The day President Donald Trump announced the opioid crisis as a nationwide public health emergency, the federal government arrested a wealthy pharmaceutical corporation executive on charges of bribing doctors to prescribe an opioid painkiller to patients!
John Kapoor, 74, is the founder of Insys Therapeutics. And it appears the Department of Justice in Phoenix arrested him recently. The authorities moved to stop Kapoor because it seems he bribed doctors and falsified information to prop up sales of a pain drug called Subsys. Subsys is a fentanyl spray medicine used to treat cancer patients suffering intense discomfort.
Kapoor’s arrest comes nearly a year after former Insys CEO Michael Babich and five other onetime executives were arrested as part of an alleged “nationwide conspiracy.”
The Justice Department claims Kapoor and other executives from Insys gave bribes in the form of incentives to doctors who wrote “large numbers of prescriptions” for patients, many of whom did not have cancer. The Justice Department also claimed that the executives defrauded insurers by forming a “reimbursement unit” dedicated to obtaining prior authorization from insurers who were reluctant to pay for the drug.
These Insys executives supposedly fueled the opioid epidemic by paying doctors to prescribe a dangerous and addictive form of fentanyl needlessly. In fact, the charges of selling an extremely addictive opioid cancer pain drug to patients who didn’t have cancer put these doctors and executives in the same bucket as street-level drug dealers.
Insys’ stock finished nearly 23% lower following the news of Kapoor’s arrest. And the company’s valuation plummeted to $417 million. It is a significant fall as the company was valued at over $19 billion in 2015. Insys is now developing its own drug to reverse opioid overdoses.
Insys’ fall cost Kapoor a significant portion of his net worth, as his net worth is made up in part from the company’s stock. At Insys’ highest, Kapoor’s stake in the company was worth over $1.9 billion. However, by Thursday’s close, it was down to $246.7 million. Kapoor also holds a $1 billion stake in Akorn Pharmaceuticals, which is a generic drug maker where he also serves as board chairman. Akorn’s stock was down about 1% at Thursday’s close.
Kapoor is set to make a court appearance in Phoenix at a later date.
Image Source: Jamel Toppin/Forbes