Former employee wins $250 million in Biogen kickback settlement
A former employee of pharmaceutical giant Biogen Inc. will pocket about $250 million from the settlement of a long-running whistleblower case he diligently pursued against the company for seven years.
The U.S. Justice Department announced Sept. 26 that Biogen has agreed to pay $900 million to resolve allegations that it paid kickbacks to physicians to induce them to prescribe Biogen drugs.
Whistleblowers are critical to maintaining the integrity of the world’s enormous pharmaceutical market, said Scott Williams, CEO of Ethic Alliance.
“This is another great example of the impact that people can make by choosing to do the right thing and having the courage to come forward with information. The False Claims Act is a powerful tool, both for the government and public, to help bring some justice to bad actors and encourage and reward individuals for providing information and assistance,” said Williams.
The Biogen whistleblower case arose from speaker and consultant programs conducted by Biogen prior to 2015. Cambridge, Mass.-based Biogen (Nasdaq: BIIB) is a global biotechnology company that generated $11 billion in revenue in 2021.
The settlement resolves a lawsuit filed and litigated by former Biogen employee Michael Bawduniak against the company under the qui tam or whistleblower provisions of the federal False Claims Act, which permit a private party or “relator” to file a lawsuit on behalf of the United States and receive a portion of any recovery.
In a lawsuit filed in federal court in Massachusetts, Bawduniak alleged that Biogen violated federal law by paying kickbacks to physicians to induce them to prescribe the company’s multiple sclerosis drugs. According to the complaint, from January 2009 to March 2014, Biogen offered and paid honoraria, speaker training fees, consulting fees and meals to health care professionals who spoke at or attended Biogen’s speaker programs, speaker training meetings or consultant programs to induce them to prescribe drugs.
Under the terms of the settlement, Biogen will pay $843,805,187 to the United States and $56,194,813 to 15 states. Bawduniak will receive about 29.6% of the federal proceeds, or $249,766,335.
“The relator diligently pursued this matter on behalf of the United States for over seven years,” said Brian M. Boynton of the Justice Department’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.”
“We thank Mr. Bawduniak for uncovering this behavior and bringing it to light,” added U.S. Attorney Rachael S. Rollins. “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.”
In a statement, Biogen said it “believes its intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case.” The company noted that the settlement does not include any admission of liability by Biogen.
“Biogen determined that now was the right time to resolve 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.”
Contact Ethic Alliance at info@ethicalliance.com
Related links: https://www.justice.gov/opa/pr/biogen-inc-agrees-pay-900-million-settle-allegations-related-improper-physician-payments ; https://investors.biogen.com/news-releases/news-release-details/statement-biogen-statement-qui-tam-settlement