Feds bust drug dealer who hates pot

Angela K. Evans | Boulder Weekly

John N. Kapoor is a drug dealer. He deals in opiods, the drugs that are currently killing more than 100 Americans a day.

He also opposes legalizing marijuana — and gave half a million dollars to the campaign that defeated a marijuana legalization initiative in Arizona last year.

Kapoor, 74, isn’t your run-of-the-mill street dealer, or even your run-of-the-mill South Asian opium lord. Not even close. When the feds caught up with him a couple weeks ago, he promptly posted a $1 million bail bond without batting an eyelash. Drug dealing has been very good to him.

Now for the rest of the story.

Kapoor is the founder and majority owner of Chandler, Arizona-based Insys Therapeutics Inc.

On October 26 he was arrested in Phoenix 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,” according to a press release put out by the U.S. Attorney’s Office in Massachusetts.

The charges filed against him and six other former Insys executives include RICO (Racketeer Influenced and Corrupt Practices Act) conspiracy, conspiracy to commit mail and wire fraud, and conspiracy to violate the Anti-Kickback Law, the release said.

The group “conspired to bribe practitioners in various states, many of whom operated pain clinics, in order to get them to prescribe a fentanyl-based pain medication,” the release said.

The medication, called “Subsys,” is “a powerful narcotic intended to treat cancer patients suffering intense breakthrough pain,” it added. “In exchange for bribes and kickbacks, the practioners wrote large numbers of prescriptions for patients, most of whom were not diagnosed with cancer.”

Subsys is a fentanyl preparation administered in spray form. It was approved by the FDA in 2012.

In order to get doctors to prescribe it, the Insys executives created a speaker program intended to raise awareness of the benefits of fentanyl at “educational lunches and dinners.” They paid docs who wrote fentanyl prescriptions to lecture about fentanyl’s use at the events.

According to the indictment, Alec Burlakoff, Insys’ southeast regional sales manager, at one point told sales reps that “the key to sales was using the speaker program to pay practioners to prescribe fentanyl spray.”

Burlakoff told one sales rep in a text obtained by the government that the practitioners “don’t need to be good speakers, they need to write a lot of (prescriptions).”

According to the Phoenix New Times, Insys “even made a video featuring a sales rep dressed as a giant fentanyl spray bottle, rapping and dancing to a song that pushed the idea of getting doctors to prescribe high doses” of Subsys.

The indictment also alleges that Kapoor and the others “conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients.”

They did this by setting up a “reimbursement unit” that was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers.

Harold H. Shaw, special agent in charge of the FBI’s Boston Field Division, said, “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.”

The conspiracy charges under RICO can result in a 20-year prison sentence and fines of up to twice the amount of money the defendants made from the conspiracy. Ditto for the conspiracy to commit mail and wire fraud.

In other words, Kapoor and his pals are in a heap of trouble.

Well, it couldn’t happen to a nicer guy.

Under Kapoor, Insys Therapeutics donated $500,000 to Arizonans for Responsible Drug Policy, a group leading the fight against Arizona Proposition 205, a marijuana legalization measure similar to Colorado’s, which was narrowly defeated last year (48.7 percent yes, 51.3 percent no).

Kapoor’s opposition to Prop 205 doesn’t appear to have been motivated by reefer madness; it was more likely a business decision. It turns out Insys had developed a drug called Syndros, based on a synthetic form of THC that would have faced competition from legal marijuana if Prop 205 had passed.

It’s inconceivable that Kapoor didn’t know the dangers associated with fentanyl and the absence of similar dangers associated with marijuana.

So Special Agent Shaw is wrong when he says he’s no better than a street-level drug dealer. He’s much worse. 

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