Criminal Justice

A Pharmaceutical Company's Truthful Fraud

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On Tuesday a federal jury convicted former InterMune CEO W. Scott Harkonen of mail fraud based on a 2002 press release about the company's drug Actimmune. Federal prosecutors argued that the press release was part of a scheme to illegally promote Actimmune as a treatment for idopathic pulmonary fibrosis (IPF), a use that had not been approved by the Food and Drug Administration. (While doctors are free to prescribe drugs for such "off-label" uses, manufacturers are not allowed to market drugs for unapproved applications.) After Harkonen's conviction, an FDA official declared that "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."

The weird thing is, the press release does not contain any false or fraudulent information. The government claimed both the headline ("InterMune Announces Phase III Data Demonstrating Survival Benefit of Actimmune in IPF") and the subhead ("Reduces Mortality by 70% in Patients With Mild to Moderate Disease") were false. One can argue about the use of the word demonstrating, as opposed to suggesting or indicating (especially in light of subsequent research that found no benefit from Actimmune for IPF patients). But the subhead accurately explains the basis for the claim in the headline: As a group, patients with mild to moderate IPF who received Actimmune lived significantly longer than similar patients who received the placebo. The press release notes that the benefit for all patients in the study "did not reach statistical significance," but that Actimmune "demonstrated a strong positive trend in increased survival in the overall patient population" and "a statistically significant survival benefit in patients with mild to moderate IPF." In short, the press release appears to be completely accurate, though it might mislead someone who does not read it carefully. That possibility does not seem like enough to convict someone of a felony that carries a penalty of up to 20 years in prison.

Although the jury somehow banished reasonable doubt on the mail fraud count, it was not fully persuaded by the government's case. It acquitted Harkonen of "acting with intent to defraud and mislead, resulting in drugs being misbranded." In other words, he was found guilty of committing a fraud with no particular goal. His lawyer calls the combination of verdicts "untenable" and "very inconsistent."

While a pharmaceutical company certainly should be held responsible for promoting its products with false claims, the remedy ordinarily would be regulatory sanctions and/or civil litigation. In this case, a CEO is being held criminally liable for claims that were truthful, though arguably misleading. The government essentially is converting a disagreement about the interpretation of medical data and the emphasis of a press release into a felony. "One position in a scientific dispute has been criminalized," says Harkonen's lawyer, and he's right that it's "quite an astonishing thing."

[Thanks to Matthew Hogan for the tip.]

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  1. It’s pretty creepy for a drug company to put out a PR hyping an insignificant statistic. None of those words, suggesting, indicating, or anything are called for in a communication from the company that goes to the street. Typically bogus announcements like that are investment fraud. This guy belongs behind bars.

    1. Okay, johnl, let me give you the following example based on a real study to illustrate the difference between “statistically significant” and “statistically insignificant.” An clinical trial hopes to determine whether certain drugs can cure an extremely rare but often-fatal disease and certain drugs. Because the disease is so rare, the researchers are only able to find two people who got the disease and are willing to take drug A and seven people with the disease to serve as controls. The study is able to conclude, to a 95% confidence level, a positive correlation between taking drug A and treating the disease.

      Now, clinical researchers want to do the same for drug B. They likewise find two people with the disease to treat with the drug, but they only have six control patients. Without that additional control, the correlation between taking drug B and treating the disease is not statistically significant to the 95th percent.

      If you had the disease and took drug A and it didn’t work, would you or wouldn’t you want to be informed of the statistically insignificant correlation between taking drug B and treating the disease?

      1. With 8 patients total, there is no way you are doing a statistical study. Same with 9.

        People with really rare diseases are poorly served with the FDA system. But that’s not what this is about.

    2. How about Tony Fauci from the NIH? His press release was misleading and withheld vital negative data on the RV144 AIDS vaccine. Does he belong behind bars, too?

  2. a statistically significant survival benefit in patients with mild to moderate IPF.

    Reading is fundamental.

  3. Typically bogus announcements like that are investment fraud.

    How is it bogus if it is accurate, read in its entirety?

    Since when is an accurate announcement fraud?

    Wouldn’t withholding test or study results be a bad thing? WTF are they supposed to do here? Release an accurate statement? Withhold the information? What?

    1. Datamining.

  4. CEO are criminally liable, per the regs. So is any employee that takes part. I think it is one of only very few parts of FDA regulation that make sense.

  5. What RC Dean said.

    I’ve worked with pharma companies in the past, including press releases. I’ve written several that talked about results which, although encouraging, are not statistically significant. I’m not quite sure what the problem with that is.

    Mind you, we didn’t put anything in the title (generally the title said something to the effect of, as generically as possible, “Company X announces results of Phase II Clinical Trial evaluating Drug Y for the treatment of Condition Z”), but still.

  6. Harkonen? And ProL made the Dune joke on the other thread?

  7. Bergholt beat me to it. They heard the name Harkonen and decided to punish him for opposing the Chosen One, regardless of what he’d actually done.

  8. The truth is NOT a defense to the FDA. It never is. Communicating scientific facts to the laypeople or even doctors without a government license is illegal when it comes to drugs.

  9. “Reduces Mortality by 70% in Patients With Mild to Moderate Disease”

    That is amazing. For the vast majority of humanity, mortality hovers right at 100%.

  10. As somebody who spends the majority of his practice representing a large pharmaceutical company, what concerns me the most is the basis for the conviction: wire fraud (a federal crime). That the Justice Dept. had to resort to a charge of wire fraud to remedy alleged abuse in one of the most heavily regulated industries in the U.S. tells me something about the strength of the case. And that they saw this as a criminal matter in the first place–when so many civil remedies are available–tells me something about the U.S. Attorneys involved.

  11. Harkonen? That’s so awesome! Of course he was convicted. And to think that I always thought that was a made-up name.

    Please, oh, please let there be an Atreides or Atreus on the prosecution team!

  12. I wonder if he’s fat?

  13. This is like the run-in General MIlls had with the FDA for telling the truth on its package. The truth is no defense.

  14. Here he is with a Bene Gesserit witch.

    I wonder if he sides with the Baron when he reads Dune?

    1. I wonder if he sides with the Baron when he reads Dune?

      Doesn’t everyone?

      1. Not this Kwisatz Haderach.

        That’s just wrong.

        1. Depends on if you acknowledge the existence of the later books. Eventually you get the feeling that things would have been a whole lot better for almost everyone in the Dune universe if the Baron had won.

          1. The Bene Gesserit had it all planned out. Then that silly woman and her whiny emo bitch son screwed it all up.

      2. Roman Polanski would side with the Baron, I imagine.

  15. If by later books you mean the ones written by Frank Herbert, yeah, I acknowledge them. I think the idea was that the whole God Emperor business was the only way to prevent the extinction of the human race.

    Oddly, the Baron was the Roman Polanski of the Dune universe, only he didn’t make movies and he preferred boys to girls.

    1. Dammit! I’ll blame comment threading for this, but really it’s not that at fault.

    2. That and what, if any, laws against rape that existed on Giedi Prime did not apply to the Baron.

  16. I’m not threadin’ my comments anymore.

  17. I’m not threadin’ my comments anymore.

    That just cries out for a mournful guitar accompaniment.

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  19. With the inevitable errors I get without preview. Grumble.

  20. Hey, what about the infamous Dr. Fauci, at the NIH. Didn’t they leave out important, and rather negative, information in their press release touting the success of their RV144 AIDS vaccine trial? Is the FDA going to go after the NIH? That would be a cool battle to follow.

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