To resolve a whistleblower lawsuit case, Biogen has decided on a $900M settlement. According to the United States Department of Justice, the company was accused of kickback payments to doctors to prescribe numerous sclerosis drugs.
This marks the end of a long-running whistleblower lawsuit, finally settled at the Boston federal court. The lawsuit was pursued on behalf of the government by an ex-employee of Biogen. It was revealed in July that the company has reached a possible settlement which was pending the approval of the government.
Biogen is an American biotechnology company that is based in Cambridge, Massachusetts. It works on discovering, developing, and delivering treatment therapies for neurological patients on a global scale.
Michael Bawduniak, who is an ex-employee of the company, pursued the lawsuit and will receive a sum of about a quarter of a billion dollars from the settlement, according to his lawyer Thomas Greene. The lawyer also claimed that this payout breaks previous prize records for United States whistleblowers.
The biotech company did not admit to be guilty of any of the allegations and Biogen stated that it believes its conduct was appropriate and under legal limits at all times. The company also made it known that it sought to resolve the case and direct its efforts toward other priorities. The company further said that the settlement does not mean admission of liability by the company.
Biogen was accused of paying millions in bribes to doctors to prescribe the company’s multiple sclerosis drugs Tysabri, Tecfidera, and Avonex, over a period of five years ranging from 2009 to 2014. According to the lawsuit, the bribes were in the form of bogus consulting deals and programs as well as entertainment and extravagant dinners.
According to the lawsuit, untrue payment claims were submitted to Medicaid and Medicare, government healthcare programs.
Michael Bawduniak filed the case under the False Claims Act a decade ago in 2012. The act allows whistleblowers to sue companies to recover the taxpayer money that was spent on fraudulent activities.
The Justice Department can intervene in such cases if it sees fit and contests them on its own after an investigation. However, in 2015 the department chose not to intervene in the case and let Michael Bawduniak pursue the case on his own.
Thomas Greene called it the biggest recovery secured in over a century and a half of False Claims Act whistleblower cases without the government becoming a part of it directly.
According to the Justice Department, the settlement will see the biotech company pay north of $843M to the federal government and the remainder to fifteen states. Bawduniak will receive between $250 and $266.5M of the federal government portion.
The head of the Civil Division of the Justice Department, Brian Boynton said, “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.”
Biogen’s second quarter report revealed that an arrangement in principle was made for the payment of $900M to put the lawsuit to bed.