As used in this Form 10-K, “we,” “us,” “our,” and “the Company” refer to Insys Therapeutics Inc. and our subsidiaries. We are a specialty pharmaceutical company that develops and commercializes innovative drugs and novel drug delivery systems of therapeutic molecules that improve patients’ quality of life. We have two marketed products: SUBSYS®, a proprietary sublingual fentanyl spray indicated for the management of BTCP patients 18 years of age and older who are already receiving and are tolerant to around-the-clock opioid therapy for their underlying persistent cancer pain; and SYNDROS®, a proprietary, orally administered liquid formulation of dronabinol for the treatment of nausea and vomiting associated with cancer chemotherapy in patients who have failed to respond adequately to conventional antiemetic treatments and anorexia associated with weight loss in patients with AIDS. As discussed below, on November 5, 2018, we announced a process to review strategic alternatives for our opioid-related assets including SUBSYS®. The Company has also engaged Lazard Freres & Co. LLC to advise the Company on capital planning and the evaluation of strategic alternatives. Additional potential transactions that we may consider include a variety of different business arrangements including spin-offs, strategic licensing and partnerships, joint ventures, restructurings, divestitures, business combinations and investments.
Net Revenue. Net revenue decreased $16.3 million, or 68.2%, to $7.6 million for the three months ended March 31, 2019, compared to $23.9 million for the three months ended March 31, 2018. The decrease in net revenue was primarily attributable to a 67.3% decrease in SUBSYS® shipments to our customers for the three months ended March 31, 2019 primarily due to reduced demand for SUBSYS®, as compared to the three months ended March 31, 2018, and a 1.6% decrease in net sales price due to changes in mix of prescribed dosages and changes in provisions for wholesaler discounts, patient discounts, rebates, and returns, partially offset by a price increase in January 2019. Provisions for patient discounts, wholesaler discounts, rebates, and returns were $0.9 million, $1.1 million, $3.3 million, and $0.8 million, respectively, for the three months ended March 31, 2019, compared to $1.7 million, $2.9 million, $6.6 million, and $3.4 million, respectively, for the three months ended March 31, 2018. The decrease in product sales allowances was primarily attributable to lower sales of SUBSYS® and a decrease in product returns during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018. As we have previously disclosed, the continuing sensitivity by some health care professionals to prescribe, and pharmacies to dispense, opioids, scrutiny by third-party payers and governmental agencies, ongoing state and federal investigations, and media reports related thereto, will likely result in our inability to grow full-year SUBSYS® revenue for the remainder of 2019 when compared to 2018. In addition, for the same reasons, we anticipate that we will experience future declines in SUBSYS® revenue for the remainder of 2019 when compared to prior quarters in 2018. On May 9, 2019, the Company was notified by its logistics provider that such provider has ceased shipments to a specialty pharmaceutical retailer, which accounted for approximately 19% of our total product shipments for the three months ended March 31, 2019. As a result, the Company is effectively precluded from shipping products to this specialty pharmaceutical retailer at this time. Management is monitoring the situation and evaluating the impact of this cessation on its operations and future results.