The New York Times can confirm that Insys Therapeutics billionaire founder was arrested on charges that he had participated in a scheme that sought to bribe doctors. It was also confirmed that the scheme involved the drug referred to as fentanyl painkiller that is used by cancer patients. In a lawsuit that was filed in Federal District Court in Boston, John Kapoor was indicted on three charges that include wire fraud, mail fraud as well as conspiracy to commit racketeering. However, it has been reported that he was arrested in Arizona where Insys Therapeutics has its headquarters. The prosecutors said that they had added other defendants to the case. These are six former managers and executives of the company. One of these individuals is Michael Babich who happens to be the former chief executive of the company. However, Mr. Kappor issued a statement through his lawyer Brian Kelly saying that he was innocent. He further said that he had the intention of fighting these dubious allegations vigorously. For the past few months, Insys Therapeutics has been holding talks with the Department of justice about reaching an agreement and settlement regarding the case. Following the arrest of the chief executive, the stocks of the company fell to an all-time low in four years closing the day at a loss of 22.64 percent.
These charges go beyond the cancer drug. Justice Department officials are also investigating another drug used for the tongue from the company that is said to be highly addictive. This comes after President Trump declared the opioid crisis in America as a public health emergency. According to the United States Attorney for the District of Massachusetts William D. Weinreb, he mentioned that part of the charges have been brought up from the desire to fight the opioid problem in America. In 2015 alone, opioid overdoses resulted in the death of 33,000 Americans. This is according to statistics that were provided by the Centers for Disease Control and Prevention. The district attorney further mentioned the importance of holding the leadership of the health industry accountable. Mr. Kapoor has been a member of the board of the company that he established in 2002. He has been the chief executive of the company since November 2015. Beyond Insys Therapeutics, he also serves as the Akorn Inc. as their chairman. He is also the president of another investment company that specializes in the health industry known as EJ Financial Enterprises.