On September 26, the Department of Justice (DOJ) announced a Cambridge, MA pharmaceutical company, Biogen Inc. (Biogen), has agreed to pay approximately $900 million to resolve allegations that the company gave doctors kickbacks to encourage them to prescribe Biogen drugs.
A former Biogen employee turned whistleblower, Michael Bawduniak, sued Biogen in 2012 on behalf of the federal government under the False Claims Act, and has pursued the matter for over seven years. In his lawsuit, Bawduniak alleged that Biogen paid kickbacks to physicians to induce them to prescribe the company’s multiple sclerosis drugs. According to his complaint, from 2009 until 2014, Biogen offered and paid remuneration, “in the form of speaker honoraria, speaker training fees, consulting fees and meals.” Biogen employees purportedly targeted health care professionals who attended Biogen’s speaker programs, speaker training meetings or consultant programs. The complaint alleged Biogen induced the health care professionals to prescribe the drugs Avonex, Tysabri, and Tecfidera.
Bawduniak brought the claim against Biogen under the qui tam or whistleblower provisions. These provisions permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery. The United States may or may not intervene in the action. In this case, Bawduniak proceeded with the lawsuit after the United States declined to intervene. Biogen will pay more than $843 million to the federal government and $56 million to fifteen states to settle the case. Bawduniak will receive 26% or about $250 million of the federal proceeds, according to the DOJ.
“The settlement announced today underscores the critical role that whistleblowers play in complementing the United States’ use of the False Claims Act to combat fraud affecting federal health care programs.” said Principal Deputy Assistant Attorney General Brian M. Boynton.
Biogen, in a statement, denied any wrongdoing in the case. Instead, it insisted it wanted to resolve the litigation to focus on other priorities. “Biogen believes its intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case,” the company said. Biogen further emphasized “the U.S. and the states did not intervene in the case and the settlement does not include any admission of liability by Biogen.”
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with criminal healthcare fraud and government investigations. If you need assistance with such a matter, please contact us today.