Founder of Opioid Maker Sentenced to 5½ Years in Prison John N. Kapoor, who founded Insys Therapeutics, and other executives were convicted in 2019 Insys Therapeutics founder John Kapoor arrived for sentencing Thursday at federal court in Boston. Photo: Charles Krupa/Associated Press By Joseph Walker and Jon Kamp Updated Jan. 23, 2020 6:16 pm ET print Text BOSTON—John N. Kapoor, a former billionaire who founded opioid maker Insys Therapeutics Inc., was sentenced to 5½ years in prison for his role in a racketeering conspiracy to illegally boost sales of his company’s prescription fentanyl drug. The sentencing Thursday caps the fall of a former pharmaceutical industry highflier, along with the company he founded and several fellow executives. Insys’s market value reached a high of $3.2 billion in 2015 thanks to the sales from its fentanyl drug Subsys. On Thursday, the company’s value stood at $3.87 million, a decline of 99.9%. Dr. Kapoor, 76 years old, and four other former Insys executives and managers were convicted in a federal court in Boston last May of conspiring to bribe doctors and defraud health insurers. Two other senior Insys executives, ex-CEO Michael Babich and former vice president of sales Alec Burlakoff, pleaded guilty before last year’s trial and testified against their former colleagues as part of cooperation agreements with the government. The convictions marked the first successful prosecution of top pharmaceutical industry executives for illegally promoting prescription opioids, according to the U.S. attorney’s office in Boston, which brought the case. Dr. Kapoor’s sentence, handed down by U.S. District Judge Allison D. Burroughs, is shorter than the 15 years sought by prosecutors. Judge Burroughs said she was unsure whether Dr. Kapoor was, as prosecutors claimed, the lone central player behind the conspiracy, and instead considered his culpability to equivalent of that of Messrs. Babich and Burlakoff. At Thursday’s sentencing hearing, seven victims or their family members spoke about the harm they suffered from Subsys, from lost teeth to the death of a loved one to the drug. They urged the court to impose a harsh sentence. Dr. Kapoor, seated between two attorneys, turned in his chair to face the victims as they spoke from the gallery. Deborah Fuller said she lost her daughter to a fatal overdose of Subsys. “We are left with daily anguish,” said Ms. Fuller, who compared company officials with mobsters. Dr. Kapoor also addressed the court. He said that Subsys was inspired by the suffering of his late wife, who died of cancer. He apologized to the victims who spoke earlier. “I’m so sorry for your suffering,” he said. Dr. Kapoor planned to appeal his conviction, his attorney said. Andrew Lelling, the U.S. Attorney whose office handled the prosecution, said it was a landmark case that should serve as a deterrent to other pharmaceutical companies. He also said he wanted to see stiffer penalties. “My view is that the public interest demanded higher sentences for these defendants,” he said, speaking outside Boston’s waterfront federal courthouse. The Justice Department had prosecuted more than a dozen individuals in connection to improper sales and prescribing of Subsys, including against physicians in Alabama and Michigan Insys, based in Chandler, Ariz., is in the process of winding down its operations. It has collapsed under the weight of civil lawsuits brought by local and state governments. Related Video The Way to Save Opioid Addicts | Moving Upstream You may also like Up Next The Way to Save Opioid Addicts | Moving Upstream Addiction experts are in wide agreement on the most effective way to help opioid addicts: Medication-assisted treatment. But most inpatient rehab facilities in the U.S. don’t offer this option. WSJ’s Jason Bellini reports on why the medication option is controversial, and in many places, hard to come by. Image: Ryno Eksteen and Thomas Williams Subsys, a fentanyl spray, was approved by the Food and Drug Administration to treat severe cancer pain in 2012. The next year, Dr. Kapoor took his company public, in what became the year’s most successful IPO thanks to booming sales of Subsys. The company’s revenue, composed almost entirely of Subsys sales, peaked at $330.3 million in 2015. Last June, the company declared bankruptcy. Earlier this month, it won court approval for a plan to pay creditors less than 10 cents for each dollar it owes. Insys could face claims from creditors exceeding $16 billion, the company has said in securities filings. Among its creditors is the Justice Department, which is owed $225 million from a June settlement in which Insys pleaded guilty to five counts of mail fraud In September, the company sold the rights to Subsys in exchange for future royalties and other payments valued at about $60 million. The Boston prosecutors indicted six of the former Insys executives in December 2016, and added Dr. Kapoor as a co-defendant in October 2017. Dr. Kapoor was the last of the seven co-defendants to be sentenced over the past two weeks. Michael Gurry, former vice president of managed markets, and former national sales director Richard Simon, both received prison terms of two years and nine months; prosecutors had recommended 11 years. At Mr. Gurry’s sentencing hearing last week, where three patients testified about becoming addicted to Subsys after being prescribed the drug for conditions unrelated to cancer, Judge Burroughs said she viewed the case against the Insys executives as “financial crimes.” Joseph Rowan, a former regional sales director, was sentenced to two years and three months; prosecutors had recommended 10 years. Sunrise Lee, also a former regional sales director, was sentenced to one year and one day; prosecutors had sought six years. Mr. Babich, who was CEO from 2008 to 2015, received a sentence of two years and six months; prosecutors had sought a more lenient sentence of two years in light of his cooperation in the case. Mr. Burlakoff, the former head of sales, was sentenced to two years and two months; prosecutors had recommended one year and eight months. Dr. Kapoor came from India to the U.S. in the 1960s and earned a doctorate in medicinal chemistry before becoming a successful pharmaceutical-industry executive and entrepreneur. In 2002, he co-founded Insys and financed the company with his own money. In addition to being Insys’s majority shareholder and executive chairman, Dr. Kapoor also served as CEO from November 2015 to January 2017. He resigned from the board of directors after his arrest in October 2017 and agreed to place his stake in the company, representing 59% of shares outstanding, in a blind trust. During last year’s trial, prosecutors portrayed Dr. Kapoor as the leader of a mail- and wire-fraud conspiracy keeping a close watch over the company’s bribery of doctors, which it masked as speaking fees, and its efforts to win reimbursement for the drug by lying to insurers about patients’ diagnoses. Write to Joseph Walker at joseph.walker@wsj.com and Jon Kamp at jon.kamp@wsj.com https://www.wsj.com/articles/former-opioid-executive-sentenced-to-5-years-in-prison-11579815251
,,...Dr. Kapoor also served as CEO from November 2015 to January 2017. He resigned from the board of directors after his arrest in October 2017..." Probably had to make his preparations, for some ... - free holidays. Made me to laugh, the irony, while some had 120% per annum.
Good article and good sentence. I have only one question. Will the government take these sentenced people money (millions) and assets after all the harm and death they caused to people from their opioid drugs? They should take every dime they have and leave them and their family with $0.00 and pay their victims family. Because if a crack or cocaine or heroin dealer is busted and goes to jail, the government takes ALL their money and assets and leaves them with $0.00.