As President Trump announced strong measures to fight the opioid epidemic, an Indian-American billionaire made the national news Oct. 26, when he was arrested and charged with racketeering, based on allegations that he and other executives in his company bribed doctors and pharmacists to prescribe the cancer pain drug fentanyl spray.
The U.S. Attorney for the District of Massachusetts, announced the arrest of John Kapoor, 74, the founder and majority owner of Insys Therapeutics Inc. Kapoor was charged with allegedly leading a nationwide conspiracy to profit by using bribes and fraud to cause the illegal distribution of a Fentanyl spray intended for cancer patients experiencing breakthrough pain. The medication, called “Subsys,” is a powerful narcotic intended to treat cancer patients suffering intense pain.
Kapoor’s lawyer said his client was innocent and intended to fight the accusations “vigorously” CBSNews reported.
Kapoor, of Phoenix, Ariz., a current member of the Board of Directors of Insys, was arrested this morning in Arizona and charged with RICO conspiracy, as well as other felonies, including conspiracy to commit mail and wire fraud and conspiracy to violate the Anti-Kickback Law. The former Executive Chairman of the Board and CEO of Insys, appeared in federal court in Phoenix the same day. He will appear in U.S. District Court in Boston at a later date.
The superseding indictment, unsealed today in Boston, also includes additional allegations against several former Insys executives and managers who were initially indicted in December 2016.
The superseding indictment charges that Kapoor and a slew of executives in the company, conspired to bribe practitioners in various states, many of whom operated pain clinics, in order to get them to prescribe a fentanyl-based pain medication.
The indictment also alleges that Kapoor and the six former executives conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. They allegedly achieved this goal by setting up the “reimbursement unit,” which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers. In exchange for bribes and kickbacks, the practitioners allegedly wrote large numbers of prescriptions for the patients, most of whom were not diagnosed with cancer.
The details contained in the charging documents are only allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
“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,” Acting United States Attorney William D. Weinreb is quoted saying in the press release.
The charges of conspiracy to commit RICO and conspiracy to commit mail and wire fraud each carry a maximum sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000, or twice the amount of pecuniary gain or loss. The charges of conspiracy to violate the Anti-Kickback Law provide for a sentence of no greater than five years in prison, three years of supervised release and a $25,000 fine.