U.S. Attorney's Office Collects $48 Million Restitution Ordered Against Insys Executives Convicted of Health Care Racketeering Conspiracy

BOSTON - United States Attorney Leah B. Foley announced today that her office has collected the entire $48,344,036 in criminal restitution awarded to victims of a health care racketeering conspiracy committed by the founder and six former executives of Insys Therapeutics.

John N. Kapoor, Insys founder and former Executive Chairman; Richard M. Simon, the former National Director of Sales; Sunrise Lee, a former Regional Sales Director; Joseph A. Rowan, a former Regional Sales Director; and Michael J. Gurry, the former Vice President of Managed Markets, were convicted by a federal jury in May 2019 in connection with bribing medical practitioners to prescribe Subsys, a highly-addictive sublingual fentanyl spray intended for cancer patients experiencing breakthrough pain, and for defrauding Medicare and private insurance carriers. Two other Insys executives - Michael Babich, the former CEO and President of the company and Alec Burlakoff, the former Vice President of Sales - pleaded guilty.

The court ordered the defendants to pay $48,344,036 in restitution to victims of the defendants' crimes, including individual patient-victims, several insurance companies and Medicare. The U.S. Attorney's Office is responsible for collecting criminal restitution. Since the defendants' sentencings, the U.S. Attorney's Office has diligently pursued enforcement of the restitution until it was collected in full.

Subsys, a drug owned and manufactured by Insys Therapeutics, Inc., was a fentanyl-based, rapid-onset opioid approved to treat cancer patients suffering intense breakthrough pain. From May 2012 to December 2015, the defendants conspired to bribe practitioners, many of whom operated pain clinics, in order to induce them to prescribe Subsys to patients, often when medically unnecessary. The defendants used pharmacy data to identify practitioners who either prescribed unusually high volumes of rapid-onset opioids, or had demonstrated a capacity to do so, and bribed and provided kickbacks to the practitioners to increase the number of new Subsys prescriptions as well as to increase the dosage and number of units of Subsys. The defendants measured the success by comparing the net revenue earned from targeted practitioners with the total value of bribes and kickbacks paid. The defendants used this information to reduce or eliminate bribes paid to practitioners who failed to meet satisfactory prescribing requirements.

The defendants also conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the expensive drug when it was prescribed for patients without cancer. Medicare would not approve payment for the drug unless the patient was being treated for breakthrough cancer pain.

The Asset Recovery Unit of the U.S. Attorney's Office oversaw restitution enforcement, which was handled by Assistant U.S. Attorneys Alexandra Amrhein and Raquelle L. Kaye.