Document ID: FDA-2020-N-1337-0003
Agency: fda
Document Type: Notice
Title: John Kapoor: Final Debarment Order
Posted Date: 2020-11-30T05:00Z

[Federal Register Volume 85, Number 230 (Monday, November 30, 2020)]
[Notices]
[Pages 76581-76582]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26262]

-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2020-N-1337]

John Kapoor: Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA or Agency) is issuing an 
order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) 
permanently debarring John Kapoor from providing services in any 
capacity to a person that has an approved or pending drug product 
application. FDA bases this order on a finding that John Kapoor was 
convicted of a felony under Federal law for conduct that relates to the 
regulation of a drug product under the FD&C Act. John Kapoor was given 
notice of the proposed permanent debarment and an opportunity to 
request a hearing to show why he should not be debarred. Mr. Kapoor, 
through counsel, submitted a letter to FDA, which commented on some of 
the factual circumstances surrounding the case. In the letter, he also 
stated that he did not intend to request a hearing nor, however, would 
he acquiesce to debarment. As of August 26, 2020 (30 days after receipt 
of the notice), Mr. Kapoor has not requested a hearing. His failure to 
request a hearing constitutes a waiver of his right to a hearing 
concerning this action.

DATES: This order is applicable November 30, 2020.

ADDRESSES: Submit applications for special termination of debarment to 
the Dockets Management Staff (HFA-305), Food and Drug Administration, 
5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500, or 
https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Jaime Espinosa, (ELEM-4029) Division 
of Enforcement, Office of Strategic Planning and Operational Policy, 
Office of Regulatory Affairs, Food and Drug Administration, 12420 
Parklawn Dr., Rockville, MD 20857, debarments@fda.hhs.gov, 240-402-
8743.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 306(a)(2)(B) of the FD&C Act (21 U.S.C. 335a(a)(2)(B)) 
requires debarment of an individual from providing services in any 
capacity to a person that has an approved or pending drug product 
application if FDA finds that the individual has been convicted of a 
felony under Federal law for conduct relating to the regulation of any 
drug product under the FD&C Act. On January 23, 2020, Mr. Kapoor was 
convicted as defined in section 306(l)(1) of the FD&C Act when judgment 
was entered against him in the U.S. District Court for the District of 
Massachusetts, after a jury verdict, to one count of Racketeering 
Conspiracy in violation of 18 U.S.C. 1962(d). The pattern of 
racketeering activity he was convicted of included engaging in multiple 
acts of mail fraud (18 U.S.C. 1341) and wire fraud (18 U.S.C. 1343).
    The factual basis for this conviction is as follows: Mr. Kapoor was 
the founder and majority owner of Insys Therapeutics Inc. (Insys), a 
Delaware Corporation, with headquarters in Chandler, Arizona. In 
addition, he held executive management positions at Insys, including 
Executive Chairman of the Board of Directors and, for a time,

[[Page 76582]]

Chief Executive Officer (CEO). Insys developed and owned a drug called 
SUBSYS, a liquid formulation of fentanyl to be applied under the 
tongue. FDA approved SUBSYS for the management of breakthrough pain in 
adult cancer patients who are already receiving and are already 
tolerant to opioid therapy for their underlying persistent cancer pain. 
From 2012 and continuing through 2015, Mr. Kapoor oversaw a conspiracy 
whereby employees of Insys bribed medical practitioners in various 
states to get those practitioners to increase prescribing SUBSYS to 
their patients. Mr. Kapoor, along with his co-conspirators, measured 
the effect of these bribes on each practitioner's prescribing habits 
and on the revenue that each bribed practitioner generated for Insys. 
Mr. Kapoor, along with his co-conspirators, reduced or eliminated 
bribes paid to those practitioners who failed to meet the minimum 
prescription requirements or failed to generate enough revenue to 
justify additional bribes.
    To further this conspiracy, Mr. Kapoor oversaw a scheme whereby 
Insys executives conspired to mislead and defraud health insurance 
providers to ensure those providers approved payment for SUBSYS. Insys 
achieved this goal by establishing the ``Insys Reimbursement Center,'' 
which was designed to shift the burden of seeking prior authorization 
for SUBSYS from practitioners to Insys. This allowed Insys to determine 
what medical information was presented to insurers. Mr. Kapoor and his 
co-conspirators directed Insys employees to mislead insurers to obtain 
payment authorization.
    As a result of this conviction, FDA sent Mr. Kapoor by certified 
mail on July 16, 2020, a notice proposing to permanently debar him from 
providing services in any capacity to a person that has an approved or 
pending drug product application. The proposal was based on a finding, 
under section 306(a)(2)(B) of the FD&C Act, that Mr. Kapoor was 
convicted of a felony under Federal law for conduct relating to the 
regulation of a drug product under the FD&C Act. The proposal also 
offered Mr. Kapoor an opportunity to request a hearing, providing him 
30 days from the date of receipt of the letter in which to file the 
request, and advised him that failure to request a hearing constituted 
an election not to use the opportunity for a hearing and a waiver of 
any contentions concerning this action. Mr. Kapoor received the 
proposal on July 27, 2020. Mr. Kapoor, through counsel, submitted a 
letter to FDA dated August 12, 2020, which commented on some of the 
factual circumstances surrounding the case. In the letter, he also 
stated that he did not intend to request a hearing nor, however, would 
he acquiesce to debarment. Since he did not request a hearing within 
the timeframe prescribed by regulation, Mr. Kapoor has waived his 
opportunity for a hearing and any contentions concerning his debarment 
(21 CFR part 12).

II. Findings and Order

    Therefore, the Assistant Commissioner, Office of Human and Animal 
Food Operations, under section 306(a)(2)(B) of the FD&C Act, under 
authority delegated to the Assistant Commissioner, finds that Mr. 
Kapoor has been convicted of a felony under Federal law for conduct 
otherwise relating to the regulation of a drug product under the FD&C 
Act.
    As a result of the foregoing finding, Mr. Kapoor, is permanently 
debarred from providing services in any capacity to a person with an 
approved or pending drug product application, effective (see DATES) 
(see sections 306(a)(2)(B) and (c)(2)(A)(ii) of the FD&C Act). Any 
person with an approved or pending drug product application who 
knowingly employs or retains as a consultant or contractor, or 
otherwise uses the services of Mr. Kapoor, in any capacity during his 
debarment, will be subject to civil money penalties (section 307(a)(6) 
of the FD&C Act (21 U.S.C. 335b(a)(6))). If Mr. Kapoor provides 
services in any capacity to a person with an approved or pending drug 
product application during his period of debarment, he will be subject 
to civil money penalties (section 307(a)(7) of the FD&C Act). In 
addition, FDA will not accept or review any abbreviated new drug 
application from Mr. Kapoor during his period of debarment, other than 
in connection with an audit under section 306 of the FD&C Act (section 
306(c)(1)(B) of the FD&C Act). Note that, for purposes of section 306 
of the FD&C Act, a ``drug product'' is defined as a drug subject to 
regulation under section 505, 512, or 802 of the FD&C Act (21 U.S.C. 
355, 360b, or 382) or under section 351 of the Public Health Service 
Act (42 U.S.C. 262) (see section 201(dd) of the FD&C Act (21 U.S.C. 
321(dd))).
    Any application by Mr. Kapoor for special termination of debarment 
under section 306(d)(4) of the FD&C Act should be identified with 
Docket No. FDA-2020-N-1337 and sent to the Dockets Management Staff 
(see ADDRESSES). The public availability of information in these 
submissions is governed by 21 CFR 10.20.
    Publicly available submissions will be placed in the docket and 
will be viewable at https://www.regulations.gov or at the Dockets 
Management Staff (see ADDRESSES) between 9 a.m. and 4 p.m., Monday 
through Friday, 240-402-7500.

    Dated: November 23, 2020.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2020-26262 Filed 11-27-20; 8:45 am]
BILLING CODE 4164-01-P