Today's message from the courts: Be careful what you tout to the press. W. Scott Harkonen, ex-chief of InterMune (ITMN), was convicted of wire fraud for sending out a "misleading" release that helped pump up off-label sales of his company's drug. He faces up to 20 years in prison and a potential fine of up to $250,000.
Here's the background: InterMune's Actimmune was FDA-approved for two rare diseases, but most of its sales were for off-label use in treating idiopathic pulmonary fibrosis. The company had studied the drug for that use, but Actimmune didn't meet the trial endpoint. A subset of the patients using Actimmune did, however, live longer than those on placebo, and the company emphasized this bit of positive news in a news release.
Prosecutors said the news release was aimed at boosting off-label sales of the drug; Harkonen's attorney Marcus Topel told the New York Times that the company simply interpreted the scientific data in a manner that's open to debate. Topel says he will appeal the conviction.
As you know, pharma executives are rarely prosecuted personally for their companies' infractions. But Harkonen's case could be the shape of things to come. "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, an FDA special agent in the office of criminal investigations, said in a statement. Legal experts told the Times that they expect individual prosecutions to increase, partly because government officials believe drugmakers view fines and settlements simply as a cost of doing business.
- read the NYT story