Insys Therapeutics

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Insys Therapeutics
Russell 2000 Component
FounderJohn Kapoor
Key people
Saeed Motahari
ProductsSubsys (fentanyl)
Syndros (THC)
RevenueIncrease $146.6 million (2017)
Number of employees

Insys Therapeutics is an American specialty pharmaceutical company based in Chandler, Arizona.[1] Its main product is Subsys, a sublingual spray of fentanyl. The drug fentanyl is a very fast acting and powerful opioid used to relieve peaks of pain in cancer patients.[2][3]

Founded in 1990, the company and its executives are facing legal issues related to the opioid crisis and marketing activities by the company incuding accusations of bribes and misleading advertising. Several company executives were convicted in a jury trial rendered in May 2019.[4]


In addition to Subsys, Insyshe also sells Syndros, a synthetic THC, and is working toward approval on other cannabis derivatives.[5][3] Syndros is a prescription medicine 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 medicine (chemotherapy) in people whose nausea and vomiting have not improved with usual anti-nausea medicines. Syndros is the first and only FDA-approved (DEA schedule 1) liquid THC formulation, which allows for fast absorption, flexible dosing and a potential solution for patients who may prefer a liquid medication.


The company was founded in 1990 by billionaire John Kapoor. Kapoor served as CEO and president after former CEO Michael Babich was arrested. Kapoor retired from Insys in 2017 and was ultimately replaced by Saeed Motahari.[6]

In 2016, the company was ranked No. 52 on the Deloitte Fast 500 North America list.[7]

Legal issues[edit]

Seven former executives and managers employed by Insys were taken into custody by law enforcement on Thursday, December 13, 2016. U.S. Attorney for the District of Massachusetts, Carmen Ortiz, alleges that several former employees of Insys Therapeutics, Inc. - including the once CEO and president of the company - conspired to bribe medical staff in several states to get them to prescribe a specific pain medication.[8] This was the topic of an NBC special feature report on Megyn Kelly's 'Sunday Night' on Sunday, June 4, 2017.[9]

In August 2017, Insys Theraputics 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.[10] 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."[11]

In October 2017, Insys founder John Kapoor was arrested in Arizona and charged with RICO conspiracy, conspiracy to commit wirefraud, 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.[12]

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.[13][14]

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 to patients.[15] 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.[16] 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.[17]

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 onetime 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 their product but also by misleading insurers about patients’ need for the drug.[4] [18] Other Insys also found guilty were: Richard M. Simon, former national director of sales; Sunrise Lee, regional sales director; and Joseph A. Rowan, regional sales director; and former vice president of managed markets, Michael J. Gurry.[19] A sentencing hearing has not been scheduled but is expected to take place in early August 2019.[19]

Political issues[edit]

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.[20] Investor filings confirm the company was concerned about the impact of legalization on sales for a cannabis-based drug it was developing.[21] The reason publicly given for opposing the measure was to "protect children".[21] However, medical marijuana advocates have criticized Insys' position as hypocritical and profit driven as the company has pursued synthetic cannabis derived products.[5] In a September 2016 statement, J.P. Holoyak, 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."[22] That same month the opposition campaign defended the donation, 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."[23] The measure would eventually fail to pass at the ballot, losing 51.32% to 48.68%.[24]

In 2017, US 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] The patient later died due to an adverse reaction to her medications.[6]


  1. ^ a b "General Contact - INSYS". Retrieved December 27, 2018.
  2. ^ Worstall, Tim (May 11, 2014). "The Short Case For Insys Therapeutics". Forbes. Retrieved May 12, 2015.
  3. ^ a b "Subsys".
  4. ^ a b "Founder and Four Executives of Insys Therapeutics Convicted of Racketeering Conspiracy". Retrieved May 14, 2019.
  5. ^ a b Ingraham, Christopher (March 24, 2017). "A pharma company that spent $500,000 trying to keep pot illegal just got DEA approval for synthetic marijuana". Washington Post. Retrieved September 7, 2017.
  6. ^ a b c Mole, Beth (September 7, 2017). "Opioid maker caught on tape lying to push deadly drug on patient". Ars Technica. Retrieved September 7, 2017.
  7. ^ "2016 Winners by rank" (PDF). Deloitte. Retrieved November 16, 2017.
  8. ^ Williams, Michelle. "Pharmaceutical executives accused of bribing doctors to 'unnecessarily prescribe' fentanyl".
  9. ^ Siemaszko, C. (June 4, 2017). "Dangerously Addictive Painkiller Prescribed for Patients Who Shouldn't Have Received It, Says Whistleblower". NBC News. Retrieved July 31, 2017.
  10. ^ "Tucson doctor among 3 named in state's lawsuit against opioid firm". Arizona Daily Star. August 31, 2017. Retrieved August 31, 2017.
  11. ^ "Insys Addresses Arizona Attorney General Complaint".
  12. ^ "Founder and Owner of Pharmaceutical Company Insys Arrested and Charged with Racketeering". Retrieved October 26, 2017.
  13. ^ "Ex-CEO of drug company to plead guilty in major opioid case". NBC News. Retrieved December 27, 2018.
  14. ^ "Former Insys CEO to plead guilty in opioid kickback scheme case". Retrieved December 30, 2018.
  15. ^ "Former Insys sales exec settles with Arizona for $9.5M in opioid bribe case". Retrieved May 3, 2019.
  16. ^ "AG Brnovich Announces $9.5 Million Settlement with Former VP of Sales for Insys". Retrieved May 3, 2019.
  17. ^ "Former Insys sales exec settles with Arizona for $9.5M in opioid bribe case". Retrieved May 3, 2019.
  18. ^
  19. ^ a b Garrison, Joey (May 2, 2019). "Insys Therapeutics CEO John Kapoor, 4 other execs found guilty in fentanyl bribery case". USA Today. Retrieved May 3, 2019.
  20. ^ Nelson, Steven (September 8, 2016). "Fentanyl Maker Donates Big to Campaign Opposing Pot Legalization". U.S. News & World Report. Retrieved June 4, 2017.
  21. ^ a b Fang, Lee (September 12, 2016). "Pharma Company Funding Anti-pot Fight Worried About Losing Business, Filings Show". The Intercept. Retrieved June 4, 2017.
  22. ^ "A maker of deadly painkillers is bankrolling the opposition to legal marijuana in Arizona".
  23. ^ "A maker of deadly painkillers is bankrolling the opposition to legal marijuana in Arizona".
  24. ^ "Arizona Marijuana Legalization, Proposition 205 (2016)".

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