Right on the heels of the high-profile arrest of Insys' billionaire founder John Kapoor, the drugmaker has recorded a $150 million charge as it works to put its Subsys legal problems in the past.
The charge is the "best estimate of the minimum liability exposure" the company expects out of its ongoing Department of Justice probe into Subsys marketing, according to a release. With the expense, the company recorded a net loss of $166 million in the third quarter, it announced Thursday.
Insys has extended an offer to settle the DOJ investigation, the company said in a release, but federal officials haven't accepted the proposal. The embattled drugmaker is weathering scrutiny on its promotion strategies for powerful painkiller Subsys, which is approved to treat breakthrough pain from cancer.
Over the years, the company has attracted attention from authorities for aggressive off-label marketing and for paying doctors to prescribe its med. The company attracted attention due to rapid sales increases for the drug. Separate from the federal investigation, the company faces a slew of other probes and lawsuits.
Most recently, federal officials arrested Kapoor and charged him with multiple felonies relating to the promotional scheme. Kapoor has since stepped down from the company's board and wrote to fellow members he is "confident" he committed no crimes and believes he will be "fully vindicated after trial."
"Nevertheless, I realize that my continued involvement with Insys will only serve to draw unnecessary attention to the company and its employees, and distract the management team from my primary goal when I founded Insys—helping patients," Kapoor wrote.
Kapoor's arrest came after officials previously charged other former executives at the company, including former CEO Michael Babich, and other lower level staffers. In response to the scrutiny, the company brought in a new CEO, who has replaced staff and other management.