Former Pharmaceutical Executive, billionaire, and indicted criminal John Kapoor was sentenced to five and a half years in prison last Thursday at the end of a trial that lasted for months and resulted in the first successful prosecution of a pharmaceutical executive tied to the opioid epidemic.
Kapoor is the founder of the pharmaceutical company Insys Therapeutics (OTC: INSYQ) and was a "central" component of the aggressive marketing of the potent opioid painkiller Subsys. He was one of five executives found guilty of orchestrating a criminal conspiracy to bribe doctors. Insys bribed doctors to prescribe opioid painkiller Subsys, even to patients who didn't need it. They also lied to insurance companies to make sure the painkiller was covered.
This oral fentanyl spray was intended for cancer patients and could cost as much as $19,000 a month. Nearly 70,000 people died from drug overdoses in the U.S. in 2019. Nearly half of those deaths involved fentanyl or a similar drug. While overall overdose fatalities decreased in 2019, deaths from fentanyl overdoses is still on the rise.
The other executive involved in the opioid push were given much shorter sentences, between one year and 33 months. These sentences, Kapoor's included, were significantly lower than what was recommended by federal prosecutors. Two other executives became cooperating witnesses for the prosecution.
One of the other executives found guilty, Insys sales chief Alec Burlakoff was sentenced on the same day to 26 months in prison for his role in the criminal conspiracy and fraud scheme. Burlakoff had hired a stripper, Sunrise Lee, to act as a sales representative for the opioid medication in the hopes that she could persuade doctors to boost prescription numbers. She later went on the oversee a third of the company's sales force. A former employee saw Lee give a lapdance to a doctor to get him to prescribe more Subsys.
At one point, Insys even produced a rap video about Subsys. The song starts with a repeated line, "I've got new patients, ya I got a lot of them" and promised, "VIP service like they never seen". The song also includes the line "Always compliant like we supposed to be... Shout out to Kapoor for what he created."
Burlakoff tried to explain what had happened the judge overseeing the trial, U.S. District Judge Allison Burroughs: "I didn't think of who we were... and how unethical what we were doing was. The only thing I could think was how could I keep up with the fast and furious pace necessary to get ahead."
Corporate executives were charged last year under the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO is well known as the charge served to mob bosses and drug lords.
This ruling is meant to send a message to drug companies that fueled the opioid epidemic that they will be held criminally accountable. Up to now, fines for this sort of behavior have been seen as "simply... the cost of doing business" according to Ameet Sarpatwari, a physician and the assistant director of Harvard University's Program on Regulation. These prison sentences serve as "an important warning to other pharmaceutical manufacturers and executives who may be considering pushing their products through aggressive, and possibly legally dubious, marketing schemes" Sarpatwari said.