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Insys Therapeutics founder, former executives found guilty in criminal fentanyl bribery case

Key Points
  • A Boston jury convicted Insys Therapeutics founder John Kapoor and other former executives of racketeering and other crimes.
  • Federal prosecutors say the fentanyl bribery case helped fuel the U.S. opioid epidemic.
  • Prosecutors accused Kapoor and four former executives of bribing doctors to unnecessarily prescribe their painkiller, Subsys.
John N. Kapoor, left, a defendant in the Insys trial, departs the John Joseph Moakley United States Courthouse in Boston on Jan. 29, 2019.
Craig F. Walker | Boston Globe | Getty Images

A Boston jury convicted Insys Therapeutics founder John Kapoor and four former executives of racketeering and other crimes in a fentanyl bribery case that federal prosecutors say helped fuel the U.S. opioid epidemic.

Prosecutors accused Kapoor and the other executives of bribing doctors to unnecessarily prescribe their painkiller, Subsys. The Department of Justice said the bribes took many forms, mostly as "sham" programs that were meant to increase brand awareness for their drug. Instead, prosecutors alleged Insys used the programs as a way to pay practitioners to overprescribe Subsys. The former executives were also accused of defrauding insurers and others that paid for the medication.

Kapoor and his colleagues were found guilty Thursday after 15 days of deliberations, the U.S. Attorney's Office for the District of Massachusetts announced on Twitter. Kapoor, the former chairman of Insys, is the highest-ranking pharmaceutical executive to be tried in a case related to the opioid epidemic.

"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," U.S. Attorney Andrew Lelling said in a statement.

Subsys is a fentanyl-based narcotic meant to treat cancer patients. Prosecutors say the former Insys executives bribed doctors to write large numbers of prescriptions to patients, many of whom did not have cancer.

The other executives found guilty were: Richard Simon, former national director of sales; former regional sales directors Sunrise Lee and Joseph Rowan; and Michael Gurry, former vice president of managed markets.

Michael L. Babich, former CEO and president, pleaded guilty in January and is set to be sentenced in September. Alec Burlakoff, former vice president of sales, also pleaded guilty in January to one count of racketeering conspiracy and is set to be sentenced later this year.

Insys Therapeutics said in a statement that Kapoor's shares in the company have been and will remain in an independent trust, with which Kapoor is not involved. The company added that the "actions of a select few former employees of the company are not indicative of the hard work conducted" by it today.

Insys stock was down 1.6% on Thursday after the markets closed.

The opioid epidemic has become a major issue that lawmakers have sought to tackle. More than 130 people in the nation die every day after overdosing on opioids. According to the CDC, about 218,000 people died from overdoses related to prescription opioids from 1999 to 2017.

Federal prosecutors have recently started cracking down on drugmakers accused of contributing to the opioid epidemic.

In April, Rochester Drug Cooperative agreed to pay a $20 million settlement after it was charged with unlawfully distributing oxycodone and fentanyl and conspiring to defraud the Drug Enforcement Administration. Prosecutors also charged 60 doctors, pharmacists and other health-care professionals in April for illegally prescribing more than 32 million pain pills.

— Reuters contributed to this article.