Nearly four years ago, W. Scott Harkonen was convicted of wire fraud for allegedly skewing the results of a clinical trial in a 2002 press release about the effectiveness of a drug. And he appealed on the grounds that prosecutors trampled his First Amendment and commercial speech rights. Now, though, a federal appeals court has upheld the ruling.
Here is the back story: The former Intermune ceo (ITMN) issued a release containing results of a clinical trial for a drug called Actimmune. The trial failed, but the press release stated a sub-analysis showed the drug helped patients with a fatal lung disease called idiopathic pulmonary fibrosis, or IPF, live longer. Physicians began writing more prescriptions even though Actimmune was not approved for that disease.
At the 2009 trial, federal prosecutors argued that Harkonen orchestrated a scheme to widen the market for Actimmune in a way that deceived doctors and investors. And they maintained that he did so by manipulating the interpretation of a sub-group analysis from the clinical trial in order to show the drug offered a significant survival benefit (here is the indictment).
As we wrote previously, Harkonen countered that the case was more subtle and hinged on a willingness to look beyond strict statistical significance in order to recognize perceived value in scientific debate over study results. Specifically, he pointed to the extent to which the feds relied upon the so-called ‘p value,’ a key probability measurement, in arguing that Harkonen distorted the results for his own ends
He contended the feds overstated the virtues of relying on the p-value to discuss the full spectrum of benefits that were parsed from the clinical tria. And to bolster his argument, Harkonen cited a 1902 US Supreme Court case to argue that "federal fraud statutes do not permit the government to prosecute individuals for expressing scientific opinions about which reasonable minds can differ" (back story).
But the US Court of Appeals for the Ninth Circuit dispensed with his argument in just 10 pages and only three months after his appeal was filed. The court decided there was sufficient evidence to suport the verdict and, after reviewing the core issue of whether the challenged speech is protected by the First Amendment, determined fraudulent speech is not protected.
Specifically, the court noted the evidence supports the finding that Harkonen knew the press release was misleading and had intent to defraud. "Harkonen prevented Intermune’s clinical personnel from viewing the press release prior to its publication, even when they asked to see it, at one point becoming 'visibly' upset and 'castigating' the head of the communications firm that helped prepare the release for permitting Intermune’s vp of regulator affairs to view a draft... Harkonen also did not want the FDA to know about all his post-hoc analyses, the analyses on which the press release was based, because he 'didn’t want to make it look like we were doing repeated analyses looking for a better result.'
The appeals court then maintained that the 1902 Supreme Court Ruling does not categorically prohibit fraud prosecutions for statements about the efficacy of a particular drug and added that his "request that we reverse his conviction because he was engaging in a genuine scientific debate is hardly different than arguing that he is innocent; genuine debates of any sort are, by definition, not fraudulent."
The court left no doubt about its views on the extent to which the press release could have influenced physicians. "The documents at issue here might demonstrate that the press release did not mislead some doctors, but there was other evidence that the press release was widely and successfully used as a marketing tool, indicating it was 'capable' of misleading some addressees and was, therefore, 'material.'
And the court also noted that ”Harkonen’s scientific methods were not on trial; the issue was whether he misleadingly presented his analyses in the press release. The distinction between these two issues was made clear at trial when, for instance, Intermune’s former Senior Director of Biostatistics testified that post-hoc analyses are 'good science' in the sense that they may generate hypotheses for future study, but that he 'winced' when he saw the Press Release because 'the conclusiveness of the results was overstated.'"
[UPDATE: His attorney, Mark Haddad, just sent us this comment: "We are extraordinarily disappointed by the Ninth Circuit’s decision. The central issue is whether the government may criminally prosecute a speaker for his scientific interpretation of valid study results. The Supreme Court has long protected the constitutional right to freedom of scientific expression by requiring the courts to perform a searching and independent review of allegedly false scientific opinions.
"The decision in the Harkonen case did not fulfill this basic responsibility; indeed it did not identify a single false statement, let alone evaluate whether the study results reasonably supported that statement. Leading and nationally recognized scientists stated under oath that the challenged press release was not false or misleading. Failing on appeal to address an issue of fundamental constitutional importance sends a chilling message that government officials have unfettered discretion to prosecute speakers who publicly express views about science with which government officials disagree. This is intolerable in a society that protects the freedom of scientific speech, particularly where, as here, potentially life-saving medical treatment is at issue.
"The implications of the decision, if allowed to stand, are profound. The decision calls into question the lawfulness of many opinions routinely offered in the publications of scientists throughout the country, as well as the methodology underpinning future government decisions regarding the allocation of health care treatments and procedures."]
As for Harkonen, he was also excluded for a five-year period from participating in federal healthcare programs as the result of a conviction, which involved a sentence of three years probation, six months of home confinement, a $20,000 fine and 200 hours of community service. He is fighting that as well (read the back story here with links to the HHS letter and adminstrative decision).
One final note. As the FDA Law Blog points out, the Harkonen case did not add to the debate over a recent decision by a different federal appeals court that overturned the conviction of a former sales rep for making statements about off-label use of a drug. The sales rep successfully claimed his First Amendment free speech rights were violated.
In that case, the Second Circuit noted that speech that is false and misleading about off-label could be prosecuted. But in this instance, Harkonen was convicted of wire fraud. As a result, there is, so far, no split between different circuit courts that may prompt the US Supreme Court to review the First Amendment issued that was raised in the sales rep case (read about that case here and here).