Biogen to pay $900 million in settlement

The pharmaceutical company Biogen Inc. has agreed to pay $900 million to settle federal and state claims that it paid kickbacks to physicians to encourage them to prescribe its drugs, the Justice Department said late Monday as a federal judge approved the deal.

The case began in 2012, when Michael Bawduniak — who was then a Biogen employee — reported to federal law enforcement officials his concerns that the company was making illegal payments. Bawduniak filed a lawsuit that year under the False Claims Act’s whistleblower provisions, which allows private individuals sue on the government’s behalf.

The federal government declined to intervene in the lawsuit, which left Bawduniak and his lawyers to pursue it alone.

Brian Boynton, head of the Justice Department’s Civil Division, said the settlement “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.”

Bawduniak will be paid $266 million from the settlement — the largest whistleblower award on record, said Thomas Greene, his lawyer. Fifteen states participated in the deal.

“This is a satisfying result,” Greene, who estimated that his firm spent more than 28,000 hours working on the case, said.

In a company statement, Biogen — maker of the controversial Alzheimer’s drug Aduhelm — denied all accusations in the case and said that the company settled so the drugmaker could “remain focused on our patients and strategic priorities.”

Massachusetts-based Biogen agreed to settle the case in mid-July, the night before it was scheduled to go on trial in federal court in Boston, and the day it reported second-quarter earnings for the company.

From January 2009 through March 2014, according to the lawsuit, Biogen paid physicians speaking fees, consulting fees and bought them lavish meals that were actually kickbacks, to get them to prescribe its Avonex, Tysabri and Tecfidera in violation of the federal Anti-Kickback Statute.

The tactics paid off in soaring sales, Bawduniak said in court filings. The kickbacks defrauded the government-run Medicare and Medicaid programs, according to the lawsuit.

Biogen, meanwhile, has been under fire recently over the disastrous launch of Aduhelm, which was green-lighted by the Food and Drug Administration despite showing little evidence of benefit for patients. The drug became a commercial failure, and the company’s CEO, Michel Vounatsos, stepped down in May.