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Drug company executives face prison time for role in opioid epidemic

Thursday, several executives at Insys Therapeutics were sentenced to prison for a bribery scheme that paid doctors to prescribe the company’s lucrative and addictive painkiller. These sentences are a landmark moment in the push to hold drug makers accountable for their role in America’s deadly opioid epidemic. William Brangham reports, in a collaboration with Frontline and the Financial Times.

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  • Judy Woodruff:

    Yesterday saw a landmark moment in the push to hold opioid manufacturers legally accountable for their role in fueling the addiction epidemic that has claimed hundreds of thousands of lives.

    Now, thanks to laws designed to catch mob bosses, executives at one company will go to prison for years.

    Our partners at PBS' "Frontline," working in collaboration with The Financial Times, gained unique access to the witness at the very center of this case.

    William Brangham is back and has more on this monumental case.

  • William Brangham:

    In a discreet location in Boston, under the supervision of federal prosecutors, salesman and star prosecution witness Alec Burlakoff spoke for the first time to our colleagues at "Frontline" about his role in paying doctors to write prescriptions.

  • Alec Burlakoff:

    The whole company is premised on incentivizing doctors to prescribe our medication.

    The task that Dr. Kapoor is asking me to pull off, one, bribe doctors, and then, two, dictate how they actually prescribe the medication, it's not an easy one.

  • William Brangham:

    The task he says CEO John Kapoor asked him to pull off led to the meteoric rise of a pharmaceutical company called Insys Therapeutics and its primary product, an extremely strong and expensive painkiller called Subsys.

    The drug was designed specifically for end-stage cancer patients. The main ingredient? Fentanyl, which is 50 to 100 times stronger than morphine. The company wanted doctors to write as many prescriptions as possible, and for as high a dose as possible.

    In his job interview in 2012, Burlakoff told Kapoor he could get the job done because he'd done it at a prior company.

  • Alec Burlakoff:

    And I told him flat out, we were successful because we put money in doctors' pockets. And the doctors that accepted the money, it was like Pavlov's law. Pay them, they write more. Pay them, they write more.

  • William Brangham:

    With Burlakoff on board, business began booming. The company was an American success story, with a personal note. Kapoor had made a promise to his dying wife that he'd help create a new drug to alleviate serious cancer pain.

    Journalist Roddy Boyd has covered Kapoor and Insys extensively for the Southern Investigative Reporting Foundation.

  • Roddy Boyd:

    John Kapoor had put about $60 million, maybe $65 million of his own money into this company. He wanted that money back with interest.

  • William Brangham:

    Assistant U.S. Attorney Nathaniel Yeager is a prosecutor on the federal case against Insys, Kapoor, and other employees.

  • Nathaniel Yeager:

    John Kapoor is a control freak, and controlled every aspect of the corporation. Every single decision about money and strategy went through him.

  • William Brangham:

    The key way the company made money was through its speaker program. Speaker programs allow doctors to educate other medical professionals about drug uses, and they typically get paid for it.

    That isn't illegal. But prosecutors say Insys broke the law by tying speaker payments to the number of prescriptions doctors wrote.

    Fred Wyshak is also a prosecutor on the case.

  • Fred Wyshak:

    Kapoor decided that, if I'm paying doctors to speak, I'm also paying them to write. And that's not supposed to be the way it works.

  • William Brangham:

    Insys took a legal industry practice and, according to the prosecutors, corrupted it even further, sometimes paying doctors thousands of dollars for programs they didn't even speak at.

    Doctors pocketed the cash and promised to write more prescriptions for new patients. With Kapoor's encouragement, Alec Burlakoff says they went all in on the scheme.

  • Alec Burlakoff:

    He insisted on being able to draw a direct correlation between the dollars we pay the speaker and the number of dollars we received back via prescriptions that they prescribed.

  • William Brangham:

    In 2014, Insys increased its speaker program budget to $10 million. According to court documents, top speakers were each making $200,000 per year.

    One of Burlakoff's key tasks was finding doctors who'd be open to participating in the scheme.

  • Alec Burlakoff:

    This is how small of a percentage of a number of doctors we're talking. We're talking about a needle in a haystack. You have got to find their hot button, whatever makes them tick. And you have to investigate and find out what those are if you want to pull this off.

  • William Brangham:

    He says he looked for ways to exploit their vulnerabilities, play on their weaknesses.

  • Roddy Boyd:

    He created a culture that the only thing that mattered was a prescription of Subsys. And how you got it, what you had to do, what it took didn't matter. You should go out with your doctors. You should go to strip clubs with them. He encouraged, or at least tolerated, these doctors and female staff having affairs.

  • Fred Wyshak:

    A lot of people would've been a lot more discreet about it, how they did things. That's not Alec Burlakoff.

  • Alec Burlakoff:

    We don't want to be average. Average does nothing. Average doesn't get the job done. It gets you fired.

  • William Brangham:

    Burlakoff's sales team even created this music video celebrating their bestselling drug.

    Within a year of the drug's launch, Insys Therapeutics was named IPO of the year in 2013 by CNBC.

  • Question:

    Tell us what it is about Insys that has investors so excited.

  • William Brangham:

    But while Insys was profiting from its powerful painkiller, patients were becoming addicted.

    Rodney Moreau suffered from back pain after years of working a physically demanding job. He was referred to Dr. Jerrold Rosenberg, a pain specialist, who also happened to be a speaker for Insys.

  • Jerrold Rosenberg:

    We want to create a one-stop shopping experience for you, because, the more that we do, the more we can help you.

  • William Brangham:

    Years of painkillers and surgeries had left Moreau with little long-term relief. Dr. Rosenberg prescribed Subsys for his back. It helped, but Moreau needed increasingly higher doses.

  • Rodney Moreau:

    Seven thousand, seven hundred and fifty-eight dollars per month.

    I seen him for nine months, but, every month, he would up the dose, up the dose every month, until finally, near the end, I didn't even know what day it was. I was just in a fog all the time.

  • Susan Moreau:

    He would start dropping cigarettes and fall asleep sitting up. And I was like, wait a minute. How much of this is he giving you now?

  • William Brangham:

    Finally, one day, Susan Moreau had to drive her unresponsive husband to the E.R. Doctors revived Moreau, who had accidentally overdosed on too much Subsys.

    Dr. Rosenberg ended up pleading guilty to health care fraud and conspiracy to receive kickbacks, and he was sentenced to more than four years in prison.

    Moreau was lucky enough to survive. According to some counts, hundreds of deaths have been linked to Subsys since it was introduced.

    At its peak, sales of the drug reached more than $300 million. But the company had a big problem. Former employees began coming forward as whistle-blowers, and doctors who'd been some of the most prolific prescribers of Subsys were arrested. Federal prosecutors were building their case.

  • Fred Wyshak:

    With publicly traded Fortune 500-type corporations, it's very hard to get to the top. I want an insider who can provide evidence about the activities of the people at the top.

  • William Brangham:

    The one insider prosecutors knew would be key was Alec Burlakoff.

    By 2016, the prosecutors had enough to bring conspiracy and fraud charges against him, and began working to turn him against Kapoor.

  • Alec Burlakoff:

    And it took time and a lot of work with my attorney. And he looked at me and he said: "You're going to plead guilty. You're going to tell the truth. You're going to begin to make amends, and you're going to begin to change your life for the better."

  • William Brangham:

    In a deal with federal prosecutors, Burlakoff would plead guilty and agree to testify against his former employer, in the hopes of receiving a reduced sentence.

  • Alec Burlakoff:

    Dr. Kapoor found the perfect guy in me. He found the guy who would follow him blindly, blind faith to anywhere. That was me.

  • William Brangham:

    John Kapoor's lawyers denied he was involved in any of the illegal schemes at Insys, and accused Burlakoff of lying to protect himself.

    But last May, Kapoor was found guilty of racketeering charges, along with four other Insys executives. His former number two also pled guilty and testified against him, along with Burlakoff.

  • Alec Burlakoff:

    The reality of the matter is, is, I made terrible mistakes. I'm in trouble for it. I'm paying the price. Are there other people doing the exact same thing I'm doing right now? Absolutely.

  • William Brangham:

    In late November, the trial judge dismissed some of the charges, but upheld the racketeering convictions, saying Kapoor knew his business was run — quote — "through bribes and fraud."

    Beyond Insys, there are several thousand ongoing criminal and civil cases against other pharmaceutical companies and distributors, and 130 Americans overdose every day from opioids. That shows no sign of slowing down, for now.

    Yesterday, CEO John Kapoor was sentenced to 5.5 years in prison for his role in that scheme. Several other executives were also sentenced to prison, among them, star witness Alec Burlakoff, who pled guilty and was sentenced to just over two years.

    Prosecutors told "Frontline" they want other pharmaceutical executives to see this case as a warning that they too could be held criminally liable for any illegal conduct that's fueling this opioid epidemic.

    "Frontline" and The Financial Times will have a more in-depth look at this story later this year.

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