Insys Files For Bankruptcy After Paying $225 Million Settlement In US Probe

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Insys Files For Bankruptcy After Paying $225 Million Settlement In US Probe

Insys Therapeutics Inc. told a DE judge Tuesday it is taking responsibility for its part in the nation's opioid crisis as it moves quickly toward a Chapter 11 sale of its assets and a plan to pay legal liabilities, including roughly $200 million to settle government claims.

John Kapoor, the billionaire founder of Insys Therapeutics Inc, leaves the federal courthouse in Boston, Massachusetts, U.S., March 13, 2019.

John Kapoor controls more than 60 percent of the company's stock, which slid below $1 a share after the filing. It also issued a press release, saying the filing was necessary to help it sell "substantially all of the company's assets and address the company's legacy legal liabilities".

The original suit included other opioid manufacturers, including Purdue Pharma L.P., Endo Pharmaceuticals, Inc., Janssen Pharmaceuticals, Inc., Cephalon, Inc., Allergan plc, Mallinckrodt LLC, and related companies, as well as the major opioid distributors, AmerisourceBergen Drug Corporation, Cardinal Health, Inc., McKesson Corporation, and a related company.

In May, a Boston jury found Kapoor and four other former executives guilty of engaging in a racketeering conspiracy to get doctors to oversubscribe Subsys.

Insys intends to continue operating its business in the ordinary course while it pursues these transactions through the court-supervised sale process. According to the CDC, fentanyl is fifty times stronger than heroin. This will have the company pay a US$2 million fine and forfeit US$28 million, according to US Department of Justice documents. "INSYS has compelling assets and a highly talented team".

In March 2012, Insys began using "speaker programs", purportedly meant to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners.

Among the pieces of evidence presented during the 10-week trial: a five-minute video promoting the fentanyl spray Subsys, featuring an Insys company salesman rapping about prescribing higher drug doses using a process known as "titration".

The agency recently ramped up its probe into USA pharmaceutical company's following President Donald Trump's announcement that the opioid crisis in the United States has become a public health emergency.

The case against Insys has been part of the government's effort to hold drug companies accountable for fueling the opioid epidemic.

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.

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