Opioid Trial Winds Down; Insys Execs Deny Bribing Doctors, Duping Insurers

By and | April 5, 2019

A U.S. prosecutor portrayed Insys Therapeutics Inc. founder John Kapoor and other former executives as greedy and heartless during closing arguments in their racketeering trial over the promotion of the opioid painkiller Subsys.

Kapoor and four other ex-Insys managers “exploited” consumers to illegally widen the market for Subsys and turn the highly addictive painkiller into a blockbuster drug, Assistant U.S. Attorney Nathaniel Yeager told jurors in Boston Thursday.

“These patients were used. Their pain was exploited,” Yeager said. The defendants were “driven by greed” and happy to put “profits over patients,” he added.

The trial marks the first prosecution of a pharmaceutical company chief executive tied to the national opioid epidemic, which claims more than 100 lives in the U.S. daily, according to government research. On trial with Kapoor, 75, are former vice president Michael Gurry, ex-national sales director Richard Simon, former regional sales director Joseph Rowan and one-time stripper turned Insys sales manager, Sunrise Lee.

They’re accused of running a speaker’s program that the government alleges was a vehicle for bribing doctors and an organized effort to dupe insurers into covering the wave of Subsys prescriptions generated by the scheme.

Drug companies can legally pay doctors to tout opioid painkillers to their colleagues at educational dinners, but prosecutors say Insys executives paid physicians to show up to speakers programs just to get them to write more Subsys prescriptions.

‘Conceived in Arrogance’

Yeager told the jury that the trial wasn’t a referendum on national opioid policy or insurance companies, but rather a sad tale of a crime “conceived in arrogance” and “executed with brazen audacity.”

The prosecutor pointed to emails from former Insys CEO Michael Babich in which he told underlings the company “owned” doctors who were heavy Subsys prescribers. Babich pleaded guilty to charges stemming from the Subsys marketing case and testified against his former colleagues.

The company’s laser-like focus on increasing sales encouraged its representatives to target disreputable doctors who’d write Subsys prescriptions for a variety of ailments that hadn’t been approved by government regulators, Yeager said. Alec Burlakoff, Insys’s former head of sales, boasted about how he encouraged sales reps to target so-called “pill mills” to bump up the numbers.

Pill Mills

“Pill mills, for us, meant dollars,” Burlakoff testified at the trial, Yeager reminded the jurors. “It was not run the other way. It was run to the pill mills.”

Kapoor’s attorney Beth Wilkinson countered that her client was already so rich he didn’t need more money and never sold his Insys stock. His underlings made millions selling theirs, she said. Kapoor came up with the idea of powerful painkiller after watching his wife in agony while dying of cancer, Wilkinson said.

“He’s kept his money in this business because he believes” Subsys was a force for good, Wilkinson told the jury. “He had every reason to believe that this was good for patients.”

Wilkinson, a former federal prosecutor, painted Burlakoff as the real villain — the man who came up with the idea of shoveling money to doctors who prescribed lots of Subsys. He kept that from Kapoor and Babich, she said.

The government’s two star witnesses — Burlakoff and Babich — presented conflicting testimony on whether the speakers program was a secret way of bribing doctors, Wilkinson told the panel. “They are asking you to figure out” which one is lying, she said. “The government doesn’t seem to care.”

Wilkinson also sought to persuade jurors that prosecutors targeted Kapoor because of his wealth, not because he was a part of some bribery scheme.

“They went after the rich guy,” she said. “There was no agreement to pay off these doctors.”

Federal prosecutors called 39 witnesses in the trial that spanned two months and which featured racy testimony about how Insys lured doctors into writing more Subsys prescriptions with sexy sales reps, lap dances and lavish dinners at restaurants that Kapoor owned. The defense case took two days and featured a handful of witnesses, including a patient who vouched for the benefits of Subsys. Neither Kapoor nor the other defendants testified.

Wilkinson will finish her closing argument Friday and then lawyers for the other defendants will give their summations to the jury. The key question the panel must answer is whether prosecutors proved there was an agreement among the Insys executives to bribe doctors and lie to insurers.

The case is U.S. v. Kapoor, 16-cr-10343, U.S. District Court, District of Massachusetts (Boston).

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