A pharmaceutical tycoon whose company started selling a new opioid painkiller in 2012 was disgusted with the product launch, telling underlings that doctors weren’t prescribing high enough dosages to keep patients on the addictive drug, according to a key prosecution witness in the mogul’s criminal trial.
In his first day on the witness stand in US District Court in Boston, former Insys Therapeutics chief executive Michael Babich said John N. Kapoor decried the rollout of the drug Subsys as the “worst [expletive] launch in pharmaceutical history” because patients stopped using it after only a few months.
A federal prosecutor asked Babich whether Kapoor expressed a view on why patients weren’t staying on the under-the-tongue fentanyl spray. Babich said, “Because they’re starting on too low of a dose.”
Babich agreed to testify after pleading guilty last month to participating in a nationwide racketeering scheme by Arizona-based Insys. The conspiracy allegedly paid millions of dollars in bribes and kickbacks to practitioners to prescribe Subsys. The drug was approved by the Food and Drug Administration for severe cancer pain, but prosecutors say most recipients didn’t have cancer.
Babich pleaded guilty to conspiracy to commit mail and wire fraud and to mail fraud. He faces up to 20 years in prison. He told the jury that prosecutors have promised to take his testimony into account when they recommend a sentence, but “I’m not guaranteed anything.”
In two hours on the stand, Babich said that Kapoor, 75, invested tens of millions of dollars of his own in Insys and was desperate for the painkiller to penetrate a market shared by four other fast-acting fentanyl products. Kapoor, he said, urged the Insys sales team to do things that hadn’t been authorized.
The FDA had allowed the drug label to say Subsys relieved pain within 30 minutes; that was the primary result of late-stage clinical trials. But Kapoor wanted sales representatives to walk into doctors’ offices with a five-minute hourglass, turn it over, and tell the physicians that when the sand ran out, Subsys would be working, Babich said.
Subsys had indeed proven effective in relieving pain in as little as five minutes, Babich said, but the finding was a secondary result of the trials and the FDA didn’t allow that to go on the label.
As soon as Insys launched the drug, Babich testified, Kapoor wanted employees to each day analyze data that the FDA requires for drugs that pose serious potential health risks, including opioids.
But Kapoor evidently wasn’t focused on safety concerns; he wanted to identify physicians who were writing the bulk of the 60 to 100 prescriptions that were being filled each day when the rollout began, Babich said.
Prosecutors say that Insys executives identified physicians who were most inclined to prescribe Subsys and then began paying them kickbacks and bribes to get them to write more prescriptions, and at higher dosages.
Kapoor also didn’t want to hire people drug companies usually have on staff who might question how employees do business, Babich said. For example, he said, Kapoor didn’t want to appoint a legal counsel or a compliance officer because he thought it was a waste of money.
Kapoor and four other former Insys executives are on trial for allegedly conspiring to violate the federal criminal Racketeer Influenced and Corrupt Organizations Act, or RICO, by paying bribes and kickbacks to doctors and other practitioners. Prosecutors typically use RICO to go after mobsters.
The four other defendants include Michael Gurry, former vice president of managed markets; Sunrise Lee, a sales executive; Joseph Rowan, a former regional director; and Richard Simon, a former national director of sales.
It is the first criminal trial of pharmaceutical executives who marketed an opioid painkiller since the nation’s deadly opioid epidemic began.
A native of Chicago who now lives in Scottsdale, Ariz., Babich said Kapoor hired him in 2001 after the University of Illinois graduate had worked a few years in Chicago as an investment analyst.
Initially, Babich’s job was managing an investment portfolio of Kapoor’s that Babich said totaled more than $100 million. But Kapoor was involved in several drug companies and in 2011 named Babich CEO of Insys. Kapoor founded the company around 2006, Babich said.
Kapoor paid most of Babich’s tuition to earn a master of business administration at Northwestern University at night, Babich said. And Kapoor let him live in a guesthouse for at least four months after Kapoor set up Insys in Arizona.Jonathan Saltzman
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