The future doesn’t look too bright for Insys
Insys’ (INSY) past is in the news again; a past it wishes it could forget. In a 20-page report with a 173-page appendix consisting mostly of distasteful emails depicting aggressive sales tactics for an opiate 30 times more powerful than heroin, the Senate… released the details of a… case against the company…
The company’s main income is still its fentanyl sublingual product Subsys, revenues from which it will have to use in order to make its transition to a cannabinoid-focused biotech with a new image a success. That’s quite an awkward position to be in.
This interplay between compensation—for physicians on the one hand and their assigned sales representatives on the other—drove explosive growth. By the fifth year of OxyContin sales, the drug generated more than $1 billion in annual revenue for the company. In 2001 alone, “Purdue paid $40 million in sales incentive bonuses to its sales representatives.” The same year, annual bonuses for Purdue sales representatives averaged $71,500—compared to the average salary of $55,000—with a bonus range of $15,000 to almost $240,000.
Like Purdue, Insys Therapeutics, Inc., aggressively used speakers programs, physician detailing, bonus structures, and management pressure to boost sales for its fentanyl product Subsys. Between 2012—the year the Food and Drug Administration approved Subsys—and 2013, Insys achieved more than 1,000% growth in net revenue from Subsys sales.
ISP’s [Insys speakers programs] are the most important thing you will do to increase your business. ISP’s are basically the ONLY thing you should be focusing on to increase your sales. […] Most of you say you want to work, say you want to make money, but don’t put forth the necessary effort pertaining to ISP’s to back up what you say. […] If you are not living, eating, and breathing ISP’s to drive sales, you should not be in specialty pharma.