The Department of Justice on Thursday announced an indictment against a pharmaceutical CEO accused of bribing doctors and pharmacists to prescribe an extremely potent and addictive opioid, containing fentanyl, in charges that carry up to 20 years in prison and hundreds of thousands of dollars in fines.
John N. Kapoor, 74, of Phoenix, Arizona is the founder and majority owner of Insys Therapeutics Inc., through which federal officials say he was involved in a nationwide conspiracy to illegally distribute a fentanyl spray most commonly prescribed to cancer patients in extreme pain.
Mr. Kapoor was arrested in Arizona on Thursday and brought before a federal court in Phoenix. He is charged with Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy, conspiracy to commit mail and wire fraud and conspiracy to violate the anti-kickback law, among other felonies. He is expected to appear in a U.S. District Court in Boston at a later date, the Department of Justice said.
The superseding indictment was unsealed in Boston on Thursday and alleges that Mr. Kapoor, along with several other Insys executives and managers, bribed doctors and pharmacists to prescribe “Subsys”, a fentanyl-based pain medication dispensed as a spray and intended for cancer patients with severe pain.
The accused also conspired to defraud and mislead insurance companies to reimburse for the prescription pain medication, even though it went to non-cancer patients, the indictment says.
The announcement coincides with President Donald Trump’s declaration of the nation’s opioid crisis as a public health emergency.
“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 for the District of Massachusetts William D. Weinreb said in a press release.
“Today’s arrest and charges reflect our ongoing efforts to attack the opioid crisis from all angles. We must hold the industry and its leadership accountable — just as we would the cartels or a street-level drug dealer.”
The accused, including Mr. Kapoor and six other Insys executives, are being charged under the RICO Act, which carries up to 20 years in prison, three years of supervised release and a fine of $250,000, the Department of Justice said. They are also charged with conspiracy to violate the anti-kickback law, which can lead to a sentence of five years in prison, three years supervised release and a $25,000 fine.
Over 11 different federal agencies took part in the investigation in addition to cooperation with U.S. Attorney’s offices in six states — including Connecticut, Michigan, Alabama, New York, Rhode Island and New Hampshire.