A federal judge overturned a part of the conviction of Insys Therapeutics Inc. Founder John Kapoor and three former executives accused of bribing doctors to prescribe an addictive opioid on Tuesday.
In her decision, U.S. District Judge Allison Burroughs ruled that the government failed to prove that the defendants intended to commit bribery and extortion, which means the convictions of honest services fraud and violating the Controlled Substances Act will be thrown out.
The defendants, Kapoor and former employees Michael Gurry, Richard Simon, Sunrise Lee and Joseph Rowan, will still be convicted of wire and mail fraud.
“The Government could have easily proved bribery, but it elected not to charge bribes or kickbacks and now must live with that decision,” Borroughs wrote in her ruling. “The Court only very reluctantly disturbs a jury verdict, but finds it necessary to do so here.”
In 2017, Kapoor, Gurry, Simon, Lee, Rowan, and former Insys employees Michael Babich and Alec Burkaloff were arrested and charged with felony counts including conspiracy, wire and mail fraud, forfeiture and racketeering.
In May, Kapoor was found guilty on all counts, but his sentencing has been delayed for months.
Last month, Kapoor’s attorneys requested a new trial, arguing that the jury would not be able to view each charge independently. In her ruling Tuesday, Borroughs denied the defendants’ request for a new trial.
In 2012, the FDA approved Subsys, a fentanyl spray product manufactured by Insys for use by patients seeking relief from cancer pain. After an unsatisfactory launch of the product that year, Insys began a more aggressive marketing strategy that fall, recommending higher doses of the addictive drug and allegedly making financial deals with prescribers to write large numbers of prescriptions for patients, most of whom were not diagnosed with cancer.
Read more:Insys Therapeutics Pushed Opioid With Bribes And Lies, Prosecutors Say
Though the conviction was partially overturned, Borroughs noted in her ruling that the decision was not intended to “condone or minimize” the actions of the company’s leaders in marketing the powerfully addictive Fentanyl spray.
“The conduct of Insys and the Defendants in this case was reprehensible and designed to financially incentivize healthcare practitioners to prescribe Subsys without regard for the best interests of their patients,” Borroughs wrote. “Defendants knew the power of Subsys and that addiction was a risk, but nonetheless tried to maximize the number of prescriptions written and the dosage prescribed.”
Kapoor’s attorney and a spokesperson for Insys declined to comment for this story.
Brad Bailey, a Boston-based criminal defense attorney and a former federal prosecutor who has been following the case, said he was not surprised by Borroughs' ruling.
“It shouldn’t have surprised anybody,” Bailey said, “because the underlying product was a Fentanyl-based spray that had a legitimate medical use on the market. To conflate that into narcotics distribution is is a real slippery slope.”
The defendants are now scheduled for sentencing in the second week of January 2020. Kapoor is scheduled to be sentenced on January 10 in the John Joseph Moakley Courthouse.
According to Bailey, it’s too early to say what impact the dropped conviction might have on the sentence, though taking these convictions out could have an impact on the final ruling.
“There's no doubt that that those controlled substance counts certainly could have had enhancements based on the impact on alleged victims and based on what the projected weight was,” Bailey said. “It is going to bring down the calculus and result in a sentence that's going to be less tomorrow than what it was this morning.”
