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 A federal jury in Boston found John Kapoor, the drugmaker's former
chairman, and his co-defendants guilty of racketeering conspiracy
for engaging in a scheme that also misled insurers into paying for
the drug.
Kapoor's 2017 arrest came on the same day U.S. President Donald
Trump declared the epidemic that has caused tens of thousands of
overdose deaths annually a public health emergency.
Kapoor, 76, was found guilty of running a wide-ranging scheme to
bribe doctors nationwide by retaining them to act as speakers at
sham events at restaurants ostensibly meant to educate clinicians
about its fentanyl spray, Subsys.
Prosecutors said Kapoor also directed efforts to defraud insurers
who were reluctant to pay for Subsys. His co-defendants were former
Insys executives and managers Michael Gurry, Richard Simon, Sunrise
Lee and Joseph Rowan.
They face up to 20 years in prison. They denied wrongdoing, and
defense lawyers signaled plans to appeal.
"Dr. Kapoor is disappointed in the verdict, as are we," Beth
Wilkinson, Kapoor's lead attorney, said in a statement. "Four weeks
of jury deliberations confirm that this was far from an
open-and-shut case."
The U.S. Food and Drug Administration approved Subsys in 2012 only
for use in treating severe cancer pain. Yet prosecutors claimed
doctors who took bribes often prescribed Subsys to patients without
cancer, helping boost sales for Chandler, Arizona-based Insys.
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Fentanyl is an especially potent opioid, 100 times stronger than
morphine.
Kapoor's lawyers acknowledged Insys paid doctors but contended he
believed they were being legally paid to discuss Subsys' benefits.
Wilkinson in her opening statement in January told jurors Kapoor had
no knowledge of "side deals" being cut with doctors. She said a
former executive turned government witness, Alec Burlakoff, kept
Kapoor in the dark about them.
Burlakoff, Insys' ex-vice president of sales, and Michael Babich,
its former chief executive, testified against Kapoor after pleading
guilty to participating in the scheme.
Jurors during the trial watched a rap video Insys produced for its
sales staff describing its strategies to boost sales that starred
Burlakoff dressed as a dancing bottle of Subsys.
Witnesses also testified that Lee, an ex-stripper turned Insys
regional sales director, gave a lap dance to a doctor at a Chicago
club while pushing him to prescribe Subsys.
Insys in August said it had agreed to pay at least $150 million in a
related settlement with the U.S. Justice Department. In a statement
on Thursday, it said the case involved "the actions of a select few
former employees."
(Reporting by Nate Raymond; Editing by Scott Malone and Bill Berkrot)
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