The Naked Self-Interest of Insys, the Pharma Company Funding Opposition to Weed Legalization in Arizona

Sep 09 2016

The Naked Self-Interest of Insys, the Pharma Company Funding Opposition to Weed Legalization in Arizona

September 9th, 2016

A pharmaceutical corporation in Arizona has just provided a particularly egregious example of funding a campaign to oppose the legalization of marijuana out of pure self-interest—despite the damaging consequences of marijuana prohibition for the wider community in the form of mass arrests and racial injustice.

Insys Therapeutic, LLC, the Arizona-based pharmaceutical company, last month donated  $500,000—the largest single contribution yet—to Arizonans for Responsible Drug Policy, the pro-legalization advocacy organization Marijuana Policy Project has revealed. Arizonans for Responsible Drug Policy is a committee formed to oppose Proposition 205, a marijuana legalization ballot initiative which voters will decide on in November.

The $500,000 donation has prompted suspicion among supporters of Proposition 205, which would regulate marijuana much like alcohol and also allow adults to grow up to six plants, that Big Pharma is gaming the public to protect its bottom line.

There are two specific reasons for this speculation: Insys Therapeutic is developing drugs derived from cannabis and it currently relies on the profits from its distribution of a potent opioid painkiller. Legal marijuana, with its painkilling properties, could diminish both of those revenue streams.

According to CNBC, Insys Therapeutic’s revenue is “almost entirely derived from the highly addictive opiate fentanyl.” Fentanyl has garnered a bad reputation of late, due to its involvement in deaths caused by its being mixed with street heroin. It was implicated in Prince’s death, too.

On its “products in development” page, Insys writes:

Using our proprietary sublingual spray technology and our capability to develop pharmaceutical cannabinoids, we work to address the clinical shortcomings of existing commercial products.

Our product pipeline is concentrated on developing medicines that directly address areas of unmet medical needs, including pain, opioid dependence, reversal of opioid-induced respiratory depression, prevention of nausea and vomiting, and ovarian and gastric cancer.

In addition, our pipeline is purposed to address the significant unmet needs of severe pediatric epilepsies such as Dravet Syndrome, infantile spasms, and Lennox-Gastaut Syndrome.

So, the company that makes its money from powerful opioid—the dangers of which advocates and lawmakers have used as a reason to call for looser restrictions on marijuana—is also gearing up to sell its own cannabinoid-based pharmaceutical drug.

And now it has become the biggest donor to the campaign to stop marijuana legalization in Arizona.

“This is certainly about competition that Big Pharma does not appreciate,”J.P. Holyoak, chair of the Campaign to Regulate Marijuana Like Alcohol, tells The Influence. “They aren’t opposed to ending marijuana prohibition … They are just protecting their business.”

Indeed, the pharmaceutical industry has a history of fighting against marijuana legalization for reasons that appear obvious: It not only competes with their products, but also leaves them without a stake in the new industry.

The threat is clear: When it comes to competition with non-cannabinoid-based drugs, several reports have found correlations between medical marijuana states and lower prescription opioid use—although room for debate remains about whether the differences are due to cause or coincidence.

In July, a study published in the journal Health Affairs examined opioid use in Medicare enrollees both before and after medical marijuana laws were passed—and the findings were clear enough to frighten pharmaceutical executives.

The study analyzed 17 states that implemented medical marijuana programs from 2010-2013, and found that after a medical marijuana law was implemented, “the use of prescription drugs for which marijuana could serve as a clinical alternative fell significantly”—and also had a “significant impact” on “spending patterns.” Medicare (a customer of pharma companies) spent $165.2 million less on prescription drugs for conditions marijuana could treat in 2013, after those 17 states legalized for medical use, than it had in 2010.

The study authors wrote: “We found that the use of prescription drugs for which marijuana could serve as a clinical alternative fell significantly, once a medical marijuana law was implemented.“

While there is still some room for doubt—we can’t be certain that marijuana’s availability caused the fall as there is no control group, and factors such as increased restrictions on opioids could also have played a significant role—such findings are still likely to cause concern in the pharmaceutical industry.

This chart from the Washington Post’s “Wonkblog” sets out the situation visually:


To marijuana policy reform activists, the Arizona donation is not necessarily shocking, but still despicable.

“Big Pharma has long been opposed to marijuana legalization. And this massive donation from a company that is actually creating pharmaceutical cannabinoids shows the hypocrisy,” said Holyoak in a press release. “We hope that every Arizonan understands that Arizonans for Responsible Drug Policy is now a complete misnomer. Their entire campaign is tainted by this money.”

To supporters of Prop. 205, the donation proves that the opposition is not about concern for the public, but corporate profit. “Any time an ad airs against Prop. 205, the voters should know that it was paid for by highly suspect Big Pharma actors,” Holyoak said.

Arizona Governor Doug Ducey and the state legislature’s Republican leadership also oppose marijuana policy reform, however, helping to rake in other, less expected donations for opponents of legalization.

Gov. Ducey has said urged supporters of legalization to “check your facts” when claiming marijuana is safer than alcohol. (There has never been a confirmed overdose death from marijuana use in which no other drugs or pre-existing conditions were involved, as even the DEA acknowledges.) And some Arizona politicians have employed more than rhetoric: Despite constituents’ vote to legalize medical marijuana in 2010, state legislators have made a series of attempts to roll back the program. Now, efforts to combat Prop. 205 included an attempt to roll back the Voter Protection Act, and to allow the legislature to appeal a proposal passed by voters.

The pharmaceutical industry is not the only one that seems emboldened by the politicians’ lead.

The alcohol industry is often considered an “expected” enemy of marijuana legalization, given that marijuana could be seen as a recreational alternative to booze. So in that context, the Arizona Wine and Spirits Wholesale Association’s $10,000 donation to Arizonans for Responsible Drug Policy was nothing spectacular.

But other companies that would appear to have no ulterior motive aside from cozying up to the powerful have also contributed to the campaign against Prop. 205.

The Pinnacle West Capital Corporation (one of two major suppliers of electricity in the Phoenix region), Sun State Builders (a General Contracting corporation), and Ewing Irrigation Products, Inc. have each donated $10,000. Other major backers included the construction equipment company Empire Southwest, LLC ($50,000) and Uhaul ($25,000).

However, the largest business contribution to the campaign (Insys aside) was $114,000 from the Arizona Chamber of Commerce & Industry, which joined Republican Rep. Paul Boyer and other local officials in a lawsuit to try to push the initiative off of the ballot this summer. Other members of the suit included Maricopa and Yavapai County attorneys, the latter of whom, Sheila Polk, is co-founder of Arizonans for Responsible Drug Policy. Polk has personally donated $7,600 to the campaign.

The largest individual funders of Arizonans for Responsible Drug Policy are Randy Kendrick, a conservative activist based in the state, and Danny T. Senford, a philanthropist and chairman of the United National Corp., who each contributed $100,000. Big Pharma may be shelling out the biggest bucks, but industry and individual contributions to Prop. 205 opposition totaled $950,000 even before the recent Insys donation.

The situation in Arizona is a telling microcosm of wider marijuana reform battles, currently taking place in nine US states leading up to November—including, most significantly of all, Prop. 64 in California.

Supporters of legalization would question the logic of anyone who donates to the campaigns to block it, but—given the essential racism and injustice of prohibition—they have reason to question the morality of those who do so purely out of self-interest.

Kristen Gwynne is a reporter with a focus on criminal justice and drug policy. Her work has appeared in Rolling Stone, Vice and the Guardian, among other publications. She is a former drugs editor at Alternet and a former associate editor of The Influence. You can follow her on Twitter: @KristenGwynne.