Insys Agrees to Pay $150 Million to Settle Opioid Sales Probe

(Bloomberg) -- Pharmaceutical company Insys Therapeutics Inc. said it reached a $150 million settlement with the U.S. Department of Justice to resolve a civil and criminal probe into inappropriate sales of opioid-based painkillers by former employees.

The settlement will be paid over five years and could increase by as much as $75 million in contingency-based payments if certain unspecified events occur before the deal is finalized, the Chandler, Arizona-based company said Wednesday in a statement.

“This is a very important step for our company to move forward and continue our transformative efforts to foster a compliant and ethical culture,” Saeed Motahari, the company’s chief executive officer, said in the statement.

Insys became embroiled in legal trouble as President Donald Trump’s administration cracked down on a national epidemic of opioid abuse that’s ravaging communities from coast to coast. Insys founder John Kapoor was arrested last year and accused alongside other company officials of bribing doctors to prescribe the company’s Subsys painkiller.

U.S. District Judge Allison Burroughs in Boston last month questioned whether Justice Department prosecutors could make racketeering charges stick. She challenged prosecutors to show how allegations Kapoor and other executives used money and dinners to bribe doctors to boost sales would support the charges.

The company’s Syndros product for loss of appetite in people with AIDS and nausea caused by chemotherapy is one of a few drugs approved by the Food and Drug Administration made from synthetic cannabinoids. Insys has been developing a cannabidiol oral solution for a severe type of epileptic seizure known as infantile spasms, and childhood epilepsy defined by staring spells where the child isn’t aware or responsive.

The final version of the accord is expected to include other material nonfinancial terms and conditions that must still be negotiated, the company said.

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