Biogen finalized a $900 million settlement concerning alleged kickbacks it paid to doctors to induce them to prescribe the company’s drugs and not those of its competitors, the Department of Justice (DOJ) announced Monday.
Biogen made the alleged payments to try and dampen competition for its multiple sclerosis (MS) drugs, including Avonex, Tysabri, and Tecfidera, according to the settlement.
The agreement, first disclosed by Biogen in July, ends years of litigation dating back to 2012, when former employee Michael Bawduniak blew the whistle on the alleged kickbacks. He filed a lawsuit against the company in U.S. District Court for the District of Massachusetts, citing violations of the False Claims Act (FCA).
“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 in a statement on its website. “… Biogen determined that now was the right time to resolve the litigation and allow the company to remain focused on our patients and strategic priorities.”
From January 2009 through March 2014, Biogen tried to entice doctors to prescribe its MS drugs by paying them speaker honoraria, training fees, consulting fees, and meals, according to the settlement.
The fees were paid through “sham” speaker and consultant engagements, Bawduniak claimed in his lawsuit.
In 2009 and 2010, Biogen paid $18 million in fees to 1,500 doctors and nurses, whose prescriptions made up 60 percent of the entire market for MS drugs, according to the lawsuit.
The compliance department at Biogen was “nothing more than a rubber stamp,” Bawduniak claimed.
The claims the doctors submitted to federal health programs, including Medicare and Medicaid, violated the FCA, the settlement alleged.
The DOJ declined to intervene in the case in 2015. As a result, under the qui tam provisions of the FCA, Bawduniak was entitled to receive a higher award—about 29.6 percent—of the $843.8 million Biogen will pay to the United States.
Biogen will also pay about $56.2 million to 15 states.
“This matter is an important example of the vital role that whistleblowers and their attorneys can play in protecting our nation’s public healthcare programs,” said Rachel Rollins, U.S. attorney for the District of Massachusetts, in a press release.
Bawduniak “diligently pursued this matter on behalf of the United States for over seven years,” acknowledged Principal Deputy Assistant Attorney General Brian Boynton, head of the DOJ’s Civil Division.
In 2020, Biogen agreed to pay $22 million to settle a qui tam lawsuit alleging the company used foundations to pay the copays of Medicare patients who were taking its MS drugs.