Biogen Agrees to Pay $900 Million in Drug Kickbacks Settlement, Denies Wrongdoing

A test tube in front of displayed Biogen logo in this illustration taken on Dec. 1, 2021. (Dado Ruvic/Illustration/Reuters)

Pharmaceutical giant Biogen has agreed to pay $900 million to settle claims that it paid kickbacks to physicians to encourage them to prescribe its multiple sclerosis drugs, the Department of Justice announced on Monday.

The Cambridge, Massachusetts-based company’s settlement resolves a lawsuit filed in 2012 by former Biogen employee turned whistleblower, Michael Bawduniak.

Bawduniak sued Biogen under the False Claims Act, which allows whistleblowers to sue companies that they allege defrauded the federal government, on behalf of the government.

Such lawsuits, if successful, allow the private party to receive a portion of any recovery.

The DOJ said the former employee will receive approximately 29.6 percent of the federal proceeds from the settlement, amounting to $266.4 million.

The former employee alleged in a lawsuit filed in the District of Massachusetts that the pharmaceutical giant had paid kickbacks to doctors from 2009 through 2014 to encourage them to prescribe its multiple sclerosis drugs.

Such kickbacks included “speaker honoraria, speaker training fees, consulting fees and meals,” which were allegedly granted to health care professionals “who spoke at or attended Biogen’s speaker programs, speaker training meetings or consultant programs to induce them to prescribe the drugs Avonex, Tysabri and Tecfidera,” prosecutors said.

The kickbacks resulted in false claims for payment being submitted to the government health care programs Medicare and Medicaid, the lawsuit alleged.

The Anti-Kickback Statute prohibits companies from exchanging or offering to exchange anything of value in order to induce referrals of items or services that are covered by Medicare, Medicaid, and other federally-funded programs.

Under the settlement, Biogen will pay approximately $843,805,187 to the United States and $56,194,813 to 15 states in the case.

‘Biogen Denies All Allegations’

Biogen announced in July in its second quarter report that it had reached a potential settlement that was subject to government approval.

“The relator diligently pursued this matter on behalf of the United States for over seven years,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the DOJ’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.”

U.S. Attorney for the District of Massachusetts Rachael S. Rollins thanked Bawduniak for coming forward and revealing Biogen’s alleged behavior.

“This matter is an important example of the vital role that whistleblowers and their attorneys can play in protecting our nation’s public health care programs,” Rollins said.

In a statement published on Sept. 26, Biogen said it believes that its “intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case.”

The company did not admit wrongdoing as part of the accord.

“The U.S. and the states did not intervene in the case and the settlement does not include any admission of liability by Biogen. 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. Biogen continues to believe that it is important to equip physicians and patients with the information needed to make the best decisions for their care,” the statement continued.

Elsewhere, Biogen’s Alzheimer’s drug Aducanumab, which is marketed as Aduhelm, was approved by the Food and Drug Administration in June 2021, despite there being “uncertainties” regarding its clinical benefit.