Indian-American billionaire charged with pharma fraud
An Indian-American pharmaceutical billionaire was on Friday charged with leading a nationwide conspiracy in the US by bribing doctors to over-prescribe a potent opioid to patients and committing fraud on insurance firms for profit.
John Nath Kapoor, 74, was arrested by the FBI from his home in Arizona on several charges including racketeering, conspiracy and fraud.
The Amritsar-born entrepreneur and well known philanthropist, who migrated to the US from India in 1960s, is a current member of the Board of Directors of the pharmaceutical company Insys Therapeutics.
A superseding indictment, unsealed in Boston, also includes additional allegations against several former company executives and managers who were initially indicted in December 2016.
More than 20,000 Americans died of synthetic opioid overdoses last year, and millions are addicted to opioids. And yet some medical professionals would rather take advantage of the addicts than try to help them," said Attorney General Jeff Sessions.
"This Justice Department will not tolerate this. We will hold accountable anyone – from street dealers to corporate executives - who illegally contributes to this nationwide epidemic," Sessions said.
The indictment also alleges that Kapoor and six former executives 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 achieved this goal by setting up the "reimbursement unit", which was dedicated to obtaining prior authorisation directly from insurers and pharmacy benefit managers, it said.
"In the midst of a nationwide opioid epidemic that has reached crisis proportions, 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 US Attorney William D Weinreb.
According to Insys website, Kapoor received his PhD in Medicinal Chemistry from the State University of New York at Buffalo and a BS in Pharmacy from Bombay University in India.
The building that is home to University of Buffallo's School of Pharmacy and Pharmaceutical Sciences bears the name of Kapoor and his wife in recognition of their long-time philanthropic support for the school and the university.
According to Forbes, Kapoor’s net worth is estimated to be USD 1.75 billion. He had stepped down as CEO and chairman of the company in January 2017, a month after six of its former executives including Kapoor's predecessor as CEO Michael Babich were arrested and charged with conspiracies to bribe doctors to needlessly subscribe Subsys, which is a Fentanyl spray to treat patients with severe cancer pain, Forbes said.