Kapoor to pay NJ millions for deceptive Subsys marketing.
John N. Kapoor, 77, former Insys pharmaceutical executive will pay New Jersey $5 million to settle a lawsuit alleging the drug manufacturer helped fuel the opioid crisis by overprescribing the powerful fentanyl opioid, Subsys. He must also make two payments to New Jersey, a lump sum of $1 million and another of $4 million. Kapoor was convicted in a bribery and kickback scheme that prosecutors said helped fuel the opioid crisis.
“With today’s settlement, we’ve recovered a substantial sum from one individual who used his perch in a corporate board room to sell addictive drugs through bribes and fraud,” state Attorney General Gurbir Grewal said. “We are looking forward to additional recoveries from other opioid manufacturers and distributors, who also are responsible for helping New Jersey overcome and heal from the epidemic they unleashed.” He added, “It’s the first settlement in any of the state’s lawsuits against corporations and executives who allegedly manufactured and fraudulently marketed opioids. Most of the money will help fund New Jersey’s effort to fight the opioid epidemic.”
Kapoor and four other former executives are were charged with allegedly “funneling millions of dollars in kickbacks and bribes to prescribers to get them to prescribe the Insys drug, Subsys,” according to court papers.
The drug was originally approved by the Food and Drug Administration (FDA) only to treat chronic cancer-related pain. However, it was sold by Kapoor and his colleagues to patients without cancer or who had suffered from cancer and recovered long before they had been prescribed doses of Subsys. The deceptive marketing scheme allowed company executives to realize substantial gains that had a trickle-down effect to all parties involved.
“The company also bribed health care professionals to write Subsys prescriptions at higher doses than necessary,” Grewal said, in order for patients to become addicted and keep coming back for more. “This led to a flood of Subsys subscriptions, many of which resulted in payments from state health care and workers’ compensation programs.”
Assistant U.S. Attorney Nathaniel Yeager said Kapoor was the one running the show the whole time. “It was a top-down conspiracy run by John Kapoor,” he said at trial.
At the time of Kapoor’s indictment, the company said it was under new management and has taken “necessary and appropriate steps to prevent past mistakes from happening in the future.”
Kapoor apologized to the victims in the courtroom. “I am heartbroken by the words of the patients,” he said. “I sincerely apologize to them.”
The settlement will prevent Kapoor from “managing, owning or leading” any business in New Jersey, or from “owning more than 10% stock in any corporation” doing business in the state.
“We cannot begin to measure the pain and suffering caused by John Kapoor’s callous greed, but we know it will plague our communities for years to come,” said Sharon M. Joyce, director of the Office of the New Jersey Coordinator for Addiction Responses and Enforcement Strategies. “This settlement rightly makes him responsible for providing financial resources needed to combat the long-lasting and destructive ripple effects of his unlawful actions.”