New Jersey Attorney General Christopher Porrino

The New Jersey Attorney General's Office has targeted the founder of a pharmaceutical company that makes and sells a fentanyl-based opioids as an individual defendant in a lawsuit alleging that he and his former company, Insys Therapeutics Inc., engaged in an illegal campaign to push sales of its drug, Subsys.

The announcement comes a day after the Insys founder, John Kapoor, pleaded not guilty in a federal court in Boston to charges that he led a conspiracy involving doctors to overprescribe the painkiller.

Insys and now Kapoor are accused in the New Jersey civil complaint of endangering the public through a greed-driven, unlawful marketing campaign designed to exponentially increase sales of Subsys by making fraudulent claims and unlawfully incentivizing health care providers to prescribe Subsys to an inappropriately broad array of pain patients.

According to a release from the U.S. Attorney's Office for the District of Massachusetts, Kapoor, 74, and other Insys executives and managers have been charged by federal prosecutors in Massachusetts with offering kickbacks to doctors to write large numbers of prescriptions for the potent opioid, which is meant for cancer patients. Former CEO Michael L. Babich and others are set to go to trial next year and have pleaded not guilty.

The charges against Kapoor, who resigned as CEO, include racketeering conspiracy, mail fraud conspiracy and wire fraud conspiracy. The charges carry a sentence of up to 20 years in prison on conviction. Conspiracy to violate the anti-kickback laws calls for up to five years in prison.

Kapoor has been free on $1 million bail since he was arrested at his home in Arizona last month, according to a report yesterday by the New Jersey Herald.

Brian Kelly of Nixon Peabody in Boston, who represents Kapoor in the Massachusetts case, could not be reached by phone for comment.

Insys did not immediately respond to a call seeking comment on the amended civil suit.

New Jersey's amended complaint, filed in Superior Court in Middlesex County, says Kapoor publicly claimed in a Wall Street Journal article that he was “not involved in day-to-day operations” concerning Subsys and that he was merely “an investor” in the company. The complaint alleges those statements are contradicted by documentary evidence: In reality, Kapoor exercised “firm direction” and “close management” of the illegal push to have Subsys prescribed for patients with routine chronic pain, the state claims.

“This individual [Kapoor] founded Insys and for all intents and purposes ran the company. We reject the suggestion that he had only a hands-off, observer's role in the process of illegally expanding the off-label prescription market for his company's flagship drug Subsys. And, as our amended complaint filed today makes plain, we believe that available evidence suggests otherwise,” Attorney General Christopher Porrino said in a statement.

“We allege that Mr. Kapoor was firmly at the controls as Insys coldly set aside any concerns about addiction and death, and forged full-steam ahead with a campaign to have more doctors prescribe Subsys to more patients, and to have doctors who were already prescribing the drug prescribe higher doses,” Porrino added. “Naming him as a direct defendant credits his alleged role in a calculated scheme to drive profits at the expense of human life, and allows us to look beyond the corporate veil and obtain a judgment against Mr. Kapoor and his personal assets.”

The original complaint filed by the state last month alleges that Insys' conduct has put “hundreds” of lives in jeopardy and “led to the death of at least one New Jersey resident,” a 32-year-old Camden County woman, Sarah Fuller of Stratford, who allegedly was prescribed Subsys for fibromyalgia.

In addition, the suit alleges that two New Jersey state employee health benefit plans paid a total of approximately $10.3 million to reimburse Subsys prescriptions between 2012 and the third quarter of 2016, while the state workers' compensation program paid another $300,000.

Porrino at the time said Insys ”used every trick in the book, including sham speaking and consulting fees and other illegal kickbacks.”

The lawsuit includes three counts alleging violations of New Jersey's Consumer Fraud Act and one count alleging violations of the New Jersey False Claims Act. The suit asks that Insys and Kapoor be assessed maximum civil penalties for each violation of the CFA, and seeks trebled damages for violations of the FCA, per that statute. The suit also seeks to have Insys and Kapoor held responsible for costs and fees incurred by the state in bringing the case.

From the 2012 market launch of Subsys until the present, the drug has accounted for approximately 98 percent of net revenues for Insys, a Delaware corporation with headquarters in Chandler, Arizona, according to the suit. Insys, which has raised the price of Subsys every year since its launch, sold $74.2 million worth of the drug in New Jersey between 2012 and the third-quarter of 2016, the state says.

The state's complaint alleges that Insys's corporate decision-makers, led by Kapoor, devised a strategy to expand what they recognized as a limited market for Subsys by aggressively pushing “off label” uses of the drug, even to podiatrists and other specialty practitioners who typically would have little call to treat cancer patients or prescribe powerful Schedule II painkillers. Off-label use denotes use of a drug for purposes other than that for which it was approved by the FDA.

New Jersey Attorney General Christopher Porrino

The New Jersey Attorney General's Office has targeted the founder of a pharmaceutical company that makes and sells a fentanyl-based opioids as an individual defendant in a lawsuit alleging that he and his former company, Insys Therapeutics Inc., engaged in an illegal campaign to push sales of its drug, Subsys.

The announcement comes a day after the Insys founder, John Kapoor, pleaded not guilty in a federal court in Boston to charges that he led a conspiracy involving doctors to overprescribe the painkiller.

Insys and now Kapoor are accused in the New Jersey civil complaint of endangering the public through a greed-driven, unlawful marketing campaign designed to exponentially increase sales of Subsys by making fraudulent claims and unlawfully incentivizing health care providers to prescribe Subsys to an inappropriately broad array of pain patients.

According to a release from the U.S. Attorney's Office for the District of Massachusetts, Kapoor, 74, and other Insys executives and managers have been charged by federal prosecutors in Massachusetts with offering kickbacks to doctors to write large numbers of prescriptions for the potent opioid, which is meant for cancer patients. Former CEO Michael L. Babich and others are set to go to trial next year and have pleaded not guilty.

The charges against Kapoor, who resigned as CEO, include racketeering conspiracy, mail fraud conspiracy and wire fraud conspiracy. The charges carry a sentence of up to 20 years in prison on conviction. Conspiracy to violate the anti-kickback laws calls for up to five years in prison.

Kapoor has been free on $1 million bail since he was arrested at his home in Arizona last month, according to a report yesterday by the New Jersey Herald.

Brian Kelly of Nixon Peabody in Boston, who represents Kapoor in the Massachusetts case, could not be reached by phone for comment.

Insys did not immediately respond to a call seeking comment on the amended civil suit.

New Jersey's amended complaint, filed in Superior Court in Middlesex County, says Kapoor publicly claimed in a Wall Street Journal article that he was “not involved in day-to-day operations” concerning Subsys and that he was merely “an investor” in the company. The complaint alleges those statements are contradicted by documentary evidence: In reality, Kapoor exercised “firm direction” and “close management” of the illegal push to have Subsys prescribed for patients with routine chronic pain, the state claims.

“This individual [Kapoor] founded Insys and for all intents and purposes ran the company. We reject the suggestion that he had only a hands-off, observer's role in the process of illegally expanding the off-label prescription market for his company's flagship drug Subsys. And, as our amended complaint filed today makes plain, we believe that available evidence suggests otherwise,” Attorney General Christopher Porrino said in a statement.

“We allege that Mr. Kapoor was firmly at the controls as Insys coldly set aside any concerns about addiction and death, and forged full-steam ahead with a campaign to have more doctors prescribe Subsys to more patients, and to have doctors who were already prescribing the drug prescribe higher doses,” Porrino added. “Naming him as a direct defendant credits his alleged role in a calculated scheme to drive profits at the expense of human life, and allows us to look beyond the corporate veil and obtain a judgment against Mr. Kapoor and his personal assets.”

The original complaint filed by the state last month alleges that Insys' conduct has put “hundreds” of lives in jeopardy and “led to the death of at least one New Jersey resident,” a 32-year-old Camden County woman, Sarah Fuller of Stratford, who allegedly was prescribed Subsys for fibromyalgia.

In addition, the suit alleges that two New Jersey state employee health benefit plans paid a total of approximately $10.3 million to reimburse Subsys prescriptions between 2012 and the third quarter of 2016, while the state workers' compensation program paid another $300,000.

Porrino at the time said Insys ”used every trick in the book, including sham speaking and consulting fees and other illegal kickbacks.”

The lawsuit includes three counts alleging violations of New Jersey's Consumer Fraud Act and one count alleging violations of the New Jersey False Claims Act. The suit asks that Insys and Kapoor be assessed maximum civil penalties for each violation of the CFA, and seeks trebled damages for violations of the FCA, per that statute. The suit also seeks to have Insys and Kapoor held responsible for costs and fees incurred by the state in bringing the case.

From the 2012 market launch of Subsys until the present, the drug has accounted for approximately 98 percent of net revenues for Insys, a Delaware corporation with headquarters in Chandler, Arizona, according to the suit. Insys, which has raised the price of Subsys every year since its launch, sold $74.2 million worth of the drug in New Jersey between 2012 and the third-quarter of 2016, the state says.

The state's complaint alleges that Insys's corporate decision-makers, led by Kapoor, devised a strategy to expand what they recognized as a limited market for Subsys by aggressively pushing “off label” uses of the drug, even to podiatrists and other specialty practitioners who typically would have little call to treat cancer patients or prescribe powerful Schedule II painkillers. Off-label use denotes use of a drug for purposes other than that for which it was approved by the FDA.