Opioid Maker Insys’ Founder, Others Lose Appeals of Convictions

By Nate Raymond and Jonathan Stempel | August 26, 2021

BOSTON — A federal appeals court on Wednesday upheld the jury convictions of Insys Therapeutics Inc founder John Kapoor and four other company officials, over their roles in a scheme to bribe doctors to prescribe addictive opioids and defraud insurers into paying for them.

The 1st U.S. Circuit Court of Appeals in Boston ruled 3-0 that “unalloyed greed” drove the defendants to market the fentanyl spray Subsys to “pill mill” doctors, who would then prescribe it to patients with no medical need.

In a 138-page decision, Circuit Judge Bruce Selya wrote that Insys and Kapoor, who had been chief executive, deserved “great credit” for developing Subsys to treat cancer pain, but in the pursuit of profit “turned what should have been a blessing into a curse.”

Kapoor, 77, was convicted in 2019 and is serving a 5-1/2-year prison sentence.

He remains the highest-ranking pharmaceutical executive convicted for helping fuel the U.S. opioid epidemic https://www.reuters.com/legal/litigation/us-states-rush-meet-deadline-join-26-billion-opioid-settlement-2021-08-19.

His co-defendants Michael Gurry, Sunrise Lee, Joseph Rowan and Richard Simon were sentenced to terms ranging from one to 2-3/4 years.

Kapoor’s lawyer declined to comment. Lawyers for the other defendants and the U.S. attorney’s office in Boston, which prosecuted the case, did not immediately respond to requests for comment.

Prosecutors said Insys used sham “speaker programs,” ostensibly to educate the medical field, as a means to pay bribes and kickbacks to doctors who then prescribed Subsys, often to non-cancer patients.

Kapoor also directed efforts to defraud insurers that were reluctant to pay for Subsys, prosecutors said.

Fentanyl is an especially potent opioid, up to 100 times stronger than morphine. Insys, based in Chandler, Arizona, filed for bankruptcy protection in 2019.

A lower court judge had set aside some of the jury’s findings, but the 1st Circuit restored the original verdicts.

The appeals court also set aside the defendants’ restitution and forfeiture orders, apart from Kapoor’s forfeiture, and ordered them recalculated. Kapoor’s punishment included $59.8 million of restitution and a $1.9 million forfeiture.

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