By Terry Baynes
(Reuters) - A drug company executive convicted of
misrepresenting the results of a clinical drug trial cannot use
the First Amendment to overturn his conviction, a federal
appeals court ruled in a case with potentially far-reaching
implications for the pharmaceutical industry.
The 9th U.S. Circuit Court of Appeals in San Francisco on
Monday upheld the criminal conviction of former InterMune CEO
Scott Harkonen, who was prosecuted for overstating the
therapeutic benefits of a pediatric drug in a company press
The Food and Drug Administration had approved the drug,
Actimmune, for two rare pediatric diseases. But InterMune sought
to tap into the larger market for a chronic lung disease, a use
not approved by the FDA. When the company conducted a clinical
drug trial for the lung disease in 2002, the initial results
were disappointing, showing no benefit overall. But when
Intermune re-examined the results and focused more narrowly on
patients with mild to moderate lung disease, the company
calculated a statistically significant benefit.
Harkonen, a physician and CEO of the company, announced the
subgroup results in a company press release, saying the data
demonstrated that Actimmune could prolong life. Federal
prosecutors charged Harkonen with wire fraud for allegedly
misstating the study results and for promoting the drug
off-label in violation of the Food Drug and Cosmetic Act.
A jury convicted Harkonen of fraud in 2009 but acquitted him
on the off-label charge. The district judge imposed a $20,000
fine and sentenced him to three years' probation, even though
the prosecutors had requested a 10-year prison sentence.
On appeal, Harkonen argued that the conviction violated his
free speech rights because his statements were a matter of
scientific interpretation and he was engaging in genuine
scientific debate. But the 9th Circuit's three-judge panel
rejected his appeal in an unpublished, unsigned opinion,
pointing to evidence that Harkonen knew that the press release
The decision, if allowed to stand, will permit the
government to put pressure on manufacturers to rein in what they
can say about promising clinical results, stifling the flow of
information to doctors and seriously ill patients, said
Harkonen's lawyer, Mark Haddad at Sidley Austin.
"Allowing the government to criminally prosecute and convict
a speaker for expressing a scientific opinion with which the
government disagreed represents a real sea change in the law,"
A 'VERY DISTURBING' OPINION
Haddad said Harkonen will likely request a rehearing before
the full 9th Circuit. In the meantime, Harkonen cannot practice
medicine because the state medical board has taken away his
license. He is also barred from participating in research that
goes before the FDA, which makes it virtually impossible for him
to continue his career as a researcher, Haddad said. Before the
case, Harkonen's work had contributed to the approval of five
different drugs, three of which treated rare diseases, he added.
Daniel Meron, former general counsel of the U.S. Department
of Health and Human Services now at Latham & Watkins, called the
opinion "very disturbing."
"Perhaps the subgroup analysis Dr. Harkonen proposed was
right or wrong, but that's subject to scientific debate. It's
not something we should be using criminal law to go after," said
Meron, who submitted an amicus brief on behalf of the Abigail
Alliance for Better Access to Developmental Drugs, an advocacy
group for people with serious illnesses.
The decision could expose not only drugmakers but also the
publishers of medical journals to criminal prosecution for
articles that overstate the benefits of a drug, said Nathan
Schachtman, a law professor at Columbia University.
The role of the First Amendment in pharmaceutical marketing
has come into sharp focus since the 2nd Circuit in December
overturned the conviction of a pharmaceutical sales
representative, Alfred Caronia, on free speech grounds. Caronia
had been convicted for promoting a drug off-label. But the 2nd
Circuit found that Caronia had a First Amendment right to inform
a physician about off-label uses for a drug, provided the
statements were truthful.
Pharmaceutical companies and their lawyers have looked to
the Caronia ruling as a weapon to fend off government
allegations of fraud in the marketing of their products. But the
9th Circuit declined to apply the same logic to Harkonen's case.
The cases are fundamentally different, said Michael Loucks,
a former federal healthcare fraud prosecutor now at Skadden,
Arps, Slate, Meagher & Flom. Caronia involved truthful
statements to doctors, while a jury found Harkonen's statements
to be fraudulent.
"If there's evidence of falsity, the First Amendment
analysis that permeates the Caronia decision will not help you
as a defendant," Loucks said.
Loucks also noted that Harkonen presented his strongest
evidence at the sentencing hearing, not the jury trial,
according to a footnote in the 9th Circuit's opinion. The court
said it would not reverse the jury's verdict based on evidence
it never considered.
While different from Caronia, the Harkonen decision gives
defendants an opportunity to bring the issue before the Supreme
Court by arguing that a split exists between the 9th and 2nd
Circuits, said Suzanne Durrell, a lawyer who represents
whistle-blowers in healthcare fraud cases.
Another whistle-blower lawyer, Erika Kelton of Phillips &
Cohen, welcomed the 9th Circuit's decision.
"Misleading speech couched as scientific speech isn't
sheltered by the Constitution," Kelton said. It simply gives
false hope to individuals who suffer from serious diseases, she
The case is USA v. Harkonen, 9th U.S. Circuit Court of
Appeals, No. 11-10209.
For the prosecution: Anne Voigts of the Justice Department.
For Harkonen: Mark Haddad of Sidley Austin.
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