How big pharma used strip clubs and broke laws to sell more opioids

Drug company Cephalon used illegal sales tactics to sell fentanyl, according to former undercover FDA agent Greg Tremaglio.

Tremaglio’s investigation revealed Cephalon was breaking FDA laws with their sales tactics regarding Actiq, a form of fentanyl sold in lollipop form. The drug is 100 times stronger than morphine and only intended for severe cancer pain.

It is illegal for pharmaceutical companies to push a drug for patient groups not on the label, spread misleading information or publicize drugs as less dangerous than the FDA’s evaluations indicate. These illegal activities are known as off-label promotion. Cephalon engaged in off-label promotion, according to Tremaglio.

Pain is pain. That’s their motto. So whether you have a migraine, pop a fentanyl lollipop. Whether you have a back injury, take a fentanyl lollipop. It didn’t matter,” Tremaglio said.

Alec Burlakoff, a former star sales representative at Cephalon, said he would say almost anything to get doctors to prescribe Actiq and that sales tactics were the same wherever he worked: ignore off-label promotion laws.

The key to success? The less of a conscience you had, the better,” Burlakoff said.

Internal Cephalon documents revealed that the strategy of Cephalon was to sell Actiq not just to cancer patients but to the general pain market as well, including “but not limited to osteoarthritis, rheumatoid arthritis, chronic back pain, migraine headaches…”

The most critical component of the Actiq tactical plan” was convincing doctors to prescribe the medication off-label, according to the documents.

They targeted what we call pill mill doctors first,” Tremaglio said.

The internal Cephalon documents showed that Cephalon funded advocacy groups who promoted opioids, spread deceptive addiction information and gave doctors incentives for prescribing opioids. These incentives included free dining and drinking and exorbitant fees for minor services which essentially amounted to bribes. The documents noted that these programs led to doctors prescribing more opioids.

“’Talk to your peer.’ Except, they don’t tell the doctor, ‘Oh, your peer has been to four vacation spots over the last year and we paid him approximately $200,000,’ or some astronomical consulting fee. It’s garbage. It’s no different than a bribe,” Tremaglio said.

Cephalon pleaded guilty to illegal promotion in 2008 and paid $425 million in settlements and fines, less than one quarter of what the company made in a year. Cephalon was eventually sold for $6.8 billion and Burkaloff found a new job at a company named Insys.

Burkaloff proceeded to create huge profits selling Subsys, a form of fentanyl. It was FDA-approved for cancer pain only, just like Actiq, and just like Cephalon did with Actiq, Insys broke off-label promotion laws in promoting Subsys. Insys sales reps convinced doctors to sell prescribe opioids for off-label uses by giving doctors money, all-expenses-paid visits to strip clubs and fancy dinners. Insys executives were criminally prosecuted and found guilty of racketeering, mail and wire fraud.

Burkaloff said that during his time with Insys, most doctors would throw him out of their office quickly and that the goal was to find doctors who were willing to talk, essentially asking “what’s in it for me?”

Burkaloff said that once you find a doctor like this, “you got one on the hook. It doesn’t mean you’re gonna be successful. But you’re gonna figure out real quick that the more you pay that doctor, the more he’s gonna prescribe.”

Burkaloff said that Insys would pay doctors as much as $125,000 per year in bribes which were disguised as “speaker program” fees.

Burkaloff said that doctors were very clearly told that they would either increase the number of dose of prescriptions or the bribe money would stop coming in.

The more you write, the more you’re gonna earn. The more you increase the strength, the more you’re gonna earn. And, doctor, if you don’t like it, we walk away as friends. No big deal,” Burkaloff said.

Burkaloff said if an Insys sales rep saw doctors weren’t prescribing enough opioids that the sales rep would demand to be in the doctor’s office and attempt to launch an “effective dose campaign.”

That’s a fancy way of basically saying, let’s make sure that the patient will come back and want more. Others might say, let’s make sure we get the patients addicted,” Burkaloff said.

Fred Wyshak, a member of the prosecution team which prosecuted Insys executives, said “most of the patients who received this drug were non-cancer patients taking Subsys – [it] essentially over-medicated them. It ruined their lives. Many of them lost their jobs, their families fell apart. Some were hallucinating. They all became addicted.

Federal prosecutor Nathaniel Yeager added that some of the patients in the case were shown their own insurance records and were surprised to see diagnoses on the records they had never been given.

It was very compelling testimony. Some of them were shown insurance records that claimed that they had diagnoses that they’ve never had. And reacted to the fact that– ‘I didn’t have cancer. I didn’t have that diagnosis,’” Yeager said.

Insys CEO John Kapoor had Insys employees pose as doctor’s office staff to dupe insurers into prescribing opioids. The employees would lie and tell the insurers that the patient had cancer.

Nine times outta ten, that drug’s getting approved,” said federal prosecutor David Lazarus about this tactic.

About the author

Nadrich & Cohen, LLP

Nadrich & Cohen, LLP is a California personal injury law firm with offices in Los Angeles, San Francisco, Modesto, Fresno, Tracy and Palm Desert. The firm has been representing victims of dangerous drugs since 1990 and has recovered over $350,000,000 on behalf of clients in that time.

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