United States District Court, D. Massachusetts
UNITED STATES OF AMERICA, et al., ex rel. MICHAEL BAWDUNIAK, Plaintiffs-Relators,
BIOGEN IDEC, INC., Defendant.
MEMORANDUM & ORDER
TALWANI, UNITED STATES DISTRICT JUDGE
Michael Bawduniak and Fernando Villegas's Third
Amended Complaint (“Complaint”) [#132]
charged Defendant Biogen Idec, Inc. (“Biogen”)
with causing health care providers to file fraudulent
Medicare and Medicaid reimbursement claims in violation of
the False Claims Act, 31 U.S.C. § 3729, et
seq., and various state laws, by paying kickbacks to
influence them to prescribe of Biogen's multiple
sclerosis (“MS”) products (the qui tam
claims), and with retaliating against Villegas in violation
of 31 U.S.C. § 3730(h). The court allowed in part
Defendant's Motion to Dismiss [#137] for lack of
subject matter jurisdiction, dismissing Villegas's (but
not Bawduniak's) claim under 31 U.S.C. § 3730(b).
Mem. & Order [#166]. Now before the court is Biogen's
Motion to Dismiss Relators' Third Amended Complaint
Pursuant to Rules 8, 9(b), and 12(b)(6) [#139]. For the
reasons set forth below, the motion is ALLOWED as to
Villegas's retaliation claim and as to certain state
qui tam claims, but is otherwise DENIED.
Overview of the Allegations
court's recitation of the facts is limited to a brief
overview of Relators' substantive allegations, with
further details provided as relevant below.
allege that Biogen paid illegal kickbacks to healthcare
providers by retaining providers in sham consulting and
speaking programs, in order to increase prescriptions of
Biogen's MS drugs Avonex, Tysabri, and Tecfidera. With
regard to the sham consulting programs, Biogen held dozens of
consulting meetings with hundreds of physicians,
“liberally paying consulting fees to the physicians who
attended.” Compl. ¶ 9. The physicians were
selected based on their prescribing volume and ability to
influence peers rather than expertise on the topic of the
consulting meeting. Id. ¶¶ 9-10. Relators
allege that Biogen “retained far more consultants than
it required, and never did anything with the expensive
‘consulting product' that it received.”
Id. ¶ 10.
regard to the alleged sham speaking programs, Biogen trained
physicians to speak to other physicians about Biogen's
products. Id. ¶ 11. Biogen paid physicians both
when they obtained training and again when they gave
presentations. Id. Biogen “constantly”
trained speakers, though most would present only twice, or
less, a year, and many presented only to a single person.
Id. Relators allege that like the consultants,
speakers were selected based on prescribing ability, not
speaking ability. According to the Complaint, “[g]iven
that there was no demand for additional presentations . . .
and that there were many experienced speakers who could
handle what little demand existed, the expansion of the
speaking program was a complete sham operated solely to pay
physicians to remain loyal to Biogen.” Id.
and 2010, Biogen paid $18 million to 1, 500 physicians and
nurses, who collectively wrote prescriptions totaling
approximately 60% of the MS market. Id. ¶ 2.
Relators allege that though Biogen's internal Compliance
Department routinely expressed concerns that there were too
many meetings, too many consultants, and too many payments,
these concerns were disregarded by Biogen's marketing
executives. Id. ¶ 13.
reviewing a motion to dismiss, the court “accept[s] as
true all well-pleaded facts, analyzing those facts in the
light most hospitable to the plaintiff's theory, and
drawing all reasonable inferences for the plaintiff.”
U.S. ex. rel. Kelly v. Novartis Pharm. Corp., 827
F.3d 5, 11 (1st Cir. 2016) (quoting U.S. ex rel.
Hutcheson v. Blackstone Med. Inc., 647 F.3d 377, 383
(1st Cir. 2011)).
Rule of Civil Procedure 9(b) requires that “[i]n
alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or
mistake, ” while “[m]alice, intent, knowledge,
and other conditions of a person's mind may be alleged
generally.” Relators are “required to set forth
with particularity the who, what, when, where, and how of the
alleged fraud.” U.S. ex rel. Ge v. Takeda Pharm.
Co., Ltd., 737 F.3d 116, 123 (1st Cir. 2013) (internal
citation and quotation marks omitted); see also Lawton ex
rel. U.S. v. Takeda Pharm. Co., Ltd., 842 F.3d 125, 130
(1st Cir. 2016).
is, however, “a difference between qui tam actions
alleging that the defendant made false claims to the
government and those alleging that the defendant induced
third-parties to file false claims with the
government.” U.S. ex rel. Nargol v. DePuy
Orthopaedics, Inc., 865 F.3d 29, 39 (1st Cir. 2017)
(quoting Lawton, 842 F.3d at 130). In the latter,
indirect type of action, the court must “apply a more
flexible standard.” Id. “[W]here the
defendant allegedly induced third parties to file false
claims with the government a relator could satisfy Rule 9(b)
by providing factual or statistical evidence to strengthen
the inference of fraud beyond possibility without necessarily
providing details as to each false claim.” Id.
(quoting U.S. ex rel. Duxbury v. Ortho Biotech Prods.,
L.P., 579 F.3d 13, 29 (1st Cir. 2009)) (internal
quotation marks and omission omitted).
Pleading Anti-Kickback Statute Violations with
contends that the purported underlying violations of the
Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, on which
Relator's fraudulent claims reimbursement allegations are
based, have not been pled with the specificity required by
Anti-Kickback Statute prohibits the knowing and willful offer
or payment of “any remuneration (including any
kickback, bribe, or rebate) directly or indirectly, overtly
or covertly, in cash or in kind to any person to
induce such person” to “purchase, lease,
order, or arrange for or recommend purchasing, leasing, or
ordering any good, facility, service, or item for which
payment may be made in whole or in part under a Federal
health care program.” 42 U.S.C. § 1320a-7b(b)(2)
(emphasis added). These provisions were “intended to
strengthen the capability of the Government to detect,
prosecute, and punish fraudulent activities under the
[M]edicare and [M]edicaid programs, . . . because fraud and
abuse among practitioners . . . is relatively difficult to
prove and correct.'” U.S. ex rel. Greenfield v.
Medco Health Solutions, Inc., 880 F.3d 89, 96 (3d Cir.
2018) (quoting H.R. Rep. No. 95-393, at 1, 27 (1977))
(quotation marks omitted).
alleges throughout the Complaint that Biogen identified and
paid top prescribers to keep prescriptions at profitable
levels, and did so by retaining the prescribers as
consultants and hiring them as speakers. See, e.g.,
Compl. ¶ 1 (“The goal of [Biogen's] kickback
scheme was . . . to preserve the eroding market share of
Biogen's . . . product Avonex; increase the market share
of its . . . product Tysabri, and to ensure that its new oral
MS drug, Tecfidera, once approved, would be prescribed at a
high rate. Biogen knowingly identified the top prescribers
and paid them millions of dollars to keep their prescriptions
at profitable levels.”); id. ¶ 8
(“Biogen expanded [its mechanisms for retaining
physicians as consultants and hiring them as speakers] so
that its . . . consulting and speaking schemes were . . .
conduits for the channeling of illegal payments to . . . high
prescribers.”); id. ¶ 10 (“Biogen
did not pay doctors to consult unless they were high
prescribers . . . .[Biogen] retained far more consultants
than it required, and never did anything with the expensive
‘consulting product' that it received.”);
id. ¶ 11 (“Speakers are paid when they
obtain training and paid again when they present, even if no
one attends the scheduled meeting. Biogen constantly trained
speakers . . . even though most speakers would only present
twice (or less) a year and many presented only to a single
person . . . . Biogen selected all speakers based on their
prescribing ability, not their speaking ability.”);
id. ¶ 53 (“Just 300 neurologists . . .
write 30% of all [MS treatment] prescriptions. 1, 200
prescribers write 60% of [MS treatment] prescriptions. Biogen
devised a way to identify and target the doctors who wrote
60% of prescriptions for MS . . . and thus would provide the
‘most bang for the buck.'”); id.
¶ 73 (“None of the feedback from any of the
[consulting] meetings was ever used by Biogen. After an
Executive Summary was prepared, no one expressed any interest
in the opinions of Biogen's expensive
responds that its payments to physicians were exactly the
kind of personal services contracts protected by the
statutory safe harbor adopted by Congress and that the
Complaint fails to plead with specificity Defendant's
failure to comply with the safe harbor requirements.