The News:

A former regional sales director for Insys Therapeutics Inc. (Phoenix AZ) allegedly gave a lap dance to a doctor as the company was pushing him to prescribe its deadly opioid painkiller to patients. That’s according to multiple reports of testimony given last week from a former Insys sales executive in a federal court in Boston, says Ars Technica.

The testimony is part of a federal racketeering trial finally getting underway last week against Insys founder John Kapoor and four former executives, including the sales director, Sunrise Lee. Federal prosecutors allege that the Insys executives used bribes and kickbacks to get doctors to prescribe the company’s powerful and addictive fentanyl spray, called Subsys–which was intended only for cancer patients experiencing pain that’s not alleviated by other medications (aka “breakthrough pain”).

The former executives are also accused of misleading and defrauding health insurance companies that ended up covering the drug for patients who did not need it. A congressional investigation in 2017 concluded that Insys sales representatives bluntly lied and tricked insurers to do that–and the investigators released the tapes to prove it.

Two additional former Insys executives–former Insys CEO and President, Michael Babich and former VP of Sales, Alec Burlakoff–were also charged in the case but have pleaded guilty and are cooperating with prosecutors. In testimony last Tuesday against her former colleagues, former sales representative Holly Brown made the lap-dancing allegation against her former boss, Lee. Brown testified that in mid-2012 she, Lee, and other sale representatives took one Dr. Paul Madison to a club after a dinner event sponsored by Insys.

Brown said that her superiors had told her to focus on Dr. Madison, who was known for prescribing a large quantity of opioids. She described his office as a “shady pill mill” in a “dingy strip mall in a not-so-nice area of town,” according to reports. Brown recalled an encounter she witnessed that night between Lee and Madison, saying, “She was sitting on his lap, kind of bouncing around, and he had his hands all over her chest.”

Lee, a former exotic dancer, had no experience in the pharmaceutical industry before working at Insys, prosecutors noted. According to Bloomberg, court documents reveal that Insys whistle-blowers quoted Burlakoff as saying that “doctors really enjoyed spending time with [Lee]” and that she was “more of a closer.”

Prosecutors reported that Insys paid Madison at least $70,800 in “speaker fees.” Madison was convicted last November in a separate trial for healthcare fraud, among other charges. He is awaiting sentencing in March and faces up to 10 years in prison.

Steve’s Take:

This won’t take long to read. And I apologize for extending the life of a lurid “news” item without much genuine pertinence to anything important.

As a lawyer, I don’t recall seeing a healthcare trial where the prosecution (and defense) devoted so much effort to appeal to the prurient interest of the court and general public in the very opening remarks of a federal, criminal trial. And it worked.

I googled “Insys” and “Lee,” and there were 37 articles about the lap dancing allegations in return for fentanyl prescriptions–and that’s in just the first four pages of search results. Thirty seven!

That’s what struck me about this news item. It’s pretty much a first in the sense that no real evidence of a substantive nature was offered in support of a criminal charge, just the allegation by Ms. Brown that she saw Ms. Lee astride Dr. Madison at a night club. Brown’s account immediately caught fire with the news services, including this one. I decided to wait a week from the first reports of the lap dance accusation and see where they led.

So, what impact did this story have on, say, Insys?

Let’s step back for a minute. Last May, in response to unsealed court records, Insys responded that the company “continues to have ongoing dialogue with the DOJ regarding this investigation” and had set aside $150 million, “which it expects to be paid out over five years in connection with this investigation.” Some things actually have changed: The company has shut down the Insys Reimbursement Center, and there has been a lot of turnover. Ninety percent of the company’s sales force was hired since 2015.

According to the Insys 2018 statement, “As the company has documented in various public releases, today INSYS is a completely transformed organization, with a promising pipeline, a strong commitment to serving patients as well as an organizational culture of high ethical standards. Throughout this transformation, INSYS has learned from the past and remains committed to significant innovation and investment in R&D, which the company believes will result in improving the lives of many patients.”

A “completely transformed organization?” Sounds good but, a visitor today to the Subsys website is still greeted by a banner plugging “Free Trial and $0 Co-Pay” for those with the Subsys Savings Card. The site reads, “Similar to a coupon, it can offer you free product and up to $1,000 off each additional prescription of SUBSYS fentanyl sublingual spray.”

In other words, nothing substantive has really changed except the cast of characters; from lead performer Dr. Kapoor, all the way down to extras, Ms. Brown and Ms. Lee–each of whom had their several days of sleazy “fame” last week. Unfortunately for them and their families, their fame will be tarnished by the lurid and vast dissemination of the lap dance allegation, easily pictured by the readers of the many news organizations in search of eyeballs. And sadly, I now admit to being an accomplice in the further broadcasting of this.

Let’s return to covering the truly important news, shall we? (Note: Read more of my previous Insys posts here)