Former Insys executive pleads guilty to opioid bribe scheme


BOSTON (Reuters) – A former executive at Insys Therapeutics Inc pleaded guilty on Wednesday to participating in a scheme to bribe doctors to prescribe the company’s powerful opioid medication and entered into a deal to cooperate with prosecutors.

FILE PHOTO: A box of the Fentanyl-based drug Subsys, made by Insys Therapeutics Inc, is seen in an undated photograph provided by the U.S. Attorney’s Office for the Southern District of Alabama. U.S. Attorney’s Office for the Southern District of Alabama/Handout via REUTERS

Alec Burlakoff, who was the drugmaker’s vice president of sales, pleaded guilty in federal court in Boston to racketeering conspiracy, becoming the highest-level executive to admit wrongdoing in the wide-ranging investigation of Insys.

By agreeing to cooperate, Burlakoff, 44, could become a key witness at the January trial of six other former Insys executives and managers accused of engaging in the scheme, including the company’s billionaire founder, John Kapoor.

Kapoor and his co-defendants have pleaded not guilty. Beth Wilkinson, Kapoor’s lawyer, did not respond to a request for comment.

The case centers on Subsys, Insys’ under-the-tongue spray for managing pain in cancer patients that contains fentanyl, an opioid 100 times stronger than morphine.

The U.S. Justice Department contends Insys paid kickbacks to doctors to prescribe Subsys, often via fees to participate in sham speaker programs, ostensibly meant to educate medical professionals about the drug.

Prosecutors allege that from 2012 to 2015 Kapoor, former Chief Executive Michael Babich, Burlakoff and others conspired to pay bribes to doctors to prescribe Subsys in order to boost sales and to defraud insurers into paying for it.

Burlakoff supervised the company’s sales managers and sales representatives and pushed them to use the speaker programs to pay doctors to prescribe Subsys, according to prosecutors.

Prosecutors have sought to link the case to the country’s opioid addiction epidemic. According to the U.S. Centers for Disease Control and Prevention, opioids were involved in more than 49,000 overdose deaths in 2017.

Other defendants include Michael Gurry, Insys’ former vice president of managed markets; Richard Simon, a former national director of sales; and Sunrise Lee and Joseph Rowan, both of whom were regional sales directors.

Insys in August announced it had agreed to pay at least $150 million as part of a settlement with the Justice Department.

Reporting by Nate Raymond, Editing by Rosalba O’Brien and Bill Berkot

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