By Nate Raymond

(Reuters) – Minnesota on Wednesday became the latest state to sue Insys Therapeutics Inc <INSY.O>, accusing the drugmaker of illegally marketing a powerful fentanyl-based pain medicine, while a former employee pleaded guilty in New Jersey over bribing doctors to prescribe the drug.

The lawsuit by Minnesota Attorney General Lori Swanson alleged that the company marketed the opioid drug intended to alleviate pain in cancer patients for unapproved uses. It added to the legal woes of Insys, whose former top executives have been caught up in a federal criminal investigation involving the drug, Subsys.

In Middlesex County Superior Court in New Jersey on Wednesday, former Insys sales representative Michelle Breitenbach pleaded guilty to participating in a scheme to bribe doctors to prescribe Subsys. She faces up to five years in prison for a second-degree charge of conspiracy to commit commercial bribery, prosecutors said.

Insys, in a statement, said it takes allegations of wrongdoing by ex-employees seriously and is “determined to take responsibility for the past and to learn from it.” Breitenbach’s attorney declined to comment.

Subsys is an under-the-tongue spray that contains fentanyl, an opioid 100 times stronger than morphine. It won U.S. approval in 2012 for managing pain in cancer patients.

Minnesota’s lawsuit, filed in Hennepin County District Court, accused Insys of encouraging doctors to prescribe Subsys to people with other medical conditions and at unapproved doses.

The suit also alleged Insys improperly paid two doctors who became the top Subsys prescribers in Minnesota $43,000 in “speaker fees.”

The Minnesota Board of Pharmacy, which filed the lawsuit with Swanson, also brought an administrative action seeking civil penalties.

The Justice Department earlier this month said it had joined five whistleblower lawsuits accusing Insys of paying kickbacks to doctors to prescribe Subsys.

In October, federal prosecutors in Boston announced billionaire Insys founder John Kapoor’s arrest on charges he participated in a scheme to bribe doctors to prescribe Subsys and to defraud insurers into paying for it.

Prosecutors said Kapoor, former Insys Chief Executive Michael Babich and others schemed to bribe medical practitioners using sham speaker programs ostensibly meant to educate healthcare professionals about Subsys.

Kapoor, Babich and five other former executives and managers have pleaded not guilty.

Insys has said it is in settlement talks with the Justice Department and may need to pay at least $150 million to resolve the probe.

Insys also faces lawsuits by New York, North Carolina, Arizona, New Jersey and New Mexico. It previously settled cases by Oregon, New Hampshire, Massachusetts and Illinois for $9.45 million.

(Reporting by Nate Raymond in Boston; Editing by Will Dunham and Bill Berkrot)