Former billionaire and pharmaceutical executive John Kapoor was sentenced to five and a half years in prison on Thursday. His sentencing is the culmination of a months-long criminal trial in Boston’s Moakley Federal Court that resulted in the first successful prosecution of pharmaceutical executives tied to the opioid epidemic.
Kapoor did not make a statement after his sentencing.
The 76-year-old is the founder of Insys Therapeutics, which made and aggressively marketed a potent opioid painkiller. Kapoor and four other executives were found guilty of orchestrating a criminal conspiracy to bribe doctors to prescribe their medication, including to patients who did not need it, and then lying to insurance companies to make sure the costly medication was covered. Two other executives pleaded guilty and became cooperating witnesses.
"I never wanted Subsys to be prescribed to patients who did not need it," Kapoor said during the proceedings to family members of those who died from the drug's use. "I listened to you and, from my heart to you and your families, I am so sorry for your suffering."
Kapoor’s 66-month prison term is substantially less than the 15-year sentence recommended by federal prosecutors, but it is more than the one year requested by Kapoor’s defense attorneys, who maintained his innocence and stressed his old age as reason for a short prison sentence. The other executives received between one year and 33 months, significantly less than many of the prison times recommended by the federal prosecutors.
For the federal government, this was a landmark trial in which corporate executives were charged under the Racketeer Influenced and Corrupt Organizations Act (RICO), a charge often reserved for mob bosses and drug lords. Experts saw the trial as sending a message to drug companies that they will be held criminally accountable for their alleged role in fueling the opioid crisis.
“I think this is just the tip of the iceberg,” said Brad Bailey, a former federal prosecutor and current defense attorney who is not involved in the Insys trial but has been following it closely. “It’s a template that prosecutors will continue to use.”
While seven Insys executives were awaiting sentencing, the company entered into an agreement with the government to settle criminal and civil investigations. Insys agreed to pay $225 million and admitted to the kickback scheme. Shortly after the agreement was announced, the company filed for bankruptcy.
Bailey said between the prison sentences and the company’s financial woes, “there’s no question that this was a cautionary tale to all executives.”
The other former Insys executives who have been sentenced are Michael Gurry (former vice president), who received 33 months in prison; Richard Simon (former national sales director), who also got 33 months; Joseph Rowan (former sales manager), who was sentenced to 27 months; Sunrise Lee (former sales manager), who received a sentence of one year and one day; Michael Babich (former CEO), who received 30 months; and Alec Burlakoff (former vice president), who was also sentenced Thursday and received 26 months in prison.
Ameet Sarpatwari, an epidemiologist and lawyer at Harvard University’s Program On Regulation, Therapeutics, And Law, said he thinks this trial will have a chilling effect on the pharmaceutical industry.
“It’s an important warning to other pharmaceutical manufacturers and executives who may be considering pushing their products through aggressive, and possibly legally dubious, marketing schemes,” said Sarpatwari. “The consequences for such actions may not simply be fines — which has historically simply been the cost of doing business — but possibly jail time.”
However, he said, this trial does not mean the practices that contributed to the overprescribing and addiction to opioids will go away.
“A lot of the activities that you see within the industry that are effective are technically legal. And so, if that’s the case, is this going to curb those aggressive tactics? No. But it will give second thought to pushing the boundaries,” said Sarpatwari. “I think that is going to be the hopefully helpful fallout of the case.”
Correction: This story has been updated to correct Ameet Sarpatwari's title at Harvard University. He is an epidemiologist and lawyer.