In a significant ruling in the ongoing battle against the opioid crisis, John Kapoor, the founder of Insys Therapeutics, has been sentenced to 66 months in federal prison. The sentencing, handed down in a Boston federal court, marks a pivotal moment in holding pharmaceutical executives accountable for their role in fueling the opioid epidemic. Kapoor, aged 76 and residing in Phoenix, Arizona, was convicted of orchestrating a vast bribery scheme designed to incentivize doctors to prescribe Subsys, a potent fentanyl-based pain medication, often irrespective of medical necessity.
Judge Allison D. Burroughs delivered the sentence, which also includes three years of supervised release and mandates Kapoor to pay forfeiture and restitution, the amounts of which will be determined at a later date. The prosecution had sought a 15-year prison term, underscoring the severity of the crimes committed. Kapoor’s conviction in May 2019 on racketeering conspiracy charges, alongside four other Insys executives, highlighted the systemic nature of the misconduct within the company.
John Kapoor’s background as a seasoned pharmaceutical industry veteran played a crucial role in the scheme’s inception. Recognizing the potential for profit in novel drug delivery systems, Kapoor privately funded Insys to develop Subsys. This drug, formulated as a spray for breakthrough cancer pain, received regulatory approval, but Kapoor’s ambition extended beyond its legitimate use. Driven by a substantial personal financial stake in Insys’s success, Kapoor exerted considerable control over corporate decisions, fostering a culture that prioritized profit above ethical considerations and patient welfare. This intense pressure from Kapoor led to the implementation of illegal strategies to boost Subsys sales.
In 2012, under Kapoor’s authorization, Insys initiated “speaker programs” ostensibly aimed at enhancing Subsys brand awareness through peer-to-peer physician education. However, these programs were deliberately subverted into mechanisms for bribery and kickbacks. Targeted medical practitioners, many operating pain clinics, were illicitly incentivized to increase Subsys prescriptions and escalate dosages. Kapoor explicitly demanded that the financial returns from these programs should be double the investment in bribing doctors, revealing a calculated and cynical approach to patient care. He further directed the Vice President of Marketing to rigorously assess the return on investment (ROI) for each speaker, purging those who failed to meet aggressive prescribing quotas. Disturbingly, Kapoor knowingly approved bribing doctors with a history of abusive opioid prescribing practices, demonstrating a complete disregard for the potential harm to patients.
The daily operational control of this criminal enterprise was maintained by Kapoor through the “8:30 call,” a morning meeting involving his co-conspirators. These meetings served as a forum to discuss and refine the bribery scheme, with Kapoor actively participating in decisions regarding fund allocation and monitoring doctors’ prescribing habits, including prescriptions for Subsys and competing drugs.
Understanding that insurer approval was paramount to Subsys’s commercial viability, Kapoor sanctioned the creation of the “Insys Reimbursement Center” (IRC) in October 2012. This pilot program was designed to aggressively pursue prior authorization for Subsys payments directly from insurers and pharmacy benefit managers. IRC employees were trained to impersonate clinic staff and deploy deceptive scripts filled with false and misleading patient diagnoses. A key tactic involved misrepresenting patients’ conditions as cancer-related pain, as insurers were more inclined to approve Subsys for this indication. Kapoor not only approved these unethical and illegal tactics but also set an audacious target of a 100% success rate for securing insurance approvals, further illustrating his relentless pursuit of profit at the expense of ethical conduct and patient well-being.
United States Attorney Andrew E. Lelling powerfully articulated the gravity of Kapoor’s crimes, stating, “Out of pure greed, Insys executives, from John Kapoor on down, bribed doctors to prescribe this powerful and highly addictive narcotic to people who did not need it.” He emphasized the defendants’ appalling disregard for public health and safety amidst the escalating opioid epidemic, driven by the pursuit of millions of dollars at patients’ expense. Lelling underscored the landmark nature of the prosecution, aiming not only to punish the perpetrators but also to deter future misconduct by pharmaceutical companies, reinforcing the crucial message of corporate responsibility towards public safety.
FBI Boston Division Special Agent in Charge Joseph R. Bonavolonta condemned Kapoor and his associates for minimizing their actions and evading responsibility for the devastating harm inflicted upon patients. He affirmed the FBI’s unwavering commitment to combating the opioid crisis from all fronts, dismantling criminal enterprises like Insys and ensuring that healthcare providers prioritize patient care over personal enrichment.
Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, echoed this sentiment, emphasizing that the sentences deliver a clear deterrent message to healthcare executives contemplating illegal profit-driven schemes. He reiterated the unwavering resolve to hold accountable those who prioritize profits over patient well-being in the pharmaceutical industry.
Judith McMeekin, Acting Associate Commissioner for Regulatory Affairs at the U.S. Food and Drug Administration, highlighted the FDA’s proactive response to the opioid epidemic, emphasizing the necessity of safe and appropriate opioid use. She condemned the bribery of healthcare providers to prescribe fentanyl, the most potent type of opioid, as unacceptable and as posing severe risks of overdose and death to patients. McMeekin reinforced the FDA’s dedication to collaborating with law enforcement to bring to justice those who prioritize profits over public health.
Drug Enforcement Administration Special Agent in Charge Brian D. Boyle pointed out that the reckless actions of executives like Kapoor, involving controlled medications, amplified the risks of drug diversion and addiction, jeopardizing public health and safety. He reaffirmed the DEA’s commitment to working with law enforcement and regulatory partners to enforce regulations and safeguard public health.
Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office, underscored the Defense Criminal Investigative Service’s dedication to protecting military personnel and their families from opioid-related harm. He emphasized that Kapoor’s sentencing showcased DCIS’s commitment to collaborating with law enforcement partners to prosecute those who fraudulently profit at the expense of patients, including within the military healthcare system (TRICARE).
Carol S. Hamilton, Acting Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office, highlighted the collaborative effort to protect participants in private sector health plans, combat healthcare fraud, and contribute to the fight against the opioid epidemic. She emphasized that Kapoor and his fellow executives prioritized profits over patients, driving sales of a highly addictive opioid.
Inspector in Charge Joseph W. Cronin of the U.S. Postal Inspection Service’s Boston Division, emphasized the coordinated law enforcement effort to combat the opioid crisis. He condemned Insys Therapeutics executives for using bribery and kickbacks to boost prescriptions of a highly addictive fentanyl spray, endangering public health and compromising the integrity of the mail system.
Matt M. Modafferi, Special Agent in Charge of U.S. Postal Service Office of Inspector General, reiterated that the defendants prioritized the company’s financial gains over patient welfare. He emphasized that the sentences serve as a stark reminder of the severe consequences for employing such tactics to inflate pharmaceutical sales.
Acting SAC Jeff Stachowiak of VA OIG reinforced the commitment to ensuring the safety and integrity of VA healthcare programs and holding accountable those who endanger veterans, their families, or the public through healthcare fraud.
Thomas W. South, Deputy Assistant Inspector General for Investigations, OPM OIG, stated unequivocally that the unscrupulous practices of Insys Therapeutics and John Kapoor fueled the devastating national opioid epidemic. He lauded the groundbreaking nature of the case and the collaborative efforts of investigators and law enforcement partners, emphasizing that bribing physicians to overprescribe Subsys endangered countless lives, and Kapoor’s sentencing represents a crucial step towards accountability and justice.
The prosecution team, comprising Assistant U.S. Attorneys K. Nathaniel Yeager, Fred M. Wyshak, and David G. Lazarus from Lelling’s Health Care Fraud Unit, successfully presented the case, culminating in this landmark sentencing for John Kapoor, signifying a crucial victory in the fight against corporate greed and the opioid crisis.
