Opioid manufacturer Insys Therapeutics filed for Chapter 11 bankruptcy protection five days after agreeing to pay $225 million to settle federal criminal and civil cases against the company for bribing doctors to prescribe its fentanyl-based painkiller, reports NPR. Insys asked the court for permission to sell its assets to pay more than $250 million in debts. The move means the government may not collect all the settlement money it is due.
The Phoenix-based company listed a little more than $175 million in assets and $262.5 million in debt as of March 31. Founder John Kapoor owns 63.2 percent of the company. It was the first time a drugmaker sought bankruptcy protection due to legal action related to the opioid crisis. The company will be able to keep operating as it devises a plan to pay mounting legal expenses, including more than $11 million spent to defend Kapoor against criminal charges by the government. Kapoor and four other top executives were found guilty in a widespread racketeering conspiracy last month. The bankruptcy filing comes on the heels of a guilty plea by Insys last week to five counts of mail fraud and the admission that it bribed doctors to boost sales of the powerful and highly addictive opioid, Subsys. The sublingual spray was developed as a pain management drug for adult cancer patients who are already tolerant to around-the-clock opioid therapy.