Pharma founder, UB grad, arrested in alleged nationwide opioid scheme

Oct 27, 2017

John Kapoor has been arrested in Arizona, charged with leading a nationwide conspiracy to bribe doctors and pharmacists to widely prescribe an opioid cancer drug for people who did not need it. You may not recognize the name, but the drug company founder is a billionaire and University at Buffalo graduate for which UB's School of Pharmacy and Pharmaceutical Sciences is named.

Forbes several years ago listed Kapoor, the founder of Insys Therapeutics, as having a worth of $2.4 billion. However, that worth has fallen amid indictments of numerous fellow Insys executives on fraud and racketeering charges.

They are accused of offering bribes to doctors to write large numbers of prescriptions for a fentanyl-based pain medication meant only for cancer patients with severe pain. Subsys, as the drug is known, transmits the extremely powerful narcotic in spray form, allowing it to be placed beneath the tongue for fast, potent pain relief.

However, most people who received prescriptions did not have cancer. They also allegedly "conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients."

"In the midst of a nationwide opioid epidemic that has reached crisis proportions," acting U.S. Attorney William Weinreb said in a statement, "Mr. Kapoor and his company stand accused of bribing doctors to overprescribe a potent opioid and committing fraud on insurance companies solely for profit.

"Today's arrest and charges reflect our ongoing efforts to attack the opioid crisis from all angles," Weinreb added.

A judge in Arizona, where Insys is based, set bail at $1 million for Kapoor. He must wear electronic monitoring and surrender his passports if he posts bail. Defense attorney Brian Kelly said after Thursday's hearing that his client is not guilty and will fight the charges.

Prosecutors say the charges of conspiracy to commit racketeering and conspiracy to commit mail and wire fraud each carry a maximum sentence of up to 20 years in prison. Conspiracy to violate the anti-kickback law carries a possible penalty of up to five years in prison.

UB released a statement on Kapoor’s arrest, saying it is aware of the arrest.

"We became aware of the charges through today’s media reports and therefore it would be premature to comment further or take any action until the university has more information."

They also confirmed the building that is home to UB’s School of Pharmacy bears the name of "Kapoor and his wife in recognition of their long-time philanthropic support of the school and the university."

"As I've said, we need to go after the opioid drug companies like dealers on the street corner," tweeted Erie County Executive Mark Poloncarz. "They are just, even more liable, than dealers for the . This is welcome news."

Kapoor and some of his colleagues were charged with pushing prescriptions for the addictive drug the same day President Donald Trump declared the opioid crisis a nationwide public health emergency.