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Insys CEO Accused Of Bribing Docs To Prescribe Fentanyl

By Paul Gaita 11/01/17

McCaskill's investigative probe yielded an audio recording of an Insys employee misleading a pharmacy insurance manager about a patient's condition to secure approval of Subsys.

corrupt businessman
Profits over people.

John Kapoor, the billionaire founder of troubled pharmaceutical firm Insys Therapeutics Inc, has resigned from his company's board of directors following his arrest for allegedly participating in a bribery scheme focused on its fentanyl-based pain medication.

U.S prosecutors filed several charges against Kapoor, including engaging in a conspiracy to commit racketeering, and mail and wire fraud in a Boston federal court on October 26, the same day that President Donald Trump declared the national opioid crisis a public health emergency.

The federal indictment is just the latest in a string of damaging news for Insys, which has weathered federal charges against its former CEO, Michael L. Babich, and a withering congressional investigation by Senator Claire McCaskill, which found company employees providing misleading information in order to increase sales of its product.

As ABC News noted, the new charges allege that Kapoor, Babich and other Insys executives allegedly offered bribes to medical professionals to prescribe large numbers of its pain medication Subsys—a powerful, fentanyl-based pain medication intended to treat severe cancer pain—to patients who did not require such a high-potency drug.

The defendants are also charged with conspiring to mislead and defraud insurance providers that refused to approve prescriptions for the drug to patients without cancer. McCaskill's investigative probe yielded an audio recording of an Insys employee misleading a pharmacy insurance manager about a patient's condition to secure approval of Subsys.

In regard to the allegations against Kapoor and his fellow executives, acting U.S. Attorney William D. Weinreb said, "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."

Kapoor's defense attorney, former federal prosecutor Brian T. Kelly, said that his client is "not guilty of these charges [and] intends to fight it vigorously." Kapoor's bail was set at $1 million, and he was required by the judge to wear electronic monitoring and surrender his passports.

Kapoor issued a statement on Sunday, October 29, in which he officially resigned from the Insys board while adding that he believed he would be "fully vindicated after trial." He was the company's majority shareholder after stepping down as CEO in January 2017.  

A spokesperson for the company said it is currently under new management—former Purdue Pharma Chief Commercial Officer Saeed Motahari took over in March 2017—and issued a statement one day before Kapoor's court appearance, which said in part that they will "continue to work with relevant authorities to resolve issues related to the misdeeds of former employees."

Stock prices for Insys took a dive after news of the charges were issued on Thurday, dropping more than 20%.

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Paul Gaita lives in Los Angeles. He has contributed to the Los Angeles Times, Variety, LA Weekly, and The Los Angeles Beat, among many other publications and websites. 

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