Former Insys execs in alleged opioid conspiracy start criminal trial in Boston

The trial – of Insys founder John Kapoor and four other defendants – had been scheduled to start Monday morning. Two other executives pleaded guilty in November and earlier this month.

Former executives of a company that allegedly persuaded doctors to needlessly prescribe an opioid medication – and were accused in the process of helping fuel the country’s opioid epidemic – were set to face criminal trial in a Boston federal court Monday.

The case involves former executives of Chandler, Arizona-based Insys Therapeutics, who are charged with conspiracy and conspiracy to commit racketeering, wire fraud and mail fraud. They include founder John Kapoor, regional sales directors Sunrise Lee and Joseph Rowan, national director of sales Richard Simon and vice president of managed markets Michael Gurry. Two other executives, former CEO Michael Babich and vice president of sales Alec Burlakoff, pleaded guilty earlier this month and in November, respectively, and are cooperating with prosecutors.

All but Kapoor were arrested in December 2016 and charged with allegedly conspiring to get doctors in various states, many of whom operated pain clinics, to to prescribe the drug, Subsys, in exchange for bribes and kickbacks, mostly for patients who did not have cancer. Kapoor was arrested and added to the indictment in October 2017.

Subsys is a sublingual spray used to treat breakthrough cancer pain that the company launched in March 2012. The drug carries risks similar to those of other opioids, especially fentanyl-based products, some of which can be life-threatening, according to its label.

According to the indictment, the executives became dissatisfied with Subsys’s sales performance and, starting in May 2012, allegedly devised their plan to use bribery and fraud to induce doctors to prescribe the drug. The bribery and kickbacks included speaker fees and honoraria for marketing events, food and entertainment, administrative support and fees paid to pharmacies that were also involved, according to the indictment.

During the period of the alleged conspiracy, which lasted through December 2015, sales of Subsys went from $3.7 million during the first nine months of 2012 to $329.5 million for fiscal year 2015, according to Insys Securities and Exchange Commission filings. In July 2015, the company’s stock price peaked at $44.92. As of Monday, it was trading at $3.65 per share.

At the time of their arrests, the executives were accused of helping to fuel the nationwide problem of overprescribing and overuse of opioid painkillers. “These Insys executives allegedly fueled the opioid epidemic by paying doctors to needlessly prescribe an extremely dangerous and addictive form of fentanyl,” Phillip Coyne, a special agent with the Department of Health and Human Services’ Office of Inspector General, said in a statement related to Kapoor’s October 2017 arrest.

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