Brash salesman who watched ‘The Wolf of Wall Street’ for sales tips testifies against executives
He once played the mascot for the Fentanyl spray his company peddled, brashly rapping lyrics celebrating the powerful painkiller.
Alec Burlakoff was the larger-than-life executive who told his employees to watch the film, “Wolf of Wall Street,” for sales tips. He smoked pot with doctors and paid for their lap dances at strip clubs, bragging in texts to fellow executives at Insys Therapeutics about what a good time he had showed them.
On Friday, Burlakoff, the former vice president of sales for the Arizona-based pharmaceutical company took the stand in the landmark federal racketeering trial against his former colleagues, who are accused of bribing practitioners to prescribe Subsys to patients who did not need it and lying to insurance companies so they would approve coverage. The man at the top of that conspiracy was company founder, John Kapoor, Burlakoff testified in US District Court in Boston.
“ ‘I’m running a [expletive] business,’ ” Burlakoff recalled Kapoor telling him. “ ‘If we’re going to put money out, we need to get money in.’ ”
Burlakoff, 45, was among the most eagerly anticipated witnesses in the case against Kapoor; Michael Gurry, the company’s former vice president of managed markets; Richard Simon, former national sales director; and Sunrise Lee and Joseph Rowan, former regional sales directors. Throughout the trial, Burlakoff has been described by other witnesses as dynamic, temperamental, and “unique.” A company rap video touting the virtues of Subsys, a painkiller meant to treat the severe pain of cancer patients, showed him in a costume of the Fentanyl spray, dancing and preening with other company employees.
Defense lawyers have described him as a slick salesman willing to say anything to procure a lighter sentence from the government. He pleaded guilty to racketeering in November and faces anywhere from no time in prison to 20 years.
On the first of what is expected to be several days of testimony, Burlakoff described his first meeting with Kapoor, who hired him in 2012 and expressed his frustration that not enough doctors were prescribing Subsys at a high enough dose to keep patients coming back for more.
Kapoor, Burlakoff said, wanted to make sure the money he was spending on speaker programs, which the company set up to pay doctors to promote Subsys, would yield more profits.
“He wanted to make sure that when he was spending money he was getting his money back and at least doubling his investment,” Burlakoff testified.
Burlakoff said he told Kapoor that sales representatives could not be afraid to be straightforward with doctors: In exchange for being paid to speak, they would need to prescribe Subsys at a high rate and in high doses. The higher the dose, the more likely the patient was to become addicted and seek more prescriptions, other witnesses have testified.
“The physicians are either going to be taken aback or turned off . . . or they’re going to be elated and excited to get money in their pockets,” Burlakoff said
Kapoor slammed his fist on his desk and announced, “That’s our next VP of sales,” Burlakoff testified.
Burlakoff, a married father of two, said he hired Rowan, a friend since high school and his former college roommate, away from another pharmaceutical company to work in sales at Insys because he had a close relationship with an Alabama doctor, Xiulu Ruan, who was known for prescribing high amounts of opioids.
Doctors like Ruan became known in the company as “whales.”
Those were physicians who had “taken the deal, hook, line, and sinker,” Burlakoff testified. “They basically agreed in a very clear and concise manner that they are up for the deal, which is they will be compensated based on the number of prescriptions for Subsys that they write.”
Ruan was Rowan’s only client, but he wrote so many Subsys prescriptions that Rowan eventually became the company’s number one sales representative, Burlakoff said.
“They suck,” Rowan e-mailed Burlakoff about the other sales reps. “Beat their ass with 1.”
“True dat,” Burlakoff replied.
In 2017, Ruan was sentenced to 21 years in federal prison for running a massive pill mill in Mobile, Ala.
Burlakoff, who would make more than $5 million in stock options working for Insys, said he wrote a business plan that specifically instructed sales representatives to follow Rowan’s formula: Identify one practitioner willing to prescribe heavily in exchange for payments and strive to maintain that relationship.
“WE MUST OWN AND SOLIDIFY OUR SUBSYS LOYALISTS,” Burlakoff wrote to Insys employees.
“I tailored this business plan exactly based on the . . . wants and needs that Mr. Kapoor made to me,” Burlakoff told the jury. “He made it very clear that if you blow his money, you’re out of a job. You don’t give away anything.”