High Court Rejects Appeal by Convicted Pharma Exec Harkonen

, The Litigation Daily

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A Sidley Austin team led by Carter Phillips and Mark Haddad struck out on Monday in a bid to have the U.S. Supreme Court review the wire fraud conviction of former InterMune Inc. CEO Scott Harkonen.

A federal jury in San Francisco found Harkonen guilty of one count of wire fraud in September 2009, concluding that he promoted the drug Actimmune to treat idiopathic pulmonary fibrosis (IPF) in a 2002 press release. InterMune had received approval from the U.S. Food and Drug Administration to promote Actimmune to treat other conditions, but not IPF, a fatal lung disease. Intermune agreed in 2006 to pay the government $37 million to settle claims that it promoted the drug for off-label uses. (Both InterMune and Harkonen have had better luck fighting off class action lawsuits in follow-on private civil litigation.)

Harkonen's lawyers at Sidley argued in their petition for certiorari that the 2009 fraud conviction had effectively criminalized scientific debate. In the 2002 press release at the heart of the case, Harkonen pointed to study results demonstrating that Actimmune increased the survival rate for some patients with IPF. The Sidley lawyers wrote that their client's statement amounted to protected scientific speech.

By rebuffing the petition on Monday, the Supreme Court leaves in place a March decision from the U.S. Court of Appeals for the Ninth Circuit upholding Harkonen's conviction. The Ninth Circuit panel found that there was plenty of evidence at trial showing the press release was meant to mislead--even if Harkonen's statement wasn't literally false. The appeals court upheld Harkonen's sentence of three years probation, six months home detention, and a $20,000 fine.

Although the sentence itself falls well short of the 10-year prison term and a $1 million fine the government was asking for, regulators continue to seek to ban Harkonen from involvement with federal health care programs for five years, and to ban him for life from "providing services in any capacity to a person that has an approved or pending drug product application."

In the run-up to trial, Harkonen was represented by carousel of defense lawyers. He turned to Wilmer Cutler Pickering Hale and Dorr and Morrison & Foerster before bringing on Kasowitz, Benson, Torres & Friedman to handle the trial. Sidley's Haddad argued Harkonen's appeal at the Ninth Circuit and joined Sidley chair and Supreme Court stalwart Phillips in briefing the cert petition.

Haddad declined to comment.

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