UB graduate Kapoor sentenced for opioid-related scheme

Jan 23, 2020

A 1972 University at Buffalo graduate and founder of an Arizona-based pharmaceutical company has been sentenced to 5 1/2 years in prison for his role in a bribery and kickback scheme that prosecutors said helped fuel the opioid crisis.

John Kapoor, 76, the former chairman of Insys Therapeutics, was sentenced in federal court in Boston to 66 months in prison. Kapoor and four co-defendants were convicted in May 2019 of racketeering. They were accused of paying doctors millions of dollars in bribes to prescribe the company's fentanyl spray, Subsys, which was highly addictive.

Additionally, prosecutors argued, Kapoor and his associates lied to insurance companies to secure coverage of Subsys. The painkiller, which was intended for cancer patients, could cost as much as $19,000 a month.

John Kapoor (center) and officials dedicate the University at Buffalo School of Pharmacy in honor of Kapoor and his wife Editha in 2012. The names were removed shortly after John Kapoor's May 2019 conviction in a opioid-related racketeering case.
Credit Douglas Levere / University at Buffalo

Portions of the conviction, however, were overturned later in the year. The federal judge making that decision ruled prosecutors failed to prove Insys executives violated the Controlled Substances Act. But wire and mail fraud convictions were allowed to stand.

Kapoor's 66-month prison term is substantially less than the 15-year sentence recommended by federal prosecutors, but it is more than the one year requested by Kapoor's defense attorneys, who maintained the executive's innocence and stressed his old age as reason for a short prison sentence.

U.S. District Judge Allison Burroughs explained that she reached the lesser sentence after considering Kapoor's advanced age and philanthropy, as well as "his central role in the crime," the Associated Press reported.

Earlier on Thursday, Insys sales chief Alec Burlakoff was sentenced to 26 months in prison for his role in the bribery and fraud scheme.

"This was an offense of greed," Burroughs said before sentencing Burlakoff.

Two other executives who pleaded guilty became cooperating witnesses. The other executives received between one year and 33 months, significantly less than many of the prison terms recommended by the federal prosecutors.

The case is 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.

Kapoor and his wife, Editha, had contributed generously to the University at Buffalo, which named its School of Pharmacy building in their honor. One month after Kapoor's conviction, UB officials voted to remove his name from the building and school.

University officials said at that time, in a written statement: "The university is aware of Dr. Kapoor’s conviction in federal court today. The leadership of UB is currently reviewing and discussing the impact under UB and SUNY policies pertaining to university namings. The university recognizes the seriousness of this matter and is giving it very careful consideration.

"The illegal and unethical activities brought to light during the trial are in stark contrast to UB’s core values and our mission to improve lives, strengthen communities and positively change the world."

"I think this is just the tip of the iceberg," said Brad Bailey, a former federal prosecutor and current defense attorney who has been following the Insys trial closely. "It's a template that prosecutors will continue to use."