though this bribery case gives hope in addressing the pharmaceutical industry’s role in the ongoing opioid abuse epidemic, it also draws attention to the legal loopholes and moral gray areas that allow such activity to take place. Though it is illegal to pay physicians to write prescriptions or concoct false diagnoses, paying for product promotion to other medical professionals is not. Off-label prescribing, or advocating for use of a medication to treat a condition it is not intended to treat, is also not illegal. Despite clear and known connections between prescription opioids and substance abuse, there’s currently no major legislative efforts to regulate the pharmaceutical industry.