The head of a leading drug manufacturer has been found guilty of bribing doctors to prescribe a dangerous painkiller to patients who did not need it, in the first criminal conviction of a pharma chief over the opioid epidemic.
A Boston jury also found John Kapoor, the 75-year-old billionaire founder of Insys Therapeutics, guilty of defrauding insurance companies in the push to sell Subsys, a spray made from fentanyl, a synthetic opioid many times stronger than morphine.
Subsys was approved for terminal cancer patients but the company targeted sales at a much bigger and more profitable market of people with non-life threatening chronic pain. Prosecutors said that fuelled the opioid epidemic and cost lives.
Four other Insys executives were also convicted on similar racketeering charges after the jury took two weeks to deliberate. They each face up to 20 years in prison.
The convictions will spur demands for executives of other opioid makers to be held to account for an epidemic that has claimed about 400,000 lives over the past two decades.
Drug manufacturers, distributors and pharmacies are already facing hundreds of civil lawsuits by states and cities seeking to recover the costs of the epidemic on public finances, from increased crime to addiction treatment and care for orphaned children. On Thursday, the drug distributor, McKesson, agreed to pay West Virginia $37m to settle a lawsuit over flooding the state with millions of opioid pills without abiding by proper controls.
But there is mounting anger that corporations have spent years paying civil settlements as “the cost of doing business” while continuing to rake in huge profits by illegally pushing the mass prescribing of the drugs or failing to obey laws intended to prevent their misuse. Political leaders in some of the worst hit parts of the country have called for criminal prosecutions of the executives who made the decisions calling them “drug dealers in Armani suits”.
Kapoor oversaw a marketing strategy at Insys that hired doctors as speakers at educational seminars as cover to pay them more than $1m to prescribe high doses of Subsys to patients who did not need it. Prosecutors said the seminars were no more than social gatherings at expensive New York restaurants followed by company sales reps taking the physicians to strip clubs and bars.
Prosecutors showed the jury spreadsheets of payments to doctors and how much the company profited from each bribe. In one instance, the company paid nearly $260,000 to two New York doctors who wrote more than $6m worth of Subsys prescriptions in 2014. Insys employees also posed as doctors to give insurance companies invented diagnoses to get approval for payments for the drug.
The jury was also shown a promotional rap video of Insys sales reps dancing next to a large bottle of Subsys including the line, “I got new patients, and I got a lot of ’em.”
Sales of Subsys surged as a result of the company’s aggressive marketing, rising from $14m in 2012 when the drug came on the market to nearly half a billion dollars five years later. Fentanyl is a powerful and highly addictive drug that has killed more people than any other opioid over recent years, although most of those who overdose do so on illegal versions of the drug smuggled into the country.
Prosecutors said the kickback scheme was one factor in the opioid epidemic as doctors “saw a huge payday that potentially put people’s lives in danger”. They showed the jury emails in which a former Insys CEO said certain doctors were “owned” by the company because of the amount of Subsys they prescribed.
Prosecutors said the Insys executives risked the lives of patients out of greed.
“These patients were used. Their pain was exploited,” US attorney Nathaniel Yeager told the jury. “The decisions, the money, the strategy came from the top.”
The company’s former vice-president of managed markets, Michael Gurry; its former national sales director, Richard Simon; and two sales directors, Sunrise Lee and Joseph Rowan, were also convicted.
Several other former Insys executives previously pleaded guilty over the scheme and gave evidence against Kapoor.
Michael Babich, the former Insys CEO, pleaded guilty earlier this year. Babich faces up to 20 years in prison when he is sentenced later this year. Babich’s wife, Natalie Levine, an Insys sales rep, is also awaiting sentencing after pleading guilty over the kickback scheme.
Others convicted include the company’s vice-president of sales, Alec Burlakoff, who told the trial Kapoor devised a sales strategy to target doctors known to dispense opioids without too many questions in so-called “pill mills”.
“Pill mills, for us, meant dollars,” he said.