Insys agrees to pay $4.45 million to resolve Illinois opioid lawsuit

BOSTON (Reuters) - Insys Therapeutics Inc has agreed to pay $4.45 million to resolve a lawsuit by Illinois’ attorney general claiming it deceptively marketed an addictive fentanyl-based cancer pain drug for off-label uses.

FILE PHOTO: A box of the Fentanyl-based drug Subsys, made by Insys Therapeutics Inc, is seen in an undated photograph provided by the U.S. Attorney's Office for the Southern District of Alabama. U.S. Attorney's Office for the Southern District of Alabama/Handout via REUTERS

The settlement, announced by Illinois Attorney General Lisa Madigan on Friday, will resolve claims that Insys illegally marketed its product Subsys to high-volume prescribers of opioid drugs instead of to oncologists treating cancer patients.

“It’s unethical, greedy behavior by companies like Insys that is responsible for creating the opioid epidemic and resulting overdose deaths in our state,” Madigan said in a statement.

Arizona-based Insys, which disclosed a potential settlement earlier this month, did not admit any wrongdoing. It did not immediately respond to a request for comment.

The case came amid a series of investigations centered on Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a highly addictive and regulated synthetic opioid.

Those investigations led to federal prosecutors in Boston in December charging six former Insys executives and managers, including former Chief Executive Michael Babich, with engaging in a scheme to bribe doctors to prescribe Subsys.

Babich and his co-defendants have pleaded not guilty. Federal charges have also been filed in several other states against other ex-Insys employees and medical practitioners who prescribed Subsys.

The investigation came amid increased attention to the national opioid addiction epidemic.

According to the U.S. Centers for Disease Control and Prevention, opioids were involved in over 33,000 deaths in 2015, the latest year for which data is available, and the death rate is estimated to have continued to rise.

In her lawsuit, Madigan alleged that Insys deceptively marketed and sold Subsys for uses other than its intended purpose of treating breakthrough cancer pain.

She also claimed that Insys rewarded doctors nationally for prescribing Subsys to non-cancer patients through payments for sham speaking events and expensive dinners.

As part of the Illinois settlement, Insys also agreed to create a program aimed at identifying prescribers who abuse opioids and to restrict the promotion of Subsys to oncologists or prescribers who treat cancer patients.

Insys has said it is in separate talks with the U.S. Justice Department to resolve the federal probe.

Insys has seen a major drop in prescriptions for Subsys, which until recently was the company’s only U.S. Food and Drug Administration-approved drug. Insys cited the decline in reporting a 38 percent drop in its second-quarter revenue earlier this month. Its net loss for the second quarter included a $4.5 million charge to cover the expected settlement with Illinois.

Reporting by Nate Raymond in Boston; Editing by Leslie Adler