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Former InterMune CEO Dr. W. Scott Harkonen Is Convicted for Actimmune

By Thomas Frommherz for CEOWORLD Magazine Updated:October 4, 2009

The former chief executive of the biotechnology company InterMune Inc. (NASDAQ:ITMN) has been convicted of wire fraud in marketing of the drug Actimmune.

A federal jury in San Francisco convicted Dr. W. Scott Harkonen after a seven-week trial. He was acquitted of a separate charge of misbranding the drug, the U.S. Department of Justice said Friday.

Harkonen’s indictment last year charged that he made false and misleading statements about the drug’s effectiveness in fighting the fatal lung disease idiopathic pulmonary fibrosis, known as IPF.

The conviction centered on an August 2002 news release that misstated the results of a clinical trial using Actimmune to treat the disease. The release falsely said the test showed Actimmune helped IPF patients live longer.

Prosecutors said the company, led by Harkonen, marketed the drug to treat IPF even though it wasn’t approved for that purpose by the Food and Drug Administration, AP reported.

In October 2006, InterMune agreed to enter into a deferred prosecution agreement and to pay nearly $37 million to resolve criminal charges and civil liability in connection with the illegal promotion and marketing of its drug Actimmune. InterMune also entered into a five-year Corporate Integrity Agreement with the Office of Inspector General for the Department of Health and Human Services.

“This conviction of W. Scott Harkonen demonstrates the Department of Justice´s commitment to hold accountable those corporate executives who provide false or fraudulent information about pharmaceutical trials,” said Ann Ravel, Deputy Assistant Attorney General for the Civil Division. “When corporate executives provide false or fraudulent information about pharmaceutical trials, they jeopardize the public health and welfare. The Department of Justice is committed to ensuring that doctors and patients receive truthful information about medical products.”

“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,” said Thomas P. Doyle, Special Agent in Charge of FDA´s Office of Criminal Investigations, Metro Washington Field Office. “Pharmaceutical companies do not run themselves, and those who engage in criminal conduct will be held personally accountable.”

“Mr. Harkonen lied to the public about the results of a clinical trial and offered false hope to people stricken with a deadly disease. Manipulating scientific research and falsifying test results damages the foundation of the clinical trial process and undermines public trust in our system for drug approval,” said FBI Special Agent in Charge Stephanie Douglas.

Douglas J. Carver, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Western Field Office, stated “today´s verdict, which resulted from a complex and labor-intensive investigation and trial, demonstrates our commitment to work with our law enforcement partners to aggressively pursue all individuals that would jeopardize the integrity and safety of the VA´s health care system. The actions of this defendant served to divert precious financial resources from the VA´s critical mission of providing healthcare to this nation´s military veterans. The VA OIG will continue to aggressively pursue investigations of this type and hold those responsible accountable for their actions.”

The maximum statutory penalty for 18 U.S.C. § 1343 (wire fraud) is 20 years in prison, $250,000 fine, three years supervised release, and $100 mandatory special assessment. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

This case is being prosecuted by Assistant U.S. Attorney Ioana Petrou of the Northern District of California and Trial Attorney Allan Gordus of the Office of Consumer Litigation in the Civil Division in Washington, D.C., with the assistance of Associate Chief Counsel Anne Walsh of the FDA Office of Chief Counsel, Paralegal Specialists Matthew McCrobie and Matthew Robinson, and Legal Technician Jennifer Hiwa. The prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation; the Food and Drug Administration’s Office of Criminal Investigations; the U.S. Department of Veterans Affairs, Office of Inspector General; and the Office of Personnel Management, Office of the Inspector General.

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