John Kapoor, founder of Insys Therapeutics, sentenced to 66 months in landmark fentanyl bribery case
FILE – In this Jan. 30, 2019, file photo, Insys Therapeutics founder John Kapoor leaves federal court in Boston. He is one of four former company executives accused of scheming to bribe doctors into prescribing a powerful fentanyl painkiller. Lawyers are delivering their closing arguments Thursday, April 4, 2019, in the trial. (AP Photo/Steven Senne, File) ORG XMIT: BX105 (Photo: Steven Senne, AP)
BOSTON — John Kapoor, the billionaire founder of the pharmaceutical company Insys Therapeutics, will spend 5-and-a-half years in prison for orchestrating a scheme of bribes and kickbacks to physicians who prescribed large amounts of a fentanyl spray to patients who didn’t need the painkiller.
Kapoor’s 66-month sentence, handed down Thursday in Boston federal court by U.S. District Judge Allison Burroughs, is the lengthiest prison term imposed on seven former Insys executives sentenced in the landmark case over the past two weeks.
In separate sentencings in recent days, Insys’ former vice president Michael Gurry and national director of sales Richard Simon each received 33 months in prison for their involvement in the scheme; former Insys CEO Michael Babich was sentenced to 30 months; the company’s regional sales director Joseph Rowan to 27 months; and Sunrise Lee, former regional sales director, to one year and a day in prison.
Former Vice President of Sales Alec Burlakoff was sentenced to 26 months Thursday.
Federal prosecutors, who sought 15 years in prison, called Kapoor the “fulcrum” of the criminal scheme and the only defendant who could not have been replaced by another conspirator. In addition to prison, he was sentenced to three years of supervised release and must pay a $250,000 fine.
“He was the principal leader, who personally approved, and thereafter enforced, the corrupt strategies employed throughout the conspiracy,” prosecutors wrote in a sentencing memo. “This crime would not have happened, could not have happened, without John Kapoor. It was, in almost every way, Kapoor’s crime.”
The case, which included indictments going back to 2016, centered on a fentanyl-based pain medication called Subsys, a powerful, highly addictive and potentially dangerous narcotic intended to treat patients with cancer suffering from intense pain.
Seven victims and family members of victims who were prescribed the spray gave emotional statements to the court before Kapoor’s sentencing.
“Far too many people have died, or like me, have had their lives changed, at the hands of your greed and cruelty,” said one victim, Paul Lara. “It’s unrealistic to believe that Insys Therapeutics executives could not see the results of their behavior.”
Lara said he suffers to this day from a drug “not meant for me” because he does not have cancer. He struggles remembering how to get back home, suffers from hallucinations and has seen his teeth fall out.
“By the grace of God, I am here to speak for all of us including the ones who lives you took,” Lara said.
Deborah Fuller said her daughter, Sarah Fuller, died because of Kapoor and his co-conspirators, calling them “no different than mobsters.” Her daughter was among those prescribed Subsys without having cancer.
“She was robbed by Kapoor of her wedding day,” Fuller said. “The impact of his actions has forever broken our family and Sarah’s fiancé. The actions of John Kapoor and his conspirators have been a sentence of hell for our family.”
Kapoor, 76, faced each victim as they spoke.
A federal jury in May convicted Kapoor and four other Insys executives on racketeering charges, marking the first-ever conviction of a drug company CEO in the federal government’s fight to combat the opioid crisis. Two other co-conspirators, Babich and Burlakoff, pleaded guilty to charges last January.
The convictions were hailed as victories on the legal front in the government’s efforts to fight the rising number of opioid overdoses. Kapoor’s 2017 arrest came on the same day that President Donald Trump declared the epidemic a public emergency.
Federal prosecutors argued that doctors between 2012 and 2015 provided patients large numbers of Subsys prescriptions — including to non-cancer patients — in exchange for kickbacks and bribes from the Insys executives. Some of the doctors, already convicted of crimes the states where they practiced, testified against the Insys executives during trial.
The bribes took “different forms,” according to prosecutors, but were usually disguised as fees that the company paid the physicians for marketing events. The government cited in-person meetings, telephone calls and texts to inform sales representatives that the key to sales was using speaker program series to pay practitioners to prescribe the fentanyl spray.
The prison sentences come as other cases stemming from a surge in opioid use and overdose deaths are being prosecuted nationally.
Use of the painkiller Fentanyl — considered 50 times stronger than heroin and up to 100 times more potent than morphine — is on the rise. In 2017, more than 28,000 of the nation’s overdose deaths involved synthetic opioids, according to the Centers for Disease Control and Prevention. In most cases, the synthetic opioid involved was fentanyl or one of its analogs.
Insys took concerted and unusual steps to drive sales of the drug, even having a rap video produced for their sales team featuring a giant dancing bottle of Subsys that Burlakoff was shown to be wearing at the end.
“I love titration, yeah, that’s not a problem,” the rap song in the video goes, referring to the process of increasing doses. “I got new patients and I got a lot of them.”
The bribes varied for each of the 10 practitioners referenced in the complaint, but in some cases exceeded $100,000 or even $200,000.
The government also alleged company leaders defrauded health insurance companies, which they said were reluctant to approve the payments for patients who didn’t have cancer.
Prosecutors said company employees, at the direction of Babich and Gurry, carried out that part of the scheme from a call center at the company’s corporate offices. Sales representatives and other workers disguised the identity and location of their employer and lied about patients’ diagnoses, the type of pain being treated and their course of treatment, prosecutors said.
The physicians who prescribed the Subsys to non-cancer patients practiced in Alabama, Michigan, Florida, Texas, Illinois, Florida, New Hampshire, Connecticut and Arkansas. An Alabama doctor linked to the case was sentenced to 20 years in prison in 2017 and a Michigan doctor last year was sentenced to 32 months in prison.
Reach Joey Garrison and on Twitter @joeygarrison.
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