Insys’ John Kapoor Sentenced to 66 Months for Opioid Scheme

January 28, 2020 - Insys Therapeutics founder and former CEO, John Kapoor, was sentenced to 66 months in federal prison on January 23 for his role in the drugmaker’s alleged opioid kickback scheme.

The case was initially brought on by the US Attorney’s Office for the District of Massachusetts in 2016. The government alleged that Insys used “speaker programs” between 2012 through 2015 to increase awareness of its fentanyl-based pain medication Subsys via peer-to-peer educational lunches and dinners. It further alleged that Insys was using these “speaker programs” to pay bribes and kickbacks in exchange for increased prescriptions and dosage.

Insys faced a $225 million sentencing order in summer 2019 over kickbacks in the marketing of Subsys. “Many of these kickbacks took the form of speaker program payments for speeches to physicians that were, in fact, shams; jobs for the prescribers’ relatives and friends; and lavish meals and entertainment,” the DOJ said. The drugmaker received US Food and Drug Administration approval for Subsys in 2012 for the management of breakthrough cancer pain.

FDA approved a supplement for Subsys last October to address a concern the agency had with an update to labeling for serotonin syndrome, its storage and disposal, and risk of sleep apnea.   

The government had recommended 15 years for Kapoor’s sentencing. “This was a landmark prosecution that successfully held accountable a pharmaceutical company’s top executives for their roles in the illicit marketing and prescribing of opioids,” said US Attorney Andrew E. Lelling.   

The sentencing was touted for its role in combatting the US opioid crisis. FDA acting associate commissioner for regulatory affairs, Judith McMeekin said, “The FDA continues to respond forcefully to the ongoing opioid epidemic – one of the largest public health tragedies our country has faced – by ensuring the safe and appropriate use of these powerful medications.”

Kapoor insisted that the profits that the drugmaker was making from Subsys ”should double the amount of money spent paying doctors,” according to the DOJ. Kapoor also directed its vice president of marketing to calculate “positive ROI” with Subsys among speakers in the program.

Doctors who were not prescribing enough were ousted from Insys’ program for Subsys, too. A deemed “8:30 call” was allegedly used as a mechanism to enforce the scheme on a daily basis. 

The "Insys Reimbursement Center" pilot program for prior authorizations was launched as part of the scheme, allegedly falsifying patient diagnoses -- which speaks to an over-prescribing issue.

“Out of pure greed, Insys executives, from John Kapoor on down, bribed doctors to prescribe this powerful and highly addictive narcotic to people who did not need it,” Lelling said. “...these defendants, led by Kapoor, ploughed ahead, setting weekly quotas for doctors on their payroll, urging them to prescribe Subsys in higher and higher doses, all so they could make millions of dollars at patients’ expense.” The 1990 Arizona-based firm was facing bankruptcy by last year. 

The drugmaker received approval for Chapter 11 petitions by the June 2019 jury verdict, after which it filed for a new trial. US District Court Judge Allison D. Burrough. By August 2019, the company had sold several pipeline products, including naloxone, to Hikma Pharmaceuticals.

Kapoor's formed part of the case facing several other former Insys executives. Alec Burkaloft, former vice president of sales, and Michael Babin, former CEO, were sentenced to 26 and 30 months, respectively. Former sales executive Sunrise Lee was sentenced to one year and one day after Michael Gurry, Richard Simon, Joseph Rowan each faced a 33-month sentence order.

A new investigation from AARP takes a look into Insys’ profitable beginnings, reporting that upwards 8,000 people died taking Subsys. “The investigation showed that far more people died while taking Subsys than had been previously reported, among other discoveries,” AARP said.