indica News Bureau-
John N. Kapoor, the Indian-American billionaire, founder, and former executive chairman of Insys Therapeutics, along with four former executives, were convicted by a federal jury of bribing medical practitioners to prescribe opioid-based medicine.
The jury found that 76-year-old Kapoor had bribed doctors to prescribe Subsys, a highly-addictive sublingual fentanyl spray intended for cancer patients experiencing breakthrough pain, and that he had also defrauded Medicare and other private insurance carriers.
“Today’s convictions mark the first successful prosecution of top pharmaceutical executives for crimes related to the illicit marketing and prescribing of opioids,” stated United States Attorney Andrew E. Lelling through a press note, and called it a landmark prosecution that vindicated the public’s interest in staunching the flow of opioids into our homes and streets.
According to a press release from the United States Attorney’s Office, District of Massachusetts, along with Kapoor, the other people convicted by a federal jury of RICO conspiracy were Richard M. Simon, 48, the former national director of sales, Sunrise Lee, 38, a former regional sales director, Joseph A. Rowan, 45, a former regional sales director, and Michael J. Gurry, 53, the former vice president of managed markets.
Michael L. Babich, the former CEO and president of the company, and Alec Burlakoff, the former vice president of sales, pleaded guilty and testified during the trial.
According to the press release, the bribes and kickbacks took multiple forms. In March 2012, Insys began using “speaker programs,” purportedly intended to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners. However, the programs were used as a vehicle to pay bribes and kickbacks to targeted practitioners in exchange for increased Subsys prescriptions and increased dosage.
In most instances, the programs were shams.
The defendants also conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. They did this by setting up the “Insys Reimbursement Center,” (IRC), which was dedicated to obtaining prior authorization for payment directly from insurers and pharmacy benefit managers.
Beginning in October 2012, employees of the IRC posed as employees of the practitioner and used “the spiel” – a script of false and misleading representations about patient diagnoses in order to secure approval for the drug by the insurance provider. For example, since insurers were more likely to authorize payment for Subsys if a patient was being treated for cancer-related pain, IRC employees were instructed to mislead insurers regarding the true diagnosis of the patient.
The defendants used pharmacy data to identify practitioners who either prescribed unusually high volumes of rapid-onset opioids, or had demonstrated a capacity to do so, and bribed and provided kickbacks to the practitioners to increase the number of new Subsys prescriptions, and to increase the dosage and number of units of Subsys.
The defendants also measured the success of their criminal enterprise by comparing the net revenue earned from targeted practitioners with the total value of bribes and kickbacks paid. They used this information to reduce or eliminate bribes paid to practitioners who failed to meet satisfactory prescribing requirements, which they determined to be the net revenue equal to at least twice the amount of bribes paid to the practitioner.
“These executives exploited vulnerable patients and cashed in on dishonest doctors by bribing them to prescribe one of the most powerful, addictive opioid painkillers to patients who should never have received it. Motivated by sheer greed, they lied to insurance companies and are no better than street level drug dealers,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division on the press release. “Today’s verdict marks an important step in holding pharmaceutical company executives responsible for their role in fueling the opioid epidemic.”
“The opioid epidemic is one of the largest public health tragedies our country has faced, and as the FDA continues to forcefully confront the opioid crisis, ensuring safe and appropriate use of these powerful medications remains a cornerstone of our efforts,” said Melinda K. Plaisier, FDA Associate Commissioner for Regulatory Affairs in the press release. “In this case, we’ve seen unacceptable behavior from the defendants who influenced health care providers to prescribe the most powerful type of opioid – an immediate release form of fentanyl – to patients who did not need it, putting them at serious risk of overdose and in some cases, death.”
“The integrity of TRICARE, the U.S. Defense Department’s health care program for military members and their dependents, is a top priority for the Defense Criminal Investigative Service (DCIS),” stated Special Agent-in-Charge Leigh-Alistair Barzey, DCIS Northeast Field Office in the press release.
“This case shows that healthcare fraud will not be tolerated,” said Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office in the press release.
Inspector in Charge Joseph W. Cronin of the U.S. Postal Inspection Service’s Boston Division stated in the press release, “We are committed to investigating and bringing to justice those who contribute to the opioid abuse epidemic. We would not be successful in doing so without our fellow law enforcement partners and the U.S. Attorney’s Office.”
“The verdict, in this case, sends a clear message to pharmaceutical companies that tactics like these will not be tolerated,” said Matthew Modafferi, Special Agent in Charge of the United States Postal Service Office of Inspector General in the Northeast Area Field Office in the press release. “This is a win for the public in the war against opioids.”
“Bribing doctors and misrepresenting patient’s medical conditions in order to boost profits by overprescribing a highly addictive opioid is reprehensible criminal conduct,” said Sean J. Smith, Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division in the press release.
“Every day, millions of Americans struggle with opioid addiction,” said Thomas W. South, OPM Deputy Assistant Inspector General for Investigations in the press release. “These executives put the health and wellbeing of Federal employees, annuitants, and their families at risk in order to make a profit.”
Sentencing dates have not yet been set, but the charge of RICO conspiracy provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000, or twice the amount of pecuniary gain or loss.