Biogen suffers yet another setback. Just as Biogen’s CEO departs and sales decline for its controversial Alzheimer's drug, the company has settled a lawsuit for over $900 million. The settlement was announced just days before the trial was scheduled to begin.

The lawsuit originates from a whistleblower, Michael Bawduniak, a former thought leader liaison for Biogen. Mr. Bawduniak claimed Biogen intentionally paid its highest prescribers for services it did not need to keep the company’s multiple sclerosis drug competitive.

Settlement payments will be made to the United States, state Medicaid programs, and the whistleblower in connection with the False Claims Act. This settlement is the largest False Claims Act recovery secured by a whistleblower without United States involvement.

Here are 3 quick facts to know.

1. Whistleblower Exposed Fake Consulting Meetings and Speaker Programs

Mr. Bawduniak worked for Biogen from 2004 to 2012, first in marketing and ultimately as a thought leader liaison in its multiple sclerosis (MS) division. During his time with Biogen, he witnessed multiple violations of the anti-kickback statute. 

According to one of the court documents, “Biogen knowingly identified top prescribers and paid them millions of dollars to keep their prescriptions at profitable levels.” The company retained them through speaker and consulting fees. According to Mr. Bawduniak’s attorney,…” consulting and speaking schemes were conduits for the channeling of illegal payments to . . . high prescribers."

The attorney continued, writing, "Biogen selected all speakers based on their prescribing ability, not their speaking ability. Biogen devised a way to identify and target the doctors who wrote 60% of prescriptions for MS . . . and thus would provide the 'most bang for the buck.’”

Once the settlement is resolved, Mr. Bawduniak will receive between 25% and 30% of the federal portion of the recovery.

2. Among the Largest False Claims Act Settlements

The $900 million settlement represents one of the largest False Claims Act settlements ever. The largest settlement occurred in 2012 when GlaxoSmithKline reached a $3 billion settlement for kickbacks to physicians, false and misleading statements on its drug Avandia, and underpayment of Medicaid rebates. Healthcare fraud is the most common violation of the False Claims Act.1

3. Settlement Is One of Many Recent Setbacks for Biogen

This settlement is just one in a long list of setbacks for Biogen. Biogen had previously decided to terminate commercialization activities for Aduhelm due to the restrictions placed on it by the Centers for Medicaid & Medicare Services (CMS). 

In April 2022, CMS restricted Aduhelm coverage to patients enrolled in randomized controlled trials. In the absence of clinical trials, Aduhelm's commercial prospects were effectively stifled. According to Biogen, their current Aduhelm $223 million dollar inventory is essentially worthless. 

In May 2022, Biogen announced it was sending CEO Michel Vounatsos packing after the negative Medicare decision for Aduhelm. Without proper reimbursement, Aduhelm posted sales of only $100,000 in the second quarter of 2022. Meanwhile, Biogen is currently focused on revealing its new CEO and awaiting the FDA's decision on its new Alzheimer's drug, lecanemab, a follow-up to Aduhelm.

References

1. Adashi EY, Cohen IG. Health Care Fraud: The Leading Violation of the False Claims Act. Am J Med. 2022;135(5):558-559. doi:10.1016/j.amjmed.2021.12.014.

United States v. Biogen IDEC Inc., Civil Action 1:12-cv-10601-IT (D. Mass. Jul. 5, 2022)