BOSTON — A pharmaceutical company founder accused of paying doctors millions in bribes to prescribe a highly addictive fentanyl spray was convicted Thursday in a case that exposed such marketing tactics as using a stripper-turned-sales-rep to give a physician a lap dance.
John Kapoor, the 76-year-old former chairman of Insys Therapeutics, was found guilty of racketeering conspiracy after 15 days of jury deliberations. Four ex-employees of the Chandler, Arizona-based company, including the former exotic dancer, were also convicted.
Conviction Could Embolden Feds to Bring More Cases
Some of the most sensational evidence in the months-long federal trial included a video of employees dancing and rapping around an executive dressed as a giant bottle of the powerful spray Subsys, and testimony about how the company made a habit of hiring attractive women as sales representatives.
Federal prosecutors portrayed the case as part of the government’s effort to go after those it views as responsible for fueling the nation’s deadly opioid crisis.
“This is a landmark prosecution that vindicated the public’s interest in stanching the flow of opioids into our homes and streets,” Massachusetts U.S. Attorney Andrew Lelling said in a statement.
The convictions could embolden federal authorities to bring more cases against top executives of opioid manufactures, said Andrew Kolodny, co-director of opioid policy research at Brandeis University’s Heller School for Social Policy and Management.
“Paying a fine or even civil litigation is inadequate if we want to deter corporations from killing people in their pursuit of profit,” Kolodny said.
Estimated 2 Million Addicted to Opioids in U.S.
Opioid overdoses claimed nearly 400,000 lives in the U.S. between 1999 and 2017, according to the Centers for Disease Control and Prevention. An estimated 2 million people are addicted to the drugs, which include both prescription painkillers such as OxyContin and illegal drugs such as heroin.
Kapoor and the others were accused of scheming to bribe doctors across the U.S. to boost sales of Subsys and misleading insurers to get payment approved for the drug, which is meant for cancer patients in severe pain and can cost as much as $19,000 a month, according to prosecutors. The bribes were paid in the form of fees for sham speaking engagements that were billed as educational opportunities for other doctors.
The charges carry up to 20 years in prison.
“We will continue the fight to clear Dr. Kapoor’s name,” defense attorney Beth Wilkinson said in a statement. She said the long deliberations prove it was “far from an open-and-shut case.”
Former Sales Rep Testified About Lap Dance
A former sales representative testified that regional sales manager Sunrise Lee once gave a lap dance at a Chicago nightclub to a doctor whom Insys was pushing to write more prescriptions. Lee’s lawyer said she will challenge the verdict.
Jurors also watched the rap video , which was shown at a national meeting in 2015 to motivate sales reps to push doctors to prescribe higher doses of the drug. At the end of the video, the person dressed up as the bottle takes off his costume and is revealed to be then-vice president of sales, Alec Burlakoff.
Burlakoff pleaded guilty and testified against Kapoor. Burlakoff told the jury that he met Lee at the strip club where she worked and recruited her to join the company despite her lack of pharmaceutical industry experience because he believed she would be willing to help carry out the plan to pay off doctors.
A former CEO of the company, Michael Babich, also pleaded guilty and testified against his colleagues. He said Insys recruited sales reps who were “easy on the eyes” because doctors didn’t want an “unattractive person to walk in their door.”
Company Previously Paid $150 Million Federal Settlement
Kapoor’s attorney sought to shift the blame onto Burlakoff, who she said was cutting side deals with doctors. Wilkinson argued that Burlakoff and Babich were lying about Kapoor in an attempt to save themselves.
Kapoor’s lawyers also argued that prosecutors were unfairly blaming Insys for fueling the drug crisis, noting that the drug makes up a tiny fraction of the prescription opioid market.
Several doctors have been convicted in other cases of participating in a kickback scheme. A number of states have sued the Insys, which also agreed last year to pay $150 million to settle a federal investigation into inappropriate sales.
Insys said in an emailed statement that the “the actions of a select few former employees” are not indicative of the company’s work today.