Drug manufacturer Insys Therapeutics Inc. agreed Wednesday to pay $225 million to resolve Justice Department claims that it bribed doctors to prescribe a powerful opioid.
The payments will be made over five years, the Justice Department said in a statement. A company subsidiary will plead guilty to five counts of mail fraud, while Insys itself will enter into a deferred prosecution agreement with the government.
“Today’s settlement underscores our determination to hold opioid manufacturers accountable for pushing these highly addictive narcotics on the public via kickbacks to doctors and nurses, and other illegal means,” said United States Attorney for the Central District of California Nick Hanna. “Our goal is to bring about an end to the tragic epidemic of opioid addiction and to go after those who profit from that epidemic.”
The settlement stems from a probe into Insys‘ founder, John Kapoor, who is currently awaiting sentencing for his role in the scheme. He was convicted of using bribes and other incentives to encourage doctors into over-prescribing Subsys, an opioid painkiller. Four other former executives were also convicted on racketeering charges related to the kickbacks. They will be sentenced in September.
Kapoor and the others face a maximum of 20 years in prison each on the charges. A former billionaire, Kapoor is the first drug-company CEO to face significant jail time on allegations he helped fuel the opioid epidemic.
Last week, the company warned it may seek bankruptcy protection as a result of legal settlements and other costs related to defending the former executives. The company last year agreed to pay $150 million to resolve separate but related probes into illegal marketing tactics it used to promote its drugs. In a regulatory filing, Insys warned it may not have enough money to pay the original settlement.