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In closing argument, prosecution says bribes, brazen quest for profit fueled Insys painkiller sales

Assistant US Attorney K. Nathaniel Yeager said Thursday that Insys’s founder, John Kapoor, and four other executives paid off physicians to prescribe Subsys in order to drive up profits for the Arizona drug company and enrich themselves.
Assistant US Attorney K. Nathaniel Yeager said Thursday that Insys’s founder, John Kapoor, and four other executives paid off physicians to prescribe Subsys in order to drive up profits for the Arizona drug company and enrich themselves.(Pat Greenhouse/Globe Staff)

Five former Insys Therapeutics executives paid unscrupulous physicians millions of dollars in bribes to prescribe a powerful opioid painkiller to patients who shouldn’t have gotten it — and sometimes got addicted — in a scheme of “brazen audacity,” a government lawyer told jurors Thursday.

In a closing argument at the landmark trial in federal court in Boston, Assistant US Attorney K. Nathaniel Yeager said Insys’s founder, John N. Kapoor, and four other executives paid off physicians to prescribe Subsys in order to drive up profits for the Arizona drug company and enrich themselves.

The under-the-tongue fentanyl spray was approved specifically for severe cancer pain, Yeager said, but eight practitioners who took more than $1.1 million in bribes sometimes prescribed it for neck injuries, neurological conditions, and other forms of pain.

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“First, do no harm,” Yeager told juors in US District Court, quoting the doctrine that he said the executives got doctors to abandon. The executives changed that, Yeager said, to “first, do what you’re told: Take care of us.”

He urged jurors to convict the five of racketeering conspiracy in what is the first criminal trial of pharmaceutical executives who marketed an opioid painkiller since the nation’s deadly opioid epidemic began.

But Kapoor’s lawyer, Beth Wilkinson, who made it partway through the first of five closing arguments that the defense plans to deliver by the end of Friday, said several government witnesses undermined the very argument Yeager made.

Although the jury did hear from several patients without cancer who were prescribed Subsys, they represented a small number of outliers, she said. Kapoor, she added, genuinely thought Subsys was a game-changing opioid and wanted it widely prescribed because he saw his wife suffer horrific pain before she died of metastatic breast cancer in 2005. “He believed in this medication,” Wilkinson said.

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The arguments came in the 10th week of a criminal trial that has seen the government present jaw-dropping evidence, including a thumping rap video that Insys made for its sales staff in 2015.

In the slickly produced five-minute video, two young Insys salesmen, alternately wearing hoodies and spiffy black suits, dance next to a giant Subsys spray bottle and urge employees to increase sales of the product and get doctors to prescribe high dosages.

Kapoor, a onetime billionaire, was desperate for Subsys to succeed after the Food and Drug Administration approved it in 2012 for cancer patients, Yeager said. Kapoor had invested $59 million in the Chandler, Ariz., company from trusts that he controlled and wanted to recoup his investment.

In late 2012, he brought in Alec Burlakoff, a brash veteran pharmaceutical marketing executive, to galvanize sales. Testifying for the prosecution, Burlakoff said he achieved that by funneling phony “speaking fees” to doctors who agreed to prescribe Subsys. Burlakoff exhorted sales staff to identify doctors who already had a record of prescribing competing fentanyl products — “whales,” Burlakoff called the physicians — and persuaded them to switch to Subsys.

Matter-of-factly calling the payments bribes, Burlakoff said Kapoor insisted that each practitioner generate at least twice as much revenue for Insys from prescriptions than he or she got in payoffs.

Burlakoff said the company kept track of each whale’s ROI, or return on investment.

Burlakoff, who rose to senior vice president of sales, pleaded guilty in November to a racketeering charge and agreed to testify against his former colleagues. He awaits sentencing.

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“There’s nothing wrong with ROI as a business practice,” Yeager said, but at Insys, “You shouldn’t call it ROI. You should call it ROB — return on bribes.”

Getting doctors to prescribe the drug was only half the challenge for the defendants in the conspiracy, Yeager said. Insys also needed to make sure that insurance companies covered the medicine, which had been approved for cancer pain.

So the company created a reimbursement center to fool insurers, according to the government. Prosecution witnesses said employees at the center learned to tell insurers that patients had tried other painkillers and failed to get relief. They also learned insurers would be more likely to approve Subsys if they heard that patients had difficulty swallowing.

One patient who testified, Paul Lara, a 55-year-old grandfather from San Antonio, Texas, said he learned only this year from federal investigators that his insurance company had been told he suffered from cancer, a fraud meant to ensure that Insys would be paid $25,000 a month in prescription costs for Subsys.

In fact, Lara said, he had fallen on cement years earlier, hurting his back and neck. He said he suffered hallucinations from Subsys and frightening bouts of forgetfulness.

Yeager told jurors Insys executives transferred the risk of launching the startup onto such patients, some of whom became addicted to Subsys.

“These patients were used,” he added. “Their pain was exploited.”


Jonathan Saltzman can be reached at jsaltzman@globe.com.

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