The former executives have been charged with initiating kickback schemes, as well as falsifying data, to increase sales of its powerful opioid Subsys.
John Kapoor, the founder of Insys Therapeutics and former chief executive officer, along with four other former company executives, will head to court today over allegations they orchestrated kickback schemes to encourage doctors to prescribe the company’s fentanyl-based sublingual spray, Subsys.
Subsys is a powerful pain killer used to treat cancer pain. The drug, which is made from fentanyl, is incredibly powerful, about 100 times more powerful than morphine. Kapoor, who was charged by the government in 2017, is the highest-level executive to be charged in the opioid epidemic lawsuits, Reuters noted. The criminal case brought against the executives marks a rare instance of the government using the criminal Racketeer Influenced and Corrupt Organizations Act, or RICO, to go after corporate executives, the Boston Globe reported.
Opening arguments in the trial are expected to begin today in Boston. Along with Kapoor, the government charged former CEO and company president Michael Babich, Alec Burlakoff, the former vice president of Sales; Richard Simon, the former national director of sales; former regional sales directors Sunrise Lee and Joseph Rowan; and former vice president of managed markets, Michael Gurry. When the indictments were handed down, the governments said all “conspired to bribe practitioners in various states, many of whom operated pain clinics, in order to get them to prescribe a fentanyl-based pain medication.” The government first brought charges against Babich and the five other former Insys executives in December 2016. The charges against Kapoor were not issued until two years ago.
The trial is expected to last up to three months, the Boston Globe reported. The indictment against Kapoor and the other former Insys executives allege the men “conspired to mislead and defraud health insurance providers” who did not want to approve payment for Subsys when it was prescribed for patients who did not have a cancer diagnosis. The U.S. Department of Justice said the company executives were able to get around those concerns by setting up the “reimbursement unit,” which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers.
“In exchange for bribes and kickbacks, the practitioners wrote large numbers of prescriptions for the patients, most of whom were not diagnosed with cancer,” the government said in its 2017 announcement.
The charges against Kapoor and the other executives were made on the same day President Donald Trump declared a nationwide public health emergency from the opioid crisis.
The allegations made against Insys reveal a company that was hell-bent on increasing revenues from Subsys prescriptions, despite any concerns over abuse. The 2017 indictment against Kapoor revealed that former sales associates danced with a giant bottle of Subsys in a rap music video during a 2015 sales conference.
The government’s charges against Kapoor and the other executives are part of a long list of charges against the company. In 2015, the company faced allegations it falsified data in order to sell more of its painkiller. Also in 2015, the Southern Investigative Reporting Foundation (SIRF) issued a report alleging an Insys unit has been misleading insurers to change documents to state that pain was cancer-related in order to prescribe Subsys.
After the charges were made against the company, Insys initiated a strategic makeover as it reorganized. That included the termination of 90 percent of the sales force that had been assigned to Subsys, as well as the bulk of its management team. In November, the company began to assess strategic alternatives for its opioid-related assets, including Subsys, as it continues to shift its focus to a new therapeutic – cannabinoids. Saeed Motahari, president and chief executive officer of Insys, said the company is shifting its focus away from the development of opioids and focusing on becoming a leader in pharmaceutical cannabinoids and novel drug delivery systems.
