The ballot measure eventually failed to pass, losing 51.32% to 48.68%. Litigation and bankruptcy
In December 2016, seven former executives and managers employed by Insys were taken into custody, including CEO John Kapoor and charged with conspiracy to bribe medical staff in several states to prescribe a specific pain medication to their patients. The accusations were the topic of an NBC special feature report on Megyn Kellys Sunday Night on June 4, 2017.In August 2017, Insys Therapeutics was sued by Arizona Attorney General Mark Brnovich for misleading patients and doctors about the dangers of the drug Subsys, and for lying to insurers about the condition of the patients in a bid to get payment for the drug. He said the firm deceived insurers and pharmaceutical benefit companies into agreeing to pay for the expensive drug by misleading them to believe that the payment request was coming from a doctors office and not the company making the drug. Brnovich also said those Insys employees misrepresented the medical conditions of the patients, lying that they had breakthrough pain, lying that the patients had tried other medications, and lying that the patients needed the sublingual spray rather than less expensive pills marketed by other firms because they had difficulty swallowing. Insys Therapeutics issued a response to the Arizona filing on their website, stating, in part, that "[t]he allegations contained in the Arizona Attorney Generals complaint relate to former employees and physicians that are no longer associated with our Company or our speaker bureau.
The patient later died due to an adverse reaction to her medications.A study done by physician and scientist Scott Hadland, examined the marketing of Insys Therapeutics and found that it was responsible for half of all marketing dollars to doctors. Hadland’s study was cited in a 2017 federal case against the company CEO John Kapoor and several executives, which resulted in their conviction by a federal jury of racketeering conspiracy. Political advocacy
In 2016, Insys donated $500,000 to Arizonans for Responsible Drug Policy, a group opposing a marijuana legalization ballot initiative in the state of Arizona. Investor filings confirm the company was concerned about the impact of legalization on sales for a cannabis-based drug it was developing. The reason publicly given for opposing the measure was to "protect children". However, medical marijuana advocates have criticized Insys position as hypocritical, profit-driven, and an appeal to emotion, as the company actively developed its own cannabis-derived products. In a September 2016 statement, J.P. Holyoak, a representative from the pro-legalization campaign, commented, "It appears they are trying to kill a non-pharmaceutical market for marijuana in order to line their own pockets." That same month, the opposition campaign defended Insys involvement, stating: "We are grateful that Insys Therapeutics – an Arizona-based company – has chosen to join Governor Ducey, the Arizona Association of County School Superintendents, the Arizona Small Business Association, the Arizona Hospital and Healthcare Association, the Arizona Catholic Conference of Bishops, the Arizona Chamber of Commerce and several other community organizations in defeating Prop. 205 in November."