Billionaire Drug Company Founder John Kapoor Convicted Of Illegally Profiting From Opioid Epidemic

Published May 7, 2019

John Kapoor's conviction sets an enormous precedent: He's the first pharmaceutical boss to be convicted for his role in the U.S. opioid epidemic.

John Kapoor Leaving Court

Pat Greenhouse/The Boston Globe/Getty ImagesInsys Therapeutics founder John Kapoor leaving federal court in Boston on March 13, 2019.

John Kapoor of Insys Therapeutics has just been found guilty of defrauding insurance companies to sell Subsys — a fentanyl spray much stronger than morphine. According to The Guardian, the 75-year-old billionaire’s company was also found guilty of bribing doctors to prescribe the drug to their patients.

The Boston jury also discovered that Insys Therapeutics paid these doctors to prescribe the powerful painkiller to patients who didn’t even need it.

In the midst of an unprecedented opioid epidemic — where addiction, suicide, and dependence rates are through the roof and an estimated 400,000 lives have been lost over the last two decades — the first criminal conviction of a pharmaceutical chief sets a welcome precedent to curb this reckless corruption.

A CBS segment on John Kapoor’s guilty verdict.

While Subsys was FDA-approved for patients with terminal cancer, the drug manufacturer’s relationship with doctors across the country found them targeting people with non-life threatening ailments. These were often painless, as well.

The prosecution was adamant that Kapoor and Insys Therapeutics were responsible for a substantial portion of the opioid epidemic.

Four additional Insys executives were convicted on similar charges, as well. Their illegal racketeering, which the jury took two weeks to deliberate on, now has them facing 20 years in prison.

Fighting Back Against The Companies That Are Profiting

Sunrise Lee With Attorney

John Tlumacki/The Boston Globe/Getty ImagesSales executive Sunrise Lee (left) was convicted alongside four other Insys executives and John Kapoor.

While pharmacies, distributors, and drug manufacturers like Insys Therapeutics are already facing hundreds of civil lawsuits for their intentional pushing of opioids, these new criminal convictions should serve as a deterrent for John Kapoor’s peers and competing corporations. At least, that is the hope.

Countless city and state governments across the nation are filing suits in order to recoup some financial compensation from the companies that started this epidemic in the first place. From the resultant crime rate increase to the rise in cost for additional treatments, the greedy, criminal behavior has spread far and wide.

Drug company McKesson settled with West Virginia for $37 million in early May. The distributor riddled the state with millions of pills without adhering to the protocols meant to protect patients.

While these consequences may seem as though the tide is turning, watchdogs and activists are reminding the public that these finds have always been “the cost of doing business” for drug companies.

McKesson is in no danger of going under, as part of its agreed-upon settlement. These “drug dealers in Armani suits” are merely dropping pennies in the proverbial bucket in order to continue their work and make ten-fold what they pay in fees.

The company’s vice president of sales, Alec Burlakoff, has been convicted for his involvement as well. He’s the one who told John Kapoor to develop a more profitable sales strategy by financially targeting doctors. Burlakoff called these cooperative physicians “pill mills.”

“Pill mills, for us, meant dollars,” he said.

John Kapoor’s Crimes

Opioid Sales Chart

Annual Review of Public HealthA chart depicting just how staggering the rise in sales and, hence, profit has been in the opioid industry.

As for John Kapoor, he oversaw an Insys marketing strategy that hired doctors to give speeches at seminars and conferences. This was merely a cover, with their speaking fees of more than $1 million instead serving as payment to prescribe the company’s drugs.

The seminars, as they were called, were mere social gatherings and dinners at fancy New York restaurants. Doctors were taken to strip clubs and bars.

The prosecution showed spreadsheets to the jury that detailed how profitable each bribe was for the company. One example saw $260,000 allotted to two New York doctors — who, in turn, wrote more than $6 million worth of Subsys prescriptions in one year.

It was also uncovered that Insys employees pretended to be physicians in order to provide insurance companies with fabricated diagnoses to garner approval for payments for Subsys.

An arguably even more embarrassing revelation arising from the trial was a promotional rap video that had Insys employees dancing next to a big bottle of Subsys. They rapped: “I got new patients, and I got a lot of ‘em.”

The rap video shot by Insys Therapeutics employees and shown to the jury.

The Big Business Behind The Opioid Epidemic

To provide some staggering clarity regarding the company’s rise in profits, Subsys sales increased from $14 million in 2012 to about half a billion dollars in 2017. Meanwhile, Fentanyl has killed more people than any other opioid.

Doctors “saw a huge payday that potentially put people’s lives in danger,” prosecutors said in reference to the illegal kickbacks. They also showed the jury emails from a former Insys CEO which claimed numerous doctors were “owned” by the company.

“These patients were used,” U.S. attorney Nathanial Yeager told the jury. “The decisions, the money, the strategy came from the top.”

In the end, Insys Therapeutics’ former vice president of managed markets, Michael Gurrry; former national sales director, Richard Simon; and sales directors Sunrise Lee and Joseph Rowan were convicted alongside Kapoor.

Former Insys CEO Michael Babich already pleaded guilty earlier this year and is facing 20 years in prison. He’ll receive his sentence later this year, while his wife — Natalie Levine, an Insys sales rep — is awaiting her own sentence for engaging in the kickback strategy.

After learning about Insys Therapeutics and John Kapoor’s conviction for profiting from the opioid epidemic, read about what happens to your body when you do Krokodil, the “zombie drug.” Then, learn about the meth epidemic in America.

Marco Margaritoff
A former staff writer for All That’s Interesting, Marco Margaritoff holds dual Bachelor's degrees from Pace University and a Master's in journalism from New York University. He has published work at People, VICE, Complex, and serves as a staff reporter at HuffPost.
John Kuroski
John Kuroski is the editorial director of All That's Interesting. He graduated from New York University with a degree in history, earning a place in the Phi Alpha Theta honor society for history students. An editor at All That's Interesting since 2015, his areas of interest include modern history and true crime.
Cite This Article
Margaritoff, Marco. "Billionaire Drug Company Founder John Kapoor Convicted Of Illegally Profiting From Opioid Epidemic.", May 7, 2019, Accessed April 23, 2024.