Biogen agreed to pay a $900 million settlement over claims that it illegally paid kickbacks to doctors to encourage them to prescribe the company’s drugs, the Department of Justice announced Monday.
In 2012, former Biogen employee Michael Bawduniak filed a lawsuit under the whistleblower provisions of the False Claims Act. In the suit, he alleged the company paid kickbacks to physicians to get them to prescribe multiple sclerosis (MS) drugs including Avonex, Tysabri and Tecfidera to boost sales over the drugs of competitors.
The lawsuit also claimed those payments were made through ‘sham’ speaker and consultant programs, including speaker honoraria, speaker training fees as well as consulting fees and meals.
According to court filings, Biogen paid 820 physicians $8.8 million in 2009 to speak or consult, and the next year paid 1,200 physicians — in particular the ones who prescribed the most Biogen drugs — $9.1 million as part of its speaker programs.
While Biogen argued the meetings were necessary for gathering physician input, the lawsuit asserted they weren’t. Instead, it was alleged that they were a way for the company to spur doctors to prescribe its MS drugs after competitor Novartis’ Gilenya entered the space.
The U.S. government chose not to intervene in the lawsuit, leading to Bawduniak pursuing it alone.
“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 healthcare programs,” Brian Boynton, principal deputy assistant attorney general and head of the Department of Justice’s civil division, said in a statement.
In a statement, Biogen denied the allegations and argued its “intent and conduct was at all times lawful and appropriate.” The company also stated the settlements don’t include an admission of liability by Biogen — adding that the company chose to settle the lawsuit “to remain focused on our patients and strategic priorities.”
Biogen will pay more than $843 million to the federal government and more than $56 million to 15 states.
Bawduniak will receive nearly $250 million from the federal settlement.
Biogen has experienced a few rocky years, in particular as it relates to the release of its Alzheimer’s drug, Aduhelm. The drug was deemed a commercial failure and Medicare refused to pay for it under routine circumstances.
According to its latest earnings report, Biogen reported that total revenue decreased 7%, with MS revenue down 4%.