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Biogen To Pay $22 Million To Settle DOJ Claims Alleging Copay Scheme

What’s New/Significant

The U.S. Department of Justice reached a $22 million settlement with Biogen Inc. on Dec. 17 to end allegations that the pharmaceutical company violated the False Claims Act (FCA) by paying through two foundations the copays of Medicare patients taking Avonex and Tysabri, Biogen’s drugs to treat multiple sclerosis.

The settlement resolves a whistleblower lawsuit filed under the FCA. The whistleblower will receive nearly $4 million from the settlement.


The suit filed in the United States District Court for the District of Massachusetts alleged that Biogen engaged in an illegal kickback scheme from 2011 to 2013 by using two 501(c)(3) foundations to pay the copays of Medicare patients in order to induce those patients to purchase Avonex and Tysabri prescriptions, which would be reimbursed by Medicare. 

Under the Anti-Kickback Statute, a pharmaceutical company is barred from paying or offering to pay, either directly or indirectly, any remuneration to induce Medicare patients to purchase the company’s drugs. This ban includes the payment of patients’ copay obligations.

According to the complaint, Biogen allegedly identified patients participating in its Avonex or Tysabri free drug programs for its vendor, Advanced Care Scripts (ACS), and then worked with ACS to transfer those patients to the foundations, the Chronic Disease Fund (CDF) and The Assistance Fund (TAF). The foundations received payments from Biogen and then covered the costs of Medicare copays for most or all of those patients. Medicare paid the remaining portions of the patients’ Avonex and Tysabri prescription claims.

Scope of Settlement

The settlement resolves allegations against Biogen without any determination of liability.

In a separate settlement, ACS agreed to pay $1.4 million for its role in the alleged scheme.