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The founder and former CEO of Insys Therapeutics Inc., John Kapoor, has been charged with bribing doctors with illegal kickbacks for prescribing Subsys, his company's powerful opioid drug. Subsys is a fentanyl-based opioid pain drug that comes in a spray bottle and was designed for cancer patients. To date, Kapoor is the highest ranking pharma exec charged in an opioid-related crime.
Kapoor is alleged to have bribed doctors to prescribe the pain med to those who did not truly need it (i.e. non-cancer patients). Additionally, the bribe and kickback scheme not only rewarded overprescribing, but also doling out higher dosages. Not only is Kapoor and company alleged to have bribed the doctors, but also it is claimed that insurers were defrauded into paying for Subsys for non-cancer patients.
What's the Charge?
Specifically, Kapoor is being charged with conspiracy to commit wire fraud, racketeering, and mail fraud. And he is not alone. Six other executives from his company, and others, have also been charged in connection to the kickback and bribery scheme. Furthermore, lower level employees have also been charged, and some have decided not to take the fall for the billionaire CEO and are cooperating with authorities.
Allegedly, Kapoor and company bribed the doctors using speakers' fees, and reimbursements for meals and entertainment, and even just gave some docs cash. The company allocated tens of millions for these fees. Additionally, Insys employed friends and family members of the doctors as company reps in order to pressure the doctors into prescribing more Subsys. It seemed that Insys had a singular goal to sell more of its drug, and it didn't care how it achieved that goal.
And while regulators and insurers monitor high-powered opioid prescriptions, the scheme allegedly operated for a few years before being discovered. However, once it was discovered, things began to unravel for Kapoor. Although he had only just recently taken on the role of CEO in 2015, this past January, he stepped down.
When it comes to chief level officers of a company, criminal liability can mean a trip to the old cement country club, a.k.a. minimum security jail. After all, having contracts that include poison pills and golden parachutes comes at a cost.