Intermune Ex-CEO Harkonen Sentenced to Home Confinement in Fraud Case - Bloomberg

W. Scott Harkonen, Intermune Inc. (ITMN)’s former chief executive officer, was sentenced to six months of home confinement and fined $20,000 for his role in disseminating misleading information about the drug Actimmune for the treatment of lung disease, the Justice Department said today.

Harkonen was convicted by a federal jury of wire fraud in September 2009 after a three-week trial. A physician, the ex- Intermune CEO was accused of crafting a deceptive press release in 2002 to boost sales of Actimmune, prosecutors said. U.S. District Judge Marilyn Patel also sentenced Harkonen to three years’ probation at a hearing yesterday.

The government had sought a 10-year prison sentence, said Mark Haddad, Harkonen’s attorney. Patel “found that the government had no evidence whatsoever that the press release had caused any loss or any harm to anyone,” he said in a telephone interview. Harkonen plans to appeal his conviction, Haddad said.

Intermune marketed Actimmune as a safe, effective treatment for idiopathic pulmonary fibrosis, or IPF, a fatal lung disease, though the drug wasn’t approved by the U.S. Food and Drug Administration, prosecutors said. The press release, which said the drug reduced deaths by 70 percent in patients with mild to moderate IPF, was false and misleading, they alleged.

Intermune, which made Actimmune to treat rare bone and immune disorders, agreed in 2006 to pay $36.9 million to settle U.S. claims it illegally marketed the drug for unapproved uses and caused false claims for reimbursement from government health programs. While doctors are free to prescribe any drug to treat illnesses regardless of FDA approvals, drugmakers are prohibited from promoting medicines for unapproved uses.

‘Patient Health’

“Executives like Dr. Harkonen, who -- without regard for patient health or safety -- engage in criminal conduct on behalf of their companies, will not be permitted to carry out this conduct with impunity,” Acting Deputy Assistant Attorney General for the office of consumer protection litigation Maame Ewusi-Mensah Frimpong said in a statement on the agency’s web site.

Harkonen, who resigned from Intermune in 2003, had denied wrongdoing.

The case is U.S. v. Harkonen, 08-164, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.

via bloomberg.com

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