John Kapoor, founder of Insys Therapeutics, sentenced to 66 months in landmark fentanyl bribery case

BOSTON — John Kapoor, the billionaire founder of the pharmaceutical company Insys Therapeutics, will spend 5-and-a-half years in prison for orchestrating a scheme of bribes and kickbacks to physicians who prescribed large amounts of a fentanyl spray to patients who didn't need the painkiller.

Kapoor's 66-month sentence, handed down Thursday in Boston federal court by U.S. District Judge Allison Burroughs, is the lengthiest prison term imposed on seven former Insys executives sentenced in the landmark case over the past two weeks.

In other sentencings in recent days, Insys' former vice president Michael Gurry and national director of sales Richard Simon each received 33 months in prison for their involvement in the scheme; former Insys CEO Michael Babich was sentenced to 30 months; the company's regional sales director Joseph Rowan to 27 months; and Sunrise Lee, former regional sales director, to one year and a day in prison.

Former Vice President of Sales Alec Burlakoff was sentenced to 26 months Thursday.

Assistant U.S. Attorney Nathaniel Yeager, who sought 15 years in prison, called Kapoor – former chairman of the company's board – the "linchpin" of the criminal scheme and the only defendant who could not have been replaced by another conspirator.

"He was the principal leader, who personally approved, and thereafter enforced, the corrupt strategies employed throughout the conspiracy," Yeager said. "This crime would not have happened, could not have happened, without John Kapoor. It was, in almost every way, Kapoor’s crime."

In addition to prison, Kapoor, 76, was sentenced to three years of supervised release and must pay a $250,000 fine.

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The historic case, which included indictments going back to 2016, centered on a fentanyl-based pain medication called Subsys, a powerful, highly addictive and potentially dangerous narcotic intended to treat patients with cancer suffering from intense pain. Through an elaborate scheme, prosecutors said the Arizona-based company bribed doctors to prescribe the drug to their patients and tricked health insurance companies about their conditions.

Burroughs said it was unclear to her whether Kapoor had more culpability than other top figures at Insys. She said she approached his sentence the same as Babich and Burlakoff, but they both got shorter sentences for pleading guilty before the trial.

“I cannot ignore the conduct in this case and all the harm it caused people,” Burroughs said. “I’ve done my level best to be fair to everyone in this case.”

Prosecutors asked that Kapoor be taken into custody immediately after the hearing, citing his vast connections overseas. But Burroughs denied that request. Kapoor is set to report to prison March 5. His attorneys requested a facility near Tuscon, Arizona.

Kapoor exited the back of the courthouse and declined to comment.

His attorney, Beth Wilkinson, acknowledged the patients' pain, but said the government misrepresented the “real John Kapoor,” who helped others with other drugs and charity work aimed at cancer.

“Judge him on his entire life,” she said, recounting a difficult upbringing in India, where Kapoor was born and raised. “The 70 years of history that Mr. Kapoor has shows no sign of greed. He wanted to do something that would help other people."

U.S. Attorney Andrew Lelling, addressing reporters outside, said the sentences of Kapoor and other Insys executives were not just aimed at punishing the defendants but were intended to deter others from committing the same acts.

"It's about making the next pharma company think twice about its sales tactics and think hard about its basic responsibility as a corporate entity and about not victimizing the public so it can make more money," Lelling said.

He said he respected the court's decision, but thinks Kapoor's prison term should have been longer and worries he could flee before reporting to prison.

Before Kapoor was sentenced, seven victims and family members of victims who were prescribed the drug gave emotional statements to the court.

“Far too many people have died, or like me, have had their lives changed, at the hands of your greed and cruelty,” said one victim, Paul Lara. “It’s unrealistic to believe that Insys Therapeutics executives could not see the results of their behavior.”

Lara said he suffers to this day from a drug "not meant for me” because he does not have cancer. He struggles remembering how to get back home, suffers from hallucinations and has seen his teeth fall out.

“By the grace of God, I am here to speak for all of us including the ones who lives you took,” Lara said.

Deborah Fuller said her daughter, Sarah Fuller, died because of Kapoor and his co-conspirators, calling them “no different than mobsters.” Her daughter was among those prescribed Subsys without having cancer.

“She was robbed by Kapoor of her wedding day,” Fuller said. “The impact of his actions has forever broken our family and Sarah’s fiancé. The actions of John Kapoor and his conspirators have been a sentence of hell for our family.”

Kapoor faced each patient as they spoke.

Addressing the judge, Kapoor said he was "heartbroken" by their words and apologized. He asked for leniency because of his age, adding he fears for his children who had nothing to do with the scheme.

“Subsys was never intended to be for everyone," Kapoor said, recounting how he sought to make a drug that would take away pain for people suffering. “I’m sad and I regret how my demand might have affected some people. I’m sorry about that. I wanted to believe in Subys perhaps too much."

A federal jury in May convicted Kapoor and four other Insys executives on racketeering charges, marking the first-ever conviction of a drug company CEO in the federal government's fight to combat the opioid crisis. Two other co-conspirators, Babich and Burlakoff, pleaded guilty to charges last January.

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The convictions were hailed as victories on the legal front in the government's efforts to fight the rising number of opioid overdoses. Kapoor's 2017 arrest came on the same day that President Donald Trump declared the epidemic a public emergency.

Federal prosecutors argued that doctors between 2012 and 2015 provided patients large numbers of Subsys prescriptions — including to non-cancer patients — in exchange for kickbacks and bribes from the Insys executives. Some of the doctors, already convicted of crimes the states where they practiced, testified against the Insys executives during trial.

The bribes took "different forms," according to prosecutors, but were usually disguised as fees paid by the company to the physicians for marketing events. Insys also took concerted and unusual steps to drive sales of the drug, even having a rap video produced for their sales team featuring a giant dancing bottle of Subsys that Burlakoff was shown to be wearing at the end.

"I love titration, yeah, that's not a problem," the rap song in the video goes, referring to the process of increasing doses. "I got new patients and I got a lot of them."

The bribes varied for each of the 10 practitioners referenced in the complaint, but in some cases exceeded $100,000 or even $200,000. The government also alleged company leaders defrauded health insurance companies, which they said were reluctant to approve the payments for patients who didn't have cancer.

The physicians who prescribed the Subsys to non-cancer patients practiced in Alabama, Michigan, Florida, Texas, Illinois, Florida, New Hampshire, Connecticut and Arkansas. An Alabama doctor linked to the case was sentenced to 20 years in prison in 2017 and a Michigan doctor last year was sentenced to 32 months in prison.

In June, Insys filed for chapter 11 bankruptcy. It came one week after a subsidiary of Insys agreed to plead guilty to federal fraud charges and to pay $225 million to settle criminal allegations tied to its addictive opioid painkiller.

The prison sentences for Kapoor and the company executives come as other cases stemming from a surge in opioid use and overdose deaths are being prosecuted nationally.

Use of the painkiller Fentanyl — considered 50 times stronger than heroin and up to 100 times more potent than morphine — is on the rise. In 2017, more than 28,000 of the nation's overdose deaths involved synthetic opioids, according to the Centers for Disease Control and Prevention. In most cases, the synthetic opioid involved was fentanyl or one of its analogs.

Reach Joey Garrison and on Twitter @joeygarrison.

This article originally appeared on USA TODAY: Insys Therapeutics founder John Kapoor to serve 66 months in prison for opioid scheme