Biogen has agreed to pay $900 million to settle a whistleblower lawsuit accusing it of paying doctors to encourage them to prescribe its multiple sclerosis drugs, the U.S Department of Justice announced Monday.
Between 2009 and 2014, Biogen paid hundreds of physicians for consulting advice and speaker training as well as meals and travel to Biogen events — payments that were alleged to be illegal kickbacks.
A former marketing director, Michael Bawduniak, sued the drugmaker in 2012 under the whistleblower provisions of the federal False Claims Act, claiming Biogen targeted physicians and their staff who made up a large portion of its drug sales for advice on topics it did not need and speaking fees for presentations that were likewise not in demand. The efforts were aimed at preserving or growing the market share of its multiple sclerosis drugs Avonex, Tysabri and the then newly approved Tecfidera against rival products such as Novartis’ drug Gilenya.
In 2009 and 2010, for example, Biogen paid $18 million to 1,500 physicians and nurses who accounted for roughly 60% of multiple sclerosis drug prescriptions, ignoring the other 16,000 neurologists responsible for the rest, according to an amended complaint. It also continued to hold annual winter consultant meetings in places like Miami and San Diego, despite increased scrutiny and internal pressure against such events, inviting 200 medical professionals to a high-end resort in 2009 and 2010 and paying each around $6,500 plus hotel, meals and airfare.
Under the settlement, Biogen will pay $843 million to the U.S. government and $56 million to 15 states. Bawduniak will receive about 30% of the U.S. government payment. When Biogen agreed to the settlement in July before the case went to trial, Bawduniak’s lawyer said it was the largest settlement won by a whistleblower in private litigation under the False Claims Act.
“Biogen believes its intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case,” the company said in a statement on Monday. “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.”
Biogen has been under scrutiny this year after the botched launch of its Alzheimer’s disease drug Aduhelm, which failed to win over insurers and doctors and secured only limited coverage by Medicare. In May, its CEO agreed to step down once a successor was found.
The settlement follows a trend by U.S. pharmaceutical and biotechnology companies settling kickback cases rather than go to trial. In 2020, Novartis agreed to pay $678 million to settle a federal lawsuit. A Johnson & Johnson subsidiary settled claims it donated to a charity to hide alleged kickbacks for $360 million in 2018. Celgene agreed to pay $280 million in 2017.