Biogen Settles Whistleblower Bribe Case for $900 Million

This week, the United States Justice Department released a statement describing how a whistleblower accused US pharmaceutical company Biogen of bribing doctors to prescribe their drug to multiple sclerosis patients. Furthermore, the firm reached a settlement of $900 million to put the issue to rest.

Michael Bawduniak had been a marketing executive at Biogen until he chose to leave the company in 2012. Using the False Claims Act—which authorizes any private citizen to sue anyone (particularly a company), in a civil case but on behalf of the US government, if there is evidence that this entity deliberately defrauded or financially cheated the by said entity. Effectively, the False Claims Act allows for any whistleblower who wins their case to receive part of any compensation the court may award because of it.

Accordingly, then, Bawduniak will receive approximately $250 million in direct funds. The remainder of the settlement will go to different channels within the federal government, for the most part. Indeed, about $56 million will be spread among the 15 states who had joined the class-action lawsuit.

With the conclusion of the case, head of the United States Department of Justice’s, Brian Boynton, celebrates, “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.”

Boynton also describes that Bawduniak had “diligently pursued” the issue—on behalf of the United States—for more than seven years. The case actually relates to the time period between 2009 and 2014.

The case describes that Bawduniak accused Biogen of paying several million dollars, annually, to doctors—in the form of financial kickbacks—so that they would prescribe Biogen’s drugs Avonex, whose sales were in decline, and their newer Tysabri treatment. Of course, there are several drugs in competition for MS treatment, all of which are considered to be equally effective.

In response to the findings, the company said, “Biogen believes its intent and conduct was at all times lawful and appropriate and Biogen denies all allegations raised in this case. The US and the states did not intervene in the case and the settlement does not include any admission of liability by Biogen.”