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Biogen to pay $900 million to settle drug kickback allegations

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A Biogen facility in Cambridge, Massachusetts.

Brian Snyder | Reuters

Biogen will pay $900 million to settle a lawsuit that alleged the company gave doctors kickbacks to encourage them prescribe its drugs, the Justice Department announced on Monday.

A former Biogen employee turned whistleblower, Michael Bawduniak, sued the pharmaceutical company in 2012 on behalf of the federal government under the False Claims Act.

Bawduniak alleged Biogen paid kickbacks to doctors in the form of speaking fees, consulting fees and meals from 2009 through 2014 to encourage them to prescribe its multiple sclerosis drugs.

The alleged kickbacks resulted in false claims to Medicare and Medicaid for the prescription of Avonex, Tysabri and Tecfidera, according to the Justice Department.

Biogen will pay more than $843 million to the federal government and $56 million to 15 states to settle the case. Bawduniak will receive about $250 million of the federal proceeds, according to the Justice Department.

“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 Brian Boynton, head of the Justice Department’s Civil Division.

Biogen, in a statement Monday, denied any wrongdoing in the case. The company said 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. “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 disclosed in its second quarter report that it had reached an agreement in principle to pay $900 million to resolve the lawsuit.

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