John Kapoor’s fate continues to rest in the hands of jurors in the District of Massachusetts. On April 5, 2019, both the United States and defense counsel concluded their closing arguments in USA v. Babich et. al., No. 1:16-cr-10343, a case where the Government alleged that Kapoor, the founder and former Chairman of the Board of Insys Therapeutics, was instrumental in Insys’ scheme to bribe doctors to overprescribe Subsys, an under-the-tongue fentanyl-based painkiller approximately 100 times stronger than morphine. Jurors have now been deliberating since April 8, leading to a request by one of Kapoor’s co-defendants to return home to Michigan while jurors continue to deliberate.
The Government’s charges center around the company’s use of its “speaker program” to funnel money and perks to unscrupulous doctors who were willing to overprescribe Subsys, a drug approved by the U.S. Food and Drug Administration solely for cancer patients. The Government also claimed that Insys set up a fraudulent call center where it directed employees to defraud insurance companies by fabricating patient diagnoses in order to get the prescribed Subsys covered. The Government brought criminal conspiracy charges against five Insys executives, including its founder, Kapoor.
The Government’s case-in-chief lasted nine weeks. It brought forth several witnesses who testified about their addiction to opioids, and how their lives deteriorated after Insys-affiliated doctors prescribed them Subsys. The Government agreed to plea agreements with various Insys executives who testified against Kapoor and the four defendant-executives. Matthew Napoletano, the former vice president of marketing at Insys, testified that he complied with Kapoor’s request for data on how often doctors in the Insys speaker program were prescribing Subsys after a heated exchange between the two of them in 2012. Alec Burlakoff, the former vice president of sales at Insys, admitted to purposefully targeting and bribing doctors who were known for liberally prescribing opioids. Burlakoff testified that these directives came from Kapoor.
During closing, the prosecution concentrated on the theme that the defendant-executives consciously chose to place Insys profits over patient safety. The defense countered during its closing by arguing that the Government failed to meet its burden showing that Kapoor was aware of the scheme. Indeed, defense counsel argued that the Government never brought forth evidence illustrating Kapoor’s agreement with these doctors, a necessary requirement to conspiracy charges. Kapoor’s counsel painted Burlakoff as the true mastermind of the plot that fed into this Nation’s opioid crisis.
Regardless of how the jury comes out in Babich, the prosecution of Kapoor and other Insys executives continues a developing trend in the U.S. Attorney’s Office. The Government has taken the position that in order to deter such fraudulent conduct, mere fines against large companies will not suffice. It must seek to hold personally accountable the bad-faith executives who directed the company to proceed down that path.
Copyright © 2019, Foley Hoag LLP. All rights reserved.