Former Insys Billionaire John Kapoor Sentenced For Pushing Fentanyl Opioid Spray

By Heather van Blokland
Published: Thursday, January 23, 2020 - 2:52pm
Updated: Friday, January 24, 2020 - 6:28pm

Insys Therapeutics
Jean Clare Sarmiento/KJZZ
Insys Therapeutics is based in Chandler.

The founder of Chandler-based Insys Therapeutics was sentenced Thursday for orchestrating a bribery and kickback scheme that prosecutors said helped fuel the opioid crisis.

The embattled opioid maker and its principals have faced several million in fines and were the first company to be convicted on criminal charges related to the drug epidemic. 

Founder John Kapoor was sentenced to 5 1/2 years in prison. Prosecutors requested a prison sentence of 15 years, while Kapoor’s attorneys asked for a maximum of one year. 

The 76-year-old former chairman of Insys was found guilty of racketeering conspiracy last May after a trial that lasted 10 weeks and led to 15 days of jury deliberation. Sentencing took place in federal court in Boston on Thursday. 

Kapoor and others paid millions of dollars in bribes to doctors across the nation to over-prescribe the company’s highly addictive oral fentanyl spray, known as Subsys. They were also found to have misled insurers to get payment approved for the drug, meant to treat cancer patients in severe pain and can cost as much as $19,000 a month.

During the investigation in 2018, Insys representative Joe McGrath spoke with KJZZ in response to accusations against the company. 

“You have to understand that breakthrough cancer pain is excruciating and debilitating,” he said. “I mean, people with breakthrough cancer pain have said they wanted to die rather than continue with that kind of pain. It is so intense.”

At issue was the company’s Subsys product, an under-the- tongue fentanyl spray, 100 times stronger than morphine. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving around-the-clock opioid therapy. 

Prosecutors argued that is not how the drug was prescribed. Instead, they said Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and that Insys employees lied to insurers about patients’ diagnoses in order to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries.

In May, five former Insys executives were convicted of racketeering charges, including Kapoor, a onetime billionaire.

“We completely understand and respect why opioid manufacturers are subject to this kind of scrutiny and criticism,” McGrath said. “We have taken a lot of steps to put patients first over the last several years.”

On April 13, 2018, the United States intervened in five lawsuits accusing Insys of violating the False Claims Act in connection with the marketing of Subsys.

Kapoor's lawyers argued that the bribery scheme was concocted by other executives at the company. In a court filing, they said their client has been portrayed as a “caricature” of a mob boss when he’s really an “immigrant success story.”

The case was considered the first that sought to hold an opioid maker criminally liable for the drug crisis, which has claimed nearly 400,000 lives over the last two decades. At least two others have since faced criminal charges, but prominent companies — including Purdue Pharma, the maker of Oxycontin — have faced only lawsuits that carry no threat of prison time.

After the trial, the company reached a $225 million settlement with the U.S. Department of Justice to end its criminal and civil probes.

Along with Kapoor, four others from Insys also were convicted last year, while two pleaded guilty and testified against their former colleagues.

Michael Gurry, former vice president, received 33 months in prison; Richard Simon, former national sales director, received 33 months; Joseph Rowan, former sales manager, sentenced to 27 months; Sunrise Lee, former sales manager, sentenced to one year and a day; Michael Babich, former CEO, received 30 months; and Alec Burlakoff, former vice president, who was also sentenced Thursday and received 26 months in prison.

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