Biogen Will Pay $900M to Settle Drug Outreach Lawsuit

Between the years 2009 and 2014, Biogen gave hundreds of allegedly illegal kickbacks to physicians for unneeded consulting advice and speaker training as well as meals and travel to Biogen events.

In the midst of this period, in 2012, under the whistleblower provisions of the federal False Claims Act, a former marketing director for Biogen, Michael Bawduniak, sued the company. He claimed Biogen was targeting physicians and the staff of physicians who made up a large portion of its drug sales, paying them for advice it did not need and speaking fees for presentations that were not in demand.

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Biogen made these payments in an effort to preserve and grow the market share of its multiple sclerosis (MS) drugs Avonex, Tysabri, and Tecfidera against rival products, such as Gilenya from Novartis.

Now, Biogen has agreed to pay nearly $900 million to settle Bawduniak’s lawsuit, in which it is officially accused of paying doctors in order to encourage them to prescribe its MS drugs.

In 2009 and 2010, Biogen is specifically accused of paying $18 million to 1,500 doctors and nurses who were responsible for about 60% of MS drug prescriptions while ignoring the other 16,000 neurologists who accounted for the other 40%. The drugmaker also held annual winter consultant meetings in warm-weather places like Miami and San Diego. In those same two years, it invited 200 medical professionals to a high-end resort and paid each around $6,500 on top of hotels, airfare, and meals.

As part of the settlement, Biogen will have to pay $843 million to the U.S. government and another $56 million to 15 states. Bawduniak himself will receive about 30% of the U.S. government payment, or roughly $250 million. Bawduniak’s lawyer said in July, when Biogen agreed to the settlement before it went to trial, that it was the largest such settlement ever won by a whistleblower in private litigation under the False Claims Act.

Biogen, for its part, remains defiant: “Biogen believes its intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case,” the drugmaker said in a statement. “Biogen continues to believe that it is important to equip physicians and patients with the information needed to make the best decisions for their care.”