In a first of its kind prosecution, the US Department of Justice has successfully tried and convicted several top pharmaceutical executives for crimes related to the marketing and sale of opioids.

The founder of Insys Therapeutics Inc. (Insys), John N. Kapoor, and four other former Insys executives were convicted in Massachusetts of a RICO conspiracy following 15 days of deliberation by the jury. A sentencing date has not yet been set, but the charges carry a maximum penalty of 20 years in prison.

Earlier this year, two other high-level Insys executives pleaded guilty to similar charges.  Both offered testimony at the trial against Kapoor and their fellow executives.

The jury found that from 2012 to 2015, Kapoor and his co-conspirators bribed medical practitioners to prescribe Subsys, a highly-addictive sublingual fentanyl spray approved by the FDA for use with breakthrough pain in cancer patients. Most of the prescriptions were medically unnecessary.

The conspirators utilized pharmacy data to identify and target practitioners who already prescribed unusually high volumes of rapid-onset opioids, and then bribed and offered kickbacks to those doctors to increase the number of new Subsys prescriptions.

The defendants also conspired to mislead and defraud health insurance providers by setting up the “Insys Reimbursement Center,” a call center that was dedicated to obtaining prior authorization for payment directly from insurers and pharmacy benefit managers.  Call center employees made false representations regarding patients’ medical conditions, often indicating they had cancer when they did not, in order to secure payment for the Subsys prescriptions.

Based on statements from the US Attorney who oversaw the case and a number of other government investigators, the message to pharmaceutical executives is clear: no one is immune to prosecution if they are involved in furthering the opioid crisis through criminal activity.

“Today’s convictions mark the first successful prosecution of top pharmaceutical executives for crimes related to the illicit marketing and prescribing of opioids,” said United States Attorney Andrew E. Lelling. “Just as we would street-level drug dealers, we will hold pharmaceutical executives responsible for fueling the opioid epidemic by recklessly and illegally distributing these drugs, especially while conspiring to commit racketeering along the way.  I applaud the prosecutors and investigators who fought this case to the finish and won.  This is a landmark prosecution that vindicated the public’s interest in staunching the flow of opioids into our homes and streets.”

The FisherBroyles Pharmacy and Health Care Law team is pleased to keep you updated on events of interest to those in the healthcare and pharmaceutical industries. Questions regarding the subject matter of this alert may be directed to any of the following attorneys:
Brian Dickerson, FisherBroyles Partner
Brian E. Dickerson
brian.dickerson@fisherbroyles.com
202.570.0248

Anthony Calamunci, FisherBroyles Partner
Anthony Calamunci
Anthony.calaunci@fisherbroyles.com
419.376.1776

Nicole Waid, FisherBroyles Partner
Nicole Hughes Waid
nicole.waid@fisherbroyles.com
202.906.9572

Amy Butler, FisherBroyles Partner
Amy Butler
amy.butler@fisherbroyles.com
419.340.8466
 

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