The pharma sales execs who turned to crime

Published: Wed, 11/17/21

November 17, 2021

Good morning. With a record number of job openings out there, make sure your current employer is giving you more than a Starbucks gift card for hitting your incentives (pizza doesn’t count either). In this week’s Quota, we’ll tell the story of a team of pharma sales execs who turned to crime in order to sell more opioids. We’ll also find out whether salespeople think sales training is helpful, and try to help a sales director who thinks his reps are only there for the swag. Let’s get into it.

NUMBER OF THE WEEK

1 in 20

Less than 1 out of 20 sales teams are able to get 75% of their team to quota.

Source: RepVue -- November 2021

SALES ROUNDUP

Here’s what’s happening in the sales world this week:

The popular Facebook page, Humans of New York, recently profiled a mid-twentieth-century salesman through the eyes of his son. Known as the Fuller Brush Man, the once successful German sales executive was forced to flee Nazi Germany after Hitler took power, only to turn around and go back with the American Army, fighting in the Battle of the Bulge. Once the war was over, the veteran spent the rest of his career going door-to-door for the Fuller Brush Company, becoming forever immortalized by the artist Alice Neel. Read parts 1, 2, 3, and 4 of this touching tribute.
You might be old enough to remember Isuzu vehicles, but you probably don’t remember Joe Isuzu, the fictional car-salesman pitchman who (intentionally) lied to customer’s faces. Trying to break into the U.S. market with an advertising budget about 1/10th the size of Toyota’s, Isuzu decided to flip the script and get customer’s attention with blatant lies, and, well, it actually worked... for a time anyway. Isuzu sales jumped, but people seemed to love Joe a lot more than they loved the cars. You can read about Joe Isuzu here.
In a story that proves you should never give up on your dreams, David Boyd Janes, a former Ontario furnace salesman, just had his debut album hit #1 on the charts in Canada. As the story goes, Janes quit his sales job after going through a brutal breakup and decided to pursue his lifelong dream of making music. Even if you hate country, the story can’t be beat. You can watch the short segment here.

MEME OF THE WEEK

Source: Facebook -- Sales Humor

FEATURE

John Kapoor -- Credit: Charles Krupa/AP

How a Handful of Pharmaceutical Sales Execs Broke the Law to Sell More Opioids

Most everyone has heard about the opioid crisis, and about Purdue Pharma, the now-dissolved maker of the highly addictive painkiller, OxyContin. But there’s another, lesser-known business that is alleged to have used shady and illegal business practices to get doctors to overprescribe opioids to patients. And, in the case of Insys Therapeutics, their sales team went far beyond aggressive sales tactics, crossing the line into fraud, racketeering, and conspiracy.

The story starts with a man named John Kapoor, an entrepreneur who had already made a fortune in the pharmaceutical industry when he started Insys Therapeutics in 1990. Insys’s main product was called Subsys, a spray version of the potent opioid drug fentanyl. After years of development, Subsys had been approved by the Food and Drug Administration to treat cancer patients who suffered intense bouts of pain.

But there was a problem: after investing millions of dollars into developing the drug, and waiting for years for FDA approval, sales were mediocre. Kapoor needed to recoup his investment, and he needed someone who was willing to do whatever it took.

The hard-charging sales exec

Enter Alec Burlakoff. Burlakoff was a friendly, energetic sales executive who had worked for Eli Lilly, Johnson & Johnson, and Cephalon. Before making the leap into pharmaceutical sales, he was a well-liked school guidance counselor, but the draw of seeing his student’s rich parents pull up to the school in their high-end cars was too much, and Burlakoff jumped ship into the competitive (and lucrative) world of pharma sales.

By the time he joined Insys in 2012, Burlakoff understood the world of prescription drugs. More importantly, he was willing to bend and break the rules in order to win, which was exactly what Kapoor was looking for. Kapoor hired Burlakoff on the spot, and gave him his marching orders: do whatever you have to do to sell more Subsys.

The scheme

Burlakoff knew that in order to get doctors to prescribe high quantities of a drug like Subsys, they needed to be incentivized. He also knew that most doctors didn’t want to be bribed, so he came up with a workaround: the Insys Speaker Program, known as the ISP.

From the Department of Justice press release: “Insys sales representatives targeted and promised medical professionals the opportunity to be paid as Insys speakers if they wrote prescriptions for Subsys. The more prescriptions written for Subsys – and the higher the dose – the more speaking opportunities were awarded and more money paid to the practitioners. In many instances, the programs were shams.”

Participating doctors were paid up to $125,000 in bribes, camouflaged as speaker’s fees, in exchange for prescribing ever-increasing doses of Subsys to their patients. In many cases, the doctors never even showed up for their purported speaking engagements, they simply prescribed more Subsys, then sat back and collected their checks.

The aftermath

Not only did Insys and many of its sales reps break the law, the overprescription of Subsys was linked to multiple overdose deaths. This caught the attention of state and federal law enforcement and Kapoor, Burlakoff, and a handful of other Insys executives (including four sales executives) were convicted of racketeering conspiracy.

True to form, Burlakoff initially tried to talk his way out of trouble, lying about his role in the scheme when questioned by investigators. But eventually, he realized they had him dead to rights, so he cooperated with the U.S Attorney's Office in their prosecution of Kapoor and the other executives.

In January 2020, Kapoor was sentenced to 66 months in prison. Because of his cooperation, Burkaloff got off with 26 months, but was ordered to pay restitution of over $5 million dollars in proceeds. The other sales and marketing executives were sentenced to between a year and 33 months in prison, and ordered to pay restitution. In June 2019, Insys filed for chapter 11 bankruptcy.

SALES FAILS

Each week, we bring you the most cringe-worthy sales moments from across the web. To submit your sales fail story for consideration, click here. (Don't worry, you'll remain completely anonymous).

“Not sure if this is really a sales fail but about ten years ago, I worked for a large mortgage company doing inside sales. I was trying to get promoted to sales manager, and was busting my ass. One day, our regional Vice President came in for a meeting with the branch manager. This was a guy that everybody was deathly afraid of even though he was literally five feet tall, no joke.

"Anyways, they were meeting behind closed doors, then one of the managers popped out and called me over and asked me if I could go pick up lunch for them since we didn’t have a secretary or assistant in the office. Of course I said yes, then took their order, and the regional asked for a chicken salad wrap with no onions, adding that he definitely didn’t want onions in his wrap. The branch manager hands me a few twenties and I go pick up the food up the street, stressing to the cashier that I don’t want onions in the wrap. I head back and give the managers the food and they close the door again. Within a few minutes, I got an instant message from the branch manager telling me the wrap had onions and the regional manager refused to eat it and declined an offer for another one.

"When he was leaving that night, the regional gave me a blank stare as he walked by my desk. A few weeks later, I lost out on the team manager position to another guy. Can’t help thinking it was because of the onions, but who knows.”

Anonymous, 41 Calabasas, CA

POLL OF THE WEEK

Source: Instagram Poll -- November 2021

ASK THE QUOTA

Want to submit a question and be featured in our advice column? Click here. (Don't worry, you'll remain completely anonymous).

Dear Quota Team,

I’m a Director of Sales at a small four-year-old software company, and I’m in charge of a team of about a dozen SDRs and Account Executives, all of whom are in their twenties, with the exception of one AE who is in his early 30s. I’m 44, and it’s pretty clear that the way I was brought up and taught to do sales is completely different from what my current team has experienced, and what they expect the job to be.

I started here about six months ago, and since then, it’s been a huge struggle to get these guys producing at the level I know they’re capable of. They seem way more focused on feel-good, team-building activities than on driving new business. It’s almost as if they think the actual selling part of the job is secondary to socializing with their coworkers, not vice versa.

Unfortunately, I think the founders of the company somewhat encourage this behavior, always promoting the “company culture” to the sales reps and to new hires, but behind closed doors, they’re starting to get on me for not delivering the results they’re looking for.

I’ve tried a lot of different things to get the team more focused on closing deals: contests, cash rewards, recognition awards, training sessions, etc, but I feel like there would need to be a huge culture shift in order to get everybody producing at a high-level.

When I bring this up to the founders, they talk about how low the turnover is in the sales force, but it doesn’t matter how many people you keep if they’re not there to crush it. What’s the move here? I feel like I’m a few months away from jumping ship to a company that actually wants to sell.

Challenged in Massachusetts

Dear Challenged,

The (relatively) new emphasis on company culture is usually a good thing, since it’s eliminating some of the more toxic leadership styles that have long been associated with the workplace, especially with sales teams. But, as you pointed out, sometimes there can be a downside, as some employees take advantage of the situation and don’t do what they’re supposed to, knowing it’s unlikely they’ll face any repercussions.

In your case, it sounds like the leadership team wants it both ways: they want to hit revenue targets, but they’re afraid of being seen as the “bad guys,” and afraid of turnover. This makes us think that the company is well-funded, because if it was the founder’s own cash on the line, it’s highly doubtful they’d be as casual in their approach.

So what can you do? In order to build an effective sales team, you need to have salespeople who are hungry to do the job, not just to show up and collect their base salary. To find these people, you’ll have to weed out the ones who have no interest in stepping up their game, and bring in new hires that better reflect your (ambitious) values. Once there’s some new blood circulating, you’ll find that some of your existing reps will step up, and others will decide it’s not for them.

But none of this will be possible if you can’t get the founders on board. Put together a plan, and explain how and why you have to restructure the team. If they don’t agree with your new approach, then you need to decide whether you want to stay in such a laid-back atmosphere. Judging by your question, the answer seems obvious. Remember, you were brought in to run a sales team, and it’s time for you to run it your way. Good luck!

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Today's email was written by Ken K., Steve R., and Emily H.

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