Opioid Executive Who Gave Up $5 Million Points Finger at Insys Founder

(Bloomberg) -- Insys Therapeutics Inc. founder John Kapoor promoted a policy that pushed doctors to prescribe higher doses of the company’s opioid drug to boost profits, a former marketing manager told a Boston jury at the former CEO’s racketeering trial.

Matthew Napoletano, Insys’s former head of marketing, said he objected repeatedly to his boss’s methods, but was assured they wouldn’t get him in trouble. He eventually quit, giving up $5 million to $7 million in stock options, he said.

"My position was in pharma, we don’t push the dose,” Napoletano testified. “That’s what got Purdue in trouble.” Purdue Pharma Inc. resolved a federal criminal prosecution in 2007 with the company and three of its top executives pleading guilty to “misbranding” its OxyContin opioid painkiller and agreed to pay more than $630 million in civil and criminal penalties.

Purdue was also sued last year by Massachusetts Attorney General Maura Healey, who claims the company knew putting patients on high dosages of OxyContin for long periods increases the risks of addiction.

It was Napoletano’s second day of testimony in the racketeering and conspiracy trial of Insys founder John Kapoor, 75, and other executives who prosecutors accuse of conspiring to bribe doctors with phony speaker’s fees and duping insurers into covering the Subsys prescriptions. The marketing executive, who worked at Insys from November 2011 to August 2014, was granted immunity in exchange for his testimony about the company’s handling of its Subsys painkiller.

Napoletano told jurors he’d steadfastly opposed former sales chief Alec Burlakoff’s push to use the speaker’s program to reward heavy Subsys prescribers. Napoletano said he sought to use the events as a marketing technique.

At one meeting, Burlakoff said he didn’t care whether any other doctors attended the speaking events so long as the Subsys prescriber got paid, Napoletano recalled. Under federal regulations, there must be at least two doctors at such events for them to be considered legal, Napoletano said. Kapoor chimed in that only doctors who’d previously written scripts for the painkiller should get tapped for the speaker’s program, he said.

Burlakoff and former Insys CEO Michael Babich have pleaded guilty to criminal charges tied to Subsys marketing and are expected to be the government’s star witnesses.

Internal company documents entered into evidence also show that Kapoor pushed executives to have sales reps pound home the company’s “Effective Dose” message to insure doctors prescribed Subsys at higher and higher levels.

The drug’s label recommended patients start at the lowest dose before any increases. Insys executives feared patients who got no relief from such a dose would demand competing drugs and stop using Subsys, Napoletano said.

Following his objections to Kapoor’s promotion of the high-dosage levels, Napoletano said he was pushed aside by Burlakoff when it came to training sales representatives on their pitches to doctors.

The sales reps received emails from Burlakoff tying their bonuses to higher doses and threatening “immediate negative consequences” if their doctors kept prescribing low doses, the jury was told. In one email, sales reps were told a new prescription for 100 micrograms of Subsys would earn them $283 in bonuses, while they’d get $1,830 for the highest dose.

Napoletano testified he once shouted at Kapoor over the speakers’ program and stormed out of a meeting. As he sat in his office waiting to get fired from his $200,000-a-year job, Babich assured him he could stay as long as he gave Kapoor what he wanted, Napoletano testified.

Napoletano said he didn’t quit then because he had moved his family across the country for the Insys job and his son and his mother were both battling cancer. He said he and his colleagues thought Insys would grow out of its habit of bending and breaking federal laws governing pharmaceutical companies.

“We kept thinking things were going to correct, and they didn’t,” he testified.

During cross-examination, Napoletano said Kapoor approved the sales force’s efforts to get patients to switch from competing drugs, such as Teva Pharmaceutical Industry Ltd’s generic version of Actiq, by giving away free Subsys samples while awaiting insurers’ okay for the prescriptions.

“My recollection is we continued to provide it even if it was not approved,” he said.

The case is U.S. v. Kapoor, 16-cr-10343, U.S. District Court, District of Massachusetts (Boston).

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.