Biogen to pay $900 million to settle drug smear allegations

A Biogen facility in Cambridge, Massachusetts.

Brian Snyder | Reuters

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

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

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

The alleged kickbacks resulted in false claims to Medicare and Medicaid for prescribing 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 federal proceeds, according to the Justice Department.

“The settlement announced today underscores the critical role whistleblowers play in the United States’ amendment to the False Claims Act to combat fraud affecting federal health care programs,” said Brian Boynton, director of the Civil Division at the Department of Justice.

Biogen denied any wrongdoing in the case in a statement Monday. The company said it wants to settle the litigation to focus on other priorities.

“Biogen believes that its intention and conduct were lawful and reasonable at all times, and Biogen denies all allegations made in this case,” the company said. “The US and the states have not intervened in the case and the settlement does not include an admission of Biogen’s liability.”

Biogen announced in its second-quarter report that it had reached an agreement in principle to pay $900 million to settle the lawsuit.

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