This week, the founder and seven former top employees of Arizona-based Insys Therapeutics appeared in Boston to face sentencing in front of a federal judge. According to prosecutors, their role in a bribery scheme increased sales of a potent and highly addictive painkiller, helping to fuel the nationwide opioid crisis.
The case against company founder John Kapoor and his associates is the first of its kind that seeks to hold an opioid maker and its executives criminally liable for the drug epidemic, which has claimed approximately 400,000 lives over the past twenty years.
Drug distributors in both New York and Ohio are two other companies that are also now facing criminal charges. However, notable industry names have only faced lawsuits that carry no threat of prison time – specifically OxyContin maker Purdue Pharma and the Sackler family that owns it.
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Prosecutors maintain that leaders at Insys Therapeutics paid millions of dollars in bribes to doctors across the country so they would overprescribe Subsys, a fentanyl-based oral spray meant to ease intense pain suffered by cancer patients. The AP states:
Insys Therapeutics also deployed other questionable marketing tactics, according to prosecutors. One sales executive, who prosecutors said used to be an exotic dancer, gave a physician a lap dance at a club. And the company misled insurers to get payment for the drug, which cost as much as $19,000 a month.
(the above video is from Kapoor’s arrest back in 2017)
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Last year, after a lengthy trial, Kapoor and four others were convicted of racketeering conspiracy. Two other defendants pleaded guilty. According to the AP:
Shortly after, the company reached a $225 million settlement with the U.S. Department of Justice to end its criminal and civil probes.
Insys Therapeutics has since filed for bankruptcy protection, and it’s not clear whether the company will fully pay what’s owed. The company has been approved to sell off Subsys and its other drugs for about $30 million, but the it maintains its assets, all told, are worth only $175 million.
U.S. Attorney for Massachusetts Andrew Lelling, whose office is prosecuting the case, said Insys Therapeutics has already paid $5 million towards the $195 million civil settlement with the government. A $2 million criminal fine and $28 million forfeiture haven’t been paid.
While the defendants can face up to 20 years for the charges, prosecutors are seeking 15 years for Kapoor, arguing the former billionaire was the “fulcrum” of the scheme, according to recent court filings.
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Kapoor’s lawyers insist their client was characterized as a parody of a mob boss. They claim he is actually the “consummate immigrant success story.” Their filings assert that the India-born exec developed Subsys after witnessing his wife suffer and die from breast cancer. They’re seeking no more than a year and a day in prison for Kapoor.
Lelling’s office is seeking sentences ranging from five to 11 years for the other defendants.
Kapoor will be sentenced on January 23, along with Alec Burlakoff, a North Carolina resident who was the company’s vice president of sales.
Babich and Burlakoff both pleaded guilty and were crucial witnesses for prosecutors.
