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 The expected plea in federal court in Boston by the Chandler,
Arizona-based Insys' operating subsidiary is coming in one of the
few criminal prosecutions to date of a corporation accused of
helping fuel the nation's deadly opioid epidemic.
The plea deal was announced on Wednesday, a month after a federal
jury found wealthy Insys founder John Kapoor and four other former
executives and managers guilty of engaging in a vast racketeering
conspiracy.
Insys is facing growing financial pressures as a result of the U.S.
probe and a decline in sales of its flagship fentanyl pain product,
Subsys, which it has said could prompt the company to seek
bankruptcy protection.
Beyond the expected plea by subsidiary Insys Pharma Inc, Insys has
also entered into a five-year deferred prosecution agreement with
the government and agreed to pay $30 million in the criminal case
and $195 million to resolve civil claims.
Insys in a statement said it believes the deal is in its best
interests. Kapoor and his co-defendants deny wrongdoing and are
expected to appeal.
Subsys is an under-the-tongue spray the U.S. Food and Drug
Administration approved in 2012 only for treating pain in cancer
patients. Its main ingredient, fentanyl, is an opioid 100 times
stronger than morphine.
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Prosecutors alleged that while Kapoor served as Insys' chairman, the
company from 2012 to 2015 paid doctors and other medical
practitioners bribes in exchange for prescribing Subsys to their
patients, often to those who did not have cancer.
Insys did so by paying medical practitioners to act as speakers at
sham events ostensibly meant to educate clinicians about Subsys but
that were often just social gatherings at high-priced restaurants
with no real attendees.
Those practitioners include a former New Hampshire physician
assistant, Christopher Clough, who prosecutors say received $44,000.
Payments to Clough form the basis of the expected plea by the
subsidiary to five counts of mail fraud.
Clough was sentenced on Monday to four years in prison after being
convicted of accepting kickbacks from Insys. He plans to
appeal.[L1N1YM0LN]
(Reporting by Nate Raymond in Boston; Editing by Bill Berkrot)
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