Opioid company executives found guilty of racketeering

(CNN) — Five top executives of Insys Therapeutics — maker of Subsys, a version of the extremely powerful synthetic opioid fentanyl — were found guilty Thursday on federal racketeering charges for bribing doctors to prescribe the painkiller to people who didn’t need it. They were also convicted of defrauding Medicare and private insurance.

Andrew Lelling, US attorney for the district of Massachusetts, hailed the convictions as “the first successful prosecution of top pharmaceutical executives for crimes related to the illicit marketing and prescribing of opioids.” The trial put on display sales tactics such as lap dances to lure doctors and a company vice president who dressed as a Subsys bottle and rapped during a company promo.

The jury took 15 days to reach its verdict against the executives, including founder and one-time billionaire John Kapoor.

“Just as we would street-level drug dealers, we will hold pharmaceutical executives responsible for fueling the opioid epidemic by recklessly and illegally distributing these drugs, especially while conspiring to commit racketeering along the way,” Lelling said after Thursday’s ruling.

Lelling hailed the verdict as a “landmark prosecution” and vindication against executives he said put greed ahead of the American public.

“These executives exploited vulnerable patients and cashed in on dishonest doctors by bribing them to prescribe one of the most powerful, addictive opioid painkillers to patients who should never have received it,” said Joseph R. Bonavolonta, the special agent in charge of the FBI’s Boston division.

Besides Kapoor, the defendants were Richard Simon, 48, the former national director of sales; Sunrise Lee, 38, a former regional sales director; Joseph Rowan, 45, a former regional sales director; and Michael Gurry, 55, the former vice president of managed markets.

Kapoor, 76, and the other four could be sentenced to up to 20 years in prison. He remains out on bail.

Kapoor’s attorney Beth Wilkinson said they were disappointed with the verdict and that it was “far from an open-and-shut case.”

“We will continue the fight to clear Dr. Kapoor’s name,” she said.

Gurry’s attorney Tracy Miner said they planned to appeal. “Opioids can be misused,” Miner said, “but the opioid crisis was not caused by these defendants.”

Attorneys for the other defendants, who had denied all wrongdoing, had no immediate comment.

Two other high-level Insys executives — former President and CEO Michael Babich and Alec Burlakoff, once the vice president of sales — pleaded guilty ahead of trial and testified against their former colleagues.

At one point, jurors were shown a promo video of Burlakoff, dressed as a purple-and-white Subsys bottle, dancing and rapping with employees.

“If you want to be great, listen to my voice. You can be great, but it’s your choice,” he said.

Toward the end of the video, two employees sitting at a coffee shop high-five. “That’s going to kill, man,” one said.

The opioid epidemic has killed nearly 400,000 Americans since 1999, according to the US Centers for Disease Control and Prevention.

Subsys is a rapid-onset opioid intended only for cancer patients with intense breakthrough pain. Prosecutors said the defendants conspired from May 2012 to December 2015 to bribe doctors, including many who ran pain clinics, to give the drug to patients who should never have received it.

The drug is about 100 times more powerful than morphine.

Dozens of states are prepared to bring lawsuits by state attorneys general against major drugmakers, accusing them of aggressively marketing opioids and fueling the nation’s opioid epidemic.

Oklahoma is set to become the first state to go to a jury trial, beginning May 28.

Purdue Pharma, the maker of Oxycontin, agreed to pay $270 million to settle before the trial. The case moves ahead against the other defendants, Johnson & Johnson, Teva Pharmaceuticals and Allergan.