Wednesday’s settlement follows last month’s conviction of five former Insys executives, including the company’s founder John Kapoor, for their involvement in bribing physicians to prescribe Subsys.
Subsys, which is approved to treat intense pain that cancer patients can experience, is extremely potent, considered to be roughly 50 to 100 times more powerful than morphine.
Insys, the government charges, constructed an elaborate scheme to convince doctors to prescribe the drug for other uses outside of cancer pain. In addition to the speaker’s program — for which Insys’ subsidiary acknowledged its criminal conduct in Wednesday’s deal — the parent company allegedly paid kickbacks to physicians and nurses, offering jobs for relatives and friends of providers willing to prescribe Subsys.
The Department of Justice also alleges Insys lied to insurers about patient diagnoses so as to receive reimbursement for prescriptions written for Medicare and Tricare beneficiaries.
The latter allegations stem from five whistleblower lawsuits that accused the company of violating the False Claims Act. By settling those civil charges, Insys will enter into a five-year corporate integrity agreement.
In May, the company disclosed that it may need to file for Chapter 11 bankruptcy due to dwindling cash reserves and a then estimated $240 million liability connected with proposed settlement with the government. Wednesday’s total of $225 million comes in below that forecasted sum.
“For years, Insys engaged in prolonged, illegal conduct that prioritized its profits over the health of the thousands of patients who relied on it,” said Andrew Lelling, U.S. Attorney for the District of Massachusetts, in a statement from the DOJ. “Today, the company is being held responsible for that and for its role in fueling the opioid epidemic.”
