Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Selling drugs is a relationship business. It s best to do it in person. That is why, on a summer evening in 2 0 1

Selling drugs is a relationship business. Its best to do it in person. That is why, on a summer evening in 2012, Alec Burlakoff was out for dinner with Steven Chun, the owner of Sarasota Pain Associates. Burlakoff was a sales manager for Insys Therapeutics, an Arizona-based pharmaceutical company with only one branded product, a new and highly potent opioid painkiller called Subsys. Chun was a doctor who prescribed a lot of opioids.
The location was a moderately expensive seafood restaurant in Sarasota, Fla., with linen tablecloths and large windows overlooking the bay. Burlakoff, then 38, had years of experience in the opioid market. Colleagues marveled over his shameless push to make the sale, but he had a charisma that was hard to resist. Even people who didnt trust him couldnt help liking him.
Chun, then 49 and stout, had impeccable credentials: He was trained at the University of Washington, Cornell Medical College and the Memorial Sloan Kettering Cancer Center.
For Insys, Chun was just the right kind of doctor to pursue. In the late 1990s, sales of prescription opioids began a steep climb. But by the time Subsys came to market in 2012, mounting regulatory scrutiny and changing medical opinion were thinning the ranks of prolific opioid prescribers. Chun was one of the holdouts, a true believer in treating pain with narcotics. He operated a busy practice, and 95 percent of the Medicare patients he saw in 2015 had at least one opioid script filled. Chun was also a top prescriber of a small class of painkillers whose active ingredient is fentanyl, which is 50 to 100 times as powerful as morphine. Burlakoffs product was a new entry to that class. On a target list derived from industry data that circulated internally at Insys, Chun was placed at No.3. The word inside the company for a doctor like Chun was a whale.
In the few months since Subsys was introduced, demand was not meeting expectations. Some of the sales staff had already been fired. If Burlakoff could persuade Chun to become a Subsys loyalist, it would be a coup for them and for the entire company. The drug was so expensive that a single clinic, led by a motivated doctor, could generate millions of dollars in revenue.
Insys wanted to sign Chun up for the companys speaker program, which was just getting underway.
Speaker programs are a widely used marketing tool in the pharmaceutical business. Drug makers enlist doctors to give paid talks about the benefits of a product to other potential prescribers, at a clinic or over dinner in a private room at a restaurant. But Krane and some fellow rookie sales reps were already getting a clear message from Burlakoff, she said, that his idea of a speaker program was something else, and they were concerned: It sounded a lot like a bribery scheme.
Chun did become an Insys speaker later that year, and sales did improve, not only in Chuns Florida office but also around the country, as more doctors signed on. By the next year, according to the company, net revenue from Subsys sales would increase by more than 1,000 percent, to $95.7 million.
But the new reps were right to be worried. The Insys speaker program was central to Insys rapid rise as a Wall Street darling, and it was also central to the onslaught of legal troubles that now surround the company. Most notable, seven former top executives, including Burlakoff and the billionaire founder of Insys, John Kapoor, now await trial on racketeering charges in federal court in Boston. The company itself, remarkably, is still operating.
In the Insys case, prosecutors are looking to break new ground in holding the pharmaceutical and medical industry accountable in connection with the current opioid crisis.
THE OPIOID CRISIS, now the deadliest drug epidemic in American history, has evolved significantly over the course of the last two decades. What began as a sharp rise in prescription-drug overdoses has been eclipsed by a terrifying spike in deaths driven primarily by illicitly manufactured synthetic opioids and heroin. But prescription drugs and the marketing programs that fuel their sales remain an important contributor to the larger crisis. Heroin accounted for roughly 15,000 of the opioid deaths in 2016, for instance, but as many as four out of five heroin users started out by misusing prescription opioids.
By the time Subsys arrived in 2012, the pharmaceutical industry had been battling authorities for years over its role in promoting the spread of addictive painkillers. The authorities were trying to confine opioids to a select population of pain patients who desperately needed them, but manufacturers were pushing legal boundaries sometimes to the breaking point to get their products out to a wider market.
Subsys belongs to a class of fentanyl products called TIRF drugs. Fentanyl is extremely powerful, so TIRF are approved exclusively for the treatment of cancer pain. TIRFs are niche products, but the niche can be lucrative because the drugs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Management A Managerial Approach

Authors: Jack R. Meredith, Samuel J. Mantel,

7th Edition

470226218, 978-0470226216

More Books

Students explore these related General Management questions