Court Upholds Executive’s Conviction Stemming from Off-Label Drug Promotion

by Saul Ewing Arnstein & Lehr LLP
Contact

The U.S. Court of Appeals for the Ninth Circuit has upheld the wire fraud and misbranding convictions and sentence of InterMune Inc. founder W. Scott Harkonen. United States v. Harkonen, No. 11-10209 (9th Cir. March 4, 2013). That decision, while based on different circumstances than the landmark decision by the Second Circuit in Caronia (which we have written about in this story, http://www.saul.com/publications-alerts-1021.html), creates further tension between lawful promotional marketing and criminal off-label practices.

Harkonen was indicted in 2008 on charges of wire fraud and misbranding under the Food, Drug, and Cosmetic Act (“FDCA”) for creating and disseminating a press release that promoted off-label uses for the drug Actimmune. A federal jury in September 2009 found him guilty of wire fraud for the press release but acquitted him of misbranding under the FDCA. Harkonen was sentenced in April 2011 to three years’ probation and was ordered to pay a $20,000 fine. The government had sought a $1 million fine and 10 years’ imprisonment. He subsequently appealed to the Ninth Circuit.

Harkonen was the first chief executive officer tried for off-label promotion. He argued on appeal that a scientific debate over whether a given treatment causes a particular effect is speech protected by the First Amendment and falls outside the scope of the mail and wire fraud laws. The Ninth Circuit dismissed this characterization as an assertion of innocence. “[G]enuine debates of any sort are, by definition, not fraudulent. Here, a jury found, beyond a reasonable doubt, that Harkonen issued the Press Release with the specific intent to defraud, and that finding is supported by the evidence presented at trial.” The Court also rejected Harkonen’s due process argument as “essentially a redressing” of his First Amendment claim.

Harkonen’s counsel has stated publicly that he will ask the Ninth Circuit for en banc review.

On the surface, the Ninth Circuit’s decision does not appear to raise any complicated freedom of speech issues. The First Amendment does not protect from prosecution harmful, dangerous or fraudulent speech. However, the mail and wire fraud statutes give prosecutors wide latitude to investigate and prosecute disfavored speech. The term “to defraud” in the statutes includes any sort of “dishonest method or scheme” and any “trick, deceit, chicane or overreaching.” And, according to the Ninth Circuit in Harkonen, statements are fraudulent if “misleading or deceptive” and need not be “literally false.”

The line between lawful promotion and misleading or deceptive statements is not always bright. Pharmaceutical and medical device manufacturers will want to stand clear of the gray area in between to ensure that their promotional efforts receive the protection afforded to truthful commercial speech by the Second Circuit in Caronia and the Supreme Court in Sorrell v. IMS Health, 131 S.Ct. 2653 (2011). In short, strong compliance policies and programs to ensure truthful promotional statements have never been more important.

Written by:

Saul Ewing Arnstein & Lehr LLP
Contact
more
less

Saul Ewing Arnstein & Lehr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.