Company enters into a Deferred Prosecution Agreement SAN F…

Company enters into a Deferred Prosecution Agreement

SAN FRANCISCO B – LAWFUEL – Law News Network – InterMune, Inc., a Brisbane, California biopharmaceutical company, has agreed to enter into a deferred prosecution agreement and to pay nearly $37 million to resolve criminal charges and civil liability in connection with its illegal promotion and marketing of its drug Actimmune7 (Interferon gamma-1b).

The criminal investigation will be resolved by the filing of a criminal Information against InterMune, Inc., and the entry into a deferred prosecution agreement (DPA). The Information charges InterMune, Inc. with one count of violating the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. ‘ 331(k), by promoting, with intent to defraud or mislead, its drug Actimmune7 for the treatment of idiopathic pulmonary fibrosis (IPF), a condition for which Actimmune7 has not been approved by the Food and Drug Administration (FDA). The Information further alleges that InterMune acted with an intent to defraud or mislead, thereby elevating the charge to a felony violation of the FDCA under 21 U.S.C. ‘ 333(a)(2). Under the terms of the DPA, the Department of Justice agrees to recommend to the court that prosecution of InterMune, Inc. be deferred for a period of two years, contingent upon InterMune=s past and future cooperation in the investigation as well as on its continued efforts to implement comprehensive changes to its compliance policies.

InterMune, Inc. has also agreed to pay $36.9 million to resolve allegations that, under the civil False Claims Act, it knowingly caused the submission of false and fraudulent claims for Actimmune that were not eligible for reimbursement because they were for the unnecessary and/or off label uses. Specifically, InterMune will pay $30,249,229, plus interest, to the United States for losses suffered by the federal portion of the Medicaid program, the Medicare Program, the Veteran=s Administration, the Department of Defense and the Federal Employees Health Benefits program. Under separate civil settlement agreements with the states, the company will also pay $6,694,814 to state Medicaid programs.

“The Justice Department is committed to rooting out and prosecuting health care fraud,” said Peter D. Keisler, Assistant Attorney General of the Civil Division. “It is vital to public health and safety that pharmaceutical companies are deterred from improperly marketing their drugs to doctors and patients to treat illnesses that these drugs are not approved to treat. This settlement sends a clear message to the pharmaceutical industry that the Justice Department will not tolerate these deceptive and illegal marketing practices.”

AGiven the high concentration of health care and biotech in Northern California, this office is committed to protecting the Medicare Trust Fund against fraud,@ said United States Attorney Kevin V. Ryan. AWe will continue to zealously prosecute fraud in this [email protected]

As set forth in the DPA, Actimmune7 was approved by the FDA for the treatment of chronic granulomatous disease and severe, malignant osteopetrosis. However, the vast majority of Actimmune7 sales during the period August 2002 through January 2003 were attributable to prescriptions for the treatment of IPF, a debilitating, fatal lung disease for which there is no FDA-approved treatment and which afflicts approximately 83,000 Americans.

As further stated in the DPA, from 2000 to 2002, InterMune, Inc. conducted a global Phase III clinical trial of Actimmune7 for the treatment of IPF that was designed to study whether Actimmune7 extended the time to disease progression or death. The primary endpoint was progression-free survival, and, in addition, there were a number of secondary endpoints, including overall patient survival. The Phase III trial failed to establish statistically significant evidence of benefit for either the primary or any of the secondary endpoints.

On August 28, 2002, InterMune, Inc. publicly announced the results of the Phase III clinical trial of Actimmune7 for the treatment of IPF in the form of a press release. Although aware that the trial failed, the InterMune, Inc. press release was headlined AInterMune Announces Phase III Data Demonstrating Survival Benefit of Actimmune in IPF,@ with the subheading AReduces Mortality by 70% in Patients With Mild to Moderate [email protected] In the release, InterMune=s then-President and CEO characterized the clinical trial results as indicating that AActimmune may extend the lives of patients suffering from this debilitating [email protected] and further stated that AActimmune is the only available treatment demonstrated to have clinical benefit in IPF, with improved survival data in two controlled clinical trials.@

The misleading information in the press release was distributed, at InterMune, Inc.=s direction, to both pulmonologists and Actimmune7 patients. In approximately mid-October 2002, a specialty pharmacy that distributed Actimmune7 disseminated both the press release and a fax concerning Actimmune7 for IPF to more than 2,000 pulmonologists and to Actimmune patients.

Notwithstanding the fact that the Phase III trial failed to establish statistically significant benefits on its primary endpoint or any of its secondary endpoints, including overall survival, InterMune sales force personnel were encouraged to inform physicians that Actimmune7 demonstrated a survival benefit in mild to moderate IPF patient populations, and certain former sales force personnel did so. Certain former sales personnel also distributed or showed the specialty pharmacy documents to physicians during sales visits.

In addition to the other components of the settlement, InterMune agreed to enter a 5-year Corporate Integrity Agreement (CIA) with the Office of Inspector General for the Department of Health and Human Services (OIG). Among other things, the CIA requires InterMune to maintain written policies and provide training to employees and relevant contractors about compliance with federal requirements in sales, marketing, and promotional activities. The CIA requires InterMune to track its responses to inquiries from health care practitioners and to have an independent auditor review a sample of the responses on an annual basis. The CIA also requires InterMune to submit annual reports to the OIG.

The two-year investigation was conducted by the Federal Bureau of Investigation; the Food and Drug Administration’s Office of Criminal Investigations; the Department of Health and Human Services’ Office of Inspector General, Office of Investigations; the Veterans Administration’s Office of Investigations; and the Office of Personnel Management’s Office of Investigations.

The investigation and resolution were handled by Assistant United States Attorneys Ioana Petrou and Alex Tse of the Northern District of California and Trial Attorney Andy Mao of the Fraud Section of the Civil Division, with the assistance of Associate Chief Counsel Anne Walsh of the FDA Office of General Counsel, paralegal Maryam Beros, Legal Technician Tyle Doerr, and financial analysts Wayne Yee and Eileen Zimmer. The Corporate Integrity Agreement was negotiated by Senior Counsel Mary Riordan and Roderick Chen of the Office of General Counsel in the Department of Health and Human Services, Office of Inspector General.

Further Information:

A copy of this press release may be found on the U.S. Attorney=s Office=s website at

Electronic court filings and further procedural and docket information are available at

Judges= calendars with schedules for upcoming court hearings can be viewed on the court=s website at

All press inquiries to the U.S. Attorney=s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at [email protected]

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