Insys Therapeutics To Pay $225 Million, Plead Guilty To Fraud
Local opioid-maker Insys Therapeutics said Wednesday that it is pleading guilty to fraud and will pay $225 million to settle charges from the U.S. Department of Justice.
This settlement follows the conviction in early May of five former Insys executives of racketeering charges for contributing to the nation's opioid epidemic. Founder and former billionaire Jonn Kapoor was among them.
Reports filed Tuesday by federal prosecutors note Insys will fork out $225 million in the settlement to close all allegations against the corporate entity.
Wednesday’s settlement calls for the operating unit, Insys Pharma, to plead guilty to five mail fraud counts.
The Chandler, Arizona-based company will pay a $2 million fine, forfeit $28 million and pay $195 million to settle charges it defrauded the government under the False Claims Act.
The company has been exploring whether to divest its Subsys business, and had on May 10 said the probes could prompt it to seek Chapter 11 bankruptcy protection, a reorganization process where the business will shed its debt obligations while continuing to operate.
Legal costs have totaled tens of millions of dollars. Insys’ share price has fallen 93% since late August.