U.S. to narrow opioid bribe case against Insys founder, others

BOSTON (Reuters) - U.S. prosecutors on Tuesday said they will narrow a case against several former Insys Therapeutics Inc executives accused of bribing doctors to prescribe a potent opioid after a federal judge questioned the scope of the indictment charging them.

Federal prosecutors in Boston, in a court filing, said they plan to seek a revised indictment against billionaire Insys (INSY.O) founder John Kapoor and six former executives and managers that will “streamline” the case by including fewer charges.

Prosecutors did not say what charges the new indictment would include against the former pharmaceutical executives, who currently face counts including racketeering conspiracy, mail fraud conspiracy and wire fraud conspiracy.

But they said they were “mindful of concerns” raised during a July 17 hearing in which U.S. District Judge Allison Burroughs questioned whether prosecutors could prove the racketeering conspiracy count as charged.

The indictment charged Kapoor, former Insys Chief Executive Michael Babich and others with conspiring since 2012 to pay bribes to doctors to prescribe the drugmaker’s fentanyl-based cancer pain medication Subsys and to defraud insurers.

Burroughs said she believed the indictment lacked sufficient allegations to establish a relationship between the Insys executives and the various doctors accused of taking bribes that would legally support the racketeering charge.

The judge also said she had a difficult time understanding the indictment and said prosecutors should look at whether the case could be “streamlined and clarified.”

“The indictment has a core of conduct that’s problematic and may be criminal,” Burroughs said. “I don’t know, that’s what a trial is for. But I’m have having difficultly with the way it’s laid out.”

A lawyer for Kapoor had no immediate comment.

Subsys is an under-the-tongue spray containing fentanyl, an opioid 100 times stronger than morphine. It won U.S. regulatory approval in 2012 for use in managing pain in cancer patients.

The U.S. Justice Department has accused Insys of paying kickbacks to doctors to prescribe Subsys, often via fees to participate in sham speaker programs ostensibly meant to educate medical professionals about the drug.

Kapoor was indicted in October and added as a defendant in a case against six other people, including Babich, who were first charged in December 2016.

Other defendants include former Insys vice presidents Alec Burlakoff and Michael Gurry, former National Sales Director Richard Simon, and Sunrise Lee and Joseph Rowan, former regional sales directors. They also have pleaded not guilty.