Alec Burlakoff: The rise and fall of a pharmaceutical opioid sales executive
This Sunday, 60 Minutes continues its groundbreaking investigative series on the American opioid epidemic and interviews Alec Burlakoff, a former top executive at Insys Therapeutics.
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Insys, the Arizona-based maker of opioid painkiller Subsys, filed for bankruptcy in January 2020. After a 10-week trial in a Boston federal court, Burlakoff, CEO John Kapoor and six other executives were sentenced to prison for their part in a racketeering scheme based on a conspiracy to recklessly and illegally boost profits from Subsys, a potent, fast-acting fentanyl intended for cancer pain patients. This landmark criminal case was the first to bring pharmaceutical executives to trial for their role in fueling the opioid epidemic, potentially indicating a shift in how the government approaches white collar crime.
60 Minutes correspondent Bill Whitaker sat down with Burlakoff before his sentencing in January, after he had testified about the illegal sales tactics he employed at Insys.
Burlakoff explained the inner workings of the company, and what it took to be a top sales executive at what prosecutors would come to call an organized criminal enterprise.
"There's a story behind each story, but I got real sick in high school," Burlakoff said.
He was diagnosed with a bacterial infection, was treated for three years and then began to see a therapist, getting "a taste of what therapy can do for you."
"I knew what it was like to be sick every day, and wake up feeling ill every day, and go to bed ill every day," Burlakoff said. "I made a decision that if this is how I have to live the rest of my life, quite frankly, I don't want to live."
Burlakoff, whose father and brother were successful car salesmen, chose to major in child psychology, get a master's degree in social work and begin what he found to be a rewarding career as a school guidance counselor. How did he make the leap to pharmaceutical sales? One incident stands out in his mind:
From that moment, Alec Burlakoff's life took a sharp turn. His first sales job was at Eli Lilly, an American pharmaceutical giant. Burlakoff began selling Prozac and "central nervous system products, psychology products," something he knew about from personal experience.
"I studied depression. I've lived with depression. I've been treated for depression. And I know what medication can do," Burlakoff said. "So I went in there starry-eyed and explaining to my father, 'Hey Dad, I'm not just going into sales. I'm parlaying the education that you helped me with, you know, through college and my masters."
Burlakoff said his father never wanted his son to pursue sales, even offering to supplement his income as a guidance counselor to keep him on that career track.
"When I was young, he didn't have any strong opinions one way or the other, but when push came to shove and I was getting ready to leave my work as a guidance counselor at a school, he actually forbade me to go into sales," Burlakoff recalled.
Despite his family's disapproval, Burlakoff entered the field. He says he was determined to get his family's support by earning "the type of dollars that my father and brother were earning." Burlakoff said he initially set out to help people, but within hours of being shown the ropes by fellow sales reps and managers, that notion was quickly dispelled. Salesmen, he learned, needed to hammer in rationalizations to justify their behaviors and be successful in the field.
Burlakoff would be named Eli Lilly's "Rookie of the Year'' for the southeast region. In his retelling, the job came down to this: "How do you find a way to get into the customer's [doctors'] mind, manipulate them, overcome their objections, incentivize them, get them excited, and move product?"
Aggressive sales tactics ultimately led to Eli Lilly becoming targeted in a lawsuit. And though the scheme was, at the end of the day, ruled legal by the judge, Burlakoff was fired. But the incident only enhanced his reputation, he said, and within three days he was hired by a competitor, Johnson & Johnson.
Burlakoff would later go on to become a top sales representative and manager at Cephalon, a biopharmaceutical company that sold the drug Actiq, a fentanyl lollipop for opioid-tolerant cancer pain patients. He had a successful run, but left the company, "turned off from the bureaucracy of pharmaceuticals'' and unhappy at being passed over for a promotion. He took a five-year break from the industry before joining Insys in 2012, after an interview with CEO John Kapoor.
Burlakoff then began piloting the drug maker's "speakers bureau," where the company would pay doctors to prescribe increasing doses of the opioid drug Subsys by directing up to $125,000 a year in bribes camouflaged as speaker fees.
"Down the road, [Kapoor] wanted me to dictate what doses they escalated the patient to, what other medications they should not write..." he says. Burlakoff emphasized that "most doctors do not want to be bribed" and that it was the job of his sales representatives to hunt and find the rare few that might be turned.
Burlakoff explained to us that to "close a doctor" a sales rep must go to almost any length.
"I had a doctor who says [he] goes to church every Sunday. Well, I'm Jewish," Burlakoff explains, "but I went to church every Sunday...for a year."
Burlakoff and his team pursued doctors with the understanding that "98% of your business is going to come from 2% of your doctors." He explains that a very small subset of doctors are "willing to play the game," and that he and his team had to search low, high, far and wide to find them. He would encourage his sales reps to do a tremendous amount of research on the physicians, saying, "we're in pain management, and if you want to find the doctors who are prescribing a lot of pain management pills, drive around 5-- 6:00 a.m. in the morning. He'd know he found a doctor to talk to when "the offices are filled...with license plates that are out of town and have patients waiting outside the door...and they're almost shaking because they're going through withdrawal."
The Insys sales reps also targeted doctors that would be most susceptible to bribery and manipulation after "profiling them," and "learning what makes them tick."
"I can tell you at Insys Therapeutics that my direction would be, 'Do not target an analytical doctor with this drug,'" Burlakoff explains.
Burlakoff said Insys CEO Kapoor ordered his executives to monitor doctors' performance to ensure they were generating enough profit from prescriptions to justify their bribes. Most startling, evidence presented at trial revealed that the U.S. Food and Drug Administration had unwittingly enabled the scheme. An FDA safety program for high risk drugs like opioids was designed to educate doctors, monitor patients and protect them from harm. A byproduct of the program was that Insys received real time data about doctors' prescriptions and dosing to patients. Insys used the FDA program to their advantage. This data helped them track the doctors they were bribing, to monitor if they were treating their patients and prescribing Subsys in a way that was profitable for Insys.
The daily 8:30 a.m. sales meetings at Insys, headed by Kapoor, were brutal.
"You didn't need coffee to work for Dr. Kapoor...he'd get all the data, all the good, bad and the ugly. And he'd be armed and dangerous from A to Z. And he would have a shellacking ready for every single vice president, director, or higher up," Burlakoff says. "And you would sit there with a pad and pen, and you would write [his orders] down quickly in bullet points, and you wouldn't miss a word. And then you would carry those orders out."
But this began to be too much for Burlakoff. He says the work caused him "to lose a piece of his soul each day." "Why didn't I walk out?" he asked. "Because I was a greedy, selfish moron who basically looked up to these people in these high-level positions, specifically at Insys with Dr. Kapoor."
Burlakoff said he continued to justify his behavior even after he was indicted, refusing to plead guilty. But after multiple visits to court, mounting evidence, and pressure from federal prosecutors, he had a talk with his lawyer that finally changed his mind.
