Arizona Drug Firm Insys Makes Synthetic Pot Compound, Spends Big to Defeat Legal Pot

A Chandler-based drug firm under investigation for its aggressive sales of a lethal painkiller claims that the large donation it made to a group that opposes marijuana legalization was an attempt to protect the public's safety.

Insys Therapeutics, Inc., which has made billions selling a fentanyl-based drug called Subsys, expects to soon launch a pharmaceutical version of THC, the main psychoactive ingredient in cannabis.

But first, it aims to eliminate the competition.

On August 31, Insys made a $500,000 donation to Arizonans for Responsible Drug Policy, (ARDP), a group that's trying to convince voters to reject Proposition 205 in the November 8 election. The ballot initiative, if approved, would grant adults 21 and older the freedom to use, possess, and grow marijuana, and would set up a limited system of cannabis retail outlets.

Prop 205 "fails to protect the safety of Arizona's citizens, and particularly its children," according to a statement Insys provided to New Times on Thursday in response to a message left for CEO John Kapoor. "Our stance is consistent with our company's goals. We strive to develop pharmaceutical products for the supportive care of patients while taking patient safety very seriously. To that end, we believe that all available medicines should meet the clinical standards set by the FDA."

Yet while Insys holds itself out as the savior of Arizonans' health, the company is reportedly under investigation in four states, including Arizona, for marketing practices related to Subsys that have allegedly resulted in patient deaths.

John Kapoor, chairman, president, and CEO of Insys
John Kapoor, chairman, president, and CEO of Insys

According to numerous published reports, Insys salespeople pushed the highly potent drug on doctors for uses beyond cancer pain, for which it was designed. A favored Wall Street buy until critical news stories caused its stock price to plummet in 2015, the publicly held company was most recently sued over its practices by the state of Illinois.

"The consumer fraud lawsuit follows an investigation by the state into allegations that Insys was marketing Subsys broadly for chronic pain in non-cancer patients, despite the lack of Food and Drug Administration approval for such use," according to an August 26 article in the Chicago Tribune.

J.P. Holyoak, chairman of the group behind Prop 205, the Campaign to Regulate Marijuana Like Alcohol in Arizona, says that by accepting the Insys donation, ARDP can no longer claim to represent "responsible drug policy."

"They're knowingly accepting money from one of the worst actors in the business," Holyoak says. "This is a company engaged in illegal marketing schemes, that is intentionally hooking people on opioids."

At a news conference in Phoenix on Thursday morning, Holyoak gave reporters a list of news-story headlines that paint Insys in a harsh light: "Murder Incorporated," "Nurse Pleads Guilty to Taking Kickbacks From Drug Maker," "Using Doctors With Troubled Pasts to Market a Painkiller," among others.

The company is focusing on the upcoming launch of its synthetic THC product, Syndros. An oral version of the generic, THC-imitation drug dronabinol, Syndros would be used to treat anorexia associated with AIDS patients, as well as the nausea and vomiting that typically accompanies chemotherapy, according to the Insys website.

"Approximately 9,500 prescribers account for 70% of current dronabinol prescriptions," the company asserts on its website. "Insys expects to convert a large portion of the market to Syndros as well as expand the market through direct detailing to physicians, highlighting the improved product profile of Syndros."

J.P. Holyoak, chair of the Prop 205 campaign, blasted an anti-legalization group for taking $500,000 from a Big Pharma company that's under investigation for the way it markets an opiate-based drug, and which hopes to produce a pharmaceutical alternative to marijuana.EXPAND
J.P. Holyoak, chair of the Prop 205 campaign, blasted an anti-legalization group for taking $500,000 from a Big Pharma company that's under investigation for the way it markets an opiate-based drug, and which hopes to produce a pharmaceutical alternative to marijuana.
Ray Stern

Insys tells New Times that it "firmly believes in the potential clinical benefits of cannabinoids." In addition to Syndros, Insys is conducting research on how cannabinoids — the compounds found in cannabis plants — might possibly treat epilepsy, anxiety, and PTSD.

Marijuana advocates claim that ingesting marijuana might be able to do the same thing — only less expensively and without as many side effects. Arizona already has a robust medical-marijuana program with about 100,000 patients and 99 dispensaries. The state's Joint Legislative Budget Committee estimates that Arizona has a total of about 600,000 regular cannabis consumers who are 21 or older. Except for the medical-marijuana patients, who pay about $300 for their freedoms, Arizona law states that possession of any amount of marijuana, or simply a pipe to smoke it in, is a felony.

Though the American public has become more tolerant of marijuana in recent years, opponents to legalization in Arizona have the establishment on their side. The ARDP has taken money from the alcohol industry, chambers of commerce, construction companies, and medical groups. State campaign-finance reports show that since May, the ARDP has collected about $1 million in contributions, including the half-million check from Insys.

Arizona Governor Doug Ducey has played a big role in soliciting donations for the ARDP, Holyoak says.

Steve Sanghi, CEO of Microchip Technology, told the press in July that he made a $25,000 contribution to the ARDP after receiving a personal phone call from the governor asking for money.

Insys declined to answer follow-up questions, including whether Ducey had urged its recent donation. 

Ducey's office didn't return a message seeking comment for this story.

The CRMLA, meanwhile, has raised more than $223,000 since May — all from local dispensaries or the national Marijuana Policy Project.

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