Ex-CEO: Insys rapped to fentanyl beat
Says company pushed Rx excesses in video
Billionaire John Kapoor dangled lavish bonuses and used a music video parody featuring a rapping fentanyl nebulizer to motivate his young sales force to talk doctors into prescribing potentially deadly doses of his company’s opioid pain reliever, the pharma founder’s disgraced CEO testified Wednesday.
“The majority did not have pharmaceutical experience,” star government witness Michael L. Babich said of the sales staffers on his second day of testimony.
Jurors hearing evidence in the racketeering trial of Kapoor and four other former Insys Therapeutics executives at the U.S. District Court in Boston appeared both disturbed and amused as federal prosecutor K. Nathaniel Yeager screened “Great by Choice.”
The low-budget motivational video was shown at Insys Therapeutics’ 2015 national sales meeting, according to Babich. It featured attractive Insys employees decked out in tuxedos and gold chains rapping of the potent product Subsys, “While the competition is just making noise, we’re making history because we’re great by choice.”
The rappers are later joined by a dancer in a Subsys sublingual inhaler costume labeled “1600 mcg,” the highest dosage of the fentanyl spray Babich said clinicians could prescribe — exceedingly more potent than the 100 mcg recommended for first-time users to avoid overdosing. The stronger the dosages Insys sales reps sold, the larger their bonuses were.
Insys was concerned that patients who dropped Subsys tended to be on low doses, prosecutors allege.
“Great by Choice” ends with the costume being stripped away to reveal Insys vice president of sales Alec Burlakoff, aggressively grunting. Burlakoff, 45, pleaded guilty to racketeering conspiracy prior to the trial’s start. He is slated to be sentenced May 29.
Babich described Burlakoff as “very aggressive.” He recalled that when Kapoor promoted Burlakoff to VP, “Alec was very forthright with the fact that he was going to fire a number of managers on the first day and he was given the green light to do that. He just said the majority of them sucked.”
Babich, 42, pleaded guilty last month to racketeering conspiracy and fraud charges and agreed to serve as a cooperating witness against his former colleagues for his role in Insys’ alleged scheme to bribe doctors to prescribe Subsys, even to patients who didn’t need it.
Nine months after Subsys was launched in 2012, Insys had paid 141 clinicians across the country $554,600 to promote the drug at what prosecutors allege were largely phony speaker programs. In turn, Insys made $4,183,616 from the prescriptions those physicians were cranking out. Babich called the payments to doctors “bribe” money. But even as the cash poured in, Babich said, Insys caved to doctors’ demands for the royal treatment.
In one instance, a physician was nicknamed “the $9 million man” because of his potential value to Insys, Babich said. The pharmaceutical manufacturer provided him first-class travel arrangements and hired his girlfriend to keep him happy, he said, adding, “We were hopeful it would equate to more scripts for us.”
He acknowledged Insys even took on one doctor who a sales rep warned in an email “runs a very shady pill mill” because, “he was the biggest writer of that type of product in the Chicago area and getting that revenue was very important to our company.”
Babich, who was Insys’ president and CEO from 2011 to 2015, faces more than 20 years in federal prison when he’s sentenced May 30.