Biogen Is Accused of Giving Kickbacks to Doctorsby David Armstrong, The Wall Street Journal |
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A former Biogen Idee Inc. manager accused the company of providing illegal discounts to doctors in an effort to increase sales of flagging products, including its psoriasis drug Amevive.
In a lawsuit filed last month, the former employee, whose job entailed arranging payments for its products from federal insurance programs, said the company used a combination of free samples and price discounts to compensate doctors who ordered the drugs for patients but later were denied reimbursement by insurers.
The doctors received the price breaks when placing new orders, the lawsuit contends. Such an arrangement would violate the federal antikickback law because the program was designed to induce new orders, the lawsuit charges.
A Biogen spokesman said the company wouldn't discuss the specific allegations in the suit, brought in U.S. District Court in the District of Columbia, by Lisa Blanton, a former associate director for reimbursement. In a countersuit it has filed against her, Biogen said Ms. Blanton was terminated for poor job performance and was "very difficult to get along with."
The company also says Ms. Blanton and her attorneys made "extortionate demands for settlement payments" before filing the lawsuit. Her lawsuit, which claims she was wrongfully terminated, seeks at least $4 million in damages.
The Blanton lawsuit, filed Feb. 18, involves injected drugs administered in a doctor's office. With such drugs, a physician normally must purchase the product - often costing thousands of dollars -- and later seek reimbursement. The suit doesn't involve Tysabri, a multiple-sclerosis medicine that Biogen pulled from the market last week after two patients in a clinical trial developed a rare and often fatal nervous-system disorder.
In her suit, Ms. Blanton claims she was fired in January after seven years at the company in part because she repeatedly complained about programs she believed were illegal. In anticipation of Ms. Blanton's lawsuit, Biogen filed its own action in Massachusetts state court on Feb. 4, contending that Massachusetts was the proper forum for the action and asking the court to issue a declaratory judgment in the company's favor. Ms. Blanton has filed a motion to dismiss the Biogen lawsuit. Ms. Blanton's lawsuit claims Biogen failed to properly report and account for the doctor discounts, helping to inflate revenue because discounted sales were being recorded at full price. She also has filed a complaint with the U.S. Occupational Health and Safety Administration alleging Biogen violated provisions of the Sarbanes-Oxley law that prohibit public companies from discriminating against employees who report fraud.
One program Ms. Blanton complained about was called the "Security Program for Amevive," according to the lawsuit. She says in the suit the program was designed to "guarantee" reimbursement for doctors who ordered Amevive and later were denied payment by an insurer.
A typical course of Amevive costs about $12,000 per patient, and involves one shot a week for 12 weeks.
Ms. Blanton also charges that the company handed out free samples of the drug to reimburse doctors for losses
