An Arizona billionaire was arrested Thursday and charged with leading a conspiracy to profit from an opioid narcotic.
John Kapoor, 74, the founder of opioid pharmaceutical producer Insys Therapeutics (INSY) and the sixth richest man in Arizona with a net worth of $2.1 billion, was charged with the illegal distribution of a fentanyl spray and with violating anti-kickback laws, according to the U.S. Attorney's Office in Boston.
Kapoor's scheme allegedly included bribing doctors into over-prescribing a painkiller intended only for cancer patients.
Most of the patients who were prescribed the fentanyl-based painkiller called Subsys – intended only for cancer patients – did not have cancer, authorities said.
The drug is reportedly 80 times stronger than morphine, the Arizona Republic reported.
"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," 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."
The success of the drug made Insys one of Arizona’s most profitable companies, but the stocks have plummeted since the investigation began and since Kapoor was arrested. Shares plunged by more than 20 percent on Thursday's news.
The indictment against Kapoor follows the Wednesday news that a Rhode Island doctor had pleaded guilty to participating in a bribery scheme in exchange for prescribing an Insys opioid drug.
Dr. Jerrold Rosenberg reportedly received $188,000 in kickbacks from Insys in the form of speaking fees, influencing Rosenberg's decisions to prescribe Subsys to his patients, Reuters reported.
Last December, former Insys CEO Michael L. Babich and five other former executives and managers of th company were arrested and indicted on similar charges.
An Insys spokesperson said the company is now under new management and has taken steps to avoid repeating past mistakes.
"We also continue to work with relevant authorities to resolve issues related to the misdeeds of former employees," a company statement said.
The Associated Press contributed to this report.