A month after a Boston jury convicted the billionaire founder of Insys Therapeutics of racketeering and conspiracy, Insys announced it had reached a $225 million settlement agreement to resolve charges brought by the U.S. Department of Justice (DOJ) over claims that the pharmaceutical company bribed doctors to prescribe its potent and highly addictive opioid spray Subsys.
The settlement requires Insys pay $2 million in criminal fines and forfeit $28 million in cash. The company will also pay $195 million to resolve whistleblower claims. Insys will also plead guilty to five counts of mail fraud.
“For years, Insys has engaged in prolonged, illegal conduct that prioritized its profits over the health of the thousands of patients who relied on it,” said Massachusetts U.S. Attorney Andrew E. Lelling. “Today the company is being held responsible for that and for its role in fueling the opioid epidemic.”
Last month, Insys announced it had only $87.6 million in cash and nearly three times that amount in liabilities after the first quarter, and dangled the possibility to its investors of filing for Chapter 11 bankruptcy.
Meanwhile, Insys founder John Kapoor is awaiting sentencing following a criminal conviction last month. Four former Insys managers convicted of racketeering will also be sentenced later this year. Each faces up to 20 years in prison for pushing sales of the potent fentanyl spray by bribing doctors with money and lap dances to prescribe higher quantities and doses of Subsys and deceiving insurance companies into paying for the drugs.
Kapoor is the first CEO of a drug company to face significant prison time for fueling the nation’s opioid epidemic.