John Kapoor — the founder of pharma company Insys — has been arrested and charged with multiple federal felonies in a fentanyl and bribery scandal.
According to court documents, Kapoor has been indicted for conspiracy to commit racketeering, conspiracy to commit mail fraud, and conspiracy to commit wire fraud. He was arrested at his home in Arizona, and his charges were added to the U.S. Department of Justice’s ongoing investigation into Insys. In addition to Kapoor, former CEO Michael Babich and other Insys executives and board members have been arrested and charged.
Beginning in 2012, both Kapoor and Babich allegedly concocted a plan to financially incentivize doctors to over-prescribe Insys’ Subsys — a fentanyl-based under-the-tongue spray prescribed to cancer patients. Following a poor initial performance after Subsys’ rollout, the company proceeded to pay physicians speakers’ fees, food, and entertainment costs in exchange for doctors prescribing Subsys more frequently, and in greater dosages.
The indictment also claims that both Kapoor and Babich allegedly misled health insurance providers regarding payment approval for patients to whom Subsys had been prescribed, when those patients didn’t have cancer. Fentanyl is considered one of the deadliest addictive painkillers, with more people dying from fentanyl overdoze than from either heroin or other opioid-based prescription drugs, like Oxycodone. Fentanyl deaths doubled between 2015 and 2016, according to the New York Times.
Reuters reported on Thursday that Kapoor’s attorney is maintaining innocence and plans to fight the charges rather than agree to a plea deal. Insys’ stock took a nosedive following Kapoor’s arrest, trading at under $6 per share as of the closing bell on Thursday.
Jordan Shaw is a New Jersey-based freelancer specializing in national and state government issues. When he’s not writing, you can find him volunteering in Camden, New Jersey, or hiking the Wissahickon Valley Park.