Healthy Skepticism Library item: 16553
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Pollack A
Former Drug Executive Convicted of Wire Fraud
The New York Times 2009 Sep 29
http://www.nytimes.com/2009/09/30/business/30drug.html?_r=1
Full text:
In a verdict that could strike fear into pharmaceutical industry executive suites, the former head of a drug company was convicted of wire fraud Tuesday for issuing what federal prosecutors called a misleading press release that contributed to off-label sales of his company’s drug.
But the executive, W. Scott Harkonen, the former chief executive of InterMune, was acquitted by the federal jury in San Francisco of a related charge of off-label marketing itself, known as “misbranding,” the Justice Department said.
The case was unusual because off-label marketing cases are often settled with the company paying a fine. It is rare for prosecutors to press charges against individual executives.
“Today’s verdict demonstrates that pharmaceutical executives will not be able to hide behind a corporate shield when they promote drugs using false or fraudulent information,” Thomas P. Doyle, a special agent in the Food and Drug Administration’s office of criminal investigations, said in a statement Tuesday.
Marcus Topel, Dr. Harkonen’s lawyer, said that he would ask for a new trial or would appeal the verdict. He said the jury verdict was “untenable” and “very inconsistent,” in that Dr. Harkonen was convicted on one count and acquitted on a closely related one.
After a drug is approved by the F.D.A. for one disease, doctors are free to prescribe it for other diseases. But pharmaceutical companies are not allowed to promote such so-called off-label uses.
InterMune’s drug, Actimmune, was approved for two rare genetic conditions. But the main sales of the drug, which peaked at $141million in 2003, came from an unapproved use: treating idiopathic pulmonary fibrosis, a scarring of the lungs that can be fatal.
InterMune conducted a large clinical trial testing Actimmune as a treatment for the lung disease. The drug did not achieve the goal of the trial, which was to improve lung function compared with a placebo. But InterMune found that if only the patients in the trial with mild or moderate disease were considered, those who got the drug lived longer than those who received the placebo. The company highlighted the “survival benefit” in a news release, issued in August 2002.
Prosecutors said the news release was part of a scheme to induce off-label sales of Actimmune, also known as interferon gamma, which costs about $50,000 a year.
Mr. Topel said interpretation of the clinical trial results was a matter of debate. “One position in a scientific dispute has been criminalized – quite an astonishing thing,” Mr. Topel said in an interview.
Wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine. Dr. Harkonen, who remains free on bail, has not been sentenced.
A medical doctor by training, he was chief executive of InterMune from February 1998 until June 2003.
InterMune agreed to pay about $37 million in 2006 to settle charges related to Actimmune marketing. The company, based in Brisbane, Calif., also entered into a five-year corporate integrity agreement with the Department of Health and Human Services.
In 2007, a second big trial of Actimmune found that the drug did not prolong lives of patients with pulmonary fibrosis. Sales of the drug have dwindled year by year.
Stephen Paul Mahinka, chairman of the life sciences practice at the law firm Morgan, Lewis & Bockius, said he thought prosecutions of individual pharmaceutical executives were likely to increase. This is partly because of efforts to control health care costs, said Mr. Mahinka, who was not involved in Dr. Harkonen’s case. It also reflects a view of some government officials that fines are written off by companies as a cost of doing business, he said.
