US pharmaceutical company Biogen has reached a US$900 million (RM4.14 billion) settlement with a whistle-blower who accused the firm of having paid bribes to doctors to encourage them to prescribe its drugs against multiple sclerosis.

The whistle-blower behind the report, Michael Bawduniak, will receive about US$250 million directly, according to a statement released yesterday by the US Justice Department.

The rest will essentially go to the federal government, and a smaller part – US$56 million – to 15 American states that had joined the lawsuit, to which the agreement puts an end.

Bawduniak, a former marketing executive at Biogen who left the company in 2012, took legal action using the False Claims Act, which authorises a private citizen to sue in civil cases on behalf of the US government if it appears that the state has been financially cheated by an individual or a legal entity.

The law allows for the whistle-blower to receive part of any compensation awarded by the courts.

In the case of Biogen, approximately 30% of the cost of treatments related to multiple sclerosis is covered by the Medicare, the federal health coverage programme dedicated to people aged 65 and over.

According to documents on file, the other major US government programme, Medicaid, supports about 10.5% of patients with the disease who are under age 65.

Biogen was accused of paying millions of dollars a year in kickbacks to doctors to get them to prescribe its drug Avonex, whose sales were declining, and its new treatment, called Tysabri.

Several other drugs for treating multiple sclerosis were in competition with Biogen’s products and were considered, according to the prosecution, to be just as effective.

In addition, in the case of Tysabri, it was considered to be an alternative to other treatments in the event of a lack of response to a first drug.

It also has to be administered intravenously, unlike its competitors, which could be ingested more easily.

The case relates to a period from 2009 to 2014.

Bawduniak “diligently pursued this matter on behalf of the United States for over seven years,” Deputy Assistant Attorney General Brian Boynton said.

“The settlement announced today underscores the critical role that whistle-blowers play in complementing the United States’ use of the False Claims Act to combat fraud affecting federal health care programmes,” he said in a statement. – AFP, September 27, 2022.