Biogen Agrees to Pay $900M to Settle Physician Kickback Allegations

Avery Hurt

September 27, 2022

Pharmaceutical company Biogen, Inc, has agreed to pay $900 million in settlement of allegations involving kickbacks and false Medicare and Medicaid claims.

The settlement with federal officials resolves a lawsuit brought by former Biogen employee Michael Bawduniak. In the lawsuit, which was filed in the District of Massachusetts, Bawduniak alleged that from January 1, 2009, through March 18, 2014, Biogen paid kickbacks to physicians to get them to prescribe three of the company's drugs: Avonex (an injectable biologic used to treat relapsing multiple sclerosis [MS]); Tysabri (a monoclonal antibody used for relapsing MS); and Tecfidera (an oral disease-modifying drug used to treat active relapsing MS). The payments were in violation of federal anti-kickback statutes as well as laws in several states.

According to the lawsuit, Biogen would pay healthcare professionals who spoke at or attended Biogen's speaker training programs, speaker training meetings, and consultant programs. These payments came in the form of speaker honoraria, speaker training fees, consulting fees, and meals and were intended to induce these doctors to prescribe the company's products.

In 2012, Bawduniak alerted federal authorities to the illegal payments and filed a lawsuit under the whistleblower provisions of the federal False Claims Act, which allows a private party to file a lawsuit on behalf of the United States and to receive a portion of any recovered money. In such lawsuits, the US may choose to intervene in the action; in this case, however, Bawduniak proceeded on his own.

"[Bawduniak] diligently pursued this matter on behalf of the United States for over seven years," said Brian M. Boynton, principal deputy assistant attorney general, head of the Justice Department's Civil Division. "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."

Under the terms of the settlement, Biogen will pay $843,805,187 to the United States and $56,194,813 to 15 states. Bawduniak will receive approximately 29.6% of the federal proceeds from the settlement, a total of $226 million, the largest whistleblower payment on record, according to The New York Times.

In a statement released by Biogen, which is based in Cambridge, Massachusetts, the company denied any wrongdoing and asserted that the settlement is not an admission of liability but that a settlement at this time would "allow the company to remain focused on our patients and strategic priorities."

Avery Hurt is a Birmingham, Alabama–based freelance science writer who writes often about the science and practice of medicine.

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