John Kapoor, the 74-year-old founder and majority owner of Insys Therapeutics Inc., was arrested today and charged with leading a nationwide conspiracy to profit by using bribes and fraud to cause the illegal distribution of a fentanyl spray intended for cancer patients experiencing breakthrough pain.
'These Insys executives allegedly fueled the opioid epidemic by paying doctors to needlessly prescribe an extremely dangerous and addictive form of fentanyl.
Phillip Coyne, federal agent
Kapoor was arrested this morning in Arizona and charged with RICO conspiracy, as well as other felonies, including conspiracy to commit mail and wire fraud and conspiracy to violate the Anti-Kickback Law, according to a Department of Justice press release. Kapoor, the former Executive Chairman of the Board and CEO of Insys, will appear in federal court in Phoenix today. He will appear in U.S. District Court in Boston at a later date.
Leafly reported last year that Insys donated half a million dollars to the campaign to defeat adult-use cannabis legalization in Arizona.
Fentanyl is the synthetic opioid, cheaper and stronger than heroin, that’s turning North America’s opioid crisis into a catastrophe. Fentanyl is the drug that killed Prince. It’s up to 50 times more powerful than heroin. Pockets of the Midwest and Northeast are getting shredded by fentanyl. In July alone, the town of Akron, Ohio, documented nearly 300 overdoses and two dozen deaths linked to the drug. A surge in fentanyl-related overdose deaths last year forced officials in British Columbia to declare a public health emergency.
Last year federal agents arrested two Insys officials in New York state for allegedly carrying out a kickback scheme that paid physicians to encourage their patients to use fentanyl. That indictment came four months after an Insys regional manager pleaded guilty to similar charges of rigging a doctor kickback scheme in the South.
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Other state attorneys general continue to investigate the company’s practices. Meanwhile, Insys has continued to report record revenues.
Cannabis Cutting Into Profits
Many saw Insys’ donations to defeat adult-use cannabis legalization—which failed in Arizona last November—as a way to keep a competing (and safer) drug out of the market. A reported 28,647 Americans died from opioid-related overdoses in 2014. In the past century, the number of people who died from cannabis overdoses is exactly zero.
In recent years, researchers have documented a clear phenomenon: In states that legalize medical marijuana, opioid usage and overdose rates decline dramatically. Patients seeking relief from chronic pain are finding medical cannabis to be a safer, cheaper, more reliable form of relief that comes without the side effects of physical addiction and possible death. Castlight Health, a California health information and technology company, found in a recent report on opioid abuse that “states with medical marijuana laws have a lower opioid abuse rate than those that don’t.”
The Nasdaq's third tier, the AMEX can be just as bad, and last but not least, the OTC, it seems, are financial venues that reward failure.
