John Kapoor, billionaire founder of Insys Therapeutics. (University at Buffalo/Reuters)
The founder of an Arizona-based pharmaceutical company has been charged with spearheading a “nationwide conspiracy” to illegally distribute fentanyl, a powerful prescription painkiller.
John N. Kapoor, 74, was charged with numerous felonies, including RICO (Racketeer Influenced and Corrupt Organization) conspiracy and wire fraud. Prosecutors allege Kapoor, the founder of Insys Therapeutics, colluded with doctors and pharmacies to prescribe fentanyl that was not medically necessary and defraud insurance companies for payment.
“In the midst of a nationwide opioid epidemic that has reached crisis proportions, Mr. Kapoor and his company stand accused of bribing doctors to overprescribe a potent opioid and committing fraud on insurance companies solely for profit,” said William Weinreb, acting U.S. attorney for the District of Massachusetts.
Insys did not respond to a request for comment.
Kapoor’s company manufactured Subsys, a type of fentanyl that is sprayed under the tongue. It is meant exclusively for cancer patients who are carefully monitored. Prosecutors allege Insys was not pleased with its sales numbers and aggressively marketed the drug for use in other patients. That allegedly included the use of bribes and kickbacks, typically in the form of expensive dinners for doctors.
“As alleged, Insys executives improperly influenced health care providers to prescribe a powerful opioid for patients who did not need it, and without complying with FDA requirements, thus putting patients at risk and contributing to the current opioid crisis,” said Mark A. McCormack, special agent in charge of the FDA Office of Criminal Investigations’ Metro Washington Field Office.
Fentanyl is now a major part of the opioid epidemic — deaths from the synthetic narcotics including fentanyl jumped 72.2 percent from 2014 to 2015, according to the Centers for Disease Control and Prevention. Some people become dependent on opioids after being prescribed powerful painkillers like medical fentany, such as that made by Insys. Medical fentanyl is different from the fentanyl found on the street, which is typically manufactured illicitly in China.
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Prosecutors charged six former Insys executives and managers in December, including its former chief executive, of conspiring to bribe doctors to prescribe Subsys when it is not medically necessary.
Insys is the subject of an investigation by Sen. Claire McCaskill (D-Mo.) for allegedly marketing Subsys off-label. In a statement, McCaskill said the company engaged in “systemic fraud” that harmed public health.
“This company has repeatedly gotten away with fines that amounted to a slap on the wrist for actions that helped fuel a nationwide epidemic that’s claimed hundreds of thousands of American lives,” she said. “Anyone, including top executives, who potentially violated criminal law should be aggressively prosecuted.”
The company has paid millions of dollars to settle lawsuits by multiple state attorneys general, including a $4.5 million settlement in Illinois. The company has also been sued by the states of Arizona and New Jersey.