The drug manufacturer Insys indicates that costs associated with opioid litigation may drive the company into bankruptcy, following federal investigations into years of illegal sales tactics involving the widely abused painkiller Subsys.
The company has been under investigation by the Department of Justice since 2013, as a result of marketing practices involving Subsys, which was supposed to have limited use, but ended up breaking $100 million in sales and helping fuel the nationwide opioid abuse crisis in the U.S.
Following convictions of several company officials and years of investigations, Insys agreed to a $150 million settlement to resolve the Justice Department’s complaints. However, the company indicated that as of May 10, it only had $87.6 million in liquid assets and may need to file for bankruptcy.
The announcement sent the company’s stocks to below $1 per share. At their peak, in 2000, Insys’s stocks sold at $641.95 per share.
Subsys is a fentanyl-based pain killer delivered in the form of a spray, which is 100 times more potent than heroin. It was approved by the FDA in 2012 under the agreement that it should be prescribed by oncologists and pain specialists for cancer patients, and that those doctors undergo special training as part of a Subsys Risk Evaluation and Mitigation Strategy (REMS).
Despite that restriction, sales increased 270% in one year, and it appeared that only one percent of Subsys prescriptions were being made by oncologists. Half of the prescriptions appeared to come from doctors, dentists and even podiatrists who were prescribing the drug “off-label.”
The federal government investigators determined the company was illegally marketing the drug, even bribing some doctors to prescribe it to their patients, despite the fact that overdoses can occur easily and can be life-threatening.
Earlier this month, the founder of Insys, John Kapoor, was found guilty of racketeering conspiracy by a federal jury in Boston, along with four other company executives. It is the first time a CEO has been convicted of crimes related to the opioid crisis, according to a number of reports.
“These executives exploited vulnerable patients and cashed in on dishonest doctors by bribing them to prescribe one of the most powerful, addictive opioid painkillers to patients who should never have received it. Motivated by sheer greed, they lied to insurance companies and are no better than street level drug dealers,” Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division, said in a Justice Department press release. “Today’s verdict marks an important step in holding pharmaceutical company executives responsible for their role in fueling the opioid epidemic.
In addition to the Justice Department charges, Insys faces a number of personal injury and wrongful death lawsuits. It is expected that the number of Subsys lawsuits will continue to grow as more patients file claims and as several additional investigations underway by a number of states and the government continue.