Top executives at the Arizona-based drug company Insys Therapeutics bribed doctors into prescribing an addictive opioid spray containing fentanyl, deceiving insurers into paying for it, federal prosecutors in Boston claimed Thursday.
Insys founder and majority owner John Kapoor, 74 and four other former executives are accused of racketeering conspiracy and other charges. Two others, former Insys CEO Michael Babich and former vice president of sales Alec Burlakoff, have already pleaded guilty and testified against their onetime colleagues.
According to prosecutors, Insys paid doctors hundreds of thousands of doctors to act as speakers at events meant to educate the public about Subsys, which federal regulators have only approved to treat severe pain in cancer patients. The doctors often lectured to empty rooms but were still paid as long as they wrote prescriptions for Subsys outside the usual course of treatment.
“They eliminated that risk and transferred it to the patients who were prescribed that drug,” Assistant US Attorney Nathan Yeager said Thursday. “Profits over patients.”
One cooperating witness, former Insys sales representative Holly Brown, testified in January that the Insys Speaker Program (ISP) events “weren’t really meant to be educational programs but were meant to be rewards to physicians.” She also testified that she saw one of the defendants, former regional sales director Sunrise Lee, giving a lap dance to an Illinois doctor at a 2012 ISP event, which was held at a Chicago restaurant owned by Kapoor.
Burlakoff, the former vice president of sales, testified last month that he recruited Lee to Insys after meeting her at the strip club where she worked because he thought she would have the “ability and the willingness and the desire to talk to physicians and speak with them about the quid pro quo.” Burlakoff testified that executives were later alerted to topless photos of Lee that she had posted online and she agreed to remove them.
Having convinced doctors to prescribe Subsys to patients who did not need it, prosecutors said, Insys then turned its attention to increasing the dosage, a process known as titration. In one of the trial’s more surreal moments, viewers were made to watch a rap video created by two sales reps who sang: “I got new patients and I got a lot of them. I love titrations and it’s not a problem.” The video featured Burlakoff wearing a costume made to resemble a bottle of Subsys.
In order to convince insurance companies to cover a prescription of Subsys, prosecutors say Insys set up call centers where employees posed as physicians’ assistants and were told to say whatever was necessary — including falsely stating that a patient had cancer — to get the insurers’ approval.
On Wednesday, Arizona Attorney General Mark Brnovich announced that Burlakoff had agreed to pay $9.5 million to settle a consumer fraud suit brought against him, Insys and other executives. That amount includes $5.2 million in compensation that Burlakoff received in Insys stock and an additional $4.3 million in civil penalties.
Brnovich said the company’s practices helped “fan the flames of opioid addiction.”