An Arizona drug company is preparing to spend as much as
$4.5 million to potentially settle a lawsuit brought against it by Illinois Attorney General Lisa Madigan alleging the company pushed doctors to prescribe its opioid painkiller beyond its intended use.
The potential settlement comes as states and municipalities increasingly are suing opioid drugmakers for allegedly helping to propel the nation’s opioid epidemic. Nearly 1,400 Illinois residents died of overdoses from all types of opioids in 2015, according to the Illinois Department of Public Health.
Though the state and Insys have not yet announced a formal settlement agreement, Insys Therapeutics Chief Financial Officer Darryl Baker said during an earnings call Thursday that the company was setting aside $4.5 million for an “estimated potential settlement” with Illinois.
Illinois sued Insys in August of last year in Cook County Circuit Court, alleging that the company deceptively marketed and sold Subsys, a form of the prescription opioid drug fentanyl that’s sprayed under the tongue. The drug is intended to treat patients suffering from cancer pain.
The company heavily marketed the drug to Illinois doctors with records of prescribing high volumes of opioids regardless of whether those doctors were prescribing opioids to treat cancer pain, the state alleged.
According to the lawsuit, Insys sold nearly $12 million worth of the drug in Illinois between April 2012 and March 2015, and about 94 percent of those sales could be attributed to the state’s top 10 prescribers of the drug.
Illinois also accused Insys of marketing the drug to treat “breakthrough pain” rather than just “breakthrough cancer pain,” though the drug may only be marketed for cancer pain. Company sales representatives also inserted themselves into the prescription-writing process, the state alleged.
Attempts to reach an Insys spokeswoman for comment Friday were unsuccessful.
Madigan’s office declined to comment Friday on news of the potential settlement.
Such lawsuits are becoming increasingly common across the country as states and municipalities try to recoup some of the costs of the opioid epidemic hitting their streets and neighborhoods, said Michael Canty, a partner at law firm Labaton Sucharow in New York, which has been consulting with a number of attorneys general’s offices on whether to bring litigation over opioids.
“Taxpayers should not be footing the bill, while at the same time, these companies that are alleged to be responsible for the opioid crisis are reaping record profits,” said Canty, who also worked on opioid cases as a former federal prosecutor.
“You may not know anybody who has an opioid drug addiction, but you’re paying for the Narcan [taken for opioid overdoses], for the hospital stays, for the diversion courts, for children born with a chemical dependence on the drug,” Canty said. “These are all costs being borne by states.”
Illinois cities and counties have been active in court on the issue. The city of Chicago filed a lawsuit against five opioid drugmakers in 2014. In June of this year, the state’s attorney for Jersey County, near St. Louis, filed a lawsuit against two opioid drugmakers, and the state’s attorney for Union County, in southern Illinois, filed a lawsuit against five prescription opioid manufacturers and their related companies.
St. Clair County, near East St. Louis, sued north suburban-based Abbott Laboratories and Connecticut-based Purdue Pharma in April, accusing them of overstating the benefits of opioids and misrepresenting the risks. Abbott no longer sells drugs in the U.S., and has said that it ended its co-promotion with Purdue nearly 14 years ago. Purdue said in a statement at the time, “We share public officials’ concerns about the opioid crisis and we are committed to working collaboratively to find solutions.”
A number of other municipalities and states have also sued drugmakers in recent years, including counties in West Virginia and California, a city in Washington and the state of Kentucky, among others.
A spokeswoman for industry group the Pharmaceutical Research and Manufacturers of America declined Friday to comment on the lawsuits, but said in an email that the group “and its members are committed to supporting the appropriate use of prescription medicines and to working with others to collectively address prescription drug abuse and the growing problem of opioid abuse and addiction.”
Insys has also been the target of a federal investigation over Subsys, and Insys CEO Saeed Motahari said, during the earnings call Thursday, resolving that and other investigations is a “priority” for the company. In December, federal prosecutors in Boston charged half a dozen former Insys executives and managers with leading a nationwide conspiracy to bribe doctors to prescribe the drug and defraud insurers.
Steve Schmadeke contributed to this story
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