Former executive at opioid maker Insys to plead guilty

[November 28, 2018]  By Nate Raymond

BOSTON (Reuters) - A former executive at Insys Therapeutics Inc is expected to plead guilty on Wednesday to charges that he participated in a scheme to bribe doctors to prescribe the company's opioid drug.

Alec Burlakoff, who was the Chandler, Arizona-based drugmaker's former vice president of sales, is expected to appear in federal court in Boston after being previously charged with engaging in a racketeering scheme with others at Insys.

His co-defendants have included six other former Insys executives and managers, including the company's billionaire founder, John Kapoor. They have pleaded not guilty to racketeering conspiracy and are set to go to trial in January.

Prosecutors in a court filing earlier this month confirmed they had reached a plea deal with Burlakoff, 44, but did not say whether as part of the agreement he would become a cooperating witness in their case.

But at a court hearing last week, Beth Wilkinson, Kapoor's lawyer, said she had learned Burlakoff had been working with prosecutors since August.

Wilkinson did not respond to a request for comment on Tuesday. George Vien, Burlakoff's attorney, declined to comment.

The case centers on Subsys, Insys' under-the-tongue spray that is intended for managing pain in cancer patients and which 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.

The billionaire founder of Insys Therapeutics Inc. John Kapoor, exits the federal court house after a bail hearing in Phoenix, Arizona , U.S., October 27, 2017. REUTERS/Conor Ralph

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)

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