'Eat what you kill': How a fentanyl drugmaker bribed doctors, harmed patients and collected millions

With two weeks to go in the year, Alec Burlakoff dashed off an urgent email to sales representative Daniel Tondre.

Tondre was assigned to a pain specialist in Sarasota, Florida, who was one of the most prolific prescribers of the potent fentanyl spray called Subsys. And Insys Therapeutics sales executive Burlakoff wanted the doctor, Steven Chun, to prescribe more of the addictive and potentially deadly drug to meet his company’s goal.

“My best chance of hitting this is for Dr. Chun to turn it on this week,” Burlakoff wrote to Tondre in the December 2012 message. “He is my ace in the whole (sic). Ask him NOT to hold back, I need a big bump this week.”

Insys pursued Chun and doctors like him across the country as part of a multiyear effort to juice sales and bribe doctors willing to prescribe the company’s pain-relieving drug Subsys, according to court testimony and new documents released this week.

While major pharmaceutical companies such as Purdue Pharma and Mallinckrodt have garnered far more attention for their respective roles in the opioid crisis, Insys remains the only drug marketer whose top executives were jailed as part of the opioid epidemic. The fallout from Insys' cash-for-scrips strategy that made the company a Wall Street favorite reverberates today.

On Monday, Chun was sentenced by a federal judge in Florida to three years and six months for charges of accepting bribes in the form of sham speaker fees from Insys. The doctor collected $278,000 in payments that federal prosecutors described as kickbacks and bribes to prescribe the fentanyl spray for his patients. Tondre, an Insys sales rep also convicted in the bribery scheme, will be sentenced Dec. 15.

The email exchange between Burlakoff and Tondre is among more than 760,000 emails and other documents released this week that reveal details about the company’s culture of greed, power and sales. The documents, released first to USA TODAY, were published in an archive run by Johns Hopkins University and the University of California, San Francisco.

The documents shed light on the company’s intense focus on sales during daily 8:30 a.m. calls and frequent emails demanding sales reps prod doctors referred to as "whales" to prescribe Subsys to more patients in higher dosages to collect more money from insurers.

The documents  include transcripts from the executives' 2019 criminal trial and details about the company's center where employees learned to deceive insurers to get Subsys prescriptions covered. The archive has access to about 3 million Insys records with follow-up document releases planned.

In all, more than 8,000 people died after taking Subsys since 2012, Food and Drug Administration records show. The company filed for bankruptcy in 2019 and its top executives went to jail — including founder John Kapoor, a once-billionaire entrepreneur who became the highest-ranking pharma executive to be jailed in the opioid crisis.

RELATED: Company settles with family of woman who died of Subsys overdose 

The meteoric rise of a small drug company

It started a decade ago when Kapoor described his startup’s early efforts to market Subsys as the “worst (expletive) launch” in the drug industry’s history. Kapoor sought a fix in 2012 when he hired an ambitious pharma sales veteran, Burlakoff, who laid out his plan to woo doctors who'd take lucrative payments in exchange for freely prescribing the fentanyl spray.

When he explained his vision during a job interview, Kapoor slammed his first on a conference table, Burlakoff testified.

“That’s our next VP of sales,” Kapoor said.

Insys Therapeutics founder John Kapoor, right, departs federal court on Jan. 23, 2020, in Boston, after he was sentenced to 5 1/2 years in prison for orchestrating a bribery and kickback scheme prosecutors said helped fuel the opioid crisis.
Insys Therapeutics founder John Kapoor, right, departs federal court on Jan. 23, 2020, in Boston, after he was sentenced to 5 1/2 years in prison for orchestrating a bribery and kickback scheme prosecutors said helped fuel the opioid crisis.

This exchange one decade ago fueled the meteoric rise of a small Arizona-based drug company whose executives touted success on financial news shows amid a climbing stock price and sales that exceeded $330 million in 2015.

In 2012, the Food and Drug Administration approved Subsys for cancer patients with “breakthrough” pain. The user sprays the drug beneath the tongue so it can be instantly absorbed, bringing immediate relief for pain spikes that aren't controlled by other pain relievers.

The company could not legally market the drug to non-cancer patients. But doctors were free to prescribe the drug “off label” for uses other than cancer. Insys found and paid doctors who were willing to do so.

Acting on tips and whistleblower complaints, federal investigators dug into the company's business practices, and Kapoor and four executives on his team were ultimately convicted of bribing doctors and defrauding insurers under the Racketeer Influenced and Corrupt Organizations Act.

In 2020, Kapoor was sentenced to 5 ½ years. Burlakoff, 48, served 26 months after pleading guilty to racketeering. CEO Michael Babich, 46, served 30 months after pleading guilty to conspiracy to commit mail and wire fraud and one count of mail fraud. Both testified against Kapoor before they were sentenced in 2020.

Babich and Burlakoff did not return messages from USA TODAY. Kapoor is scheduled to be released from federal prison August 2024, federal Bureau of Prisons records show.

More coverage of the opioid epidemic:

'Culture of sales'

Author Evan Hughes detailed the company’s fraternity-like atmosphere in his book, "The Hard Sell: Crime and Punishment at an Opioid Startup," released earlier this year. He said the company marketed its fentanyl drug as if it was selling cars.

“Kapoor was a hard-driving boss and businessman who only wanted to work with the most aggressive people,” Hughes told USA TODAY.  “It was a culture of sales ... The fact that it was opioids was a little inconvenient because it meant there were more regulations. It didn’t color their strategy, which would be very much the same as, say, moving more Subarus than the competing dealer.”

The emails and court transcripts reveal the company targeted sales representatives who were PhD’s — “poor, hungry and dumb” or "poor, hungry and driven." The company’s motto, “eat what you kill,” reinforced how sales reps would be rewarded or punished based on their ability to reel in doctors willing to prescribe more and higher dosages.

One exchange between Burlakoff and a regional sales manager on Dec. 31, 2013, showed how fortunes changed quickly for employees. Burlakoff wanted to assign a new sales rep to an Arkansas anesthesiologist who had been prescribing another company’s painkillers to patients.

While the subordinate manager protested the assignment change of her sales rep, Burlakoff upbraided her.

“The current rep did not eat what he killed. He did not KILL anything, he merely braised the doctor!” Burlakoff wrote in an email Dec. 31, 2013. “No manager has a leg to stand on with me as it pertains to what targets I move from one rep to another. I don't want to hear it. I will do what will maximize the results of Insys!”

This still image from a 2015 video presented as evidence by the U.S. Attorney's Office in federal court in Boston shows a scene from a rap video made to motivate Insys Therapeutics sales representatives to get doctors to prescribe higher doses of the company's highly addictive fentanyl spray.
This still image from a 2015 video presented as evidence by the U.S. Attorney's Office in federal court in Boston shows a scene from a rap video made to motivate Insys Therapeutics sales representatives to get doctors to prescribe higher doses of the company's highly addictive fentanyl spray.

The documents provide the public a glimpse into the types of actions and decisions companies made that fueled the opioid epidemic, said Dr. Caleb Alexander, a Johns Hopkins professor of epidemiology and medicine professor and founding co-director of the university's Center for Drug Safety and Effectiveness.

Alexander described Insys as a "rogue actor" because its leaders engaged in "outright criminal behavior."

In particular, he said, the improper marketing of Subsys led to too many cases of addiction and overdose deaths.

"These are incredibly potent drugs that really have a very, very narrow place in clinical practice," said Alexander, who has served as a paid expert witness on opioid-related litigation. "That's not how they were promoted to prescribers and patients. And far too many people have paid the price."

'Dirty little secret'

After Insys hired Burlakoff in mid-2012, he was assigned as a manager overseeing the company's Southeast region. It was there where he piloted the scheme to pay doctors "speakers fees" in exchange for prescribing Subsys.

Burlakoff testified the cash for prescriptions scheme is the "dirty little secret in the industry that everybody is aware of."

He hired his college roommate, Joseph Rowan, who also worked with Burlakoff at the pharmaceutical company Cephalon. Rowan had developed a close relationship with a Dr. Xiulu Ruan, an Alabama pain management specialist who was one of the region's most prolific prescribers of powerful fentanyl-based opioids.

The goal from the beginning was unmistakable, Burlakoff testified. "We're going to pay him (Ruan) as much as we possibly humanly can in exchange to write as much Subsys as he humanly can."

The arrangement worked. Rowan was the company's highest-grossing sales representative as Ruan became a top Subsys prescriber. Federal prosecutors said he often prescribed Subsys and Abstral, a fentanyl drug from a rival manufacturer, off label for neck, back and joint pain. Ruan is serving 21 years and his partner, Dr. John Patrick Couch, 20 years, but the U.S. Supreme Court in June reversed the convictions, citing the lower court's failure to give a jury good faith instructions, and sent the case to the 11th Circuit Court of Appeals.

Burlakoff was promoted to the position of vice president of sales, and he deployed his pay-to-prescribe strategy nationwide. He also took control of the staff, hired managers who took direction from him, and even hired a woman he met at a strip club who would later rise to the position of regional sales manager.

Insys recruited Tondre from another drug company, in part, because he had a "great relationship" and a "tremendous amount of success" with Chun, Burlakoff testified.

Chun's attorneys argued in a sentencing memorandum that Insys "homed in on his loneliness and need for social interaction," to convince him to attend company-paid dinners as part of the speakers program.

Roger Futerman, a lawyer representing Tondre, said his client is "truly remorseful for his poor judgment."

"This happened a long time ago, over seven years," Futerman said in an email. "He has lost a lot, and is trying to be a good father and good husband ... "

In all, Kapoor and eight former employees, 18 doctors, a nurse practitioner and a physician's assistant pleaded guilty or were convicted following trials in connection with the Insys investigation.

Insys case spotlights pharma marketing

In 2019, Insys filed for bankruptcy after reaching a $225 million settlement over claims it paid doctors to prescribe Subsys. Later that year, a judge approved a deal to sell Subsys to a company called BTcP Pharma. While the drug is still available, BTcP Pharma pledged to limit marketing and distribution of Subsys to make sure only cancer patients could get access.

Meanwhile, experts have sought to highlight the importance of restricting or ending drug companies' promotion of opioids. The Stanford-Lancet Commission on the North American Opioid Crisis called for a national ban on direct-to-consumer advertising of drugs that make a therapeutic claim. Drug companies also should be prohibited from deducting the costs of advertising from their income.

The commission did not call for a ban on speakers programs in which drug companies pay doctors to discuss a drug's uses. However, the commission recommended full disclosure of pharmaceutical and other private industry connections to medical providers, said Keith Humphreys, a Stanford University professor who chaired the Stanford-Lancet commission.

Such disclosures might not prevent but it could help detect an Insys-style "fraud and bribery," Humphreys said.

"Full disclosure would aid that detection because the amounts paid were so high for such minimal work," he said.

Ken Alltucker is on Twitter at @kalltucker, or can be emailed at alltuck@usatoday.com.

This article originally appeared on USA TODAY: How fentanyl drugmaker Insys bribed doctors to prescribe potent Subsys