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INSYS Therapeutics Founder Charged With Racketeering Related to Fentanyl

November 16th, 2017

John Kapoor, owner of INSYS Therapeutics, has been charged with conspiracy to profit from the illegal distribution of fentanyl spray, a potent opioid used to treat cancer pain. The indictment alleges that Kapoor and six former INSYS executives violated Racketeer Influenced and Corrupt Organizations (RICO) Act statutes, committed mail and wire fraud, and violated the Anti-Kickback Statute (AKS).

The conspirators are alleged to have bribed practitioners who owned pain clinics to prescribe fentanyl spray, usually meant to treat cancer patients who have pain so severe that it cannot be controlled by more routine pain medicine. The prescriptions for Subsys, the brand name of the fentanyl spray, were mostly written for patients who did not have the diagnosis of cancer, according to the allegations from the United States Attorney’s Office in the District of Massachusetts.

The indictment also alleges that Kapoor and colleagues defrauded insurance companies that were reluctant to approve use of the drug for patients not diagnosed with cancer. INSYS allegedly set up a so-called “reimbursement unit” that sought prior authorization for the drug from an insurance company or pharmacy by misrepresenting the patients’ real diagnosis.

These charges are particularly poignant as the government is pursuing an effective intervention for the nation’s opioid crisis. Violation of RICO, mail fraud, and AKS all carry potential prison sentences and large fines.

Michael Babich preceded Kapoor as president and CEO of INSYS. He was arrested and charged similarly in December 2016. He has pleaded not guilty and his trial is scheduled for 2018.


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