Pharmaceutical company Biogen has agreed to pay $900 million to settle federal and state claims that it paid kickbacks to doctors to encourage them to prescribe its drugs, the Justice Department said Monday. It said a federal judge had approved the deal.
The lawsuit began in 2012 when Michael Baudniak, then a Biogen employee, reported concerns to federal law enforcement officials that the company was making illegal payments. filed under the whistleblowing provision of the False Claims Act, which allows it to sue on behalf of
The government refused to intervene in the case, leaving Mr. Baudniak and his lawyers to proceed alone. Brian M. Boynton, head of the Department of Justice’s civil division, said the settlement “is in complement to the United States’ use of the False Claims Act to combat fraud affecting federal health care programs. , highlighting the critical role played by whistleblowers.”
Baudoniak will receive $266 million from the settlement. 15 states have joined the agreement.
“This is a satisfying result,” said Mr. Green, who estimated that his firm spent more than 28,000 hours on litigation.
In a statement, Biogen denied all accusations in the matter and said it had “settled so that we can continue to focus on our patients and our strategic priorities.”
Biogen, of Cambridge, Massachusetts, agreed to settle in mid-July, the night before its scheduled trial in federal court in Boston and the day it reported second-quarter earnings. In the lawsuit, Mr. Bawduniak alleges that Biogen bribed doctors with consulting fees and lavish dinners to favor its multiple sclerosis drug over a competitor’s drug. The tactic led to a surge in sales, he said in court. According to the lawsuit, the alleged kickbacks were defrauded of government-run Medicare and Medicaid programs.
Biogen has recently come under fire over the disastrous launch of its Alzheimer’s drug Aduhelm.