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Florida Whistleblower Lawyers > Blog > IRS Whistleblower > Major False Claims Act Settlement: Pharmaceutical Company Will Pay $900 Million

Major False Claims Act Settlement: Pharmaceutical Company Will Pay $900 Million


According to a report from Reuters, Biogen—the American multinational pharmaceutical giant with headquarters in Cambridge, Massachusetts—has reached an agreement in principle to pay approximately $900 million to resolve a False Claims Act lawsuit. The preliminary settlement was reached days before the trial was set to begin. The pharmaceutical company was accused of paying illegal kickbacks to physicians. In this article, our whistleblower rights attorneys discuss one of the largest False Claims Act settlements in U.S. history.

Allegations: Biogen Paid Kickbacks to Doctors to Prescribe Multiple Sclerosis Drugs

 Biogen is a multi-billion dollar biotechnology and pharmaceutical company. It manufactures and sells several different high-priced Multiple Sclerosis (MS) medications. In 2012, a former employee of Biogen named Michael Bawduniak filed a False Claims Act lawsuit against the company in a federal court in Massachusetts. The lawsuit alleged that the company paid illegal kickbacks to incentive doctors to prescribe its MS drugs.

More specifically, the lawsuit alleged that the company directed many millions of dollars to doctors using “sham” consulting agreements, speaking programs, and other illicit agreements. Federal law strictly prohibits the use of kickbacks and similar financial incentives when federal health programs such as Medicare or Medicaid are billed for services. The alleged misconduct occurred between 2009 and 2014. Shortly before the trial was set to begin, Biogen reached a preliminary agreement to pay $900 million to resolve the matter.

Whistleblower Filed Qui Tam Lawsuit, DOJ Declined to Intervene 

The False Claims Act allows whistleblowers to file a lawsuit on behalf of the government to stop healthcare billing fraud or other violations of federal law. This type of whistleblower claim is known as a qui tam lawsuit. Notably, when a qui tam claim is filed by a whistleblower, the Department of Justice (DOJ) will have an opportunity to review the matter and intervene on the case if it chooses to do so. It is not uncommon for the DOJ to intervene in False Claims Act cases. The whistleblower still receives a share of the recovery even if the DOJ intervenes.

However, in this case, the DOJ opted not to intervene. The False Claims Act lawsuit against Biogen was handled entirely by the individual whistleblower and his legal counsel. By law, the whistleblower is now entitled to receive between 25 percent and 30 percent of the money that was ultimately recovered on behalf of the government. If the DOJ does intervene in a whistleblower case, the award is between 15 percent and 25 percent of the enforcement action.

Get Help From a False Claims Act Whistleblower Rights Attorney Today

At Guttman, Freidin & Celler, we are a law firm devoted to protecting the rights and interests of whistleblowers. With extensive experience handling False Claims Act cases, our attorneys have the skills and experience to help whistleblowers get justice and the maximum available financial support. Contact us today to set up your confidential initial appointment. With a main office in South Florida, we provide nationwide legal representation in federal whistleblower claims.



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