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Head of pharmaceutical firm found guilty, bribed doctors to prescribe unneeded drugs

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J-P Mauro - published on 05/04/19 - updated on 05/04/19

Prosecutors said the firm's action fueled the opioid epidemic and cost many lives.

After two weeks of deliberation, a Boston Jury has ruled John Kapoor, the 75-year-old billionaire founder of Insys Therapeutics, guilty of bribing doctors to prescribe highly addictive pain killers to patients who did not need it. This is the first conviction of a pharmaceutical chief in connection with the opioid crisis.

Alongside Kapoor, the jury also laid guilt at the feet of four other executives from Insys. Now, the company’s founder, VP, former national sales director and two current sales directors could each face up to 20 years for their parts in the scheme. The formal charges were for defrauding insurance companies in a bid to peddle Subsys, a spray made from fentanyl, a synthetic opioid many times stronger than morphine.

Subsys has only been approved for prescription to terminally ill cancer patients, but the company targeted patients with non-life-threatening chronic pain, which provides a much larger market. Prosecutors cited this reckless distribution as one of the driving factors behind the opioid epidemic, which has claimed over 400,000 lives in the U.S. for the last two decades.

It is expected that this conviction will begin a trend in holding pharmaceutical companies responsible for dangerous or illegal practices. Already, drug manufacturers, distributors, and pharmacies are facing scrutiny from states and cities across the nation. These governmental bodies are attempting to recover some of the great costs which the epidemic has demanded on public finances — including increased crime, addiction treatment, and care for orphaned children.

Last week, the Guardian reports, the drug distributor McKesson agreed to a settlement with the state of West Virginia to pay $37 million for their part in flooding the state with millions of opioid pills, all the while ignoring state-mandated controls. These settlements, however, may no longer be enough as politicians in states plagued by addiction are calling for more criminal prosecution against such executives, whom they refer to as “drug dealers in Armani suits.”

In the case of Kapoor, the executive was found to have overseen “educational seminars” that were used as cover to bribe doctors more than $1 million to prescribe high doses of the dangerous Subsys to patients who did not need it. Prosecutors described these “seminars” as little more than social gatherings, which would usually end in high-end bars or strip clubs.

The jury was shown spreadsheets of the company’s payment to doctors over the years, which included how much the company made off of each one. In one instance, two doctors who wrote prescriptions for over $6 million worth of Subsys were paid over $260,000 in 2014.

Insys employees were also found to have posed as doctors in order to defraud insurance companies. The company’s sales reps were also seen in a promotional rap video, in which they danced around a large bottle of Subsys and claimed, “I got new patients, and I got a lot of ’em.”

It is estimated that this aggressive and illegal marketing campaign allowed Subsys sales, which entered the market place at around $14 million, to surge to nearly half a billion. Prosecutors cited these numbers before claiming that the company’s greed led it to put patients’ lives in danger.

“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 sentence has yet to be decided, but it is likely that these five executives will join former Insys CEO, Michael Babich, in his 20-year prison sentence. Babich’s wife, Insys sales rep Natalie Levine, is also awaiting sentencing for pleading guilty over the kickback scheme.

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