A former pharmaceutical executive will pay New Jersey $5 million to settle a lawsuit that claimed his company bribed health care professionals to write improper prescriptions for a powerful opioid, state authorities said Thursday.
John N. Kapoor, 77, of Phoenix, Arizona, was already sentenced last January to more than five years in federal prison for his role in fueling the nation’s opioid crisis.
Now he will also make two payments to New Jersey — a lump sum of $1 million followed by another of $4 million — to settle allegations that he directed and approved a campaign that fraudulently marketed the sublingual fentanyl spray Subsys, which is 50 times stronger than heroin.
“With today’s settlement, we’ve recovered a substantial sum from one individual who used his perch in a corporate board room to sell addictive drugs through bribes and fraud,” state Attorney General Gurbir Grewal said in a statement. “We are looking forward to additional recoveries from other opioid manufacturers and distributors, who also are responsible for helping New Jersey overcome and heal from the epidemic they unleashed.”
It’s the first settlement in any of the state’s lawsuits against corporations and executives who allegedly manufactured and fraudulently marketed opioids, Grewal said. But it does not resolve New Jersey’s claim against Kapoor’s company, Insys Therapeutics, which has declared bankruptcy and intends to liquidate.
Most of the money will help fund New Jersey’s effort to fight the opioid epidemic, Grewal said. Some will reimburse the state for the cost of the lawsuit or be split among the agencies affected by Kapoor’s alleged scheme.
The state’s 2017 complaint claimed Kapoor orchestrated a fraudulent marketing plan to boost Subsys’ sales in New Jersey and elsewhere.
The U.S. Food and Drug Administration approved the drug only for narrow use, but Kapoor directed a plan to lie to insurance carriers and benefits managers about patients’ diagnoses and treatment histories to secure unwarranted prescriptions, Grewal said.
The company also bribed health care professionals to write Subsys prescriptions at higher doses than necessary, Grewal said.
This led to a flood of Subsys subscriptions, many of which resulted in payments from state health care and workers’ compensation programs.
A federal jury in Boston later convicted Kapoor and four other company executives of racketeering in connection with the plot.
The state settlement bans Kapoor from managing, owning or leading any business in New Jersey, or from owning more than 10% stock in any corporation doing business in the state.
“We cannot begin to measure the pain and suffering caused by John Kapoor’s callous greed, but we know it will plague our communities for years to come,” said Sharon M. Joyce, director of the Office of the New Jersey Coordinator for Addiction Responses and Enforcement Strategies. “This settlement rightly makes him responsible for providing financial resources needed to combat the long-lasting and destructive ripple effects of his unlawful actions.”