BOSTON – A notorious Phoenix man, John Kapoor, was sentenced to a mere 66 months in prison this week for master-minding a scheme in which doctors were bribed to prescribe Subsys, a fentanyl-based pain medication, often when medically unnecessary.
According to U.S. Sentencing Commission data, meth cases netted offenders an average of 87 months in prison, compared with 63-month average prison sentences for heroin traffickers and a 26-month average for marijuana dealers.
Kapoor, age 76, was sentenced by U.S. District Court Judge Allison D. Burroughs to the light prison sentence, three years of supervised release, and ordered to pay forfeiture and restitution to be determined at a later date. The government recommended a sentence of 15 years in prison.
According to the Department of Justice, in May 2019, Kapoor was convicted by a federal jury of racketeering conspiracy along with four other Insys executives.
As a veteran of the pharmaceutical industry, Kapoor learned that he could profit from developing a spray delivery system for a generic drug, then marketing it as a premium product. Kapoor privately funded Insys as it developed Subsys, which was eventually approved to treat cancer patients suffering intense breakthrough pain. With such significant personal financial investment, Kapoor was committed to ensuring that Insys was successful, and he did so by exercising tight control on all aspects of corporate decision making. Kapoor hired, or authorized the hiring of, several top executives who became co-conspirators in the criminal scheme to bribe practitioners, many of whom operated pain clinics, to prescribe Subsys to patients, often when medically unnecessary
In 2012, Kapoor authorized the use of “speaker programs” purportedly intended to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners. However, the programs were used as a vehicle to pay bribes and kickbacks to targeted practitioners in exchange for increased Subsys prescriptions and increased dosage. Kapoor insisted that profits generated should double the amount of money spent paying doctors. In October 2012, Kapoor instructed the Vice President of Marketing to calculate the return on investment (ROI) for each speaker to determine if the speaker had a “positive ROI.” Practitioners who failed to meet satisfactory prescribing requirements were ousted from the speaker program. Kapoor approved bribing doctors that he knew abusively prescribed opioids.
Kapoor controlled and enforced the criminal scheme on a daily basis during a morning meeting, referred to as the “8:30 call,” which also involved many of his co-defendants. One of the topics discussed was the scheme to bribe doctors. Kapoor routinely discussed the suitability of additional funds, and which doctors were writing prescriptions for Subsys or a competitive drug.
Kapoor knew that the success of Insys depended on insurers approving payment for Subsys. In October 2012, Kapoor approved the creation of a pilot program, the “Insys Reimbursement Center” (IRC), which was dedicated to obtaining prior authorization for payment directly from insurers and pharmacy benefit managers. To do so, employees of the IRC posed as employees of the practitioner and used a script of false and misleading representations about patient diagnoses in order to secure approval for the drug by the insurance provider. For example, since insurers were more likely to authorize payment for Subsys if a patient was being treated for cancer-related pain, IRC employees were instructed to mislead insurers regarding the true diagnosis of the patient. Kapoor approved these tactics, and demanded a 100% success rate.