Opioid maker settles with DOJ for $225M

Opioid manufacturer Insys Therapeutics agreed to a $225 million global settlement with the government after admitting to paying doctors kickbacks to promote the drug Subsys, a highly addictive fentanyl spray, the Department of Justice announced Wednesday.

The U.S. attorney's office in Massachusetts charged Insys and its subsidiary with five counts of mail fraud. According to the charging document, after the drug was approved by the Food and Drug Administration in 2012, Insys began using "speaker programs" supposedly to increase brand awareness of Subsys through "peer-to-peer educational" lunches and dinners.

However, according to the Department of Justice, the programs were actually used to pay bribes and kickbacks to targeted practitioners in exchange for increased Subsys prescriptions to patients.

Handled by the Department of Justice's Civil Division, and the U.S. attorney's offices in the Central District of California as well as Massachusetts, the settlement will resolve separate criminal and civil investigations.

"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," U.S. Attorney for the Central District Nick Hanna said in a statement Wednesday. "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."

Approved by the FDA for the treatment of pain, Subsys is a sublingual fentanyl spray, a powerful, but highly addictive opioid painkiller given to adult cancer patients who already received around-the-clock opioid therapy.

Last month, five former Insys executives were convicted of racketeering conspiracy in connection with the marketing of Subsys, according to a DOJ press release. Eight company executives have now been convicted in Boston for crimes relating to the illegal marketing of the drug.

Insys will enter into a deferred prosecution agreement with the government, and one of its subsidiaries will plead guilty to five counts of mail fraud, according to the settlement. The company will pay a $2 million fine and $28 million in forfeiture in connection with the criminal investigation. As part of the civil resolution, Insys agreed to pay $195 million to settle allegations that it violated the False Claims Act.

The court has not yet scheduled the plea hearing.

-- Blaise Scemama