Kapoor’s conviction sends a signal about corporate accountability

The feds brought down their fentanyl billionaire — make that former billionaire.

John Kapoor, the founder, former chairman, and former chief executive of Insys Therapeutics, has been convicted of a racketeering conspiracy that involved bribing doctors and lying to insurance companies to boost sales of Subsys, Insys’ powerful opioid drug. Four other Insys executives were also convicted. The conviction is important because all too often when powerful executives orchestrate marketing maneuvers that put patients at risk, they go unpunished even as their companies pay fines or their lieutenants are prosecuted.

Subsys followed a well-trod playbook for powerful opioids. It packaged the pain drug fentanyl, roughly 80 times more potent than morphine, in a mouth spray. It’s like Binaca, but sprayed under the tongue instead of into the throat. The spray allows fentanyl to rapidly be absorbed into the bloodstream, which is important for patients with cancer who have what is known as breakthrough pain: their pain breaks through the high doses of opioids they are already taking.

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Subsys is approved only for use in cancer patients. Kapoor has said that his motivation for developing the drug was to help patients like his wife Editha, who died of breast cancer in 2005.

But prosecutors presented witnesses who had gotten Subsys even though they did not have cancer. They also alleged that Insys had lied to insurance companies, without patients’ knowledge, to make sure the drug was paid for in cases such as back and neck injuries.

This wasn’t even a new racket. In 2008, Cephalon, a Frazer, Penn., drugmaker paid $425 million and pleaded guilty to criminal charges involving drugs such as Actiq, a fentanyl lollipop. Prosecutors in that case alleged that Actiq, also meant only for cancer patients, was promoted for migraines, anemia, and other uses.

Alec Burlakoff, a key figure in the Insys case, had previously worked at Cephalon marketing its opioids. Burlakoff, who had headed Insys’ sales efforts, was the government’s star witness. He pleaded guilty to criminal charges before the trial. Aside from his testimony, Burlakoff provided one of the truly shocking moments from the trial: a video for training sales reps in which two men, rapping to an altered version of A$AP Rocky’s “F***king Problems,” name-checked Kapoor (“shout out to Kapoor for what he created!”) and explicitly stated the company’s strategy: raising the dose of the opioid doctors used (“titration”) and getting the medicine prescribed to more patients. The video features a giant, dancing Subsys sprayer. At the end, it’s revealed that Burlakoff was in the costume.

“I love titrations, yeah, it’s not a problem,” the ‘rappers’ chanted. “I’ve got new patients and I’ve got a lot of them.”

The video shows an amazingly cavalier attitude toward a potentially deadly opioid being prescribed in the midst of a nationwide opioid epidemic, as does another allegation – that Sunrise Lee, another Insys executive the jury convicted, gave one high-prescribing doctor a lap dance.

Insys wasn’t the cause of the national opioid epidemic. Pills like Purdue’s Oxycontin are prescribed far more often than high-potency fentanyl such as Actiq and Subsys. But the Insys executives were pushing to get patients on high-dose opioids at a time when the death toll from such drugs was rising. The controversy has cost Kapoor more than $1 billion in net worth, demoting him from the ranks of billionaires.

Kapoor’s defense – that he ran the company but did not know what was going on – didn’t hold water with a jury. That’s good news for anyone hoping that we can discourage future pharmaceutical entrepreneurs from lining their pockets while hurting patients.

Matthew Herper

Senior Writer, Medicine

Matthew covers medical innovation — both its promise and its perils.