US court endorses whistleblower’s allegations about massive kickbacks for doctors prescribing multiple sclerosis medications.

On September 26, 2022, Boston-base pharmaceutical company Biogen Inc. agreed to pay US$900 million to settle a lawsuit, U.S. v. Biogen Inc. The suit was not, however, brought by the US government. Instead it was brought by former employee and whistleblower Michael Bawduniak in the US District Court for the District of Massachusetts under the FCA.

Under the qui tam provisions of the US’ False Claims Act, whistleblowers can sue on the government’s behalf as “relators”. If the case is successful, the whistleblower may win some of the money paid. The US government decides to formally intervene in cases less than 25% of the time.

If a case is settled or subject to court ruling, whistleblowers are eligible to receive 15% to 25% of any recovery in cases in which the government intervenes, and 25% to 30% where the government does not intervene. Bawduniak received US$266 million as his part of the settlement - as it was one where the US government did not intervene - in November 2022. The company paid the remainder of the settlement to the federal government and 15 states.

His lawyer, Thomas M. Greene, said this case is the largest win for a whistleblower suit on record.

Typically in such cases the law firm will agree to a percentage of the whistleblower’s settlement as payment since the whistleblower can rarely pay the law fees up front. This is in recognition of the fact that the law firm may have to cover tens of thousands of hours of work themselves, over many years, with no guarantee of winning.

In fiscal year 2022, whistleblowers filed 652 qui tam legal suits. The government and whistleblowers were ‘party to 351 settlements and judgments, the second-highest number of settlements and judgments in a single year,’ according to the US Department of Justice.

The numbers are huge to the average whistleblower; in the same year, False Claims Act settlements and judgements added up to more than US$2.2 billion.

Yet there is a great deal more serious wrongdoing that goes on than ever receives any reward or even recognition.

It has been a long road for Michael Bawduniak – one which he never envisaged he would end up taking.

The son of a nurse and a pharmaceutical executive, he enjoyed his profession and was pleased to start working for Biogen in 2004. He was bringing medicine to victims of a terrible debilitating disease and that felt good. He rose to the position of marketing manager.

He had previously worked for both of the two other manufacturers of multiple sclerosis drugs and had few illusions about how the industry worked, with one of his former employers also having settled a case with the US Government in 2011 related to illegitimate payments to doctors.

But by the time he left Biogen in 2012, he had witnessed things that caused him to file his legal suit before he walked out the front door. He alleged that the company had engaged in a massive kickback scheme to pay millions of dollars to health care providers to influence them to prescribe three of its multiple sclerosis drugs. Further, he said that he was demoted for trying to stop the kickbacks. Incentives that were given to doctors between 2009 and 2014 included speaking fees, consulting fees and meals.

What went on at Biogen from 2010 was by all accounts brazen even by the standards of the industry. The trigger seemed to be the imminent release of a competitor drug manufactured by Novartis. In response, Biogen management decided to protect their market share aggressively. As marketing manager, Michael Bawduniak was tasked with documenting, on a spreadsheet, the fifty top prescribers most likely to switch to the new Novartis offering, together with Bawduniak’s recommendation for what kind of incentive would keep them on board.

Michael Bawduniak refused to comply. Despite Biogen’s compliance department taking his side, in 2011 he was given the lowest-possible evaluation of his performance and demoted. He decided to seek legal advice – and his next steps were the biggest gamble of his life.

“It was like I went into a casino and put my entire life on Red,” he said. “It was the right thing to do. But it was a tough thing to do, when you are providing for a wife and kids. My career stagnated.”

“I had raised the issue of compliance within my organisation,’ he said, describing a downward spiral experienced by many whistleblowers. “I became that guy who was rocking the boat. I was demoted. Someone was brought in to manage me. My boss made it clear I needed to get out.”

Once the legal case came out in the open – from “under seal” – Bawduniak realised, “I am 100% unemployable.”

“What I’d worked for 30 plus years was gone,” he said. It’s a small tight-knit industry. When he ran into former close work mates, “they’d get in the same elevator and stare straight through me”.

But Bawduniak was sure in his reasons. Biogen spent millions of dollars on flying doctors to “somewhere nice”, giving presentations on how great the company’s products were, and then paying doctors for providing “feedback” on how great the company’s products were.

“If your husband walks into a doc’s office, and the doc just got a US$3,000 payment for a day’s ‘work’ from the pharma company, how objective will the doc be around his medical opinions?” he asked.

Many patients with MS receive treatments paid for by the US government via Medicare and Medicaid. Kickbacks are illegal.

“I don't like being a law breaker, and I don’t like bribing people,” he said.

Initially, it was the FBI who seemed most keen to speak to Bawduniak. In early 2012, at the agency’s request, Bawduniak recorded meetings with his superiors at Biogen using a concealed device, although federal prosecutors eventually decided not to pursue a criminal case.

It was at this point that Michael Bawduniak and his lawyers began to prepare their civil suit. The case was kept secret, under seal, for three years while the government decided whether to take it on themselves.

Despite the enormity of the case, Michael Bawduniak did not tell even those closest to him what he was doing. He didn’t even tell his wife that he had initiated the case until it was unsealed. “I didn't want to unleash a burden of stress on her,” he said.

He didn’t set out to land such a significant financial outcome, and didn’t know it would land where it did until just before settling the case. “I just wanted to get enough money that if my career was over, at least my life wasn’t over,” he said.

He told the Boston Globe that “people like myself are an anomaly … Doing the right thing isn’t always held in the highest of esteem because usually it reveals the wrongdoing of other people.”

His advice to other whistleblowers is to get a good lawyer who is a specialist in the area of whistleblowing, gather as much evidence as humanly possible before you say anything to anyone, and be sure about your case.

There are some good whistleblower protections out there, he said, but they’re often not properly enforced. He concluded, “The protections are commensurate with how powerful your adversary is. Qui Tam remedies are a good thing.”

Congratulations to Michael Bawduniak, winner of the 2023 Blueprint for Free Speech North America Whistleblower Prize.

Photo credit: Supplied by Michael Bawduniak