On December 18, the Justice Department announced that drug company Biogen, Inc., agreed to pay $22 million to settle a False Claims Act case related to Medicare fraud.
Charities Used to Hide Copay Kickbacks
When a Medicare patient buys a prescription drug covered by Medicare, they may have to make a partial payment like a copayment, coinsurance, or deductible. Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.
A brave whistleblower claimed that Biogen engaged in a kickback scheme by using two charitable foundations to pay the copays of Medicare patients to encourage those patients to purchase prescriptions for the company's drugs, which were covered by Medicare. As part of the scheme, Biogen worked with another company, Advanced Care Scripts, to transfer patients that were part of the company's free drug program to the foundations. Biogen then paid the foundations to cover the costs of copays for the transferred parties and Medicare paid the rest of the cost of the drugs.
“The resolution announced today, like prior settlements concerning similar misconduct, demonstrates the government’s commitment to hold accountable companies that pay kickbacks to undermine important constraints on rising drug costs,” said Acting Assistant Attorney Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “Drug companies that illegally manipulate charitable patient assistance programs to subsidize copays for their own products will be held accountable.”
Whistleblower To Receive Nearly $4 Million
The whistleblower sued Biogen under the False Claims Act, which allows whistleblowers to sue for fraud on behalf of the United States and to share in any recovery. The whistleblower in this case will receive approximately $3,960,000 of the settlement. Under the False Claims Act, whistleblowers are entitled to between 15 and 30% of the amount recovered.
If You See Medicare Fraud, Talk to An Experienced Whistleblower Attorney
Whistleblowers are critical to our system of law enforcement and to stopping corporate fraud. Our experienced whistleblower attorneys can help you navigate False Claims Act cases and other complex whistleblower laws.