Wracked by opioid scandal, drug maker Insys files for bankruptcy

Wracked by opioid scandal, drug maker Insys files for bankruptcy

Drugmaker Insys Therapeutics filed for bankruptcy protection Monday, June 10, citing mounting expenses, just days after the company agreed to pay $225 million to settle civil and criminal investigations with the US Justice Department.

At a hearing in Wilmington, U.S. Bankruptcy Judge Kevin Gross approved various "first day" motions so Insys can continue operations as it seeks a buyer for its assets, including its two commercially marketed drugs: the opioid Subsys and Syndros, which treats nausea and appetite loss. Kapoor was convicted for bribing doctors through monetary and sexual courtesies to prescribe the highly addictive drug to patients by the thousands, even those who had no sign of cancer.

The settlements came a month after a jury found Insys founder John Kapoor and four other former executives and managers guilty of bribing doctors and misleading insurance companies. In most instances, the programs were shams. As the opioid epidemic heats up and gains more attention, more drug companies may succumb to bankruptcy in the near future, according to a report by NPR. These events were hosted by medical practitioners who were being paid by the company. Former Insys employees also testified that the company hired a former stripper to give a lap dance to a doctor the company was wooing.

The Defense Department said they remain concerned about services personnel and their families suffering in the fallout of the opioid crisis.

According to the Centers for Disease Control and Prevention, nearly 400,000 people in the USA died from overdoses involving prescription or illicit opioids over the past two decades. Still, no pharmaceutical executive has been convicted on a criminal count.

Insys now markets just one product, according to an August filing with the Securities and Exchange Commission: a sublingual fentanyl spray it calls Subsys.

Fentanyl is a synthetic opioid significantly more potent than heroin that can cause overdoses, especially when it's used to cut the supply of illegally sourced drugs.

"The Company does not intend to appeal the determination and, therefore, it is expected that the Company's securities will be delisted", Insys officials wrote.

According to Boston's US Attorney's Office-which filed charging documents against Insys-the company will still be on the hook for a $28 million forfeiture that was part of the $225 million deal. It will also pay $195 million to settle several whisteblower lawsuits accusing it of violating the False Claims Act.

Related Articles