Pharmaceutical Company Biogen to Pay $900M False Claims Act Settlement

September 29, 2022 - Monday, Boston pharmaceutical company Biogen agreed to pay $900 million to settle a case where it was accused of offering illegal programs that induced physicians to prescribe the drugs Avonex, Tysabri, and Tecfidra.  

Whistleblower and former Biogen employee Michael Bawduniak filed and litigated the case on behalf of the federal government, pursuing the lawsuit for more than ten years. According to the agreement reached, Bawduniak and his attorneys will be paid $266.4 million, the largest whistleblower award ever recovered. The federal government and 15 states involved in the case will receive the remainder of the $900 million settlement.  

Biogen was alleged to have used paid remuneration, including speaking and consulting fees and extravagant dinners, to encourage physicians across the country to prescribe its multiple sclerosis drugs in violation of the Anti-Kickback Statute and the False Claims Act. The pharmaceutical company denied any allegations and claimed that “it was the right time to resolve the litigation and allow the company to remain focused on our patients.” 

Early on, the Department of Justice declined to take on the case leaving it to Bawduniak and his attorneys. “We thank Mr. Bawduniak for uncovering this behavior and bringing it to light,” said United States Attorney Rachael S. Rollins in a press release. “This matter is an important example of the vital role that whistleblowers and their attorneys can play in protecting our nation’s public healthcare programs.” 

Biogen has recently received its fair share of flak after its Alzheimer’s drug Aduhelm was granted FDA approval despite strong pushback. At the time, acting FDA commissioner Janet Woodcock, MD, requested that the Office of the Inspector General review the approval process for Aduhelm and look into concerns about improper contacts between FDA representatives and Biogen employees.  

Shortly after the FDA approved Aduhelm, it decided to all but reverse its decision, limiting the use of Aduhlem to early-stage patients. Biogen then chose to reduce the price of its drug by nearly 50% after one report found that it would increase the national health expenditure by $73 billion.  

Despite news of the nearly billion dollar settlement and the rough rollout of Aduhelm, Biogen Inc.’s stock price went through the roof on Wednesday as the company announced positive clinical trial results from an experimental Alzheimer’s drug. Biogen and Japanese partner Eisai announced that lecanemab slowed Alzheimer’s progression by 27% compared to a placebo for early-stage patients. The experimental trial was the largest ever test of patients with the early stage of the disease.