Biogen IDEC, Inc., a Cambridge, Massachusetts-based pharmaceutical company, agreed to pay $900 million to resolve alleged violations of the federal Anti-Kickback Statute (AKS) and False Claims Act (FCA). The agreement was made days before the trial – which was expected to begin on July 26, 2022. The U.S. Department of Justice must approve the settlement.
The lawsuit alleged that Biogen provided illegal kickbacks to healthcare providers to incentivize providers to prescribe its multiple sclerosis drugs. The whistleblower, a former Biogen employee, alleged that the kickbacks took various forms. For example, Biogen allegedly hired the highest prescribers as consultants to consult on topics or projects for which it did not need consultation or for consultant advice never utilized. Kickbacks also allegedly came in the form of hiring high-prescribers of Biogen’s medications as speakers for its speaking program, which was described as having little-to-no educational value. The whistleblower also noted that Biogen’s compliance department routinely expressed concerns that were ignored. Overall, Biogen allegedly submitted hundreds of millions of dollars in false claims to state and federal healthcare programs. In its attempt to dismiss the lawsuit, Biogen argued (in part) that payments made were consistent with fair market value and were within applicable safe harbor provisions.
The lawsuit was originally filed in 2012 in the US District Court for the District of Massachusetts under the qui tam provisions of the FCA. The qui tam provisions of the FCA allow individuals to sue on behalf of the government. Congress strengthened the FCA by amending the qui tam provisions to provide financial incentives and a procedural structure to whistleblowers – or relators – so individuals could bring false claims act cases on behalf of the government. The financial incentive can be significant, as whistleblowers are entitled to 15% to 30% of the money the government recovers, based on several factors. In this case, while the government had the option to take over this case or “intervene,” the government did not intervene, and the whistleblower continued to pursue the case on behalf of the government. Consequently, under the qui tam provisions, the whistleblower is entitled to 25% to 30% of any money the government recovers. According to the whistleblower’s attorney, this settlement is one of the largest FCA settlements obtained by a whistleblower where the government did not intervene.
The case is captioned: United States ex rel Bawduniak v. Biogen Idec Inc, U.S. District Court, District of Massachusetts, No. 12-cv-10601.
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