Fifteen months ago, the Department of Justice signed a deferred prosecution agreement with InterMune, where some former employees of the biotech had engaged in illegal off-label marketing of its osteoporosis drug Actimune. But as it turns out, the deal didn't protect former execs from prosecution, and the investigation remains alive. In fact, lawyers familiar with the case say charges are likely to be brought, even though the DOJ has rarely pursued criminal charges against pharma execs at companies that settle,
The Recorder reports.
There is one other recent example: Purdue Pharma's parent pled guilty to illegal marketing of its OxyContin painkiller, and three current or former execs admitted to wrongdoing last May, although they avoided jail time. So is the government starting to use a select few cases, such as InterMune, to send a message to other pharma and biotech execs?
Speaking generally, Judith Waltz, a partner at Foley & Lardner, says that given the rarity with which the government goes after execs for illegal off-label marketing, conduct would probably have been judged by prosecutors to be particularly egregious for charges to be pursued. Waltz represents individual pharma execs, she discloses, but none involved in the InterMune prosecution. "The government may be trying to make an example," Waltz tells the paper. "That scares the hell out of everybody once they start talking about individuals."
The FDA approved the biotech's Actimune to treat a rare form of osteoporosis. InterMune, however, pitched the stuff to pulmonologists to treat a fatal lung disease which has no cure and affects 83,000 Americans, according to the deferred prosecution agreement. In August 2002, the biotech issued a press release which mischaracterized the results of a clinical trial to make it seem its drug was more effective for the lung disease than it actually was, according to InterMune's agreement with prosecutors, the Recorder writes.
That fall, a specialty pharmacy that distributed Actimune sent patients a letter that regurgitated the same misinformation about the drug. An InterMune employee signed off on that letter. As part of its deal with the government, InterMune paid a $30 million civil settlement and agreed to a corporate monitoring program.
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You know, it's about time the government started charging some of the PharmaExecs and/or considered having them debarred so they can't work in the industry anymore. I know for a fact that certain Executives at some of the smaller companies were not only aware of non-compliant activities, but that they directed those activities/undermined attempts at corrected action and lead or encouraged the retaliation against those trying to correct problems and set up safeguards to ensure policies and procedures going forward were compliant (instead of just giving an appearance of compliance). Maybe if those who directed the activities, covered them up and/or those in senior leadership that disregarded internal complaints were really penalized (I'm sorry but letting an executive go in a way that not only "saves face" for the exec but still gives that person a sweet severance package), companies and execs wouldn't just see investigations and fines as just part of the cost of doing business.
Until the Govt begins to hold some individual directors, VPs, President and CEOs accountable for off label promotion and other illegal marketing strategies, these practices will continue. Both sales and marketing execs are well aware of these tactics - to let them walk only perpetuates a system where rewards for superior sales are unlimited and the risk of using borderline or illegal tactics to drive sales is virtually nil. There can be no serious compliance in that setting.
Agreed! The government investigates and fines wrongful actions, negotiates a fine for the company to pay, the company admits no wrongdoing, and the top executives walk away free without ever being held accountable. On top of that, the fine paid comes out of the shareholders pockets and to executives laugh all the way to the bank. They effectively get rich because of their unethical behavior! What's wrong with this picture? Everything!
Another agreed!
The rarity of prosecuting execs is paralleled by the even greater rarity of the DOJ bringing charges against companies. The Amicus filed by the DOJ and FDA in the Levine case actually justifies that (non) practice by saying that FDA's job is essentially done once a settlement (including possible product withdrawal) is complete, and doesn't have time or resources to do a lot (or even a little) prosecuting.
Thus again, FDA preemption as proposed includes a "fraud exception," just as our own preemption law in Michigan does. But it is meaningless. Unless there is prosecution that _proves_ felony fraud (it has to be intentional to "count" in FDA preemption) , there is no fraud in a legal sense. And thus no grounds for accountability. Company has admitted nothing; DOJ has proved nothing.
End of story.