Government Continues to Focus on Opioid Cases

By Sarah Wirskye - On

The opioid epidemic has killed nearly 400,000 Americans since 1999, according to the United States Centers for Disease Control and Prevention. And the death toll from opioid addiction continues to rise. Based upon the patient harm and the costs of managing this epidemic, there is no end in sight for federal, state and private party actions against to opioid prescribers and manufacturers.

Insys Therapeutics Prosecution

The government has begun focusing on prescription opioids, such as Fentanyl, Oxycodone, and Hydrocodone. Synthetic opioids, made by companies such as Insys Therapeutics, are some of the strongest on the market.

In May 2019, a Boston jury convicted Insys Therapeutics Inc. founder John Kapoor and four other executives. They include Richard Simon, the former national director of sales; Sunrise Lee, a former regional sales director; Joseph Rowan, a former regional sales director; and Michael Gurry, the former vice president of managed markets. The defendants were convicted on federal racketeering charges for bribing doctors to prescribe the painkiller to people who didn’t need it. They were also convicted of defrauding Medicare and private insurance. Each face up to 20 years in prison.

The government argued that Insys’ drug, Subsys which is a spray version of fentanyl, had been approved by the United States Food and Drug Administration, only for cancer patients with recurring chronic pain. Beyond testimony of doctors being bribed, the government presented evidence as to how the company encouraged and bribed doctors to prescribe the drug beyond its intended scope.

Two other Insys executives, former President and CEO Michael Babich and Alec Burlakoff, the former vice president of sales, pleaded guilty before trial and testified against their former colleagues. Babich testified that Kapoor encouraged sales representatives to reward doctors who prescribed the spray more often and at higher doses. One of the government’s strongest pieces of evidence was a video in which company executives danced and rapped, dressed as a giant bottle of Subsys. The video, titled “Great By Choice,” was used to train sales representatives.

Subsequently, in June 2019, the pharmaceutical arm of Insys Therapeutics pled guilty to federal charges connected to allegations the company bribed doctors to prescribe Subsys to patients who didn’t need it, as part of a $225 million deal with the federal government.

State Actions

Dozens of states are preparing to bring lawsuits by state attorneys general against major drug makers, accusing them of aggressively marketing opioids and fueling the nation’s opioid epidemic.

The first such case to go to trial was in Oklahoma. In August 2019, an Oklahoma judge ordered Johnson & Johnson to pay $572 million. The Oklahoma Attorney General’s lawsuit sought $17 billion, alleging that Johnson & Johnson contributed to the opioid crisis with overly aggressive marketing, leading to thousands of overdose deaths in Oklahoma. Initially, the lawsuit included Purdue Pharma, the maker of OxyContin, who settled with the state for $270 million. Defendant, Teva Pharmaceuticals, also reached a $85 million settlement with Oklahoma.

Prescribers and Others Prosecuted

In additions to actions against the manufacturers, there are dozens of cases in which individuals involved in prescribing opioids have been prosecuted. In September 2019, there was a Texas Healthcare Fraud and Opioid Takedown resulting in charges against 58 individuals. The indictments allege $66 million in losses and 6.2 million pills. Of those charged, 16 were doctors or medical professionals, and 20 were charged for their role in diverting opioids.

Many of the opioid cases were in the Southern District of Texas and include the following: (1) Seven defendants were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through S&S Pharmacy of Houston, Texas; (2) Franklin Nwabugwu was charged for his alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through Golden Pharmacy of Houston, Texas; (3) Steven Inbody and Hoai-Huong Truong were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose; and (4) Six defendants were charged for their alleged participation in a scheme to unlawfully distribute and dispense a controlled substance without a legitimate medical purpose through Continuous Medical Care and Rehabilitation. Information regarding these and similar cases can be found at and

While the alleged conduct in the opioid cases varies, many of them involve the same issues found in most pharmacy cases. The government examines alleged kickbacks paid to medical providers by manufacturers, pharmacies or marketers. The alleged kickbacks can include payments under agreements or structures if the provider is really being paid for writing prescriptions. The government also examines necessity for the medication, based on a provider’s prescribing patterns and medical records. Some of the more egregious cases involve prescribing medications for patients who were not even seen by the medical provider.


As previously stated, there is no end in sight for criminal and civil cases arising from the opioid crisis. States will continue to bring actions to help recover costs arising from this drug use. Moreover, in certain parts of the country there are opioid strike forces investigating federal, criminal opioid matters. Even where that is not the case, United States Attorneys’ Offices and Medicare Fraud Strike Force prosecutors are also investigating and filing such cases. Therefore, the number of federal, criminal opioid cases is only expected to increase.


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