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https://www.nytimes.com/2019/05/02/health/insys-trial-verdict-kapoor.html
Top Executives of Insys, an Opioid Company, Are Found Guilty of Racketeering
BOSTON — A federal jury on Thursday found the top executives of Insys Therapeutics, a company that sold a fentanyl-based painkiller, guilty of racketeering charges in a rare criminal prosecution that blamed corporate officials for contributing to the nation’s opioid epidemic.
The jury, after deliberating for 15 days, issued guilty verdicts against the company’s founder, the onetime billionaire John Kapoor, and four former executives, finding they had conspired to fuel sales of its highly potent drug, Subsys, by not only bribing doctors to prescribe their product but also by misleading insurers about patients’ need for the drug.
The verdict against Insys executives is a sign of the accelerating effort to hold pharmaceutical and drug distribution companies and their executives and owners accountable in ways commensurate with the devastation wrought by the prescription opioid crisis. More than 200,000 people have overdosed on such drugs in the past two decades.
Federal authorities last month for the first time filed felony drug trafficking charges against a major pharmaceutical distributor, Rochester Drug Cooperative, and two former executives, accusing them of shipping tens of millions of oxycodone pills and fentanyl products to pharmacies that were distributing drugs illegally.
During the 10-week trial, federal prosecutors had detailed Insys’s audacious marketing plan — which included paying doctors for sham educational talks and luring others with lap dances — to spur sales of Subsys, an under-the-tongue spray approved to treat patients with cancer.
Company executives were accused of paying doctors to write prescriptions for a much wider pool of patients than the drug was approved for, and of misleading insurance companies so they would cover the potent and pricey medication. With the drug’s sales soaring, Insys became a darling of Wall Street, generating annual sales at one point of more than $300 million.
In addition to Mr. Kapoor, the other executives found guilty were Richard M. Simon, the former national director of sales; Sunrise Lee and Joseph A. Rowan, both former regional sales directors; and Michael J. Gurry, former vice president of managed markets. Lawyers for the defendants either did not comment or said they planned to appeal.
At the Insys trial, the government suggested that executives at the Arizona-based company often operated like drug dealers and that Mr. Kapoor was the ringleader.
“The decisions, the money, the strategy came from the top,” K. Nathaniel Yeager, a federal prosecutor, said during closing arguments
Details of Insys’s strategy from 2012 to 2015 to target doctors and allegedly bribe them have been revealed in lawsuits and news reports for about five years. The trial of Mr. Kapoor and his four co-defendants has brought to light the extent to which the schemes permeated the entire company and its national sales team.
Former Insys sales representatives, testifying for the prosecution, said their bonuses were tied to the dosages of Subsys prescribed by the doctors they recruited. The higher the dose, the higher the bonus. Evidence presented in court showed that sales representatives had to justify low doses to their boss within 24 hours.
Not only did Subsys cost more at higher doses, but patients were also more likely to become dependent on the highly addictive medication. Subsys is up to 100 times more potent than morphine. Abuse of fentanyl, especially black-market versions imported from overseas, have increasingly contributed to the opioid epidemic.
Alec Burlakoff, the former vice president of sales at Insys, pleaded guilty to one count of racketeering conspiracy. He wrote in an email read at trial that patients on high doses would be desirable because they “will continuously refill their monthly prescriptions indefinitely.” Court filings in a separate case suggest Purdue Pharma, the maker of OxyContin, pursued a similar strategy.
Two Insys sales representatives made a rap video in 2015 about titration, the technique used to increase a patient’s dose. The main lyric: “I love titrations, and it’s not a problem. I got new patients, and I got a lot of them.” The video, in which the salesmen dance alongside a person in a Subsys dispenser costume, was shown at a national Insys sales staff meeting where Mr. Kapoor was present.
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