Pushing Back on Kickbacks: $900 Million Settlement in Biotech False Claims Act Case
28 July 2022. On the eve of a trial with a former employee turned whistleblower, biotechnology company Biogen agreed to pay $900 million to settle allegations of lavishly overpaying doctors to prescribe their drugs to Multiple Sclerosis (MS) patients. The whistleblower was a sales representative for the biotechnology company who claimed he was demoted when he blew the whistle on the sham speaker program. He will be entitled to 25-30 percent of the $900 million settlement, or at least $225 million.
The allegations are twofold: Biogen paid kickbacks to doctors via speaking programs to allegedly induce them to prescribe Biogen’s MS drugs, which in turn made any MS prescription subsequently submitted to a government health program a false claim for reimbursement. In order to induce physicians to continue to prescribe one of its older MS drugs, increase the market share of a newer drug, and boost sales of its latest drug, Biogen’s alleged kickback scheme centered around healthcare provider speaking programs. The biotech company allegedly paid healthcare providers extremely high honoraria and wined and dined them in exotic locations as part of their speaker training and consulting programs, at which expert providers were supposedly educating less expert providers about MS treatments. According to the relator’s trial brief, the sales department at Biogen failed to keep track of any feedback they received from their customers from these meetings, in violation of the company’s compliance policies. As summarized in the brief, “from 2009 to 2013, Biogen hired approximately 8.5% of its customers to provide advice about its marketing efforts, every year.”
The issue that the whistleblower was calling out was that physicians should not be swayed to prescribe drugs based on fancy dinners from drug companies, and taxpayers should certainly not be paying for “tainted” prescriptions reimbursed by government healthcare programs. The relator’s trial brief notes, “When one examines the most prolific prescribers, those who wrote over 1,000 prescriptions a year for MS medications, almost 50% of those prescribers received consulting payments from Biogen.” Under the Anti-Kickback Statute, it is illegal for doctors to accept remuneration of any kind in exchange for patient business or referrals. MS is a debilitating disease and MS patients tend to take medication from the time they are diagnosed until death. Manipulating doctors who are caring for people who do not really have any other options for treatment is reprehensible—and making the government foot the bill is a perversion of the system.
The Department of Justice declined to intervene in this False Claims Act case, which meant the whistleblower continued to pursue the case in district court with the assistance of counsel and without a government investigation. Defendant Biogen agreed to settle to avoid the expense of trial.