Founder of Insys Therapeutics Arrested on Racketeering Charges in Opioid Scandal

A Boston grand jury has brought forth an indictment on charges of racketeering and fraud against John Kapoor, who federal authorities arrested in Arizona this past week.

According to local media reports in Maricopa County, Arizona, other executives and managers of the company Kapoor founded, Insys, were also arrested in connection to what federal authorities say was an ongoing conspiracy to reward doctors with bribes for prescribing their drugs, including a powerful painkiller medication called Subsys. That drug was designed for cancer patients in severe pain. The other executives were reportedly arrested back in December of last year.

Back in Massachusetts, where the grand jury produced the indictment, William Weinreb will serve as the acting U.S. attorney in the case. The Drug War Times reported that the 74-year-old billionaire Kapoor is also accused of creating a “reimbursement team” to secure insurance coverage in a scheme to sell more drugs, many of which were the company’s off-label promotions. Several federal agencies were involved in the investigation at a time of public health crisis with opioid addiction and overdose. Political heat is focused on the pharmaceutical industry, which the DEA and FBI have linked to opioid drug problems on the streets of America. Phillip Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, made a statement about the recent arrest and indictment.

“These Insys executives allegedly fueled the opioid epidemic by paying doctors to needlessly prescribe an extremely dangerous and addictive form of fentanyl,” Coyne, said. “Corporate executives intent on illegally driving up profits need to be aware they are now squarely in the sights of law enforcement.”

The felony charges also include Kapoor and his management and executive team deliberately trying to commit mail and wire fraud and conspiracy to violate the Anti-Kickback Law, according to a report from Fierce Pharma, who covers the pharmaceutical drug industry. Two of these charges carry the potential for a maximum of 20 years in a federal penitentiary. Kapoor and former Insys CEO Michael Babich joined other top executives who were arrested as part of the federal government’s investigation. Mark A. McCormack is Special Agent in Charge, FDA Office of Criminal Investigations’ Metro Washington Field Office. He also made statements related to public health.

“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,” McCormack said. “Our office will continue to work with our law enforcement partners to pursue and bring to justice those who threaten the public health.”

The DEA Special Agent in Charge, Michael J. Ferguson, had words for the industry.

“Pharmaceutical companies whose products include controlled medications that can lead to addiction and overdose have a special obligation to operate in a trustworthy, transparent manner, because their customers’ health and safety and, indeed, very lives depend on it,” Ferguson said. “DEA pledges to work with our law enforcement and regulatory partners nationwide to ensure that rules and regulations under the Controlled Substances Act are followed.”

The investigation included assistance from the FBI, HHS, DEA, FDA and other groups, according to reports.

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