In­sys founder, for­mer ex­ecs face decades in jail af­ter be­ing found guilty in land­mark opi­oid case

In­sys should’ve paid heed to this ill-fat­ed line from its own sales rap song. “If you want to be great, lis­ten to my voice. You can be great — but its your choice.” In­stead, its (for­mer) bil­lion­aire founder John Kapoor and four of his high rank­ing col­leagues were found guilty of en­gag­ing in a bribery scheme to get doc­tors to pre­scribe its po­tent, ad­dic­tive painkiller and dupe in­sur­ers in­to pay­ing for the drug, by a fed­er­al ju­ry on Thurs­day.

Each de­fen­dant — for­mer Chair­man Kapoor; for­mer vice-pres­i­dent of man­aged mar­kets Michael Gur­ry; for­mer na­tion­al di­rec­tor of sales Richard Si­mon; and for­mer re­gion­al sales di­rec­tors Sun­rise Lee and Joseph Rowan — faces up to twen­ty years in jail, al­though they have de­nied any wrong­do­ing and sig­naled plans to ap­peal. The crim­i­nal con­vic­tion is his­toric as it takes aim at the pow­er­ful mas­ter­minds be­hind a mar­ket­ing ploy de­signed to put prof­it ahead of pa­tients — in­stead of mere fines, or let­ting pow­er­ful ex­ec­u­tives make sac­ri­fi­cial lambs of their lieu­tenants.

Kapoor cre­at­ed In­sys $IN­SY in 1990. In 2012, the com­pa­ny’s fen­tanyl spray Sub­sys was ap­proved by the FDA for break­through can­cer pain. Fen­tanyl is a man-made opi­oid 50 times more po­tent than hero­in and 100 times more po­tent than mor­phine, ac­cord­ing to the CDC. Three years lat­er, Rod­dy Boyd of the South­ern In­ves­tiga­tive Re­port­ing Foun­da­tion first brought to light the dead­ly im­pact of in­dis­crim­i­nate Sub­sys pre­scrib­ing, trig­gered by In­sys’ ques­tion­able mar­ket­ing prac­tices in this damn­ing re­port. In 2017, the In­di­an-born Kapoor was charged with the crim­i­nal con­spir­a­cy — on the very day Pres­i­dent Trump de­clared the US opi­oid cri­sis a pub­lic health emer­gency.

Pros­e­cu­tors charged In­sys with in­flat­ing Sub­sys sales by brib­ing doc­tors to pre­scribe the drug to pa­tients with­out can­cer — in an elab­o­rate scheme that in­clud­ed win­ing and din­ing them, pay­ing them to speak at “ed­u­ca­tion­al events” and in one case even a lap dance — fu­el­ing the rag­ing opi­oid cri­sis that kills 130 Amer­i­cans every day.

Tri­al ju­rors were giv­en a front-row seat to the ob­scene video de­signed to train sales reps, in which two im­pec­ca­bly suit­ed men — os­ten­si­bly In­sys em­ploy­ees — ‘rap’ the Ari­zona-based drug­mak­er’s sin­is­ter strat­e­gy re­plete with rapid hand ges­tures: “I love titra­tions. Yeah, that’s not a prob­lem. I got new pa­tients, and I got a lot of ‘em…If you want to be great, lis­ten to my voice. You can be great — but it’s your choice.”

Al­though Kapoor’s lawyers as­sert­ed that the 75-year-old was kept in the dark about these ac­tiv­i­ties, the tes­ti­mo­ny of for­mer In­sys sales head Alec Burlakoff — who emerges as the man adorn­ing the Sub­sys cos­tume in the video that lit­er­al­ly blue­prints In­sys’ reck­less mar­ket­ing strat­e­gy — sul­lied that ar­gu­ment as the gov­ern­ment’s key wit­ness. Burlakoff, along with for­mer chief ex­ec­u­tive Michael Babich, tes­ti­fied against Kapoor af­ter plead­ing guilty to par­tic­i­pat­ing in the scheme.

Alec Burlakoff

The tri­al’s ver­dict is in­dica­tive of the “ac­tions of a se­lect few for­mer em­ploy­ees of the com­pa­ny,” In­sys spokesper­son Jack­ie Mar­cus told End­points News in an emailed state­ment, adding that “Kapoor’s (In­sys) shares have been and will re­main man­aged by an in­de­pen­dent trust, with which Kapoor is not in­volved.”

Last Au­gust, In­sys had agreed to fork over at least $150 mil­lion in a re­lat­ed set­tle­ment with the U.S. Jus­tice De­part­ment. Un­der fire for the role in played in the cri­sis of opi­oid abuse, mis­use and ad­dic­tion in the Unit­ed States, the com­pa­ny in No­vem­ber said it was look­ing to di­vest its ar­se­nal of opi­oid as­sets — in­clud­ing Sub­sys — to sharp­en its fo­cus on its pipeline of cannabis-de­rived ther­a­peu­tics.

Michael Babich

But as the com­pa­ny’s le­gal fees be­gan to add up, In­sys’ au­di­tor last month raised doubts on the drug­mak­er’s abil­i­ty to con­tin­ue as a go­ing con­cern. In­sys is hard­ly the on­ly opi­oid drug mak­er in fi­nan­cial trou­ble. Pur­due Phar­ma — the mak­er of one of most wide­ly abused pre­scrip­tion opi­oid painkiller Oxy­con­tin — is re­port­ed­ly con­sid­er­ing bank­rupt­cy.

Mean­while, oth­er drug man­u­fac­tur­ers, dis­trib­u­tors and phar­ma­cies are al­so fac­ing hun­dreds of civ­il law­suits for their role in the prop­a­gat­ing opi­oid cri­sis.


Im­age Source: John Kapoor. AP

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End­points 20(+2) un­der 40, 2023; Bio­phar­ma's high­est-paid CEOs; N-of-1 CRISPR sto­ry goes on af­ter tragedy; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

We will be off Monday in observance of Memorial Day — and when we get back, it will be a straight march to ASCO, BIO and more. Enjoy the (long) weekend!

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Bio­phar­ma's 20 high­est-paid CEOs of 2022, each bring­ing in $20M+ pay­days

Even in a down year for much of the biopharma market, 20 CEOs brought in pay packages valued at more than $20 million, an Endpoints News analysis found.

Endpoints collected data on more than 350 CEO compensation packages, covering a wide range of pharma, biotech, and life sciences companies. All told, the 20 largest earners made over $725 million in 2022 — an average package of $36.4 million. Three brought in paydays over $50 million, and one CEO broke the $100 million mark.

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Douglas Love, Annexon CEO

An­nex­on’s GA drug miss­es on pri­ma­ry goal but win on vi­su­al acu­ity will be fo­cus of planned late-stage tri­al

Annexon’s complement inhibitor didn’t prove better than sham at reducing lesion growth in a leading cause of blindness, but the biotech still plans to move forward on the back of secondary endpoints showing visual acuity preservation, which will “certainly” be the primary goal in a late-stage trial to be discussed shortly with the FDA, CEO Douglas Love told Endpoints News. 

The California biotech’s ANX007 was not statistically significant compared to pooled sham, the comparator, at 12 months in patients with geographic atrophy, per a Wednesday presentation. In every-month dosing, the GA lesion area changed about 6.2% from baseline (p=0.526) and 1.3% (p=0.896) in the every-other-month group. In a March note, Jefferies analyst Suji Jeong said a reduction of 20% to 30% would be “encouraging.”

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FDA ap­proves Lex­i­con’s heart-fail­ure drug af­ter de­feat in di­a­betes

The FDA on Friday approved Lexicon’s heart failure drug sotagliflozin following a string of setbacks for the pharma company, including an FDA rejection in diabetes and the loss of a development deal with Sanofi.

The dual SGLT1 and SGLT2 inhibitor will be marketed as Inpefa and is a once-daily tablet. It’s been approved to reduce the risk of cardiovascular death and heart failure-related hospitalization or urgent visits in adults with heart failure or type 2 diabetes mellitus, chronic kidney disease, and other cardiovascular risk factors. The label spans the range of left ventricular ejection fraction, including preserved ejection fraction and reduced ejection fraction, as well as patients with or without diabetes, Lexicon said Friday.

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Eu­ro­pean Com­mis­sion to re­ceive few­er Pfiz­er-BioN­Tech vac­cine dos­es un­der amend­ed con­tract

The European Commission has made a few changes to its vaccine contract with Pfizer and BioNTech, reducing the dose volume while extending the delivery timeline to cope with “evolving public health needs.”

The Commission previously struck a contract in May 2021 for 900 million doses, with the option to purchase another 900 million. Of those, 450 million were expected to be delivered in 2023, though an amendment now calls for fewer doses. While neither the Commission nor Pfizer and BioNTech have revealed an exact amount, an unnamed source told Reuters that the amendment reduces the remaining expected doses by about a third.

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EMA rec­om­mends re­vok­ing au­tho­riza­tion of No­var­tis' sick­le cell drug

The European Medicines Agency’s committee for medicinal products for human use (CHMP) on Friday recommended revoking the marketing authorization for Novartis’ treatment for a painful complication related to sickle cell, after a recent study did not confirm its clinical benefit.

CHMP’s review looked at results of the STAND study, finding that Adakveo (crizanlizumab) did not reduce the number of painful crises leading to a healthcare visit, and patients treated with Adakveo had slightly more painful crises on average, with a subsequent healthcare visit, over the first year of treatment, compared with those on placebo.

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Rich Horgan (R) with his late brother, Terry

Rich Hor­gan spear­head­ed a gene ther­a­py for his broth­er. The tri­al end­ed in tragedy, but the work con­tin­ues for more pa­tients

Rich Horgan’s quest to create a custom gene therapy for his brother, Terry, ended in tragedy. But Horgan doesn’t believe it’s the end of the story.

Terry, a 27-year-old patient with Duchenne muscular dystrophy, died last October just eight days after receiving the therapy in a clinical trial in which he was the only participant. The case raised questions about the safety of certain gene therapies and what would happen to other drug programs under a nonprofit that Horgan created, called Cure Rare Disease.

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The 20(+2) un­der 40: Your guide to the next gen­er­a­tion of biotech lead­ers

This year’s list of 20 biotech leaders under the age of 40 includes a huge range of ambitions. Some of our honorees are planning to create the next big drug giant. Others are pushing the bounds of AI. One is working to revolutionize TB testing. All are compelling talents who are still young in age, but already far along in achievement.

And, as in years past, we went over. The 20 are actually 22 because of two double profiles that reflect how important teamwork is in the industry. As one of our honorees, Joe Illingworth of DJS Antibodies, told me in our interview, “It takes a village to raise a biotech.”

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