As the opioid crisis dominates headlines, one pharmaceutical company that sells fentanyl recently reached a settlement in principle resolving a Department of Justice Investigation for $150 million. NBC 5 has learned it also has selected the Chicago Archdiocese’s chief operating officer to join its board of directors.
The founder of INSYS Therapeutics, based in Arizona, was charged last year by the DOJ with racketeering, mail and wire fraud as well as violating kickback laws. The company also faced an investigation and a separate lawsuit from Illinois Attorney General Lisa Madigan. That state case was settled. At the same time -- joining this opioid company board of directors is Betsy Bohlen, the COO for the archdiocese.
The spray form of fentanyl--called subsys--is manufactured by INSYS Therapeutics. Its intended use is to treat cancer patients. However a federal investigation of the company alleged INSYS paid kickbacks to induce doctors and nurse practitioners to prescribe subys for minor discomfort. Published media reports reveal allegations made in a lawsuit by a former employee that INSYS offered doctors sex, outings to gun ranges, strip clubs and expensive dinners to those who prescribed the fentanyl spray.
Madigan claimed in the state’s lawsuit “the drug company peddled the prescription opioid for neck and back pain, even though it was not approved for those uses.”
Then, Madigan said when her suit was settled. In a press release, the attorney general said “INSYS pushed a highly addictive opioid … to increase profits and its unethical, greedy behavior is responsible for creating the opioid epidemic and resulting overdose deaths in our state.”
INSYS’ founder and director,John Kapoor, was arrested a year ago racketeering, conspiracy, bribery and fraud. He’s plead not guilty.
The $150 million DOJ settlement in principle was announced by INSYS in August, the same time a new member to its board of directors was announced.
Bohlen is a former investment banker and management consultant and now the highest ranking woman of the Chicago Archdiocese.
She was chosen by Crain's Chicago Business as one of the most powerful women in Chicago business. Don Haider is a professor emeritus at Northwestern’s Kellogg School of Business.
“I don’t see any specific conflict," he said of Bohlen joining the board.
But he also offers this advice to Bohlen.
"Can you do your current job and still have time to able to contribute to a company that is in turmoil, that is in turnaround, that is going to command a lot of time," he asked.
Documents NBC 5 has obtained show Bohlen will receive $50,000 dollars a year as a cash retainer and $280,500 worth of stock shares. Her archdiocese salary is more than $300,000.
“INSYS has undergone a near-complete board, management and employee base change,” Bohlen said in a written statement to NBC 5. “The company is dedicated to bringing new and existing products to patients who need them and to complying strictly with regulations governing its operations. INSYS management is determined to support appropriate prescribing regulations and to find new pain management solutions as a means of addressing the opioid crisis. I look forward to contributing my expertise to the company’s ongoing transformation as a member of the Board.”
Madigan reacted with her own statement.
“INSYS is one of the most egregious opioid manufacturers in the country," she said. "It showed a complete disregard for patients’ health by promoting addictive opioid drugs for improper proposes. It will be incumbent on the new board members to ensure that INSYS completely changes its ways and starts operating ethically and appropriately."
A spokeswoman for the archdiocese tells NBC 5 Bohlen discussed this appointment with Cardinal Blase Cupich and he supported her joining this board.
"The Cardinal does not have to approve outside activities," Paula Waters, a spokeswoman for the archdiocese said. "Betsy discussed this appointment with Cardinal Cupich. She assured him that her board responsibilities would not diminish her effort and commitment to the operations of the Archdiocese. He supported her joining this board and noted the company was wise to recognize the wide range of experience, particularly in turnaround situations, she could bring."