Pharmaceutical Company Agrees To Pay $22 Million To Resolve Alleged False Claims Act and Anti-Kickback Statute Charges

The US Department of Justice recently announced that pharmaceutical company Biogen, Inc. (Biogen), agreed to pay $22 million to settle charges filed through the federal False Claims Act. The company, located in Cambridge, Massachusetts, was charged with improperly using foundations as a means to pay the copays for Medicare patients who used Biogen’s drugs, Avonex and Tysabri. These drugs treat multiple sclerosis.

Normally, Medicare beneficiaries must make a partial payment (a copay) when they buy medications covered by Medicare – unless they’ve met their deductible. The copays are designed to provide a check on the prices pharmaceutical makers can charge for their drugs. The copay helps patients decide if they want (or don’t want) to buy a particular drug.

The payment of the copays, according to the Acting Assistant Attorney are essentially kickbacks and violate the Anti-Kickback statute. Another US Attorney said that “Biogen coordinated with ACS to game the foundation system by timing its payments to two foundations with its transfer of financially needy free drug patients, all so that Biogen could obtain significant financial rewards.” Kickback schemes undermine the integrity of the healthcare system.

Violations of the Anti-Kickback Statute (AKS) are generally also considered violations of the False Claims Act. The AKS prohibits companies from offering or paying any remuneration (such as copay payments) to induce a Medicare patient to buy the company’s products/drugs.

The whistleblower claim

A whistleblower filed the original False Claims Ac case. As a reward, the whistleblower will receive 3,960,00 or about 20% of the judgment.

0The allegations resolved by the settlement were originally raised in a case filed under the whistleblower, or qui tam, provision of the False Claims Act. The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government did in this action. The whistleblower will receive approximately $3,960,000 of the settlement.

In a second settlement, the ACS foundation agreed to pay “$1.4 million to resolve its role in the above-referenced conduct.”

At the California Law Offices of Stephen A. Danz and Associates, our lawyers have been fighting for whistleblowers and employees for nearly 40 years. We have the experience and resources to help whistleblowers and employees get justice. To discuss your rights, please call us at 877-789-9707 or use our online contact form to make an appointment. Se Habla Espanol.