Company type | Public |
---|---|
Nasdaq: INSY | |
Industry | Pharmaceutical |
Founded | 1990 |
Founder | John Kapoor |
Fate | Bankrupt (2019) |
Headquarters | Chandler, Arizona, [1] U.S. |
Key people | Michael Babich (CEO) |
Products | Subsys (fentanyl) Syndros (Tetrahydrocannabinol) |
Number of employees | 343 (2019) |
Founded in 1990, Insys Therapeutics was an American specialty pharmaceutical company based in Chandler, Arizona. [1] Its main product was Subsys, a sublingual liquid form of the drug fentanyl. Fentanyl is an extremely fast-acting and powerful opioid used to relieve peaks of pain in cancer patients. [2] [3]
In its final phase the company and its executives faced legal issues related to the opioid crisis and marketing activities by the company, including accusations of bribes and misleading advertising. Several company executives were convicted of racketeering in a jury trial in May 2019. [4]
Insys filed for bankruptcy in 2019. The filing came just 10 days after the company agreed to pay $225 million to settle separate criminal and civil cases brought by the U.S. Justice Department.[ citation needed ]
The 2023 movie Pain Hustlers is based on the story of Insys.
In addition to Subsys, Insys Therapeutics marketed Syndros, a synthetic THC product, and was working toward approval of other cannabis derivatives. [3] [5] Despite delta-9 THC being classified as a Schedule I substance by the U.S. Drug Enforcement Administration, Syndros was classified as a Schedule II substance used in adults to treat loss of appetite (anorexia) in people with AIDS who have lost weight, as well as nausea and vomiting caused by anti-cancer medicines (chemotherapy) in people whose nausea and vomiting have not improved with usual anti-nausea medicines. Syndros was the first and only FDA-approved liquid THC formulation, which allows for fast absorption, flexible dosing, and a potential solution for patients who may prefer a liquid medication. The disparity between the US DEA scheduling of THC and of Syndros is pre- and post-formulation, respectively, according to Title 21 United States Code of Controlled Substances Act.[ citation needed ]
The company was founded in 1990 by American multi-millionaire John Kapoor, who served as CEO and president after former CEO Michael Babich was arrested. Kapoor retired from Insys in 2017 due to racketeering conspiracy charges and was ultimately replaced by Saeed Motahari. [6]
Insys had a practice of paying doctors speaking fees to promote their products. They had set up the Insys Reimbursement Center, in which Insys workers would call insurers on behalf of doctors’ offices to get them to authorize payment for Subsys. Even though Subsys was only supposed to be for cancer related patients, the workers would mislead the insurers into paying for it. In 2012, a sales rep for Insys filed a whistleblower lawsuit against the company. He gathered documents, emails and even audio recordings to bolster his case, yet the government declined to intervene. [7]
In March 2013, the company had its IPO. The public paid no attention to the lawsuit and accusations, and the company was the best performing IPO that year. [7]
In 2016, the company was ranked No. 52 on the Deloitte Fast 500 North America list. [8]
In 2017, U.S. Senator Claire McCaskill released a report and audio recording of an Insys representative allegedly falsely claiming to represent a doctor's office and lying about a patient's diagnosis in order to circumvent prescribing rules for Subsys. [6] Attorney Richard J. Hollawell obtained the audio recording from Envision in response to a subpoena for a civil suit he filed against Insys. [9] The patient later died due to an adverse reaction to her medications. [6]
A study done by physician and scientist Scott Hadland examined the marketing of Insys Therapeutics and found that it was responsible for half of all marketing dollars to doctors. [10] Hadland's study was cited in a 2017 federal case against the company CEO John Kapoor and several executives, which resulted in their conviction by a federal jury of racketeering conspiracy. [11] [12]
In 2016, Insys donated $500,000 to Arizonans for Responsible Drug Policy, a group opposing a marijuana legalization ballot initiative in the state of Arizona. [13] Investor filings confirm the company was concerned about the impact of legalization on sales for a cannabis-based drug it was developing. [14] The reason publicly given for opposing the measure was to "protect children". [14] However, medical marijuana advocates have criticized Insys' position as hypocritical, profit-driven, and an appeal to emotion, as the company actively developed its own cannabis-derived products. [5] In a September 2016 statement, J.P. Holyoak, a representative from the pro-legalization campaign, commented, "It appears they are trying to kill a non-pharmaceutical market for marijuana in order to line their own pockets." [15] That same month, the opposition campaign defended Insys' involvement, stating: "We are grateful that Insys Therapeutics – an Arizona-based company – has chosen to join Governor Ducey, the Arizona Association of County School Superintendents, the Arizona Small Business Association, the Arizona Hospital and Healthcare Association, the Arizona Catholic Conference of Bishops, the Arizona Chamber of Commerce and several other community organizations in defeating Prop. 205 in November." [15] The ballot measure eventually failed to pass, losing 51.32% to 48.68%. [16]
In December 2016, seven former executives and managers employed by Insys were taken into custody, including CEO John Kapoor and charged with conspiracy to bribe medical staff in several states to prescribe a specific pain medication to their patients. [17] The accusations were the topic of an NBC special feature report on Megyn Kelly's Sunday Night on June 4, 2017. [18]
In August 2017, Insys Therapeutics was sued by Arizona Attorney General Mark Brnovich for misleading patients and doctors about the dangers of the drug Subsys, and for lying to insurers about the condition of the patients in a bid to get payment for the drug. He said the firm deceived insurers and pharmaceutical benefit companies into agreeing to pay for the expensive drug by misleading them to believe that the payment request was coming from a doctor's office and not the company making the drug. Brnovich also said those Insys employees misrepresented the medical conditions of the patients, lying that they had breakthrough pain, lying that the patients had tried other medications, and lying that the patients needed the sublingual spray rather than less expensive pills marketed by other firms because they had difficulty swallowing. [19] Insys Therapeutics issued a response to the Arizona filing on their website, stating, in part, that "[t]he allegations contained in the Arizona Attorney General's complaint relate to former employees and physicians that are no longer associated with our Company or our speaker bureau." [20]
In October 2017, Insys founder John Kapoor was arrested in Arizona and charged with RICO conspiracy, conspiracy to commit wire fraud, and conspiracy to violate the anti-kickback law related to Insys' effort to secure prescriptions of Subsys. Kapoor is also alleged to have conspired to defraud health insurance providers. [21]
In December 2018, former Insys CEO Michael Babich agreed to plead guilty to one count of conspiracy and one count of mail fraud, in connection to bribes paid to doctors and their assistants. [22] [23] In April 2019, Alec Burlakoff, the former vice president of sales for Insys, agreed to pay the State of Arizona $9.5 million in a civil settlement with Attorney General Mark Brnovich for his role in the alleged bribery campaign of doctors to prescribe Insys products to patients. [24] Brnovich had accused Burlakoff of operating a program that paid doctors lucrative "speaking fees" in order to encourage them to prescribe more Subsys, Insys' fentanyl-based pain medication. [25] Burlakoff is required to pay the state $5.2 million from the proceeds he made from the operation, as well as $4.3 million in civil penalties. As part of the settlement, Burlakoff agreed to testify against Insys in ongoing litigation and will be permanently banned from advertising or selling any pharmaceutical drugs in Arizona. [24]
On May 2, 2019, a federal jury found top executives of Insys Therapeutics guilty of racketeering charges. The jury, after deliberating for 15 days, issued guilty verdicts against the company's founder, the one-time billionaire John Kapoor, and four former executives, finding they had conspired to fuel sales of its highly potent drug, Subsys, by not only bribing doctors to prescribe its product but also by misleading insurers about patients' need for the drug. [4] [26] Other Insys employees also found guilty included Richard M. Simon, former national director of sales; Sunrise Lee, regional sales director; Joseph A. Rowan, regional sales director; and Michael J. Gurry, former vice president of managed markets. [27] In June 2019, Insys Therapeutics agreed to pay $225 million to settle the federal government's criminal and civil investigations into the company's marketing practices. [28] In January 2020, Kapoor was sentenced by a federal court to five and a half years in prison. [29]
Insys filed for bankruptcy in Delaware Bankruptcy Court on June 10, 2019. Andrew Long, the company's CEO, claimed the company was struggling due to: 1) extensive litigation, and 2) declining revenues relating to its Subsys product. The bankruptcy filing came just 10 days after the company reached a settlement with the U.S. Justice Department. The U.S. government agreed to accept an unsecured claim of $190 million in the case. [30] [31]
Fentanyl is a highly potent synthetic piperidine opioid primarily used as an analgesic. It is 20 to 40 times more potent than heroin and 100 times more potent than morphine; its primary clinical utility is in pain management for cancer patients and those recovering from painful surgeries. Fentanyl is also used as a sedative. Depending on the method of delivery, fentanyl can be very fast acting and ingesting a relatively small quantity can cause overdose. Fentanyl works by activating μ-opioid receptors. Fentanyl is sold under the brand names Actiq, Duragesic and Sublimaze, among others.
Pharmaceutical marketing is a branch of marketing science and practice focused on the communication, differential positioning and commercialization of pharmaceutical products, like specialist drugs, biotech drugs and over-the-counter drugs. By extension, this definition is sometimes also used for marketing practices applied to nutraceuticals and medical devices.
Purdue Pharma L.P., formerly the Purdue Frederick Company (1892–2019), was an American privately held pharmaceutical company founded by John Purdue Gray. It was sold to Arthur, Mortimer, and Raymond Sackler in 1952, and then owned principally by the Sackler family and their descendants.
Cephalon, Inc. was an American biopharmaceutical company co-founded in 1987 by pharmacologist Frank Baldino, Jr., neuroscientist Michael Lewis, and organic chemist James C. Kauer—all three former scientists with the DuPont Company. Baldino served as Cephalon's chairman and chief executive officer, until his death in December 2010. The company's name comes from the adjective "cephalic" meaning "related to the head or brain", as it was established primarily to pursue treatments for neurodegenerative diseases.
In the United States, the use of cannabis for medical purposes is legal in 38 states, four out of five permanently inhabited U.S. territories, and the District of Columbia, as of March 2023. Ten other states have more restrictive laws limiting THC content, for the purpose of allowing access to products that are rich in cannabidiol (CBD), a non-psychoactive component of cannabis. There is significant variation in medical cannabis laws from state to state, including how it is produced and distributed, how it can be consumed, and what medical conditions it can be used for.
John Nath Kapoor is an American convicted felon, multi-millionaire, pharmaceutical entrepreneur, former CEO of Insys Therapeutics, and majority shareholder in the generic drug manufacturing company Akorn. In the fall of 2017, Kapoor was arrested and charged with numerous felony counts including RICO conspiracy, conspiracy to commit wire fraud, and other crimes. He was found guilty on all counts, and those convictions were upheld on appeal.
Assertio Therapeutics, Inc. is an American specialty pharmaceutical company. It mainly markets products for treatment in neurology, pain and diseases of the central nervous system. Depomed was founded in 1995 and is headquartered in Newark, California. It is a publicly traded company on NASDAQ, with several products approved by the United States Food and Drug Administration (FDA). On August 15, 2018, the company announced its name change from Depomed, Inc., to Assertio Therapeutics, Inc. As of 2019, Assertio markets three products approved by the FDA: Gralise, Cambia, and Zipsor.
Allison Dale Burroughs is a United States district judge of the United States District Court for the District of Massachusetts.
Indivior is a specialty pharmaceuticals business. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. It is also listed on the NASDAQ Global Select Market.
Dave Baker is an American politician serving as a member of the Minnesota House of Representatives since 2015. A member of the Republican Party of Minnesota, Baker represents District 16B in west-central Minnesota, which includes the city of Willmar and parts of Kandiyohi County.
Cannabis in Arizona is legal for recreational use. A 2020 initiative to legalize recreational use passed with 60% of the vote. Possession and cultivation of recreational cannabis became legal on November 30, 2020, with the first state-licensed sales occurring on January 22, 2021.
There is an ongoing opioid epidemic in the United States, originating out of both medical prescriptions and illegal sources. The epidemic began in the United States in the late 1990s, according to the Centers for Disease Control and Prevention (CDC), when opioids were increasingly prescribed for pain management, resulting in a rise in overall opioid use throughout subsequent years.
Richard Stephen Sackler is an American billionaire businessman and physician who was the chairman and president of Purdue Pharma, a former company best known as the developer of OxyContin, whose initiation of the opioid epidemic in the United States became the subject of many lawsuits and fines, filing for bankruptcy in 2019. It has been claimed that Richard Sackler's Purdue is among "the worst drug dealers in history" and the Sackler family have been described as the "most evil family in America". The company's downfall was the subject of the 2021 Hulu series Dopesick and the 2023 Netflix series Painkiller.
Andrew E. Lelling is an American attorney who served as the United States Attorney for the District of Massachusetts from 2017 to 2021.
The opioid epidemic, also referred to as the opioid crisis, is the rapid increase in the overuse, misuse/abuse, and overdose deaths attributed either in part or in whole to the class of drugs called opiates/opioids since the 1990s. It includes the significant medical, social, psychological, demographic and economic consequences of the medical, non-medical, and recreational abuse of these medications.
The timeline of the opioid epidemic includes selected events related to the origins of Stamford, Connecticut-based Purdue Pharma, the Sackler family, the development and marketing of oxycodone, selected FDA activities related to the abuse and misuse of opioids, the recognition of the opioid epidemic, the social impact of the crisis, lawsuits against Purdue and the Sackler family.
The Crime of the Century is an American two-part documentary film, directed, produced, and written by Alex Gibney. The film follows the opioid epidemic in the United States, and the political operatives, government regulations and corporations that enable the abuse of opioids, particularly the Sackler family and Purdue Pharma.
Pain Hustlers is a 2023 American crime drama film co-produced and directed by David Yates from a screenplay by Wells Tower, based on the 2022 book of the same name by Evan Hughes. The film stars Emily Blunt, Chris Evans, Andy García, Catherine O'Hara, Jay Duplass, Brian d'Arcy James, and Chloe Coleman. Its plot centers on a high school dropout who lands a job with a failing pharmaceutical company in Central Florida, where she soon finds herself at the center of a criminal conspiracy.
Scott E. Hadland is a Canadian-American physician and scientist who serves as a pediatrician, and addiction specialist at Massachusetts General Hospital and Harvard Medical School, where he is the Chief of the Division of Adolescent and Young Adult Medicine. He previously served as an addiction specialist at the Grayken Center for Addiction at Boston Medical Center.