Opioid Maker Agrees to Pay $225 Million to Settle Federal Probes

Opioid Maker Agrees to Pay $225 Million to Settle Federal Probes
Insys Therapeutics founder John Kapoor leaves federal court in Boston. On Jan. 30, 2019. (Steven Senne/AP Photo)

WASHINGTON—An opioid manufacturer has agreed to pay $225 million to resolve federal investigations into allegations that it paid kickbacks and used other illegal marketing tactics to sell a powerful fentanyl spray, authorities said Wednesday, June 11.

The settlement stems from criminal and civil probes into Insys Therapeutics Inc.’s scheme to pay doctors in exchange for prescriptions of the drug meant for cancer patients with severe pain.

It comes a month after Insys Founder John Kapoor and four other former executives of the Chandler, Arizona-based company were convicted of bribing doctors across the country to prescribe the drug known as Susbys.

“For years, Insys engaged in prolonged, illegal conduct that prioritized its profits over the health of the thousands of patients who relied on it,” Massachusetts U.S. Attorney Andrew Lelling said in an emailed statement. “Today, the company is being held responsible for that and for its role in fueling the opioid epidemic,” he said.

Representatives for Insys Therapeutics did not immediately respond to a request for comment.

Authorities have held Insys up as an example of their efforts to target those responsible for driving the drug crisis.

Opioid overdoses claimed nearly 400,000 lives in the U.S. between 1999 and 2017, according to the Centers for Disease Control and Prevention. An estimated 2 million people are addicted to the drugs, which include both prescription painkillers such as OxyContin and illegal drugs such as heroin.

As part of the agreement, Insys will enter into a five-year deferred prosecution agreement with the U.S. Justice Department and its operating subsidiary will plead guilty to five counts of mail fraud, authorities said.

NTD Photo
A box of the Fentanyl-based drug Subsys, made by Insys Therapeutics Inc, is seen in an undated photograph provided by the U.S. Attorney’s Office for the Southern District of Alabama. (U.S. Attorney’s Office for the Southern District of Alabama/Reuters)

The company has agreed to pay a criminal fine of $2 million and forfeit $28 million. It will also pay $195 million to settle civil allegations, prosecutors said.

Prosecutors say top Insys executives put patients at risk in order to boost sales for Subsys by paying doctors bribes and kickbacks in the form of speaker fees for programs billed as educational opportunities for other doctors. In reality, prosecutors say, the events were mainly social gatherings for doctors and their friends to enjoy a fancy meal.

“Paying bribes and providing other incentives to prescribe opioids with little regard to patient welfare surely signals a company is more concerned with profits than patients,” Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services said in a statement.

Kapoor and four other former Insys executives were found guilty of racketeering conspiracy charges after a lengthy trial in Boston that exposed such marketing tactics as using a stripper-turned-sales-rep to give a doctor a lap dance.

The charge calls for up to 20 years in prison.

Kapoor, 76, and the others denied all wrongdoing.

An attorney for Kapoor said after the verdict that they would “continue the fight to clear Dr. Kapoor’s name.” His lawyers argued that the prosecutors were unfairly blaming the drug crisis on Insys as Subsys makes up a small fraction of the prescription opioid market.

The company said after the executives’ convictions that the “the actions of a select few former employees” are not indicative of the company’s work today.

By Michael Balsamo And Alanna Durkin Richer

Google Bans Apps That Facilitate Sale of Marijuana

Alphabet Inc’s Google on May 29 banned apps on its app store that facilitate the sale of marijuana or related products, as part of a change to its content policy.

Developers only need to move their shopping cart option outside the app to comply with the new policy, a Google spokesperson told Reuters.

Google said it is working with many of the developers to answer any technical questions and help them implement the changes without customer disruption.

Existing apps would have 30 days post-launch to comply with the policy.

A spokesperson for Eaze, a marijuana delivery app, said: “Google’s decision is a disappointing development that only helps the illegal market thrive, but we are confident that Google, Apple, and Facebook will eventually do the right thing.”

Non-Intoxicating Cannabis Now Legal

Copies of Hemp magazine are displayed at the Cannabis World Congress Conference
Copies of Hemp magazine are displayed at the Cannabis World Congress Conference in N.Y. on June 16, 2017. (Spencer Platt/Getty Images)

The Trump administration removed non-intoxicating Cannabis plant hemp from the list of controlled substances with the signing of the Agriculture Improvement Act of 2018 on Dec. 20, 2018.

The 2018 Farm Bill allows farmers to cultivate hemp crops, which unlike Marijuana, have less than 0.3 percent concentrations of the psychoactive compound delta-9-tetrahydrocannabinol (THC), but all the health benefits.

FDA Commissioner Scott Gottlieb made it clear in a press release on Dec. 20, that the Food and Drug Administration is committed to protecting and promoting the public’s health, and will continue to strictly regulate products, foods, and dietary supplements containing cannabis or cannabis-derived compounds.

Hemp fibres in granules
A man shows hemp fibres in granules, this exclusive product called “NAFILean” is heated to pass into an injection press machine, as a 100% synthetic material at the Interval company facilities in Arc-Les-Gray, France on July 12, 2016. (Romain Lafabregue/AFP/Getty Images)

Some of the other possible uses for industrial hemp include biodegradable plastics, paper, textiles, construction materials, health foods, cosmetics, animal feed, and fuel.

Debroop Roy and NTD reporter Jeremy Sandberg contributed to this report.

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