The U.S. Attorney’s Office for the District of Massachusetts announced on December 17, 2020 that Cambridge-based pharmaceutical company Biogen Inc. (Biogen) has agreed to pay $22 million to resolve allegations that it violated the False Claims Act by illegally using two foundations, Chronic Disease Fund (CDF) and The Assistance Fund (TAF), as conduits to pay the Medicare co-pays for patients taking Biogen’s multiple sclerosis (MS) drugs, Avonex and Tysabri.
Advanced Care Scripts (ACS), a specialty pharmacy that performed services for Biogen, has agreed to pay $1.4 million to resolve allegations that it conspired with Biogen to enable Biogen to use CDF and TAF as conduits for Biogen to pay Medicare co-pays for Avonex and Tysabri patients.
In separate settlements in late 2019, CDF paid $2 million and TAF paid $4 million to resolve allegations concerning their respective roles in enabling certain pharmaceutical companies to pay kickbacks to Medicare patients.
The government alleged that Biogen, acting with ACS’s help, used CDF and TAF, each of which claimed status as a nonprofit organization for tax purposes, as conduits to pay the co-pay obligations of thousands of Medicare patients taking Avonex and Tysabri. According to the government’s allegations, Biogen used CDF and TAF, which Biogen paid, to cover Avonex and Tysabri patients’ co-pays to induce those patients’ Medicare-reimbursed purchases of the drugs.
The Special Agent in Charge of the FBI Boston Division stated in reference to the announced settlement, “Biogen tried to unfairly boost its bottom line by working with Advanced Care Scripts to bill Medicare for those who were already receiving their drug for free, undermining Medicare’s co-pay structure which was set up to safeguard against inflated drug prices. Kickback schemes like this one undermine our healthcare system, can compromise medical decisions, and waste taxpayer dollars. The FBI will continue to work with our partners to hold accountable those who conspire to disguise kickbacks as charitable contributions, at the expense of the Medicare program.”
The First Assistant United States Attorney stated, “Biogen coordinated with ACS to game the system, time its payments, and direct its money to cover co-pay costs for patients using its drugs. By using co-pay foundations this way – as a conduit to pay for co-pays for Biogen patients – Biogen violated the anti-kickback statute and undermined Medicare’s co-pay structure, which Congress designed to safeguard against inflated drug prices. We commend ACS for resolving this matter expeditiously and Biogen for resolving this matter on a cooperative basis.”
The False Claims Act settlements resolve allegations originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The relator will receive approximately $3.96 million of the recovery.
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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