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 U.S. District Judge Allison Burroughs in Boston ruled the evidence
prosecutors presented at trial did not support finding that John
Kapoor and the others intended for doctors to prescribe the drug,
Subsys, to patients who did not need it.
The ruling could impact the eventual sentence received by Kapoor,
the highest-ranking pharmaceutical executive to be convicted in a
case tied to the deadly U.S. opioid addiction epidemic.
Chandler, Arizona-based Insys filed for bankruptcy in June days
after striking a $225 million settlement with the U.S. Justice
Department.
A federal jury found Kapoor, its onetime chairman, guilty in May of
running a wide-ranging scheme to bribe doctors nationwide by
retaining them to act as speakers at sham events ostensibly meant to
educate clinicians about its fentanyl spray, Subsys.
But in her 85-page ruling, Burroughs said prosecutors failed to
establish that Kapoor and his co-defendants intended for doctors to
abdicate their duties to their patients and prescribed them Subsys
for non-legitimate medical uses.
"Even though the evidence could be readily understood as proving
that defendants did not care whether patients needed the drug, that
still is not enough to prove the requisite intent," Burroughs wrote.
As a result, she vacated the convictions of Kapoor and three former
executives, Richard Simon, Sunrise Lee and Joseph Rowan, for
conspiring to illegally distribute a controlled substance and commit
honest services fraud.
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Those were some of the so-called predicate acts underlying their
racketeering conspiracy conviction. She declined to overturn the
related mail fraud and wire fraud convictions of those four and
another former executive, Michael Gurry.
Burroughs said the evidence on those counts supported finding they
carried out a scheme to bribe doctors and defraud insurers into
paying for Subsys, which was approved only for treating pain in
cancer patients.
Beth Wilkinson, Kapoor's lawyer, in a statement said: "We have
always believed that the government brought charges it could not
sustain."
She and other defense lawyers in court papers had claimed the
illegal drug distribution charge if sustained could have resulted in
longer prison sentences and Kapoor being sent to a prison reserved
for "leaders and organizers in the drug-dealing world."
He and the others face sentencing in January.
(Reporting by Nate Raymond in Boston; Editing by Chris Reese and
Bill Berkrot)
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