Racketeering for Fentanyl: Opioid Maker Insys Founder Arrested for Bribes

Big Pharma Founder of Insys Arrested on Racketeering for Fentanyl

In December of 2016, the Palm Partners Recovery Center blog covered a story about how federal prosecutors were bringing racketeering charges against several employees of Insys Therapeutics Inc. The initial report and the controversy that followed was a profound moment considering criminal charges are rarely ever brought against pharmaceutical companies. Now it seems that even more the corporate drug dealers who helped create the opioid crisis in America are going to be finding themselves under serious scrutiny for their unethical practices.

Last week President Trump declared the opioid epidemic a public health emergency. That very same day, as if to accent the severity of the crisis and the unignorable need for change, the co-founder of Insys Therapeutics Inc. himself was arrested on fraud and racketeering charges.

Insys Therapeutics CEO Taking a Fall

John Kapoor is the former CEO of Insys Therapeutics; a founding father of one of the most prominent opioid manufacturing companies in America. As of last week, Kapoor is reported to be charged with conspiring to push the company’s signature drug for unacceptable uses through a series of bribes and kickbacks.

The drug Kapoor and his company are accused of pushing just happens to be one of the most dangerous opioids on the market, which has contributed to countless deaths across the country over the years- fentanyl.

The brand name for the product made by Insys Therapeutics Inc is Subsys. This extremely potent compound transmits the synthetic opioid fentanyl in spray form. As an opioid analgesic, people use Subsys by spraying it under the tongue for quick absorption of potent fentanyl. Technically, this drug is supposed to only be used for treating cancer patients suffering from severe pain. But according to prosecutors that is very far from the sales strategy Kapoor and his executives were using.

With recent reports showing that approximately 64,000 Americans died last year from drug overdose, and an estimated 20,100 overdose deaths linked to synthetic opioids like fentanyl, how many of those lives were impacted by the drug Insys forced onto the market with bribes?

According to the prosecution, Kapoor and several other former high-ranking executives at the company colluded to bribe doctors to write-

“- large numbers of prescriptions for the patients, most of whom were not diagnosed with cancer.”

They also allegedly-

“- 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.”

How did they do all this?

The Insidious Work of  Insys Therapeutics Inc

Back in 2016, there was the discussion of six former executives and sales-managers from Insys Therapeutics Inc. being arrested. The charges, according to the Justice Department, included:

  • Conspiring to defraud health insurers
  • Conspiring to bribe doctors into needlessly prescribing Subsys, the company’s fentanyl painkiller

The scam is allegedly a long list of kickback schemes, sham speaking programs, and illegitimate gifts or services.

Sham Speaking

Allegedly, doctors and nurses were paid to attend dinners at high-end restaurants. These dinners were disguised as ‘speaker programs’ that were actually described as gatherings of friends and co-workers who had no power to prescribe medications. Supposed ‘speakers’ were paid fees of up to several thousand dollars for attending these exclusive outings.

One healthcare provider reportedly received an illegal kickback to the tune of $83,000!

All of this money to bribe doctors and other healthcare professionals to prescribe Subsys, even when inappropriate. So not only were they pressuring doctors to use their product over alternatives, but also to prescribe a dangerous and potentially fatal opioid to people who didn’t even need it.

Country-Wide Con-Artists

Other stories written about in Forbes include cases in:

  • Connecticut

In 2015 a nurse practitioner pleaded guilty to violating a federal anti-kickback statute by taking money from Insys to prescribe the drug to Medicare patients who did not have cancer.

  • Alabama

A former Insys sales representative also pleaded guilty to a conspiracy to violate the anti-kickback statute by paying two doctors to prescribe the drug.

  • Illinois

The state has filed multiple claims against Insys Therapeutics involving the pressuring prescriptions of Subsys for unapproved uses.

Doctors who have worked with the company are being investigated by states including:

  • New York

  • Michigan

  • Florida

  • Kansas

  • New Hampshire

  • Rhode Island

U.S. attorneys in the Central District of California and the District of Massachusetts are also investigating Insys Therapeutics Inc.

Shady Gifts and Services

The buck doesn’t stop there either. It wasn’t just cash gifts for unethical practices. Insys Therapeutics wanted their partners in crime to get the full effect of their illicit activities.

The company would send its own employees to work in doctor’s offices when the physician prescribed their fentanyl fuming drug to patients. They even hired the relatives of health care providers as a favor to the family for their loyalty to Subsys.

Insurance Fraud

They allegedly even set up a portion of their staff to defraud insurance companies by calling to speak with insurance representatives while posing as doctors. Some allegations state they were even misrepresenting a patients diagnosis to inflate drug sales.

A December of 2016 indictment states that Insys actively worked to defraud insurance companies by setting up the “reimbursement unit” dedicated to obtaining prior authorization from insurers and pharmacy benefit managers.

Other Insys Therapeutics Exes

Kapoor stepped down as chief executive in January. However, he is definitely not the only former Insys Therapeutics executive currently under fire. This is just the tip of a very rocky ice-berg. The indictment from 2016 included:

  1. Michael L. Babich

Former CEO and President of the company from Scottsdale, Arizona

  1. Alec Burlakoff

Former Vice President of Sales from Charlotte, North Carolina

  1. Richard M. Simon

Former National Director of Sales from Seal Beach, California

  1. Sunrise Lee

Former Regional Sales Director from Bryant City, Michigan

  1. Joseph A. Rowan

Former Regional Sales Director from Panama City, Florida

  1. Michael J. Gurry

Former Vice President of Managed Markets from Scottsdale, Arizona

On January 5, 2017, all of these defendants appeared in federal court for their initial appearance and arraignment. Each has pled not guilty and been released on conditions approved by the court.  A Status Conference hearing followed on September 12, 2017 that is the first of many to be held over several months. That day Massachusetts federal judge set a trial date for October 15, 2018, for the 6 executives.

For now, we have to wait and see if any of the dirty laundries from these alleged white-collar criminals come out in the wash.

Holding Big Pharma Accountable

For a long time, Big Pharma companies have been using unlawful and corrupt tactics for marketing and distribution, which many now see has brought with it some great devastation to communities across the nation. Now, during an opioid crisis that has claimed tens of thousands of lives a year, for several years, these discretions are finally catching up to those accused of corporate greed. The DEA, FBI and Justice Department, along with several state officials and district attorneys, are now aggressively pursuing charges against Big Pharma operators who have a connection to some of the most dangerous and widely abused narcotics on the market.

The acting U.S. Attorney William D. Weinreb said in a statement,

“In the midst of a nationwide opioid epidemic that has reached crisis proportions, Mr. Kapoor and his company stand accused of bribing doctors to overprescribe a potent opioid and committing fraud on insurance companies solely for profit.

“Today’s arrest and charges reflect our ongoing efforts to attack the opioid crisis from all angles,”

Kapoor was arrested in Arizona and his indictment was filed in federal court in Boston. Prosecutors say the charge of conspiracy to violate the anti-kickback law carries the possibility of up to five years in prison. However, the charges of conspiracy to commit racketeering and conspiracy to commit mail and wire fraud each carry a maximum sentence of up to 20 years in prison. Needless to say, Mr. Kapoor is in for a fight.

But many are still wondering if these executives will truly be held accountable? And truthfully, is it even enough at this point? Even if proven to be indirectly contributing to the opioid epidemic, how could anyone ever know how many lives were damaged or lost because the powerful played around with lethal prescription drugs to line their pockets?

For more important information on the dangers of prescription drugs, download our FREE E-BOOK “Big Secrets of Big Pharma: Why They Secretly Hope You Get Hooked”

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With recent reports showing that approximately 64,000 Americans died last year from drug overdose, and an estimated 20,100 overdose deaths linked to synthetic opioids like fentanyl, how many of those lives were impacted by drugs like Subsys being forced onto the market with bribes?

More needs to be done to stop Big Pharma companies like Insys Therapeutics Inc from exploiting the system and putting the lives of millions of Americans at risk. And not just the middle-men should be accountable, but also those sitting comfortably at the top these industries. At least this is a start. But for the individual, it all starts with taking action. Getting safe and effective treatment can not just save a life, but help someone build a foundation for a better one. If you or someone you love is struggling, please call toll-free now. We want to help. 

 CALL NOW 1-888-922-5398

Will China Help the US Fight the Fentanyl Outbreak in America?

Will China Help the U.S. Fight the Fentanyl Outbreak in America?

Every day the opioid epidemic continues to create more suffering and struggle across the country. In every state there are people scrambling for a way out, with politicians and citizens staggering to keep up with growing death rates and the damage to their communities. With America fighting desperately to get ahead of the outbreak officials are looking to China, where most of the illicit synthetic opioids are coming from, for some help putting an end to the flow of the fentanyl outbreak.

The American Fentanyl Outbreak

Subsequently, the continual rise of illicit and lethal fentanyl being blended into the underground market of opioids has instigated higher than ever death tolls. Government officials found themselves in increasingly desperate times last summer when the DEA warned the public that counterfeit pill pressers were distributing the potent fentanyl drug disguised as prescription painkillers. This cost countless users unaware of the drugs presence or its danger their lives, and continues to do so today.

At the time, the agency said that fentanyl disguised as prescription pills has become a consistent trend, not a series of isolated incidents or freak accidents.

Drug dealers could reportedly make millions from selling pills. But many decided they could easily boost their profits by making pills at home. All they would need were:

  • Pill press
  • Dyes
  • Stamps
  • Binding agents

With enterprising ingenuity drug dealers could easily make fentanyl resemble other less potent and more popular drugs of abuse, such as the prescription opioid oxycodone or even anti-anxiety pills.

Once this drug became a go-to ingredient for dealers to cut their product, be it heroin or prescription pills, the fentanyl outbreak spread like wildfire. There is no telling as of now how many overdoses alone have been caused by fentanyl, not to mention how many deaths.

China Market for Synthetic Opioids

China has been singled out as the main source of synthetic drugs like fentanyl. Through the internet drug dealers can purchase fentanyl from websites hosted in China and have shipments sent to the United States, making the same package handlers that deliver your mail in the morning secret drug traffickers.

According to data from US Customs and Border Protection (CBP), seizures of fentanyl arriving by mail have increased drastically:

  • In 2011, 0.09 kilograms of fentanyl were seized by mail
  • In 2016 is rose to 37 kilograms

America definitely knows what kind of damage the dark web drug trade can do. We have seen it right here with Dread Pirate Robets and the Silk Road story. Having to try and disrupt the flow of drugs coming from another country puts officials in a tough spot.

China and U.S. Team Up

Officials in the US are bracing for the threat of what they call the “next wave” of the opioid crisis. Experts looking at the current trend believe with conviction that things will inevitably get worse before they get better. However, not everyone is as concerned about the future of the fentanyl outbreak.

Team U.S.A.

Enter Tom Price, Secretary of the Department of Health and Human Services, who insists he is optimistic about the China’s efforts to team up with the United States in the fight against the fentanyl outbreak.

Price knows that both the U.S. and China are struggling to keep up with what he calls the-

“- rapidly changing ability of individuals to formulate new chemical makeups that are a different drug and that aren’t in the controlled arena.”

Regarding synthetic drugs this is the same hurdle law enforcement and government officials have come up against for years. Manufacturers continually rename products and slightly alter the chemical make-up in order to slip through loop-holes of legality.

For example, the drug U-47700 (also known as “Pink”) is designed to mimic the effects of controlled substances. However, these counterfeit chemists twist the chemical structure of the compound. This makes it more possible for illegal drug makers to skirt drug laws and drug tests.

The same thing has happened over and over with synthetic marijuana products in America, like K2 and Spice.

Fentanyl has become more relevant than ever.

  • In June the DEA reported a seizure of 44.14 kilograms (which comes out to 14 million doses) of fentanyl in San Diego County, California
  • Weeks ago Arizona law enforcement seized 30,000 fentanyl pills that were made to look like oxycodone

Team China

Chinese officials have also stated that facing the fentanyl outbreak they have dealt with many difficulties. This past June, Yu Haibin of China’s narcotics control agency stated:

“My feeling is that it’s just like a race and I will never catch up with the criminals,”

Shortly afterwards on the 1st of July, China implemented a ban on four synthetic opioids, including:

  • U-47700
  • MT-45
  • PMMA
  • 4,4’-DMAR

The head of the US Department of Health and Human Services stated,

“When a particular drug is identified as being a problem, China has been an incredible partner in helping to stop the production of drugs like fentanyl in China,”

Price says he is also confident that China will play an important part in fighting the rise of carfentanil, a drug so potent it is used as an elephant tranquilizer.

Both nations have found it hard to keep up with everything the illicit drug makers are up to. If anything they can agree it is a very real problem and it must be taken seriously. While the opioid epidemic in America has yet to show any sign of slowing down, some officials are optimistic that at the very least we may soon see some decline in the more deadly elements that have been slipped into the market.

The bad batches drug users run the risk of getting has increased exponentially over time. Plenty have already died as a result. Thankfully, the crisis has brought together communities, political rivals and even foreign countries to fight the spreading threat together. Beyond prevention, a vital part of fighting this fight is effective and long lasting recovery. If you or someone you love is struggling, please call toll-free now.

 CALL NOW 1-888-922-5398

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