The campaign against marijuana legalization in Arizona received a major infusion of cash last week from a synthetic cannabis drugmaker that has been investigated for alleged improper marketing of a highly addictive prescription painkiller, according to campaign finance reports.
The $500,000 donation from Insys Therapeutics, based in Chandler, Ariz., amounts to more than one-third of all money raised by Arizonans for Responsible Drug Policy, the group opposing legalization. It's one of the largest single contributions to any anti-legalization campaign ever, according to campaign finance records maintained by ballotpedia.com.
The cash infusion could even the playing field in an arena where legalization supporters have traditionally outspent opponents. Until the Insys donation, legalization supporters in Arizona had out-fundraised opponents by about 3-to-1. The Campaign to Regulate Marijuana Like Alcohol has raised more than $3 million, much of it from the Marijuana Policy Project, a national group working to change marijuana laws.
Insys has developed a drug based on a synthetic version of marijuana's active ingredient, THC. Called Syndros, the drug was approved by the Food and Drug Administration in July for treatment of AIDS and cancer patients' symptoms. It is awaiting scheduling by the Drug Enforcement Administration.
Insys also manufactures the deadly painkiller Subsys fentanyl. The company is facing state and federal investigations, as well as a shareholder lawsuit, over allegations that it improperly marketed the drug to doctors in an effort to boost sales.
In February, a former sales rep for the company pleaded guilty to fraud charges stemming from a kickback scheme involving Subsys fentanyl purchases. Last month, two former employees pleaded not guilty after being arrested for allegedly participating in a similar fentanyl kickback scheme.
At the time of the arrests, FBI Assistant Director Diego Rodriguez said in a statement, "This case should be something the medical industry and the general public should pay close attention to because it’s one of the reasons we’re experiencing an epidemic of overdoses and deaths in this country."
In an emailed statement, Insys said it opposes the Arizona ballot measure, Proposition 205, because marijuana's safety hasn't been demonstrated through the federal regulatory process.
Insys "has joined a broad alliance of elected officials, health care organizations and business leaders in opposing Prop. 205 because it fails to protect the safety of Arizona’s citizens, and particularly its children," the company said. "Insys firmly believes in the potential clinical benefits of cannabinoids. Like many in the healthcare community, we hope that patients will have the opportunity to benefit from these potential products once clinical trials demonstrate their safe and effective use."
Supporters of marijuana legalization questioned the company's motivation for getting involved in the campaign, noting its financial interest in minimizing competition for Subsys and synthetic marijuana products.
"It appears they are trying to kill a non-pharmaceutical market for marijuana in order to line their own pockets," J.P Holyoak of the pro-legalization campaign said in a statement.
Tom Angell of the pro-marijuana group Marijuana Majority said the donation blunts opponents' argument that marijuana legalization would put public safety at risk. Studies have shown that marijuana can be effective in treating chronic pain, without the overdose risk or side effects that powerful opioid painkillers, like fentanyl, can bring. Other studies have found that opioid overdose deaths fall in areas with access to medical marijuana.
"Accepting this money undermines everything that marijuana prohibitionists say about their desire to protect public health," Angell said in an email. "It's difficult to understand how people who profit from selling a drug like fentanyl can keep a straight face while arguing that marijuana is just too dangerous to legalize."
The opposition group Arizonans for Responsible Drug Policy made no apologies for accepting the contribution.
"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," ARDP campaign manager Adam Deguire said in an emailed statement.
Kevin Sabet of Smart Approaches to Marijuana, a national group opposed to marijuana legalization, said in an email that there was nothing particularly objectionable about Insys's efforts to oppose recreational marijuana while also working to develop synthetic drugs based on chemicals in the plant. "I don't think Insys should be admonished for working on marijuana-based medications via the FDA process — they're following the rules, and that's a good thing," he said.
"Obviously I don't agree with aggressive fentanyl marketing," he added.
This isn't the first time the company has been active in marijuana politics. In 2011, the company wrote to the Drug Enforcement Administration to express opposition to loosening restrictions on natural THC, citing "the abuse potential in terms of the need to grow and cultivate substantial crops of marijuana in the United States."
Last year, the company petitioned the DEA to loosen restrictions on the synthetic version of another compound occurring in marijuana plants, known as cannabidiol (CBD).
Insys Therapeutics made $62 million in net revenue on Subsys fentanyl sales in the first quarter of this year, representing 100 percent of the company's earnings. The CDC has implicated the drug in a "surge" of overdose deaths in several states in recent years.
Last October, the company announced it had received a "fast track" designation from the FDA to speed development of a drug intended to treat opioid overdoses.
"We are encouraged by the Fast Track designation that will allow us to advance our program to address a significant unmet medical need in the market," the company said in a statement at the time. "Opioids are responsible for a high proportion of fatal drug overdoses around the world."
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This story has been updated to include the name of Insys's fentanyl drug, Subsys.