Pharmaceutical Company Settles for $900M to Resolve Allegations of Providing Kickbacks to Physicians

Biogen Inc., a drug company that makes multiple sclerosis medications, has agreed to settle for $900 Million to end allegations that it paid kickbacks to doctors and submitted false claims to Medicare or Medicaid. The Justice Department announced Monday.

Michael Bawduniak (an ex-employee of Biogen) filed the lawsuit against Massachusetts-based Biogen alleging that the company provided kickbacks to doctors in return for prescribing multiple sclerosis drugs. According to the complaint, Biogen made improper payments to physicians between January 1, 2009, and March 18, 2014.

Bawduniak claimed that the payments were disguised to reimburse physicians who attended or spoke at the company’s speaker programs or speaker training meetings. Biogen paid out remunerations to health care professionals for speaking at these events. These included speaker honoraria and speaker training fees, consulting fees, and compensation meals.

According to the lawsuit, doctors were required to prescribe Biogen drugs to patients in return for payments. This would violate the Anti-Kickback Statute.

Bawduniak filed a case against the pharmaceutical company under whistleblower provisions in the False Claims Act. This allows private parties to file cases for the federal government and receive a percentage of any monetary recoveries. The United States can file a complaint against the company or the whistleblower could proceed with the lawsuit.

“The relator pursued this matter for the United States for more than seven years,” stated Principal Deputy Assistant AttorneyGeneral Brian M. Boynton. “The settlement announced today highlights the crucial role whistleblowers play when complementing the United States use of the False Claims Act in combating fraud affecting federal healthcare programs.”

The pharmaceutical company agreed that it would pay $843,805,187 in the United States and $56,194,813 in 15 other states. Bawduniak will be entitled to $250 million from the federal proceeds of the settlement.

“We thank Mr. Bawduniak, for uncovering such behavior and bringing this to our attention,” stated Rachael S.Rollins, U.S. attorney for the District of Massachusetts. “This case is an important example showing the crucial role whistleblowers can play in protecting our nation’s public health care programs,” said U.S. Attorney Rachael S. Rollins for the District of Massachusetts.

Biogen didn’t admit any wrongdoing in the settlement agreement. Biogen stated Monday that it believed its conduct and intent were lawful. Biogen also denied all allegations. Biogen has not admitted any liability as a result of the U.S. and state intervention in the case.