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Outrage of the Month: Opioid Maker Executives “No Better Than Street-Level Drug Dealers”

Health Letter, December 2017

By Michael Carome, M.D.


If you’re not outraged,
you’re not paying attention!

Read what Public Citizen has to say about the biggest blunders and outrageous offenses in the world of public health, published monthly in Health Letter.

drug dealing transaction for pills
Image: Syda Productions/Shutterstock.com

On Oct. 26, 2017, the U.S. Department of Justice (DOJ) announced the arrest of John Kapoor, the billionaire founder and majority owner of Insys Therapeutics, the drug company that markets fentanyl sublingual spray (SUBSYS). Kapoor has been charged with “leading a nationwide conspiracy” to profit by bribing doctors to inappropriately prescribe the company’s fentanyl spray product and by defrauding health insurers.

Kapoor joins six other former Insys senior executives and managers — including former CEO and president Michael Babich — who were initially indicted in December 2016 on similar conspiracy and fraud charges. Most, including Kapoor, were charged under the Racketeer Influenced and Corrupt Organizations Act, which originally was intended to target criminal organizations such as the Mafia (see here and here).

Subsys, the first of two drugs marketed by Insys, is a rapid-acting, highly addictive, dangerous opioid that is sprayed under the tongue. The Food and Drug Administration approved the drug in 2012 only for treating breakthrough pain in adult cancer patients who are not responding adequately to other opioids.[1]

Under the brazen scheme allegedly orchestrated by Kapoor and his co-conspirators, company employees paid bribes and kickbacks to health care practitioners in multiple states to entice them to prescribe Subsys to large numbers of patients, most of whom were not diagnosed with cancer. Marketing drugs for such unapproved — also known as “off-label” — uses is illegal.

The government also alleged that the Insys executives conspired to mislead and defraud health insurance companies that resisted approving payment for Subsys when it was prescribed to non-cancer patients. To that end, they established a “reimbursement unit” within Insys that was dedicated to obtaining preauthorization for such prescriptions directly from insurers for these off-label uses.

Other generally lower-ranking Insys employees already had been charged in the conspiracy, and at least two pleaded guilty earlier this year (see here, here and here). Several doctors also have been convicted of or pleaded guilty to accepting kickbacks from Insys in exchange for prescribing Subsys (see here and here). The indictment of Kapoor reveals that the rot extended to the very top of the company.

Commenting on the indictment of Kapoor and his co-conspirators, Harold Shaw, special agent in charge of the FBI’s Boston Field Division, said, “As alleged, these executives created a corporate culture at Insys that utilized deception and bribery as an acceptable business practice, deceiving patients, and conspiring with doctors and insurers. The allegations of selling a highly addictive opioid cancer pain drug to patients who did not have cancer, make them no better than street-level drug dealers. Today’s charges mark an important step in holding pharmaceutical executives responsible for their part in the opioid crisis.”

Likewise, Drug Enforcement Agency Special Agent in Charge Michael J. Ferguson noted, “Pharmaceutical companies [like Insys] whose products include controlled medications that can lead to addiction and overdose have a special obligation to operate in a trustworthy, transparent manner, because their customers’ health and safety and, indeed, very lives depend on it.”

The DOJ and the many other federal agencies involved in the investigation of Insys should be applauded for aggressively pursuing the most senior company executives who hatched this conspiracy. If convicted, they deserve lengthy prison sentences for recklessly endangering thousands of patients across the U.S.


[1] Insys Therapeutics. Drug label: fentanyl sublingual spray (SUBSYS). December 2016. https://www.accessdata.fda.gov/drugsatfda_docs/label/2016/202788s016lbl.pdf. Accessed November 9, 2017.