Former Insys execs ordered to pay $48.3M in restitution in Subsys opioid trial

Insys Therapeutics' former top brass owes a collective $48.3 million in restitution for its role in the U.S. opioid crisis, a federal court in Boston ruled this month. 

Insys founder John Kapoor will pay the bulk of that amount, while contributions from three former Insys executives will be capped at $5 million apiece, the United States District Court for the District of Massachusetts said in court documents filed last week. 

As for how the restitution breaks up, co-defendants Michael Gurry, Richard Simon and Joseph Rowan's contributions will be capped at $5 million. Additionally, $10,198.64 has been earmarked to compensate six individual victims, while the remainder will be used to pay eight insurers including Caremark, Aetna, Medicare and Cigna. 

That's down from the $59.74 million in restitution the government had originally sought, though not quite the $24 million reduction Insys' founder pursued in October. 

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Kapoor and a triumvirate of his Insys compatriots were convicted in May 2019 of bribing doctors to prescribe opioids and defrauding insurers to pay for them. Specifically, prosecutors contend that Insys used sham speaker events to pay bribes and kickbacks to doctors who prescribed the company's fentanyl spray, Subsys, which is meant to treat cancer pain. 

The court upheld the convictions in August, paving the way for new discussions about just how much the former Insys executives would have to pay. 

Defendants last month sought to reduce their restitution bill on two measures: First, they wanted the amount to account only for claims that passed through the Insys Reimbursement Center (IRC). Secondly, they wanted the amount to only reflect prescriptions made to patients without cancer. 

In reaching its new $48 million figure, the government essentially met Insys halfway. It came up with the new restitution amount by multiplying the original $59.75 million by .809 "to account for the fact that 80.9% of Subsys claims went through IRC."

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To reach their own restitution figure, defendants asked the court to apply that same IRC arithmetic as well as to multiply the figure by an additional .73 "to account for the fact that 73% of those co-conspirators' prescriptions were written off-label to patients who did not have an active cancer diagnosis."

The court says it would have been too complicated to parse through every Subsys prescription. "Restitution is serious business, but hearings to quantify restitution amounts should not be allowed to spawn mini-trials," the court said last week in legal filings. 

The court added that it's "difficult to square with Defendants' position that the restitution amount should be further reduced based on purportedly legitimate prescriptions."

The 27% figure Defendants have floated for cancer patients can't be trusted, either, the court contends. "The fact that 27% of the prescriptions were for patients with reported cancer, however, does not mean that those prescriptions were legitimate," the court said.

As an example, "even if a patient had cancer, a claim for a Subsys prescription would not have been paid if there were no breakthrough cancer pain or if the patient had not tried and failed other medications," the court added.