Insys Therapeutics and the New ‘Killing It’

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On the evening of July 1, 2014, Carolyn “Suzy” Markland, a 58-year-old Jacksonville, Florida, resident with a degenerative disc disease, took her prescribed medicine — a 400-microgram dose of a Fentanyl spray called Subsys — and went straight to bed.

Despite the fact that she regularly experienced pain, taking Subsys was not an everyday affair for Markland. Her prescription had been filled several months prior but she almost never took the stuff; her longtime family doctor and pharmacist had expressed to her plenty of no-holds-barred skepticism about it. On the three occasions she had taken Subsys, her family noticed that its sedative and respiratory effects were noticeably sharper than those of another strong painkiller she took, Exalgo.

On July 2, Markland visited Dr. Orlando Florete, her pain-management physician of five years, for a scheduled injection for her lower spine. As part of her anesthesia mix prior to the procedure, she received another Fentanyl dose. Unlike what was the case after previous procedures, however, she wasn’t up and moving some 20 to 30 minutes afterward; this time it took about an hour until her oxygen levels allowed for her to be safely released.

Markland was tired for the balance of the day and headed to bed early, skipping her usual cup of decaf beforehand.

She never woke up.

With Markland pronounced dead at 7:01 a.m. on July 3, the Jacksonville medical examiner’s office listed the cause of her death on its report as “drug toxicity,” noting the presence of Fentanyl and Exalgo. Her death was  classified as “accidental.” The report also noted that Markland’s family doctor refused to sign the death certificate; Dr. Florete did.

Bob Markland, Carolyn’s husband of 19 years, declined to comment apart from providing a timeline of her Subsys use.

The medical examiner’s report of a lethal combination of Fentanyl and other drugs in Carolyn Markland’s blood is puzzling and sad, seemingly emblematic of a strain in modern American medicine whereby solutions to pain can be as scarce as the medication for that pain is abundant.

In another sense, this tale recounting Dr. Orlando Florete’s treatment presents a parallel trend in American medicine — that of the physician as a compensated endorser. According to figures from the Center for Medicare & Medicaid Services’ Open Payments database for the last five months of 2013, Florete was Screen Shot 2015-04-23 at 7.55.46 AM

But that level of growth ought to warrant a raised eyebrow: Achieving in just two years more than $222 million in sales (from a level of about $15.5 million) without having invented something like a better search engine is no mean feat. Fentanyl, after all, has been around for many years. And while Subsys is the only spray version available, several Insys competitors are well-established and better capitalized and have sales forces that reach all 50 U.S. states.

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Many of Burlakoff’s former colleagues, however, described a very different experience with the speakers program.

A qui tam claim filed last year by former Insys salesman Ray Furchak alleged that the speakers program’s sole purpose was, in the words of his then supervisor Alec Burlakoff, “to get money in the doctor’s pocket.” The catch, Furchak alleged, was that the doctors who increased the level of Subsys prescriptions, and at higher dosages (such 400 or 800 micrograms instead of 200 micrograms), would receive the invitations to the program — and the checks.

The claim described texts from Burlakoff to Furchak and other sales colleagues regularly demanding that “doctors be held accountable” and that “doctors who are not increasing their clinical experience [prescription writing], please cancel, suspend, and cease doing speaker programs.”

The Department of Justice chose not to join Furchak’s suit and he withdrew it. Reached at his new job, Furchak said he stood by everything he had alleged but declined to comment further.

Conversations with former sales staff members support Furchak’s allegations that the speakers program was regularly used as a lever to pressure doctors to increase dosage strength as well as the frequency of their prescriptions for Subsys. In return, former sales staff members (who were granted anonymity in this story because of their involvement with the Department of Justice’s grand jury proceedings) often had to deal with doctors’ annoyance about payment levels or delays in receiving their checks.

The speakers program events have often been held at branches of Roka Akor, a tony sushi-steak restaurant company with venues in Scottsdale, Chicago and San Francisco that’s owned by Insys founder John Kapoor. Based on interviews with multiple attendees, the expenses often run into the thousands of dollars and, given the sheer number of events, have helped his restaurants capture a handsome revenue stream. An email to Insys CEO Michael Babich seeking comment was not returned by the time of publication of this article.

Former sales staff members also disagreed that Burlakoff’s full-throated rejection of off-label sales was shared by upper management. As evidence of this, two former salespeople pointed to a quarterly meeting in Atlanta for the Southeast region sales team in a June 2014 when CEO Michael Babich, during a question and answer session, read a question about the risk of off-label sales, given Cephalon’s steep penalty in 2008.

“I understand why you’re asking that question,” said Babich. “But Cephalon didn’t have TIRF-REMS; we do. You are protected because both the MD and the patient have signed it.”

Asked to elaborate, Babich said because of the TIRF-REMS requirement that the patient be extensively briefed on the risks of Subsys, there couldn’t be a plausible claim that the patient (or doctor) did not know what he or she were doing.

As one of the two attendees who described this event to SIRF put it, “There wasn’t much else to say about the issue when your CEO sees an information protocol as an insurance policy.”

Putting Insys’ assertions about serving cancer patients aside, the company’s bread is buttered by pain-management and physical-rehabilitation doctors, according to Tricare’s reimbursement and prescription data from Jan. 1, 2013, to May 31, 2014. Tricare represents about 9.5 million people, or 3 percent of the U.S. population.
Listed below are Tricare’s top 15 prescribers of Subsys.

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Among the top 25 Subsys prescribers within the Tricare system, there are 20 pain-management physicians, one osteopath, one nurse practioner and three physician assistants. (See a full list of the top 25.)

The Southern Investigative Reporting Foundation attempted to contact Dr. Xiulu Ruan and Dr. Patrick Couch, partners in a Mobile, Alabama, practice, about the fact that they were the leading Subsys prescription writers by an impressive margin, to discuss this, as well as their ownership of C&R Pharmacy, which dispenses the drug to their patients. (About 50 percent of the Subsys dispensed in the United States is handled by Linden Care, a specialty pharmacy on New York’s Long Island, owned by Bell Health Ventures, a private-equity fund.)

Anthony Hoffman, a lawyer representing the practice, told the Southern Investigative Reporting Foundation, “Based on your representation of the [Tricare] data you discussed with my client, we believe it to be inaccurate and encourage you not to publish it.” He did not specify what was wrong with the data and declined to provide further comment.

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As first reported in The New York Times, a series of Insys’ leading prescribers have been at the center of serious allegations involving their prescription-writing practices.

Last May federal prosecutors filed a complaint against Gavin Awerbuch, a Michigan-based pain-management physician and the company’s largest prescriber under Medicare (and third most compensated), for allegedly bilking Medicare out of $5 million over several years. Prosecutors allege that he wrote 20 percent of the Subsys prescriptions dispensed to Medicaid recipients nationwide from 2009 to 2014. (Subsys, however, has only been FDA-approved since January 2012.)

In December 2013 Judson Somerville, a Laredo, Texas-based pain-management physician (the No. 8 prescriber under Medicare and the most compensated) had his prescription-writing privileges “temporarily suspended” by the Texas Board of Medical Examiners for a host of findings, including having three patients die with six months of 2012; it was not the first time he had regulatory trouble.

Stewart Grote, a Lansing, Kansas, pain physician and the company’s fourth biggest Tricare prescriber (he received $8,48.05 from Insys), was sanctioned for multiple standard of care lapses and is no longer registered as a physician in that state, according to licensing records; he also had an earlier regulatory issue in 2010.

The Florida Department of Health sued Paul Wand and Miguel de la Garza, the No. 11 and 23 Tricare prescribers, in 2012. (Wand received $20,169.06 from Insys; de la Garza $17,019.04.) The department alleged Wand’s standard of care did not meet professional standards for a series of patients, particularly with regard to his prescription writing. With respect to de la Garza, the department claimed he did not professionally administer care to one specific patient. According to the Florida Board of Medicine’s Web site, both cases appear to be ongoing.

Chicago-based pain-management physician Paul Madison is not among the top 25 Tricare prescribers but he was the 17th most compensated under the speakers program. He was indicted in 2012 in connection with an alleged $3.5 million false insurance billings scam. The case is ongoing.

Heather Alfonso, the 25th largest Tricare prescriber of Subsys and a Derby, Conn.-based nurse practitioner, surrendered her state and federal nursing and prescription-writing licenses within the past month amid a Connecticut Department of Public Health investigation into her conduct. A February Connecticut Health I-Team story reported that in 2012, the most recent year for which data was available, she was among the nation’s top 10 prescribers of Schedule II substances within Medicare’s drug program.

The Southern Investigative Reporting Foundation asked CEO Michael Babich for comment via a detailed voice message left on his office phone and a pair of emails. He did not reply by publication time.

Clarification: This piece has been updated to clarify the description of former work roles of Jeff Pearlman, Insys’ New York regional sales manager. He served as the sales and marketing chief of an aquarium company. He also worked at two medical technology companies.

Update: This story was updated on March 22, 2016.

17 thoughts on “Insys Therapeutics and the New ‘Killing It’

  1. Hey RB

    Nice job as always

    Far better in connecting the dots than the NYT article

    All the best

    TK

  2. Allow me, Jeff Pearlman, to fill in the facts so conveniently left out or not quite correct. First, I have medical sales experience selling diagnostic testing for sleep apnea in the late 90’s and also selling genetic endocrinology testing in the mid 2000’s. Additionally, anyone who knows me knows I have never installed anything in my life, let alone a custom glass aquarium. I was the sales and marketing director for the largest custom glass aquarium manufacturer in the tri-state area. None of these facts are secrets. Ticket biz didn’t work out with StubHub and the new stadiums, so I went back into corporate/medical sales. Nobody ever spoke to me, nor left me any message attempting to contact me to verify any facts regarding my employment. I hope a better job was done elsewhere.
    As I always say, performance speaks for itself. Those who don’t perform create noise to distract from their lack of success.

  3. I am offering the truth to you to correct before I ask others to show my posts were censored and ignored from the site. Why I was not provided with the same opportunity you apparently gave everyone else I have no idea.
    Allow me, Jeff Pearlman, to fill in the facts so conveniently left out or not quite correct. First, I have medical sales experience selling diagnostic testing for sleep apnea in the late 90’s and also selling genetic endocrinology testing in the mid 2000’s. Additionally, anyone who knows me knows I have never installed anything in my life, let alone a custom glass aquarium. I was the sales and marketing director for the largest custom glass aquarium manufacturer in the tri-state area. None of these facts are secrets. Ticket biz didn’t work out with StubHub and the new stadiums coming around, so I went back into corporate/medical sales. Nobody ever spoke to me, nor left me any message attempting to contact me to verify any facts regarding my employment. I hope a better job was done elsewhere.
    As I always say, performance speaks for itself. Those who don’t perform create noise to distract from their lack of success.

  4. Jeff, is there a reason you felt compelled to comment on this topic? im sorry, but i dont see a connection. i find this story to be huge and in dyer need of being shared with the public. what the hell does your comment have to do with anything?

  5. Note the clarification by author on jeff pealman. This article is biased. The vogue of late is to attack pain doctors. Lets tear down this hypocrisy. Fentnyl is a schedule 2 drug and marijuana is a schedule 1. Is there logic to this? The DEA’s crackdown on pain meds only pushes people to heroin.

  6. I thought this was a pretty good article, shining a light on an area that is ripe for terrible behavior. On the supply side you have, let’s call them scrappy, biopharma companies. On the demand side you have people with either (a) terrible pain and / or (b) a crippling opiate dependency. You would not expect much by way of classically rational behavior from the demand side. In the middle are doctors. In the absence of ethical and legal constraints, the shrewd move for biopharma companies is to simply bribe doctors to subscribe their product (hopefully a consumer friendly one – i.e. something that is non-injectable, perhaps sublingual).

    But they can’t do this because of legal restrictions, so instead they try things that are more subtle and nuanced. These are large markets with billions of dollars at stake, so there are many different types of sophisticated tactics. RB does a good job going over a few of them.

    I enjoyed the article. I think there are a couple of areas that that merit more consideration.

    1) There are many conflicts of interest rules and regulations in place that try to minimize doctors from having ‘artificial’ preferences to prescribe one drug over another. The rules are clunky at best, but generally prohibit the most obviously conflicted behavior like having prescribing doctors also act as dealers of the drugs being prescribed. There is one huge exception: this relates to (the nebulously named) specialty drugs, wherein the doctor acts as a principal and owns the drugs in question, then writes an Rx to the patient and finally sells the drugs at a markup to patients. To be clear the doctor takes inventory risk here and is not simply acting as an agent.

    It wasn’t clear to me from the article whether this is the case with Subsys, though I got the feeling it might be the case.

    2) A bit of color on base rates would help frame the article. Opiate addiction is going surprisingly mainstream in the US. Because of partial reforms to the system, addicts are frequently turning to street heroin which frequently is much cheaper. Interestingly, there is a trend toward away from black tar herion (injected) toward brown heroin (smoked or snorted). This is more comfortable for prescription opiod addicts who are still squeamish about needles. The following article has a bit more color: http://www.economist.com/news/united-states/21633819-old-sickness-has-returned-haunt-new-generation-great-american-relapse

    3) In all fairness to Insys, while fentanyl has been around for a very long time, unique delivery systems are an extremely valuable source of IP.

    This is definitely a sector that needs a bright light of transparency to be shined on it as the (known) incentives coupled with little monitoring would lead me to predict a lot of very bad behavior.

  7. Remember this readers…. People can write just about anything they want about anyone. It could happen to you. Now I don’t know this Jeff guy or anyone else mentioned in this article but to make assumptions about someone or send a link insinuating they are psychopath base on what they read in an article that may not be accurate is ridiculous. People that are rude and form an opinion about someone or something with out knowing the person or experiencing the thing is sad and very stupid. There are two sides two every story so unless you know Jeff or know exactly what went on with INYS Therapeutics then shut up. Also, dig deep and ask yourself these questions: Has anyone ever accused me of something or represented me in a way that was not accurate and did it make me feel bad?? Hungry journalist scraping for a story will say and do just about anything to get recognized. This story has nothing to do with me but the replies struck a nerve because I have been on the bad end of an untrue story before. If you weren’t there then you don’t know! Lol, and seriously don’t believe everything you read.

  8. Jeff is obviously not all there and if he had a brain. He would know that no one cares that you sold aquarium tanks. He should be humiliated publicizing he was the director of sales for a fish tank store. It’s embarrassing that he responded.

  9. I was on subsys for about 6 months .Its kind of a blur. The pain clinic really pushed the stuff .I told them I didn’t want any fentanyl but before I new it I was on 800mil every 4-6 hours.The supplier in New Jersey would pay the co-pay and my insurance would pick up the rest 18,00 dollars every 4 weeks ,crazy prices the 200 and 400 mil wasn’t bad could get 4 weeks at a time ,but the 800 mil insurance would only pay for 2 weeks at a time .The whole set up was strang high presription coming by FED -x (funny ha) that’s what I thought.well know I am off it can’t find anything else to get rid off my neck pain do to severe burns.

  10. Tim, that is a lot of fentanyl! I have been on 400 mcg -3x with morphine ER 15 mg-3x, for two years. I am now in the middle, I pray, of a tapering off schedule. I have Torticollis, or Cervical Dystonia, which is a neck muscle movement disorder and can be incredibly painful. I am so SICK of being treated like a little child or just a homeless drug addict, I would prefer not to have to deal with any pain clinics. Typically, the Dr. will not, does not listen, and his nurses are just like him or worse! I have also been receiving botox/xeomin injections for 8+ years as well. I just pray that God will get me through this and I may actually feel better, prayers for you.

  11. This article is extremely biased and one-sided. There is nothing wrong with off-label prescribing. It’s a common and long-standing practice. As someone who suffers from a chronic autoimmune condition that is very painful, Subsys is literally a life-saver, providing fast and effective relief and allowing me to be on lower doses of long-acting opioids. My insurance refused to pay for it, so Subsys has been providing 120 800mcg sprays a month to me for free for several years now. I’m profoundly grateful to them.

    Articles such as these have made it virtually impossible to find a doctor to prescribe pain meds. Moreover, Lindencare Pharmacy (mentioned in this article) stopped supplying off-label Subsys due to the heat they were getting, making it much more difficult for me to obtain my medication.

  12. The subsys spray is prescribed in micrograms not milligrams. My Mother was Carolyn Markland, who was killed due to the off-label marketing campaign led by Insys Therapuedics pushing doctors to prescribe the medication to non-cancer related patients for off label use. My mother (who merely suffered from back pain) took the prescribed dosage, 4 times within 1 week. Her doctor prescribed this medication knowing the risks and assured her there was no real danger (and he was paid very well to write those scripts or “speak at those functions” BULLSHIT!!). I lost my mother because of the greed of and monetary reimbursement guaranteed to the unprofessional sales persons employed by this Big Pharma. There is no bias in this article. Mr Boyde did very thorough investigation and reporting. My sympathies to those who are upset that the drug is no longer available to them. but be happy you lived to be upset, my mother was not granted that.

  13. Hi Elie, I’d love to get in touch with you about your experience. Can you let me know if you are still here/see this message? I am researching Insys and would love to hear stories like yours – the other side.

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