Drug company founder, executives convicted of bribe scheme that fueled US opioid crisis

BOSTON (Reuters) - The founder of drugmaker Insys Therapeutics Inc and four colleagues were found guilty on Thursday of bribing doctors to prescribe an addictive painkiller, helping to drive the U.S. opioid drug abuse crisis.

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A federal jury in Boston found John Kapoor, who served as the drugmaker's chairman, and his co-defendants guilty of racketeering conspiracy for a scheme that also misled insurers into paying for the drug.

Kapoor, 75, is the highest-ranking pharmaceutical executive convicted in a case tied to a drug crisis that has led to tens of thousands of overdose deaths annually. His 2017 arrest came the same day U.S. President Donald Trump declared the epidemic a public health emergency.

Prosecutors charged that Kapoor oversaw a wide-ranging scheme to bribe doctors nationwide by retaining them to act as speakers at sham events at restaurants ostensibly meant to educate clinicians about its fentanyl spray, Subsys.

"Dr. Kapoor is disappointed in the verdict, as are we," Beth Wilkinson, one of Kapoor's defense attorneys said in an emailed statement. "Four weeks of jury deliberations confirm that this was far from an open-and-shut case."

Michael Babich, who resigned as Insys' chief executive in 2015, pleaded guilty to his role in the scheme in January and became a key witness for prosecutors.

The U.S. Food and Drug Administration approved Subsys in 2012 only for use in treating severe cancer pain. Yet prosecutors claimed doctors who took bribes often prescribed Subsys to patients without cancer, helping boost sales for Chandler, Arizona-based Insys.

Prosecutors said Kapoor also directed efforts to defraud insurers into paying for the drug. His co-defendants include former Insys executives and managers Michael Gurry, Richard Simon, Sunrise Lee and Joseph Rowan.

The charges carry a maximum sentence of 20 years in prison.


Lawyers for Kapoor at trial acknowledged that Insys paid doctors but contend that he believed they really were being paid to talk up the product's benefits.

The jury heard evidence early in the trial about Lee, an ex-stripper turned Insys regional sales director, who gave a lap dance to a doctor at a Chicago club as part of an effort to push him to prescribe the drug.

After the verdict was read, Assistant U.S. Attorney Fred Wyshak asked U.S. District Judge Allison Burroughs to confine Kapoor to his home until he is sentenced, saying his wealth made him a flight risk. Burroughs denied that request.

All five had pleaded not guilty and denied wrongdoing.

(Reporting by Nate Raymond in Boston; Editing by Scott Malone and Bill Berkrot)