On September 26, 2022, the United States Department of Justice (DOJ) announced a $900 million settlement with pharmaceutical company Biogen Inc., which arose from alleged violations of the federal False Claims Act (FCA) and Anti-Kickback Statute (AKS) tied to payments from the company to physicians, which were allegedly intended to induce prescription of Biogen’s drugs. The matter initiated as a qui tam whistleblower complaint filed by an employee under the FCA.
According to the DOJ, alleged kickbacks and other improper payments were made “in the form of speaker honoraria, speaker training fees, consulting fees and meals” to physicians and other providers who attended company events, training meetings, and consultant programs, in violation of the AKS. The DOJ took the position that these alleged AKS violations resulted in the submission of false claims to Medicare and Medicaid (which appear to be the claims for reimbursement of its drugs prescribed by practitioners who received alleged kickbacks) in violation of the FCA.
This settlement is notable not only for its significant amount, but also because it is another example of the significant fraud and abuse concerns the DOJ has with so-called “speaker bureaus” or similar speaker programs sponsored by pharmaceutical and device manufacturers. These programs often involve payments and other transfers of value to providers in a position to prescribe those manufacturers’ items, and thus are subject to close scrutiny under the AKS.
We have previously covered similar enforcement actions and DOJ guidance concerning such arrangements here, here, and here. This matter appears to have originated before those prior enforcement actions, but the significant settlement in this case underscores DOJ’s ongoing scrutiny of speaker programs and similar arrangements involving prescribing practitioners. It also re-emphasizes the exposure to whistleblower suits that all health care organizations may have under the FCA arising from potential non-compliance as well as the need to ensure effective compliance programs are in place to proactively address issues.
*This post was co-authored by Erin Howard, law clerk at Robinson+Cole. Erin is not yet admitted to practice law.