Arizona-Based Opioid Maker Insys Therapeutics May Seek Chapter 11 Bankruptcy Protection
Opioid-maker Insys Therapeutics is warning it may file for Chapter 11 bankruptcy protection. The announcement may mark an end to the drugmaker.
Shares of Insys Therapeutics plummeted Monday after the announcement, down almost three-quarters of its market value in less than one day.
Insys founder John Kapoor and four former executives of the Chandler-based drug company were convicted in early May of racketeering and other crimes in a fentanyl bribery case that federal prosecutors say helped fuel the U.S. opioid epidemic.
Legal costs totaled tens of millions of dollars. Now, Insys says it may not be able to complete its $150 million settlement with the U.S. Justice Department. Company principals also say Insys may not be able to continue to stay in business.
The Department of Justice's case began in 2018, when five lawsuits accused Insys Therapeutics Inc., of violating the False Claims Act in connection with the marketing of Subsys, an opioid painkiller manufactured and sold by the company.
Subsys is an under-the-tongue spray form of fentanyl, a powerful, but highly addictive, opioid painkiller. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving, and tolerant to, around-the-clock opioid therapy.
Insys was convicted of paying kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients in cases where pain was not extreme, did not fit the category of "breakthrough" pain and in some cases where cancer did not appear to be present.
Many of these kickbacks took the form of speaker program payments for speeches to physicians that were, in fact, shams; jobs for the prescribers’ relatives and friends; and lavish meals and entertainment.
Insys employees lied to insurers about patients’ diagnoses in order to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries.