The former Chief Executive Officer (CEO) of InterMune Inc. was indicted on wire fraud and felony Food, Drug, and Cosmetic Act (FDCA) charges for his role in the creation and distribution of false and misleading information about one of the company's drugs, the Department of Justice (DOJ) announced.
Elements of the indictment. The indictment alleged that, under the CEO's direction, InterMune marketed and sold Actimmune® to treat idiopathic pulmonary fibrosis (IPF), a fatal disease, even though the drug was not approved by the Food and Drug Administration (FDA) as safe and effective for treatment of the condition. According to the indictment, the CEO and InterMune promoted Actimmune® as a safe and effective treatment for IPF to increase sales of the drug and generate revenues and profits from those sales. The cost of Actimmune® for one IPF patient for one year was approximately $50,000, and most of the company's sales of the drug were for the unapproved, off-label use of treating IPF.
The indictment further alleged that the CEO devised a scheme to induce doctors to prescribe, and patients to take, Actimmune® to treat IPF. Specifically, as part of the fraudulent scheme, InterMune issued a press release announcing false results of a clinical trial of Actimmune® for the treatment of IPF. Although the press release stated that the drug “reduces mortality by 70 [percent] in patients with mild to moderate disease,” the clinical trial failed. In furtherance of the scheme, the CEO caused a specialty pharmacy to disseminate the misleading information in the press release to more than 2,000 pulmonologists and to patients taking Actimmune®.
The CEO may face up to 20 years in prison, a $250,000 fine, three years supervised release, and a $100 mandatory special assessment for the wire fraud charges; and three years in prison, a $250,000 fine, one year supervised release, and a $100 special assessment for the FDCA violations.
InterMune's settlement. In October 2006, InterMune entered into a deferred prosecution agreement and agreed to pay approximately $37 million to resolve criminal charges and civil liability in connection with the fraudulent marketing scheme. The company also entered into a five-year corporate integrity agreement with the HHS Office of Inspector General.
DOJ Press Release, March 18, 2008.
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