On July 20, Biogen, Inc, an international pharmaceutical company, agreed to pay $900 million to resolve a False Claims Act qui tam whistleblower suit. Whistleblower Michael Bawduniak filed a qui tam suit accusing the company of illegally paying kickbacks to doctors in order to increase prescriptions of its multiple sclerosis drugs.
Bawduniak, who worked as a sales rep at Biogen between 2004 and 2012, alleged that Biogen paid prescribers for services it did not need and which served no legitimate purpose in exchange for those prescribers continuing to prescribe Biogen’s drugs instead of newer competitors. Bawduniak further alleged that Biogen held consulting meetings and speaking engagements in order to offer kickbacks to physicians.
Bawduniak initially reported his concerns internally to Biogen’s compliance department. Following inaction by the company, in 2012, Bawduninak filed a qui tam lawsuit in the United States District Court for the District of Massachusetts.
Under the False Claims Act’s qui tam provisions, whistleblowers may file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs.
When a whistleblower files a qui tam suit, the U.S. Department of Justice (DOJ) has the option to intervene and take over the case. The DOJ decided not to intervene in Bawduniak’s suit and, according to his lawyer, “this settlement represents the largest recovery in the over 150 years of False Claims Act cases to be secured by a whistleblower without the intervention or participation of the United States.”
The Supreme Court is set to rule on the ability of the DOJ to dismiss qui tam lawsuits it has not intervened in. In recent years recoveries from qui tam suits have been in sharp decline due in large part to the DOJ’s tendency to dismiss strong whistleblower suits without just cause.
Under the False Claims Act, whistleblowers have helped the government recover over $70 billion from fraudsters since 1986. Whistleblowers have correspondingly been awarded over $8 billion.
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Biogen pays $900M to resolve whistleblower’s MS kickback suit as competition drags on sales