Biogen to pay $900M to settle allegations of improper physician kickbacks

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Biogen has agreed to pay $900 million to settle allegations that it paid kickbacks to persuade doctors to prescribe its multiple sclerosis drugs. 

The settlement comes after former Biogen employee turned whistleblower Michael Bawduniak sued the drugmaker in 2012 on behalf of the United States government under the False Claims Act. The law allows whistleblowers who file a lawsuit on behalf of the federal government to receive a portion of any recovery.

Bawduniak's suit claims that Biogen paid physicians kickbacks from January 2009 to March 2014 in the form of speaking fees, consulting fees and meals to prescribe its multiple sclerosis drugs Avonex, Tysabri and Tecfidera, resulting in false claims to Medicare and Medicaid. 

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Biogen has agreed to pay $900 million to settle allegations that it paid physicians kickbacks in order to persuade them to prescribe the pharmaceutical giant’s drugs. (REUTERS/Brian Snyder) | Reuters Photos

The settlement does not include any admission of liability by the company. "Biogen determined that now was the right time to resolve the litigation and allow the company to remain focused on our patients and strategic priorities," the drugmaker said in a statement.

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Under the terms of the settlement, Biogen will pay more than $843 million to the federal government and more than $56 million to 15 states. Bawduniak will receive approximately 29.6% of the federal proceeds from the settlement.

Under the terms of the settlement, Biogen will pay more than $843 million to the United States and more than $56 million to 15 states. (Kent Nishimura / Los Angeles Times via Getty Images) ((Kent Nishimura / Los Angeles Times via Getty Images) / Getty Images)

"We thank Mr. Bawduniak for uncovering this behavior and bringing it to light," Rachael Rollins, U.S. Attorney  for the District of Massachusetts, said in a statement. "This matter is an important example of the vital role that whistleblowers and their attorneys can play in protecting our nation’s public health care programs."

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Biogen Inc.

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BIIB BIOGEN INC. 195.75 -2.03 -1.03%

Biogen said in a statement that it believes its intent and conduct was "at all times lawful and appropriate" and that it denies all allegations raised in Bawduniak's case.

The company previously disclosed the settlement in its second quarter earnings report on July 20. As of the time of publication, shares of Biogen are down approximately 19% year to date.

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