Biogen to pay $900 million to settle whistleblower

Biogen is going to pay $900 million for a probe into allegations that it paid kickbacks to persuade doctors to prescribe multiple sclerosis drugs.

The settlement comes after former biogen employee turned whistleblower Michael Bawduniak sued the drugmaker in 2012 on behalf of the United States government under the False Claims Act. The law allows whistleblowers who file a lawsuit on behalf of the federal government to receive a portion of their recovery.

Bawduniak's suit claims that Biogen paid physicians kickbacks from January 2009 to March 2014 in the form of speaking fees, consulting fees and meals to prescribe its multiple sclerosis drugs Avonex, Tysabri and Tecfidera, resulting in false claims to Medicare and Medicaid.

The settlement does not include any admission of liability by the company. Biogen determined that now was the right time to resolve the litigation and allow the company to focus on their patients and strategic priorities, the drugmaker said in a statement.

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Biogen will pay more than $843 million to the federal government and more than $56 million to 15 states under the terms of the settlement. Bawduniak will receive 29.6% of the federal proceeds from the settlement.

Rachael Rollins, U.S. attorney for the District of Massachusetts, said in a statement that they thank Mr. Bawduniak for uncovering this behavior and bringing it to light. This matter is an important example of the crucial role that whistleblowers and their attorneys can play in protecting our nation's public health care programs. Biogen said in a statement that it believes its intent and conduct was lawful and appropriate, and that it denies all allegations raised in Bawduniak's case.

The company previously disclosed the settlement in its second quarter earnings report on July 20. Shares of Biogen are down approximately 19% year to date as of the time of publication.