Biogen pays $900M to settle wide-ranging physician kickback claims
Looking to clear the deck ahead of its long-awaited lecanemab data release, Biogen agreed to pay the US government and states a whopping $900 million to settle seven-year-old allegations that it submitted false claims to Medicare and Medicaid by paying kickbacks to physicians to induce them to prescribe Biogen drugs.
The settlement, which is on the higher end of these DOJ-related resolutions that have become common in the pharma industry, resolves a lawsuit filed by former Biogen employee (now a director at Genzyme) Michael Bawduniak, who will take home almost $250 million as part of the deal.
Bawduniak alleged that for more than five years from 2009 through March 2014, Biogen paid speaker honoraria, training fees, consulting fees and meals, to health care professionals attending Biogen’s speaker programs, speaker training meetings or consultant programs to induce them to prescribe Avonex, Tysabri and Tecfidera, which according to the DOJ is in violation of the Anti-Kickback Statute.
The settlement comes at a crucial crossroads for a company ready to release data on its next top Alzheimer’s prospect, lecanemab, while looking to make nice with a federal government that has several open investigations (SEC, FTC, OIG, etc.) into its conduct around the approval of its first Alzheimer’s drug, Aduhelm. Adding to the pressure for these types of kickback campaigns is Aduhelm’s commercial flop and growing generic competition for its MS drug franchise.
Almost exactly one year ago, Biogen also paid another $22 million to settle allegations that it concocted a scheme to lure patients into taking these MS drugs by sponsoring their Medicare copays.
And to the question of whether or not these kickback schemes and the subsequent settlements are just part of the cost of doing business at this point, Biogen’s $900 million settlement with DOJ compares with a $678 million settlement with Novartis in 2020, $122 million for Jazz Pharma, Lundbeck and Alexion in 2019, $40 million settlement for Bayer this year, and Purdue Pharma’s $2.8 billion settlement in 2021.