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

IDC: Life Sci­ences Firms Must Em­brace Dig­i­tal Trans­for­ma­tion Now

Pre-pandemic, the life sciences industry had settled into a pattern. The average drug took 12 years and $2.9 billion to bring to market, and it was an acceptable mode of operations, according to Nimita Limaye, Research Vice President for Life Sciences R&D Strategy and Technology at IDC.

COVID-19 changed that, and served as a proof-of-concept for how technology can truly help life sciences companies succeed and grow, Limaye said. She recently spoke about industry trends at Egnyte’s Life Sciences Summit 2022. You should watch the entire session, free and on-demand, but here’s a brief recap of why she’s urging life sciences companies to embrace digital transformation.

Paul Hudson, Sanofi CEO (Eric Piermont/AFP via Getty Images)

Up­dat­ed: Hit by an­oth­er PhI­II flop, Sanofi culls breast can­cer drug — sound­ing alarm for the class

Sanofi is officially giving up on its oral SERD.

The French drugmaker put out word Wednesday morning that it will discontinue the global development program of amcenestrant, the selective estrogen receptor degrader once billed as a top late-stage prospect. Having already failed a Phase II monotherapy test earlier this year, a combo with the drug also missed the bar in a second trial for breast cancer, triggering the decision to drop the whole program.

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James Mock, incoming CFO at Moderna

Mod­er­na taps new CFO from PerkinElmer af­ter for­mer one-day CFO oust­ed

When Moderna hired a new CFO last year,  it didn’t expect to see him gone after only one day. Today the biotech named his — likely much more vetted — replacement.

The mRNA company put out word early Wednesday that after the untimely departure of then brand-new CFO Jorge Gomez, it has now found a replacement in James Mock, the soon-to-be former CFO at diagnostics and analytics company PerkinElmer.

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Bayer's first DTC ad campaign for chronic kidney disease drug Kerendia spells out its benefits

Bay­er aims to sim­pli­fy the com­plex­i­ties of CKD with an ABC-themed ad cam­paign

Do you know the ABCs of CKD in T2D? Bayer’s first ad campaign for Kerendia tackles the complexity of chronic kidney disease with a play on the acronym (CKD) and its connection to type 2 diabetes (T2D).

Kerendia was approved last year as the first and only non-steroidal mineralocorticoid receptor antagonist to treat CKD in people with type 2 diabetes.

In the TV commercial launched this week, A is for awareness, B is for belief and C is for cardiovascular, explained in the ad as awareness of the connection between type 2 and kidney disease, belief that something can be done about it, and cardiovascular events that may be reduced with treatment.

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Joe Jonas (Photo by Anthony Behar/Sipa USA)(Sipa via AP Images)

So­lo Jonas broth­er car­ries Merz's new tune in Botox ri­val cam­paign

As the lyrics of his band’s 2019 pop-rock single suggest, Joe Jonas is only human — and that means even he gets frown lines. The 33-year-old singer-songwriter is Merz’s newest celebrity brand partner for its Botox rival Xeomin, as medical aesthetics brands target a younger audience.

Merz kicked off its “Beauty on Your Terms” campaign on Tuesday, featuring the Jonas brother in a video ad for its double-filtered anti-wrinkle injection Xeomin.

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Tom Barnes, Orna Therapeutics CEO

UP­DAT­ED: 'We have failed to fail': Mer­ck gam­bles $250M cash on a next-gen ap­proach to mR­NA — af­ter punt­ing its big al­liance with Mod­er­na

Merck went in deep on its collaboration with Moderna on new mRNA programs, and dropped them all over time, including their RSV partnership. But after writing off what turned out as one of the most successful infectious disease players in the business, Merck is coming in this morning with a new preclinical alliance — this time embracing a biotech that hopes to eventually outdo the famously successful mRNA in a new run at vaccines and therapeutics.

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Marisol Peron, Genmab SVP of communications and corporate affairs

Gen­mab launch­es cor­po­rate cam­paign am­pli­fy­ing its ‘knock your socks off’ an­ti­bod­ies

Genmab often talks about its “knock-your-socks-off” antibodies — and now the term is getting its own logo and corporate campaign.

The teal and purple logo for the acronym KYSO — Genmab pronounces it “ky-so” — debuts on Wednesday and comes on the heels of Genmab’s newly announced 2030 vision. That aspiration aims to expand Genmab’s drug development beyond oncology to include other serious diseases, while also doubling down on its own drug development.

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Joel Dudley, new partner at Innovation Endeavors (Bosch Health Campus)

For­mer Google CEO’s VC is mak­ing a big­ger push in­to the biotech world, hir­ing promi­nent Ther­a­nos skep­tic

Venture capital firm Innovation Endeavors has mainly had its focus on investments across the tech space, but it has been slowly turning its attention to the biotech world. Now, a new partner is coming into the fold showing that its interest in biotech is likely to grow further.

The Silicon Valley-based company, which is headed up by former Google CEO Eric Schmidt, has brought on Joel Dudley as a partner. According to Dudley’s LinkedIn page, he is joining Innovation Endeavors after serving as the chief science officer of biotech startup Tempus Labs since 2020.

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President Joe Biden signs the Democrats' landmark climate change and health care bill. From L-R: Sen. Joe Manchin (D-WV), Senate Majority Leader Chuck Schumer (D-NY), House Majority Whip James Clyburn (D-SC), Rep. Frank Pallone (D-NJ) and Rep. Kathy Castor (D-FL). (Susan Walsh/AP Images)

Pres­i­dent Biden signs ma­jor drug pric­ing re­forms in­to law: What's com­ing for bio­phar­ma?

President Joe Biden yesterday afternoon signed into law historic, decades-in-the-making new drug pricing reforms as part of a wider reconciliation bill that will likely take a chunk out of biopharma companies’ profits for some blockbusters just prior to generic or biosimilar competition.

The partisan bill (all Democrats in the House and Senate voted for it, and all Republicans voted against it) includes not only Medicare price negotiations — which won’t kick off until 2026, leaving ample time for a legal challenge — but mandatory inflation-related rebates, and a $2,000 annual cap on what seniors’ pay for their prescription drugs.

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