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.

The federal government had previously brought civil racketeering charges against drug companies for promoting their drugs for unapproved uses, said Richard C. Ausness, a law professor at the University of Kentucky who has been tracking opioid cases. Bringing criminal racketeering charges, he said, “raises the stakes by a lot.”

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.

Testimony from government witnesses suggested there were few limits to what the Insys sales team was willing to do. Mr. Burlakoff, who testified for the prosecution as part of a plea deal, said the company purposefully targeted doctors with a history of liberally prescribing opioids. “Pill mills, for us, meant dollar signs,” he told the jury. “It was not run the other way. It was run to the pill mills.”

Holly Brown, a former Insys sales representative in the Chicago area, testified that she saw her boss, Ms. Lee, a former exotic dancer, give a doctor a lap dance hoping it would encourage him to prescribe Subsys.

After doctors had prescribed Subsys, the company focused on persuading insurance companies to cover the drug, which can cost thousands of dollars a month. Jurors heard recorded calls from the Insys Reimbursement Center in which employees posed as doctors’ assistants and invented diagnoses that would smooth the approval process.



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