THE FENTANYL SCANDAL
FORMER BOCA SCHOOL COUNSELOR USED EXOTIC DANCER, MODELS TO PUSH FENTANYL
A lec Burlakoff once worked as a guidance counselor and basketball coach at a private Boca Raton prep school, but then he jumped into the cutthroat world of pharmaceuticals. It would never be
the same.
As national sales chief for Insys Therapeutics, he helped direct the hiring of a former exotic dancer from West Palm Beach, models and even a reality TV star who posed for Playboy to peddle one of the most dangerous drugs doctors can prescribe: a spray form of fentanyl.
Now, he stands charged as the sales mastermind, the chief driver of what federal prosecutors call a national criminal conspiracy to catapult sales for the fentanyl spray called Subsys by bribing doctors to prescribe it through a “sham” speakers program.
Insys’ alleged pay-for-scripts plan may indeed have been birthed in Palm Beach County. Before the company hired Burlakoff, he plied his trade slinging another fentanyl drug here, targeting some of the same doctors for another pharmaceutical company that employed a speakers program.
The Arizona-based company blatantly played to doctors’ libidos to get them to prescribe the fentanyl spray, which is up to 100 times stronger than morphine and approved by the FDA only for cancer treatment, criminal indict
ments claim. A regional sales manager for the Wall Street wunderkind referred to these doctors in a lawsuit as “speaker whores.”
“I’ve seen pharmaceutical companies engage in greedy and unethical tactics, but I think Insys may have set a new bar in sliminess,” said Dr. Andrew Kolodny, co-director of the Opioid Policy Research Collaborative at Brandeis University.
More than 80 percent of the prescrip
tions written during Burlakoff ’s threeyear tenure at Insys were for off-label treatments and did not go to cancer patients suffering breakthrough pain — pain so severe no other painkillers work, court records state.
Only 1 percent of doctors who prescribed Subsys were oncologists treat-
ing patients for cancer, a shareholder lawsuit states. Many of the doctors paid by Insys were neurologists and pain medicine specialists.
Sales reps embedded themselves in doctors’ offices, delved into patient files to find Subsys candidates and sat with doctors and patients to sell the drug to their patients. The Top 10 prescribers in the nation include a Palm Beach County physician.
Insys left nothing about its profit to chance. It set up a boiler room in which telephone operators from Arizona, pretending to be workers in the doctors’ offices, told insurers that patients had cancer when they didn’t in order to get prescriptions approved, criminal and civil court documents contend.
Insys’ stock price went through the roof. Top executives cashed out. And patients treated for ailments other than cancer turned into addicts — if they didn’t die.
At least 908 deaths in which Subsys is a primary suspect were reported in five years to the FDA as “serious adverse events” associated with the drug, a Palm Beach Post analysis of raw data sent to the agency by Insys found.
It’s not clear how many deaths were cancer-related.
The FDA uses the data as an alert system to trigger investigations of possible safety problems with devices or drugs it regulates.
An Insys spokesperson said the numbers are misleading because determining what caused the person’s death requires a deep dive into each case. The company said it found only a few deaths from 2012 through nine months of 2017 attributed directly to the fentanyl spray but refused to say how many.
“Some of the higher doses of fentanyl spray have more in common with a lethal weapon than a medicine,” said Kolodny. “One squirt of 800 micrograms of Subsys spray could easily cause an overdose in a person not used to taking opioids.”
Fentanyl may have a role in the operating room or for palliative care, but it is not a drug that should be prescribed for chronic pain, he added.
Take the case of Jeffrey Buchalter. The veteran survived two tours in the Iraq War only to be imprisoned by a Subsys addiction. In September, he testified at a congressional hearing on Insys that he was prescribed the equivalent of 5,000 Percocet pills a day.
Buchalter said Subsys turned him into a fullblown opioid addict. “I’m fortunate, for somehow I made it, unlike others,” he said. “The scars from Subsys always remain. The prospect of recovery remains uncertain.”
Carolyn “Susie” Markland, a grandmother in Jacksonville, and Sarah Fuller, newly engaged in New Jersey, didn’t make it.
“Every day of my life, I must live with the realization that Sarah is gone because of Insys’ greed,” her mother, Deborah Fuller, testified at the September Senate hearing. “I believe that Sarah’s death certificate should be changed to indicate her death was a homicide, and the cause of death should be corporate greed.”
Boca Raton charmer
Today, if Insys Therapeutics was a patient, it would be bleeding out. There are indictments of former executives like Burlakoff, plea bargains for sales staff and prison time for doctors. There are lawsuits by patients and their families, lawsuits by infuriated stockholders, lawsuits by insurance companies, even lawsuits by states, counties and cities.
In the numerous court actions, one name shows up more than any other — more than the company’s founder or even the CEO. The name is Alec Burlakoff.
Burlakoff, 44, was a Boca Raton charmer who rode a start-up pharmaceutical company to the top of a niche market. In an industry known for plying doctors with branded knickknacks and elaborate conference junkets, Burlakoff ’s sales force lured doctors with so much more: cold hard cash, court documents attest.
Insys paid doctors $16.3 million over nearly 2½ years, thwarting the FDA’s efforts to keep a lid on highly addictive, highly dangerous fentanyl medicines, prosecutors say.
And Insys did it when the nation struggled in the grip of an unparalleled opioid crisis.
“The conduct alleged in our lawsuit is nothing short of evil,” said New Jersey Attorney General Christopher Porrino in announcing his state’s action against Insys in October.
Eight states have sued, claiming fraud on taxpayer-supported health care programs. Other states, such as Florida, are investigating.
Burlakoff is one of several former Insys executives charged in a federal criminal racketeering case out of Massachusetts. Among them are founder John Kapoor, CEO Michael Babich and Midwestern regional sales director Sunrise Lee, who once danced at Rachel’s Gentlemen’s Club in West Palm Beach, according to news reports.
In addition to them, seven former sales reps and managers have been charged with or pleaded guilty to health-care fraud or engaging in a kickback scheme. Fourteen Insys prescribers — none in Florida — have been charged with fraud, taking kickbacks or illegal prescribing in connection with Subsys. Two have been convicted, and five have pleaded guilty.
The FBI is on a national hunt for victims and has listed 10 unidentified physicians as co-conspirators in the racketeering indictment against former Insys executives.
The city of Delray Beach sued Insys and other pharmaceutical companies in December, contending that their deceptive marketing practices have played a key part in the burgeoning opioid epidemic, which is putting a financial burden on the city. Broward County did the same in March. Palm Beach County followed on Thursday.
With so many pending lawsuits and criminal cases, most doctors and former Insys employees were reluctant to talk. Neither Burlakoff, now living in Charlotte, N.C., nor his attorney returned calls or emails for comment.
The reams of court documents examined by The Post over nine months, however, speak volumes about what prosecutors describe as a criminal enterprise masquerading as a pharmaceutical company.
These days, Insys claims it is beyond its sordid past and is a good corporate citizen, replacing 90 percent of its key staff and cooperating with investigations. It says it looks to the future with a number of drugs in its research pipeline that could help children plagued by seizures and seniors suffering from Alzheimer’s disease.
“While understandable, it’s disingenuous to repeatedly demonize a company that has made a firm and sincere commitment and is taking all the necessary steps to conduct business according to high ethical standards,” the statement read. “It’s also unfair to the company’s current employees, most of whom are new to Insys and had no involvement in the past misdeeds.”
‘Titanic greed’
One person not letting Insys off the hook is U.S. Sen. Claire McCaskill, who has accused Insys and the pharmaceutical industry as a whole of exploiting the opioid crisis to get patients hooked on its products. The Missouri Democrat held a hearing in September in which families and former Subsys patients spoke about how they or their loved ones were unwittingly prescribed the product for routine pain.
“This epidemic is the direct result of a calculated sales and marketing strategy major opioid manufacturers have allegedly pursued over the past 20 years to expand their market share and increase dependency on powerful — and often deadly — painkillers,” she wrote Insys in March 2017 seeking documents.
In 2016, about 40 percent of all U.S. opioid deaths involved prescription drugs, about 17,000 overdose deaths, according to the CDC. And that doesn’t even take into account deaths from heroin or fentanyl sold on the street.
Insys says it is not responsible for the opioid crisis, saying Subsys amounted to a fraction of 1 percent of all opioid prescriptions in Florida, for example, during the height of the medication’s use in 2015.
“There is no doubt there were misdeeds by former employees, but Subsys is probably not the cause of the opioid epidemic based on the numbers,” said company spokesman Joe McGrath.
Former Subsys patient Angela Cantone of Greenville County, S.C., isn’t ready to give Insys a pass and has sued the company after her physician put her on the medication for pain from an intestinal ailment. Dr. Aathirayen Thiyagarajah was paid more than $200,000 by Insys in nearly 2½ years as a speaker.
“That’s like Budweiser saying, ‘We don’t contribute to alcoholism,’” Cantone said. “But they have a stake in the game, so they do contribute to it.”
Porrino, the New Jersey attorney general, said that “titanic greed and corporate irresponsibility” meant Insys cared little that its product could exacerbate the opioid crisis.
It wouldn’t be the first pharmaceutical company to push off-label use of a dangerous opioid medication.
The U.S. Justice Department fined OxyContin’s manufacturer, Purdue Pharma, $634.5 million in 2007 for off-label marketing to doctors, misleading them with false studies and lying to them about the drug’s risk of addiction. Three former executives pleaded guilty to misdemeanors.
A year later, Burlakoff ’s previous employer, Pennsylvania-based Cephalon, settled with the Justice Department for $425 million for pursuing off-label prescriptions of its fentanyl lollipop and two other drugs through a speakers program for doctors. The company pleaded guilty to a misdemeanor charge of misbranding drugs.
Insys has not been criminally charged as a company.
Richard Hollawell, the attorney for Sarah Fuller’s family, said the pharmaceutical companies view these fines as the cost of doing business — and that certainly wasn’t lost on Insys.
“This is a playbook that they took from Cephalon where Burlakoff came from,” he said.
‘Not addicted if (patient) is in pain’
Alec Burlakoff ’s own words bear out a sellat-any-cost culture at Insys.
“If you keep (patients) on (Subsys) for four months, they’re hooked . ... Then they’ll be on it a year, maybe longer,” he told his reps at a 2013 training class, according to shareholder lawsuits.
A salesperson afterward took Burlakoff aside and asked whether he intended to get people addicted. Burlakoff coyly responded: “It’s not addicted if (the patient) is in pain.”
Burlakoff worked like the wizard behind the curtain, directing his “young and naive” salespeople to thwart FDA restrictions on Subsys, shareholders allege.
The agency, to control powerful fentanyl drugs, placed Subsys along with five others in a special category called TIRF-REMS. Doctors, pharmacists, patients and distributors of the drugs must enroll in the program so they are educated on the risks. The drugs are to be prescribed only for breakthrough cancer pain, and they must be given only to “opioid-tolerant” patients so the risk of fatal overdose is reduced.
For Insys, the FDA’s restrictions were hardly a prescription for big profits in a small, crowded market.
While the company is barred from marketing the drugs for uses outside FDA approval, doctors are free to prescribe them “off-label.” The FDA has no authority over doctors. Physicians prescribe off-label all the time and with great success, including antidepressants for menopause, blood-pressure medication for anxiety and an anti-convulsive pill for bipolar disorder.
“Insys devised a subversive and illegal plan to promote Subsys for uses beyond the sole, narrow indication for which it sought and received FDA approval,” the New Jersey lawsuit states.
The company started its aggressive marketing push when Burlakoff came aboard in June 2012 as Southeast regional sales manager, lawsuits state. He used a tried-and-true method of Big Pharma — having doctors host speaking engagements to get other physicians on board in prescribing Subsys.
Insys’ dinners, however, were often “shams,” according to federal prosecutors, attended only by staff, friends and family. Names of doctors who weren’t present were forged on the attendance sheet, documents state.
Burlakoff told his sales reps the program was about getting “money in the doctor’s pocket,” according to court documents.
At Burlakoff ’s urging, sales reps told doctors that if they wanted to get future speaking engagements, they needed to prescribe more