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Biogen divulges $900 million agreement in kickback whistleblower lawsuit

The Massachusetts-based biotechnology company Biogen announced on Wednesday that it had reached a $900 million preliminary agreement to settle a False Claims Act (FCA) lawsuit brought by a whistleblower who claimed that illegal kickbacks were given to doctors.

In 2012, Michael Bawduniak, a former employee of Biogen, filed a lawsuit against the company in the U.S. District Court for the District of Massachusetts, alleging that it had paid physicians to dissuade them from prescribing its rivals' products. Avonex, Tysabri, and Tecfidera, the company's three multiple sclerosis (MS) medications, were at risk of losing market share to fresher competition because of the alleged kickbacks.

The trial was scheduled to start in federal court in Boston the following week.

Bawduniak filed the lawsuit in accordance with the FCA's qui tam provisions, which permit private parties to file lawsuits on behalf of the federal and state governments for the submission of fictitious claims for government funding in exchange for a cut of any settlements. Bawduniak is entitled to a larger award—between 25 and 30 percent—of the recovery because the United States government declined to take action in the case in 2015.

In a press release, Thomas Greene, Bawduniak's lead counsel at the Boston law firm Greene, said, "We believe this settlement represents the largest recovery in the over 150 years of False Claims Act cases to be secured by a whistleblower without the intervention or participation of the United States."

The agreement was made public by Biogen in its Securities and Exchange Commission-filed second-quarter results. The agreement is contingent on the negotiation of the final settlement agreements and documents and does not include any admission of liability.

In an email statement, a Biogen representative said, "we are resolving this matter to avoid the distraction of litigation and to allow the company to focus on our strategic priorities and the patients we serv."

Bawduniak claimed in his lawsuit that Biogen's compliance division was "nothing more than a rubber stamp." He claimed that despite compliance's success in mandating that meeting feedback be recorded, the opinions were not read despite the department's concerns about consultant meetings.

According to the lawsuit, Biogen paid $18 million to 1,500 physicians and nurses who wrote prescriptions totaling roughly 60% of the MS market in just 2009 and 2010. Rich dinners, extravagant entertainment, and "sham" speaker and consultant deals served as payment. The alleged scheme continued through 2014 and “caused the submission of hundreds of millions of dollars in false reimbursement claims for Biogen’s MS drugs to government healthcare programs, including Medicare and Medicaid.”

2020 saw Biogen reach an agreement to pay $22 million to settle separate qui tam claims that it had broken the FCA by using foundations improperly as a conduit to cover the copays for Medicare patients taking Tysabri and Avonex. In that instance, the Justice Department got involved.



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