Indian American Billionaire John Kapoor on Trial Over Bribing DoctorsTop Stories

January 28, 2019 12:09
Indian American Billionaire John Kapoor on Trial Over Bribing Doctors

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The first prosecution of chief executive of Insys Therapeutics Inc, a pharmaceutical company, begins this week tied to opioid overdoses.

The 75-year-old Indian American Kapoor, a former billionaire, goes on a trial, who is accused of masterminding illegal marketing strategies that contributed to an epidemic of addiction and death.

Kapoor rose from modest means in India. He is on a trial for using speakers’ fees, dinners and cash to lure doctors into prescribing a highly addictive opioid painkiller meant solely for cancer patients.

Though the case will be heard in Boston, the verdict may echo in the boardrooms of the nation’s pharmaceutical companies.

Over 1,500 local governments have sued opioid makers and distributors to recoup the billions of dollars spent fighting the crisis. The clash could serve as a test-drive for how jurors weigh claims of industry wrongdoing.

“It’s a real advantage for the local governments’ lawyers to get jury feedback on the Insys marketing evidence,’’ said Richard Ausness, an expert on mass-tort law at the University of Kentucky College of Law. “It will help them build their conspiracy cases against all the companies involved in the opioid litigation.”

The conviction could turn Kapoor into the face of the opioid crisis.

Kapoor earned a doctorate in medicinal chemistry from the University of Buffalo in 1972 and subsequently became a health-care entrepreneur. He worked as a drugmaker’s plant manager and later became Chief Executive Officer (CEO) of a hospital-products company. After forming a venture-capital firm that invested in health-care firms, he merged closely held Insys with NeoPharm Inc. in 2010 to get access to technology to develop pain drugs for cancer patients.

According to company filings, he remains Insys’s majority shareholder, controlling about 60 percent of its shares. They have fallen by about one-third since his October 2017 indictment.

If convicted on charges of racketeering, federal fraud, and bribe, Kapoor and four other ex-Insys managers would be sent to prison for as long as 25 years.

Prosecutors say Kapoor oversaw a scheme in which doctors got sham speaker’s fees in return for issuing more prescriptions and subordinates lied to insurers about the type of patients receiving the fentanyl-based drug, they said.

Doctors were allegedly seduced with lavish meals, jobs for relatives and in one case, a $1,000 private champagne-room session at a strip club. As the bribes lead to Subsys sales, Kapoor pumped more money into speakers’ fees, with spending going up to $10.5 million in 2014 from $550,000 two years earlier, prosecutors say.

“We will have testimony from doctors who said, ‘I would not have prescribed this if I wasn’t being bribed or paid,”’ Assistant U.S. Attorney Fred Wyshak said in court this month.

-Sowmya Sangam

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Tagged Under :
opioid  Indian American