Former billionaire and pharmaceutical executive John Kapoor has
been sentenced to five years and six months in prison. His sentencing is the
culmination of a months-long criminal trial in Boston's Moakley U.S. Courthouse
that resulted in the first successful prosecution of pharmaceutical executives tied
to the opioid epidemic.
The 76-year-old is the founder of Insys Therapeutics, which made
and aggressively marketed the potent opioid painkiller Subsys.
Kapoor's 66-month prison term is substantially less than the
15-year sentence recommended by federal prosecutors, but it is more than the
one year requested by Kapoor's defense attorneys, who maintained the
executive's innocence and stressed his old age as reason for a short prison
sentence.
U.S. District Judge Allison Burroughs explained that she reached
the lesser sentence after considering Kapoor's advanced age and philanthropy,
as well as "his central role in the crime," The Associated Press
reported.
Kapoor and four other executives were found guilty last year of
orchestrating a criminal conspiracy to bribe doctors to prescribe the company's
medication, including to patients who didn't need it. They then lied to
insurance companies to make sure the costly oral fentanyl spray was covered.
The painkiller, which was intended for cancer patients, could
cost as much as $19,000 a month.
Two other executives pleaded guilty and became cooperating
witnesses.
The other executives received between one year and 33 months,
significantly less than many of the prison terms recommended by the federal
prosecutors.
Earlier on Thursday, Insys sales chief Alec Burlakoff was
sentenced to 26 months in prison for his role in the bribery and fraud scheme.
"This was an offense of greed," Burroughs said before sentencing Burlakoff.
The sales executive hired a stripper as a Subsys sales
representative to help persuade doctors to boost prescriptions. The woman,
named Sunrise Lee, eventually was promoted to oversee a third of the company's
sales force.
"I didn't think of who we were at Insys and how unethical
what we were doing was," he told the judge on Thursday, according to Bloomberg. "The only thing I
could think was how could I keep up with the fast and furious pace necessary to
get ahead."
For the federal government, this was a landmark trial in which
corporate executives were charged under the Racketeer Influenced and Corrupt
Organizations Act, or RICO, a charge often reserved for mob bosses and drug
lords. Experts saw the trial as sending a message to drug companies that they
will be held criminally accountable for their alleged role in fueling the
opioid crisis.
"I think this is just the tip of the iceberg," said
Brad Bailey, a former federal prosecutor and current defense attorney who has
been following the Insys trial closely. "It's a template that prosecutors
will continue to use."
While these seven Insys executives have been in court and
awaiting sentencing, the company entered into an agreement with the government
to settle criminal and civil investigations. Insys agreed to pay $225 million and admitted to
the kickback scheme. Shortly after the agreement was announced, the company filed for bankruptcy.
Bailey said that between the prison sentences and the company's
financial woes, "there's no question that this was a cautionary tale to
all executives."
Ameet Sarpatwari, a physician and the assistant director of
Harvard University's Program on Regulation, Therapeutics, and Law, thinks this
trial will have a chilling effect on the pharmaceutical industry.
"It's an important warning to other pharmaceutical
manufacturers and executives who may be considering pushing their products
through aggressive, and possibly legally dubious, marketing schemes," said
Sarpatwari. "The consequences for such actions may not simply be fines —
which has historically simply been the cost of doing business — but possibly
jail time."
However, he said, this successful prosecution does not mean the
practices that contributed to overprescribing and addiction to opioids will go
away.
"A lot of the activities that you see within the industry
that are effective are technically legal. And so, if that's the case, is this
going to curb those aggressive tactics? No, but it will give second thought to
pushing the boundaries," said Sarpatwari. "I think that is going to
be the hopefully helpful fallout of the case."
Correction Jan. 23, 2020 An earlier version of this story misspelled
Alec Burlakoff's last name as Burkaloff on first mention.
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