Drug company founder, 4 other former executives guilty in opioid kickback scheme

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The founder of Arizona-based drug company Insys Therapeutics and four other former executives were convicted Wednesday of conspiring to pay doctors bribes and kickbacks to boost sales of the highly addictive opioid spray Subsys.

Insys founder and former chairman John Kapoor, 74, was convicted of racketeering conspiracy and other charges for his role in directing the scheme, which included paying doctors speaking fees for sham events billed as educational opportunities, and misleading insurers about patients' medical conditions in order to get payments approved for the drug.

Convicted along with Kapoor were former national sales director Richard Simon, former regional sales directors Sunrise Lee and Joseph Rowan, and former vice president of managed markets Michael Gurry. The jury in Boston federal court deliberated for 15 days before returning the verdicts.

Two other former executives, ex-CEO Michael Babich and ex-vice president of sales Alec Burlakoff, pleaded guilty in January and November, respectively, and testified against their onetime colleagues.

Lawyers for Kapoor and the others argued in court documents that they couldn't be convicted because prosecutors failed to prove that they intended for doctors to prescribe the drug to patients who had no medical need for it.

Kapoor's attorney, Beth Wilkinson, sought to shift the blame onto Burlakoff, claiming the sales executive made side deals with doctors and lied when he testified against Kapoor because he's trying to save himself. In an emailed statement, Wilkinson said she ad Kapoor were disappointed but would "continue the fight to clear Dr. Kapoor's name." She added that the length of the jury's deliberations "confirm that this was far from an open-and-shut case."

Kapoor was arrested in October 2017, on the same day President Trump declared the opioid crisis a public health emergency. And prosecutors have touted the case as illustrative of their work to fight the drug epidemic.

The trial, which began in January, included testimony from a former sales representative who recounted how Lee once gave a lap dance at a Chicago nightclub to a doctor whom Insys was pushing to write more prescriptions. Lee's lawyer suggested the doctor was taking advantage of her.


Jurors also watched a hip-hop video created by sales reps and meant to motivate their colleagues to push doctors to prescribe higher doses of the drug. In the video, employees rapped and danced around Burlakoff, who was dressed as a bottle of Subsys.

Babich told jurors in February that Insys recruited sales representatives who were "easy on the eyes" because the company reasoned that physicians didn't want an "unattractive person to walk in their door."

The Associated Press contributed to this report.