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Biopharmaceutical Firm Intermune to Pay U.S. Over $36 Million
for Illegal Promotion and Marketing of Drug Actimmune

WASHINGTON – InterMune, Inc, a Brisbane, Cal., biopharmaceutical company, has agreed to pay the United States more than $36.9 million to resolve criminal charges and civil liabilities in connection with its alleged illegal promotion and marketing of Actimmune, the Justice Department announced today.

Today’s settlement resolves allegations that InterMune knowingly caused the submission of false and fraudulent claims for Actimmune that were not eligible for reimbursement because they were for unnecessary and/or off label uses. InterMune will pay $30.2 million 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 nearly $6.7 million to state Medicaid programs.

"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,” said Assistant Attorney General Peter D. Keisler. “Today’s settlement sends a clear message to the pharmaceutical industry that the Justice Department will not tolerate these deceptive and illegal marketing practices."

The criminal investigation will be resolved by the filing of an information against InterMune and the company’s entry into a deferred prosecution agreement (DPA) with the United States. InterMune is charged with one count of violating the Food, Drug, and Cosmetic Act (FDCA) by promoting, with intent to defraud or mislead, its drug Actimmune for the treatment of idiopathic pulmonary fibrosis (IPF) or lung scarring, a condition for which Actimmune has not been approved by the Food and Drug Administration (FDA). It is further alleged that InterMune acted with an intent to defraud or mislead, thereby elevating the charge to a felony violation of the FDCA. Under the terms of the DPA, the Justice Department agrees to recommend to the court that prosecution of InterMune be deferred for a period of two years, contingent upon the company’s past and future cooperation in the investigation as well as on its continued efforts to implement comprehensive changes to its compliance policies.

“This office has zero tolerance for fraud against the Medicare program. Given the high concentration of health care and biotech in the Northern District, prosecuting fraud in this industry is one of my highest priorities and we must zealously protect the Medicare Trust Fund against fraud,” said Kevin V. Ryan, United States Attorney for the Northern District of California.

Actimmune was approved by the FDA for the treatment of chronic granulomatous disease (disorders of the immune system that are caused by defects in the immune system cells) and severe, malignant osteopetrosis (disease resulting in increased susceptibility to infection and an overgrowth of bony structures that may lead to blindness and/or deafness). However, the vast majority of Actimmune sales during the period of August 2002 through January 2003 were attributable to prescriptions for the treatment of IPF for which there is no FDA-approved treatment.

As further stated in the DPA, from 2000 to 2002, InterMune, Inc. conducted a clinical trial of Actimmune for the treatment of IPF. The trial failed to establish statistically significant evidence of benefit for either the primary or any of the secondary endpoints. Nevertheless, a company press release distributed in August 2002 characterized the clinical trial results as indicating that “Actimmune may extend the lives of patients suffering from this debilitating disease” and further stated that “Actimmune is the only available treatment demonstrated to have clinical benefit in IPF, with improved survival data in two controlled clinical trials.”

In addition to the other components of the settlement, InterMune agreed to enter a five-year Corporate Integrity Agreement with the Office of Inspector General for the Department of Health and Human Services.

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 attorneys from the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Northern District of California, as well as the FDA Office of General Counsel.