Feds charge Insys' billionaire founder John Kapoor in Subsys probe

Authorities charged Insys Therapeutics' founder John Kapoor with several felonies relating to the Subsys promotional probe.

Following last year's arrests of six top Insys Therapeutics execs, authorities have now made their way to founder and billionaire John Kapoor. On Thursday, federal agents arrested 74-year-old Kapoor in Phoenix, Arizona, and charged him with racketeering and other felonies.  

John Kapoor

The charges stem from an investigation into Insys' promotion of Subsys, a powerful painkiller that's FDA-approved to treat breakthrough pain from cancer. Over the last several years, the company has come under increasing scrutiny for its off-label promotions, for compensating doctors to write scripts and for an in-house "reimbursement team" designed to secure coverage from insurers. 

Aside from racketeering, the feds charged Kapoor with conspiracy to commit mail and wire fraud and conspiracy to violate the Anti-Kickback Law, according to a Thursday release. Two of the charges carry potential punishments of up to 20 years in prison. Kapoor joins former CEO Michael Babich and other top execs to face charges relating to the scheme; authorities arrested that group in December. 

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“As alleged, these executives created a corporate culture at Insys that utilized deception and bribery as an acceptable business practice, deceiving patients, and conspiring with doctors and insurers,” FBI official Harold H. Shaw said in a statement. He added that the arrests "mark an important step in holding pharmaceutical executives responsible for their part in the opioid crisis." 

The company is no stranger to scrutiny and has weathered the Subsys investigation for several years. Over time, authorities arrested lower-level employees as they built a case against management. 

RELATED: Insys-paid physician faces loss of license as New Jersey aims to curb pharma's doctor payments 

Now, Insys has new leadership and is working to improve its image in the face of nonstop headlines about the investigation. Kapoor's arrest comes at a time when the opioid and addiction epidemic has grown into a nationwide crisis, prompting action at the top levels of government and industry to stem its tide. 

The Insys founder is worth about $1.8 billion, according to Forbes. The FBI, HHS, DEA, FDA and other organizations worked together on the investigation, according to the release.