Industry Interactions with Physicians Continue to be a Hot Topic for Civil False Claims Act Enforcement Actions under Private Qui Tam Litigation

Posted by John Shire on October 06, 2022

In a continuing wave of fraud and abuse civil enforcement actions brought by qui tam relators, big pharma giant, Biogen, is the latest corporate actor to reach a mega settlement with the U.S. Department of Justice (DOJ) for allegations of False Claims Act liability for paying bribes to physicians who participated in Biogen’s sales and marketing programs veiled as “physician training and education” seminars over a five year period from 2009 through 2014. DOJ did not intervene in the case.

According to an investor relations statement released by Biogen on September 26, 2022, the Company reached a final agreement to pay $900 million to settle the qui tam action; however, Biogen insists that its intent and conduct were at all times lawful and, therefore, it denies all allegations raised in the qui tam law suit. Significantly, the Company stated in the release as a basis for the settlement that, “Biogen determined that now was the right time to resolve the litigation and allow the Company to remain focused on our patients and strategic priorities.”

In this case, the qui tam relator, Michael Bawduniak, who was also an employee at Biogen, alleged specifically that the Company routinely paid fees to physicians as inducements for ordering/prescribing three Biogen products (Avonex, Tysabri and Tecfidera) in the form of speaker honoraria, training fees, consulting fees and meals at speaker programs and training sessions. If true, these practices would be in violation of the federal Anti-Kickback Statute.

What is material about this settlement is that industry manufacturers (whether pharma or DME) need to take stock of their interactions with physicians and clinical institutions and they need to do this soon. While, in this case, DOJ did not intervene, there is now precedent. As a result, we can expect only greater enforcement activity and intervention by DOJ.

Those affected by this case, or similar fact patters, should pay close attention, and seek counsel if there are questions about their own industry conduct concurrently or retrospectively.

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