Advertisement

U.S. drugmaker Biogen to pay $900 million to settle federal whistleblower case

Man who exposed kickback scheme will get $250 million of government's share

1/2
U.S. drugmaker Biogen will pay $900 million to settle a federal whistleblower lawsuit that alleged the company overbilled the nation’s health insurance programs and paid doctors under the table to prescribe its drugs. Photo by CJ Gunther/EPA-EFE
U.S. drugmaker Biogen will pay $900 million to settle a federal whistleblower lawsuit that alleged the company overbilled the nation’s health insurance programs and paid doctors under the table to prescribe its drugs. Photo by CJ Gunther/EPA-EFE

Sept. 27 (UPI) -- U.S. drugmaker Biogen will pay $900 million to settle a federal whistleblower lawsuit that alleged the company overbilled the nation's health insurance programs and paid doctors under the table to prescribe its drugs.

The case first emerged in 2012 when former Biogen employee Michael Bawduniak sued the pharmaceutical giant under the False Claims Act, alleging the company cajoled favor with physicians by paying them lavishly for speaking and consulting engagements, and then sweetened the pot by throwing in free meals.

Advertisement

The alleged kickback scheme, which involved medicines to treat multiple sclerosis, took place between January 2009 and March 2014, and led to a surge in false claims to Medicaid and Medicare for prescriptions of Avonex, Tysabri and Tecfidera, the Justice Department said in a statement.

Under the terms of the settlement, Biogen agreed to pay the government $843 million, while 15 states will receive another $56 million in compensation from the company, which was not required to admit to wrongdoing.

RELATED FDA sees risks linked to the drug Tysabri

Bawduniak, meanwhile, will get $250 million from the government's share.

"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," said Brian Boynton, chief of the Civil Division at the Justice Department.

Advertisement

Biogen also issued a statement Monday rejecting the accusations.

RELATED Safety concerns over MS drug

"Biogen believes its intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case," the Massachusetts-based company said, according to CNBC. "The U.S. and the states did not intervene in the case and the settlement does not include any admission of liability by Biogen."

Earlier this month, Bayer agreed to pay $40 million to settle alleged violations of the False Claims Act, a case that also arose from federal lawsuits filed by a former employee.

RELATED Analysis: Biogen sees rise in key drugs

RELATED Twitter whistleblower testifies in Senate over claims of security failures

RELATED Bayer settles kickback and fraud allegations for $40 million

Latest Headlines

Advertisement
Advertisement

Follow Us

Advertisement