Health Care

Founder of opioid company tied to Overland Park doctor faces federal charges

Why it’s so hard to break an opioid addiction

More than half a million people died between 2000 and 2015 from opioids. Today, opioid deaths are considered an epidemic.
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More than half a million people died between 2000 and 2015 from opioids. Today, opioid deaths are considered an epidemic.

U.S. prosecutors brought a fraud and racketeering case Thursday against the founder of an opioid medication maker that has faced increasing scrutiny over allegations of pushing prescriptions of powerful painkillers.

The charges against Insys Therapeutics founder John Kapoor came the same day President Donald Trump declared the opioid crisis a nationwide public health emergency.

The case naming Kapoor follows indictments against the company’s former CEO and other executives and managers on allegations that they provided kickbacks to doctors to prescribe a potent opioid called Subsys.

In July, FBI agents seized patient records of Overland Park physician Steven Simon, a top-paid speaker for Subsys and Kansas’ most prolific prescriber of the drug, according to several years of Medicare Part D data.

The FBI said only that it had a “lawful presence” at Simon’s clinic that day, but the clinic’s owner, Srinivas Nalamachu, said agents executed a search warrant for the records of all the patients to whom Simon prescribed oral fentanyl products, including Subsys.

Insys Therapeutics, an Arizona-based company that produces an opioid spray, said in 2017 the U.S. attorney's office in Kansas sent it a subpoena as part of ongoing investigations. The company's leaders were indicted in December 2016.

Bridget Patton, a spokeswoman for the FBI’s Kansas City branch, said Thursday the office “would not have any additional information” following Kapoor’s indictment.

Simon is not named in any of the indictments. But he is a defendant in two lawsuits brought by Johnson County residents and former patients who accuse him of pushing Subsys on them as part of the larger kickback scheme. The suits also name as defendants Insys and several other companies involved in making and distributing Subsys.

Simon did not respond to an email Thursday seeking comment on Kapoor’s indictment.

Thursday’s indictment accuses Kapoor, 74, of Phoenix, and the other defendants of offering bribes to doctors to write large numbers of prescriptions for Subsys, a fentanyl-based pain medication that is meant only for cancer patients with severe pain. Most of the people who received prescriptions did not have cancer.

It also alleges that they conspired to mislead and defraud insurance providers who were reluctant to approve payment for the drug when it was prescribed for patients without cancer.

Several former Insys employees and health care providers have pleaded guilty to felony charges around the country, including in Alabama and Connecticut. A Rhode Island doctor pleaded guilty Wednesday to accepting kickbacks in return for prescribing the highly addictive fentanyl spray.

U.S. prosecutors in Boston brought the case against Kapoor as they vowed to go after problem opioid makers similar to how they target “cartels or a street-level drug dealer.”

“In the midst of a nationwide opioid epidemic that has reached crisis proportions, Mr. Kapoor and his company stand accused of bribing doctors to over-prescribe a potent opioid and committing fraud on insurance companies solely for profit,” said Acting U.S. Attorney William D. Weinreb in Boston. “Today’s arrest and charges reflect our ongoing efforts to attack the opioid crisis from all angles.”

Kapoor was arrested in Phoenix and was expected to make an appearance in federal court Thursday.

In an interview with the Star in June, Simon said he might have met Kapoor briefly at Insys speaker training meetings or Insys physician advisory board meetings. But he said all he knew about him was that his name was John and “he had another successful company and then started Insys.”

“When I went to the speaker training meetings and the ad board meetings, sure I met the people who were there,” Simon said. “But other than meeting them there was no interaction with them other then saying hello and so forth and meeting them. Them saying hello and me saying hello and so forth.”

Andy Marso: 816-234-4055, @andymarso