Big Pharma Company Files For Bankruptcy?

Published June 11, 2019 by:
insys therapeutics - files for bankruptcy - big pharma bankrupt - big pharma - opioid crisis - opioid epidemic - insys - subsys - john kapoor - filed for bankruptcy

Last month, we reported that Insys Therapeutics executives were facing major criminal charges. Insys Therapeutics is a part of Big Pharma, a term used to label the biggest pharmaceutical companies, manufacturers, distributers, and coincidentally some of the biggest players in the current opioid crisis. Now, Insys Therapeutics is filing for bankruptcy, amidst handling the legal fees from their major federal case.

The criminal justice system has finally started fighting back against some of the biggest drug dealers in the nation, massive pharmaceutical company executives. Insys Therapeutics is best known for their product Subsys, a fentanyl spray— which was obviously an extremely addictive and dangerous product. A federal investigation ensued after Insys Therapeutics was accused of a bribery scheme that gave outrageous incentives for doctors to overprescribe their medication Subsys. This federal investigation case was “resolved” when Insys Therapeutics agreed to pay $225 million dollars.

A week after this settlement was paid, Insys Therapeutics filed for Chapter 11 protection, in other words, the big pharma company filed for bankruptcy. After Insys Therapeutics was discovered to be a major player in the opioid crisis, they needed to file for bankruptcy in response to the legal expenses they were enduring.

The details of the federal case included indictments for Insys Therapeutics’ founder, John Kapoor, and four former Insys executives. All executives charged were found guilty in early May on racketeering charges, “…after the 10-week trial revealed they had used speaker’s fees and lap dances to lure doctors into prescribing Subsys for far more patients than the drug was approved for and cheated insurers into covering prescriptions for the costly medication” (Telford). Subsys became FDA approved in 2012 to treat cancer patients, but soon doctors would be overprescribing the fentanyl spray to patients who didn’t meet the criteria. The bribery scheme provided outrageous incentives for doctors to prescribe Subsys to many patients that it was not approved for, a strategy that “…sent sales skyrocketing, from $8.6 million in 2012 to $329 million in 2015” (Telford).

This federal case was the first time the U.S. government held Big Pharma executives accountable for their perpetuation and exacerbation of the opioid crisis. The conviction of the founder of Insys Therapeutics, John Kapoor, represents the first time a major company’s founder is facing serious jail time for his part in the opioid epidemic. The consequences of this shady pharmaceutical company’s business includes major financial losses; “An onslaught of legal cases has left Insys with millions in fines and fees while sales of Subsys, which generated most of the company’s revenue, have plummeted. Insys’s assets and liabilities were blacked out in the bankruptcy filing, but at the end of the first quarter, the company said it had just $86 million in cash and more than $240 million in liabilities. Last year, Insys posted nearly $125 million in losses” (Telford).

Along with the trend of criminally charging big pharmaceutical companies, Purdue Pharma is next; “Purdue Pharma, maker of OxyContin, is reportedly mulling bankruptcy as it fends off lawsuits from several states tied to the opioid epidemic. The billionaire owners of Purdue Pharma, the Sackler family, also face widespread litigation” (Telford). These consequences for contributing to an opioid crisis that has led to tens of thousands of deaths per year, just in the United States, are better late than never. In my opinion, our criminal justice system has entered an era of damage control, and finally looking for major players to blame for the opioid crisis is a result.

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Reference:

Telford, Taylor. “Insys Becomes First Drugmaker to File for Bankruptcy to Cover Opioid Penalties.” The Washington Post, WP Company, 10 June 2019, www.washingtonpost.com/business/2019/06/10/insys-becomes-first-drugmaker-file-bankruptcy-cover-opioid-penalties/?utm_term=.6f00dafa91f6

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