How prosecutors say drugmaker carried out scheme to sell powerful opioid: Part 1

A war veteran who says his SUBSYS painkiller prescription brought him close to death, a whistleblower and a woman’s family were all on a crusade to hold the drug company Insys' executives accountable.
9:15 | 01/24/20

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Transcript for How prosecutors say drugmaker carried out scheme to sell powerful opioid: Part 1
My biggest regret is my children having to suffer the anguish of seeing their daddy in and out of hospitals and struggling to regain his health. A battle-weary hero who says he came closest to death thanks to a doctor's prescription. I missed some of the best years of my kids' life. I can't get that back. Reporter: A tormented whistle-blower who feels she's trying to make up for past sins. I took this job thinking I was going to be helping people. And I was killing people. Reporter: A small-town attorney on a crusade against big pharma. I do not know how they look in a mirror, I do not know how they put their head on a pillow at night. Reporter: United against a common cause to hold one company and its executives responsible for what they say is their role in the opioid crisis. The former company accused of bribing doctors to prescribe an opioid. Mr. Kapoor, ABC news, do you have any comment? Reporter: After a landmark comment, John Kapoor, the rags to riches founder, sentenced. I think it's a credit to the people who worked on this case, I can't believe we're here. Reporter: The prosecution team talking about what this sentence means. It means the boardroom can be prosecuted. It means CEOs and vps and people who previously have not been prosecuted in the pharmaceutical industry, it means the department of justice is willing to pursue you, to prosecute you if you break the law. Reporter: Kapoor and other former insys executives guilty in a racketeering conspiracy, an elaborate scheme where the company coaxed doctors with money and sexual favors to prescribe subsys, a fentanyl spray for severe cancer pain, to thousands who didn't need it. Any comment? Reporter: Prosecutors say insys put profits over people, defrauding companies. Which medication are you talking about? Subsys. Reporter: Prescription drugs like subsys responsible for one-third of all opioid deaths yet no company had been prosecuted in a case until now. The potential toll breathtaking, more than 7,000 deaths according to the fda adverse deaths reporting system. People who didn't have cancer but were prescribed the death Makes you wonder whether or not to be charged with homicide. Reporter: Jeffrey never imagined he would end up in a shelter like this for homeless veterans. When we first met him last year, he told us about his three tours of duty in Iraq where he was hit by multiple ied blasts. The vertebrae had slipped off each other and the back was in jeopardy of sliding off and causing paralysis. Reporter: Despite injuries Jeff flourished, settling in Maryland. What did it mean to be dad? Everything. It's the strength that you need when you don't feel anything else to give you the motivation to be the better version of yourself. Reporter: But there were still moments when the pain was unbearable. Give me a laundry list of painkillers. I don't think there's one I haven't been on. It could be an injury, a slip or fall, or simply my back would flare up. I'd have to go to the emergency room to get treated. Reporter: In 2010 he thought he found a better approach when he was introduced to a new doctor, William tam, a pain specialist in annapolis, Maryland. This initially had come out with him saying there's this new medication I think will keep you out of the emergency room. Reporter: That medication, subsys, a fentanyl spray 50 times more powerful than heroin. Squeeze fingers and thumb together to spray subsys under your tongue. Reporter: Fda approved specifically for severe cancer pain. But Jeff and thousands like him was prescribed the drug off label, a legal and common practice for many drugs, but tightly regulated for powerful opiates. This is approved for one reason only, for cancer pain. Reporter: It didn't matter that Jeff didn't have cancer pain, says a former insys employee. Estimate what percent of the patients you authorized actually had cancer? From my experience, around 10%. Reporter: What mattered was that the patient was insured so that employees like Patty Nixon could make sure subsys prescriptions were paid for. They were asking me to lie to insurance companies about patients having cancer and cancer pain. A lot of it was word games. When the insurance company would ask the question, does the patient have cancer with breakthrough cancer pain? We would say yes, we're treating breakthrough pain. Reporter: Prosecutors say insurance fraud was just part of the scheme. Dissatisfied with sales after three months on the market, insys can a speakers program, supposedly to increase brand awareness. These programs are legal and common to teach doctors about new drugs, but prosecutors argued insys conceived theirs as a front for bribes. Pointing to exchanges like this. One of the things they do is they identify medical providers, physicians, that are high prescribers of opioids in general. Pain management doctors. Reporter: Dr. Tam, the pain specialist who treated Jeff, was allegedly part of the speaker series. Government records show he received at least $55,000 from insys between 2013 and 2016. They were setting up sham speaking events. It was a means to have a fancy dinner and act like they were putting on an educational event that was legitimate. What happened to subsys prescriptions? They skyrocketed. Reporter: And evidence shows insys routinely employed sex appeal to drive prescriptions, relying on hires like Amanda. I didn't have a strong connection with anyone. Reporter: A former reality show participant and "Playboy" model. In a statement she said, what the story failed to mention is I hold a bachelor's degree from the university of Arizona, a substitute teaching credential k-8, and was the owner operator of a modeling talent agency. All of this information was discussed during my interview with insys. I have never seen such in your face, such egregious, blatant behavior. Hiring drug reps that had no industry experience whatsoever, strippers. Reporter: Socializing with doctors was a corporate strategy. Company email showed then vice president of sales pressuring his staff in one of his many directives. And the strategy paid off. Between 2012 and 2013, the company saw more than 1,000% growth in net revenue of subsys sales, making it the darling of Wall Street. Execs all smiles as they opened the NASDAQ exchange. The following year subsys became the most widely prescribed drug of its type. By then Kapoor, the soft-spoken immigrant, had become a billionaire. A few years later he joined the "Forbes" list of richest people in America. All the while hailing his drug as a win for patients and shareholders alike. That product that we launched three years ago today, this year will do close to $300 million. I got new patients and I got a lot of them Reporter: These are insys sales reps rapping about their conquests, showcased at a national sales meeting in 2015. Under the fentanyl costume, the vp of sales. Whoo! Reporter: Meanwhile Jeff says he was edging closer to death. My understanding is you were taking the equivalent of 5,000 percocet a day? Yes. Or the equivalent to a gram of heroin. Reporter: Jeff has filed a lawsuit against Dr. Tham, Kapoor, and insys. The company denied that there have been more than 7,000 deaths associated with the use of subsys. Insys has since paid out $225 million in government fines, declared bankruptcy, sold off subsys to another company. Hi, daddy. Hi, sweetheart. Reporter: That near-death hospital visit was the breaking point, Jeff says. He spent years working to get Miss you guys. Miss you. Reporter: Dr. Tham denies any wrongdoing. In response to the allegations by Jeff the doctor and his attorneys told ABC news they had no comment. When we come back, the moment a whistle-blower says she came clean. You were getting anxiety attacks, why? I knew what I was doing was wrong.

This transcript has been automatically generated and may not be 100% accurate.

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