Insys founder, others lose appeals of opioid convictions

John Kapoor arrives at the federal courthouse in Boston

By Nate Raymond and Jonathan Stempel

BOSTON (Reuters) -A federal appeals court on Wednesday upheld the jury convictions of Insys Therapeutics Inc founder John Kapoor and four other company officials, over their roles in a scheme to bribe doctors to prescribe addictive opioids and defraud insurers into paying for them.

The 1st U.S. Circuit Court of Appeals in Boston ruled 3-0 that “unalloyed greed” drove the defendants to market the fentanyl spray Subsys to “pill mill” doctors, who would then prescribe it to patients with no medical need.

In a 138-page decision, Circuit Judge Bruce Selya wrote that Insys and Kapoor, who had been chief executive, deserved “great credit” for developing Subsys to treat cancer pain, but in the pursuit of profit “turned what should have been a blessing into a curse.”

Kapoor, 77, was convicted in 2019 and is serving a 5-1/2-year prison sentence.

He remains the highest-ranking pharmaceutical executive convicted for helping fuel the U.S. opioid epidemic

His co-defendants Michael Gurry, Sunrise Lee, Joseph Rowan and Richard Simon were sentenced to terms of one to 2-3/4 years. A lower court judge had set aside some of the jury findings, but the appeals court restored the original verdicts.

“This decision is a decisive win that vindicates the jury’s verdict and preserves a just outcome for the defendants and the victims,” Acting U.S. Attorney Nathaniel Mendell in Boston said in a statement.

Kapoor’s lawyer declined to comment. Lee’s lawyer Peter Horstmann said “there are no words to adequately express my displeasure with the court’s opinion.” Lawyers for the other defendants did not immediately respond to requests for comment.

Prosecutors said Insys used sham “speaker programs,” ostensibly to educate the medical field, as a means to pay bribes and kickbacks to doctors who prescribed Subsys, often to non-cancer patients.

Kapoor also directed efforts to defraud insurers that were reluctant to pay for Subsys, prosecutors said.

Fentanyl is up to 100 times stronger than morphine. Insys, based in Chandler, Arizona, filed for bankruptcy in 2019.

(Reporting by Nate Raymond in Boston and Jonathan Stempel in New YorkEditing by Matthew Lewis)