PDF Summary:Pain Hustlers, by Evan Hughes

Pain Hustlers by Evan Hughes provides a detailed account of the unethical marketing practices employed by the pharmaceutical company Insys. Under the direction of founder John Kapoor, the company aggressively pushed its fentanyl-based painkiller Subsys beyond approved uses by bribing doctors, deceiving insurers, and prioritizing profits over patient safety.

Hughes reveals the illegal tactics used by Insys executives to boost Subsys sales, leading to the conviction of Kapoor and others on racketeering charges. This exploration signals the government's resolve to hold the drug industry accountable for contributing to the opioid epidemic.

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• The focus on high prescribing as a metric for compensation does not account for the complexity of patient cases or the need for individualized treatment plans that may not require medication.
• The financial relationship between speaking fees and prescribing habits could be seen as a compensation for the time and expertise shared during presentations, rather than an incentive to prescribe more.

Insys Built a "Reimbursement Center" to Deceive Insurers for Subsys Coverage

Recognizing that their sales effort would be hampered by insurers that resisted paying for an expensive new drug, the company created a Reimbursement Center. While drugmakers often rely on outside vendors to wrangle approvals beforehand and make sure insurance plans paid for the product, Insys made the unusual choice to bring it all in-house, allowing the company to exert more control over their own employees.

Reimbursement Staff Bonuses Tied To Approval Count, Promoting Deception

The Reimbursement Center, or IRC, was conceived by Mike Gurry, a VP of Managed Markets at Insys. He appointed someone he knew from a prior employer, Liz Gurrieri, who had experience with obtaining insurance approval, to lead the new task. Initially, she worked alone, but it soon became a call center staffed with a dozen employees or so – the ones who “work in the back room and get approvals,” as Gurry described them. The IRC staff was given bonuses tied to their approval volume. They were financially incentivized to achieve approval, whether ethical or not.

Practical Tips

• Engage with online forums and social media groups focused on personal finance management. By participating in these communities, you can share and receive advice on reimbursement strategies, learn from others' experiences, and stay informed about new ways to manage your finances effectively.
• Reflect on your own leadership appointments by journaling about the qualities and achievements that could lead to your selection for a leadership role. Consider what makes someone a good leader in your field and how you can embody those traits. For example, if you're in a customer service role, you might focus on developing empathy and problem-solving skills.
• Role-play insurance approval scenarios with a friend or family member. Practice explaining your situation and the reasons you need insurance approval to someone who is not familiar with your circumstances. This exercise can help you refine your communication skills, making you more effective when dealing with actual insurance representatives.
• Share your solo project's progress with friends or family to get feedback and stay motivated. Sometimes, working alone can be isolating, so by sharing updates, you can gain insights from others and maintain a sense of accountability, which can be crucial for keeping your momentum going.
• If you're interested in the communication aspect, start a small-scale peer support network within your community or social group. Use a dedicated phone line to offer advice, support, or just a listening ear. This initiative can help you understand the logistics of managing call volumes, scheduling, and the importance of having a dedicated team, which are all relevant to running a call center.
• Organize an "Experience Exchange" day where employees from other departments spend a few hours shadowing call center staff. This cross-departmental interaction allows for a better understanding of the call center roles and the challenges they face, leading to greater appreciation and more effective collaboration across the company.
• Create a peer recognition program where colleagues nominate each other for bonuses based on collaborative achievements. This could involve setting up a simple nomination box where employees can drop the names of coworkers who have gone above and beyond in helping the team reach its goals, fostering a culture of teamwork and mutual support.
• Engage in role-playing exercises with friends or colleagues to explore ethical scenarios. Create hypothetical work situations where financial incentives might lead to unethical outcomes. By acting out these scenarios and discussing possible actions and consequences, you can better prepare yourself to handle real-life situations ethically. For instance, if you're in sales, role-play a situation where you're incentivized to sell a product that doesn't fully benefit the customer, and work through how to balance the incentive with ethical selling practices.

Reimbursement Center Lied To Insurers About Approved Subsys Uses, Prescribed Off-Label

The Reimbursement Center used a variety of tactics to deceive insurers, including misrepresenting patients' diagnoses and health histories. The IRC employees, told to work on the edge of ethics, would claim to insurers that Subsys patients had previously tried cheaper drugs without success, for example, even when that wasn't true. The IRC also used a code for a dysphagia diagnosis—difficulty swallowing—to suggest to insurance companies that any product requiring swallowing was inappropriate. This deception was especially blatant when a person was receiving other medications in tablet form, proving that swallowing wasn't really a problem. To justify their Subsys prescriptions to insurers, they routinely avoided saying "cancer" when referencing breakthrough cancer pain. This rehearsed bit of wordplay, designed to mislead, became known internally as "the spiel".

Practical Tips

• Develop a habit of asking healthcare providers to explain the diagnosis and treatment codes they use on your medical records. By understanding what these codes mean, you can better monitor your health documents for any inaccuracies or misrepresentations. If a code doesn't seem to align with your understanding of your health situation, don't hesitate to question it and request a correction if necessary.
• Develop a decision-making flowchart that includes ethical considerations for everyday choices. Start with a simple decision you face regularly and map out the potential outcomes, including those that may be ethically questionable. This visual tool will serve as a quick reference to guide you through making choices that align with your moral compass.
• Develop a habit of seeking second opinions for medical treatments, especially when high-cost drugs are involved. Research local clinics or online services that offer consultations without requiring a change of your primary healthcare provider. This practice can help you avoid unnecessary treatments and ensure that all options have been considered.
• Develop a habit of reading labels and product descriptions with an eye for dysphagia-friendly indicators. Look for keywords like "soft," "pureed," or "easy to swallow," and avoid products that are described as "hard," "crunchy," or "chewy." This will help you make informed choices for yourself or others who may have swallowing difficulties.
• Develop a list of alternative phrases for medical terms that might be misunderstood or alarming. For instance, instead of saying "breakthrough cancer pain," you might describe it as "intense episodes of discomfort that occur despite my regular pain management routine." Use this list when discussing your health with friends and family to keep conversations focused on your experiences rather than the clinical aspects of your condition.
• Consult with a pharmacist for a medication review session to discuss all current medications and identify any unnecessary overlaps or interactions. Pharmacists are trained to recognize drug interactions and can provide valuable insights into your medication management. Schedule a session once or twice a year, or whenever your medication changes.
• Create a transparency checklist for any professional communication you draft. Before sending out emails or making calls that could have legal or financial implications, run through a list that prompts you to check for clarity, honesty, and the absence of misleading language. This could include questions like "Have I stated the facts clearly?" or "Could this be misinterpreted in any way?"

Insys's Exploitation to Increase Subsys Prescriptions

Through their focus on top-tier physicians and their Reimbursement Center, Insys leadership discovered and exploited a fundamental truth about the pharmaceutical market: the people who are most responsible for making decisions about who should be taking a drug are not the FDA, nor even the doctors—it's the insurance companies who ultimately pay for the product.

Insys Targeted "Whale" Prescribers to Boost Subsys Prescriptions Using Aggressive Tactics

Insys's sales team was motivated to target high-prescribing pain doctors, referred to internally as "whales." These physicians were lavished with speaking fees, free meals, and lavish perks, with an expectation that they would reciprocate by writing more Subsys prescriptions. The company sought to exploit any vulnerability for sales: if physicians were in debt, dealing with a divorce, or opening a clinic, Insys was there to offer a financial benefit.

Company Recruited Persuasive Salespeople to Target High-Volume Prescribers

Insys recruited a sales force that was disproportionately young, attractive, and inexperienced, hoping the reps would be hungry and driven (and perhaps naïve) enough to push Subsys without being overly wary of the ethical and lawful lines. The company’s regional sales managers, mostly veterans brought on board by Alec Burlakoff, were tasked with “teaching and motivating” the reps, Burlakoff said. The instruction wasn't subtle in the slightest: We compensate doctors for prescribing our product. Some representatives were appalled by the tactics, while others were amenable to going along to secure a big paycheck.

Context

• By hiring individuals who are new to the industry, companies can mold their sales techniques and attitudes from the ground up, aligning them closely with the company’s aggressive sales goals and strategies.
• The recruitment of experienced sales managers was part of a broader strategy to leverage their expertise in influencing high-prescribing doctors, a common practice in the pharmaceutical industry to increase drug sales.
• Motivation can involve setting sales targets, offering incentives, and providing ongoing support and feedback. Effective managers use a combination of positive reinforcement and constructive criticism to drive performance.
• For some, the tactics could conflict with their personal or professional integrity, especially if they entered the pharmaceutical industry with the intention of genuinely helping patients.
• The culture within a sales team or company can heavily influence individual behavior. If aggressive sales tactics are normalized or rewarded, employees may feel compelled to conform to these practices to fit in or succeed.

Other Perspectives

• Being hungry and driven is not inherently negative and does not imply unethical behavior; many successful salespeople are motivated and ethical.

Insys Used Incentives and Speaker Programs to Drive Large Volumes of Medically Inappropriate Subsys Prescriptions

Insys leadership knew that their sales goals required not only enticing new physicians to issue Subsys prescriptions, but also inducing those physicians to push an ever-higher volume of scripts, and, critically, to move patients to the higher, more-expensive doses. They created a complex system of incentives based on the dollar amount of prescriptions, rather than the number of patients. For reps, a Subsys script at the strongest dose was worth six times as much as a prescription for the starting dose.

Context

• Prescribing higher doses of Subsys increases the risk of severe side effects, including respiratory depression, overdose, and death, especially in patients not adequately monitored or who do not require such high doses.
• Such incentive systems can erode trust between patients and healthcare providers if patients feel that their treatment is influenced by financial incentives rather than medical necessity.
• Pharmaceutical companies often use incentive programs to encourage sales representatives to meet or exceed sales targets. These incentives can include bonuses, commissions, or other rewards based on the volume or value of prescriptions sold.

Insys Deceived Insurers For Subsys Coverage, Prioritizing Profits Over Patient Safety

The Reimbursement Center was central to Insys's business plan to circumvent insurance restrictions and ensure a continuous stream of Subsys scripts. By posing as employees of doctors' offices, those working for the IRC misled and deceived insurers about patients' diagnoses, medical histories, and prior medication trials to secure coverage for Subsys.

Reimbursement Center Falsified Diagnoses and Medical Histories For Subsys Insurer Payments

The IRC employees were encouraged to push ethical boundaries and find creative ways to make questionable Subsys prescriptions look legitimate on paper to secure payment. The IRC often claimed, for instance, that a Subsys patient had previously tried a cheaper drug without success, even when that wasn’t true. The IRC would also misrepresent a patient's background and condition to make Subsys look like an appropriate treatment.

Practical Tips

• Advocate for electronic prescribing systems in your local healthcare facilities if they're not already in use. Electronic prescriptions can reduce errors and make it harder for illegitimate prescriptions to be issued since they often include checks and balances. You can do this by expressing your preference for electronic prescriptions to your healthcare providers and encouraging friends and family to do the same.
• Develop a habit of asking for evidence when encountering claims in conversations or media. Whenever someone presents information that could impact your actions, politely ask for the source of their information or the evidence that supports their claim. This practice can be applied in everyday situations, such as discussing news events with friends or evaluating product endorsements, to ensure you're not swayed by unfounded statements.
• Educate yourself on the common tactics used in pharmaceutical marketing and sales by subscribing to watchdog organizations or consumer protection groups that monitor and report on unethical practices in the healthcare industry. Staying informed about these tactics will make you more vigilant and better prepared to spot when a treatment may be inappropriately pushed by external influences rather than being in your best health interest.

Insys Executives Knew Few People Using Subsys Experienced Severe Cancer Pain

Insys executives, including John Kapoor himself, knew about the tactics the IRC used to deceive insurers, and they knew that most Subsys patients lacked the breakthrough cancer pain diagnosis required by most public and private programs. But despite Kapoor’s claims that Subsys was motivated by the suffering of his deceased wife, he was furious about prescriptions being denied by insurers. Any script that failed to generate revenue represented a lost profit, and he expected his executives to take whatever actions were needed to ensure that Subsys got coverage. When the IRC’s acceptance rate was low after launch, Kapoor would castigate the people in charge, and he demanded improvement.

Context

• The IRC was a department within Insys that was responsible for obtaining insurance approvals for Subsys prescriptions. They used deceptive practices to ensure coverage, often misrepresenting patient diagnoses.
• For pharmaceutical companies, insurance coverage is crucial for the commercial success of a drug. Without coverage, patients are less likely to afford the medication, leading to lower sales and profits for the company.
• Fentanyl is an extremely potent opioid, significantly stronger than morphine, and is associated with a high risk of addiction and overdose, making its prescription and use highly regulated.
• John Kapoor was the founder and former CEO of Insys Therapeutics. He played a central role in the company's operations and was later convicted of racketeering conspiracy for his involvement in the fraudulent marketing of Subsys.

Insys Executive Criminal Investigations and Convictions

Federal officials, particularly at the U.S. Attorney’s Office in Boston, began investigating Subsys and Insys in 2013, after multiple whistleblowers came forward with evidence of bribery and fraudulent activity. But even though government investigators knew that Insys’s marketing tactics mirrored those of other companies during the opioid epidemic, they chose not to settle for squeezing the company for shareholder money. Instead, they went after the individuals behind the criminal conduct, seeking to hold them responsible.

Authorities Investigate Insys's Illegal Promotion Methods

Beginning in 2013, the U.S. Attorney’s Office in Boston pursued a prolonged sequence of investigations centered on Insys Therapeutics. Those probes would culminate in a seven-count indictment accusing four top executives—Kapoor, Babich, Burlakoff, and Gurry—of racketeering conspiracy. The prosecution's argument benefited enormously from evidence provided by insiders who came out and spoke about what occurred at Insys. The investigation of one “whale” prescriber, Gavin Awerbuch in Michigan, who was arrested in 2014, gave federal agents in Boston an early leg up, and the 2015 guilty plea of Heather Alfonso in Connecticut, a practitioner who accepted money from Insys in exchange for prescriptions, further revealed the conspiracy's national scope.

Evidence of Criminal Conduct by Insys Executives Uncovered: Kapoor, Babich, Burlakoff

Government investigators uncovered substantial documentary evidence of criminal conduct by the top leadership at Insys, especially focusing on the trio of Kapoor, Babich, and Burlakoff. Perhaps foremost among this evidence was a return-on-investment analysis for the speaker program—a spreadsheet that calculated for each Insys speaker, dollar for dollar, how much revenue their prescriptions generated as compared with what the company was paying them in fees. Numerous former employees, interrogated by government investigators, also provided descriptions of the company’s unethical tactics for boosting Subsys sales.

Practical Tips

• You can enhance your awareness of corporate ethics by creating a "Red Flag Diary" where you note down any questionable practices you observe in your workplace. This diary serves as a personal log that can help you identify patterns of behavior that may be unethical or illegal. For example, if you notice repeated instances of colleagues bypassing certain procedures, document these occurrences and consider discussing them with a trusted supervisor or the human resources department.
• Use social media analytics to gauge the reach and influence of your speaking engagements. After a speaking event, share a key message or quote from your talk on platforms like LinkedIn or Twitter. Monitor the engagement these posts receive, such as likes, shares, and comments, to understand the broader impact of your speaking beyond the immediate audience. This can help you refine your messages and identify topics that resonate most with your network.

Whistleblowers Crucial in Exposing Insys Misdeeds for Government Case

The government's case against Insys relied on evidence provided by multiple whistleblowers, former employees who secretly filed so-called qui tam lawsuits alleging that the company was committing fraud against the taxpayer, seeking to protect themselves legally and also to make money as they received a portion of any funds recovered by the government. Perhaps foremost among these was Ray Furchak, an inexperienced sales rep hired at the start, prior to Subsys's launch. Furchak was disturbed by the company’s efforts to induce doctors to prescribe Subsys off-label, and he secretly recorded calls with his sales manager, Alec Burlakoff, and other colleagues. Although the Justice Department initially chose not to pursue his case, Furchak’s detailed account of Insys’s tactics provided the foundation for much of the reporting that followed, in the years to come.

Context

• The exposure of Insys's practices led to significant legal consequences for the company, including criminal charges against top executives and substantial financial penalties, highlighting the effectiveness of whistleblower contributions.
• This is a powerful fentanyl-based spray used to manage breakthrough cancer pain. Its misuse and the aggressive marketing tactics surrounding it have been central to legal cases and public scrutiny.
• Qui tam lawsuits have been instrumental in uncovering and addressing fraud in the healthcare industry, leading to significant recoveries and reforms in practices.
• The financial rewards for whistleblowers are designed to encourage individuals to come forward with information about fraud. This incentive is crucial because whistleblowers often risk their careers and personal relationships.
• These are legal actions brought under the False Claims Act, allowing private individuals to sue on behalf of the government. If successful, whistleblowers can receive a portion of the recovered damages.
• Whistleblowers like Furchak play a critical role in exposing unethical practices within companies, often at personal and professional risk, and can be instrumental in initiating legal action and regulatory changes.
• Secretly recording conversations can be legally complex, varying by jurisdiction. Some places require consent from all parties involved, while others allow one-party consent.
• Furchak’s recordings and insights provided journalists with concrete evidence to investigate further, leading to broader public awareness and media coverage of Insys’s practices.
• The Justice Department may initially decline to pursue a case due to various factors, such as insufficient evidence, resource constraints, or strategic priorities. However, new evidence or public pressure can lead to a reevaluation.

Insys Execs Kapoor, Babich, Burlakoff Convicted Of Racketeering Conspiracy

In a landmark case, U.S. attorneys in Massachusetts brought charges against the top leadership of Insys, accusing them of conspiracy to engage in racketeering under the RICO Act, which is usually invoked when dealing with criminal organizations. The prosecution signaled a change in the federal stance toward holding drug company leaders accountable, attempting to punish individuals rather than just financially penalizing the shareholders.

Executives Imprisoned for First Convictions in Opioid Crisis

In the end, five of the seven defendants named in the original Boston indictment were convicted of conspiring to commit racketeering. Of those five, Mike Gurry, Rich Simon, Joe Rowan, and John Kapoor received sentences that included prison time. The fifth defendant, Sunrise Lee, a regional sales executive, was sentenced to a slightly longer term of home confinement. The other two defendants, Mike Babich and Alec Burlakoff, had both pled guilty to felonies and struck cooperation agreements with the government in exchange for assisting in the convictions of the others, particularly Kapoor, the founder. Babich and Burlakoff were also sent to prison.

Context

• The RICO Act is a federal law designed to combat organized crime in the United States by allowing prosecution and civil penalties for racketeering activity performed as part of an ongoing criminal enterprise.
• These convictions sent a strong message to the pharmaceutical industry about the legal and ethical responsibilities of companies in marketing and distributing medications.
• Home confinement is a form of legal penalty where the individual is required to remain at home for a specified period, often monitored electronically, as an alternative to prison time.
• In legal terms, a cooperation agreement is when a defendant agrees to provide assistance to prosecutors, often in the form of testimony against co-defendants, in exchange for a reduced sentence.

Prosecutions Signal Government's Resolve to Hold Drug Industry Accountable for Opioid Crisis

Hughes describes the Insys story as a turning point for the government, signaling their resolve to make the pharmaceutical industry answer for its involvement in the opioid epidemic. While the Insys case focused on a company that occupied a niche in the market for opioids, the tactics uncovered there were not unique. Insys leadership didn’t originate the playbook; they adapted it. For federal authorities, prosecuting high-level individuals at a pharmaceutical company would serve as a powerful deterrent. If you can't escape legal repercussions by hiding behind your wealth or a company's attorneys—if you'll go to jail—maybe it's not worth the risk.

Other Perspectives

• Holding one company accountable does not necessarily mean the entire pharmaceutical industry will be held to the same standards or that systemic issues will be addressed.
• The assertion that these tactics are not unique could be an overgeneralization; without concrete evidence of widespread malpractice, it's possible that Insys's behavior was more of an outlier than a standard within the industry.
• The deterrent effect may be limited if convictions are rare or if penalties are inconsistently applied across the industry.
• Wealth and access to legal representation are part of the broader legal rights afforded to individuals and companies in many legal systems, which aim to ensure a fair trial for all parties, regardless of their financial status.