BIOGEN $900m record settlement and DOJ focus on compliance departments

Recently DOJ announced the record $900m settlement with Biogen after a long investigation that began in 2012 with a whistleblower claim by employee Michael Bawduniak who will receive the largest individual payout to one whistleblower of about $250m less attorneys fees. The complaint involved allegations of kickbacks provided to many physicians to prescribe Biogen's billion dollar MS drugs. The kickbacks alleged involved sham consulting agreements with top prescribers plus unnecessary Advisory boards where the same physicians were paid over and over again and invited to such events at lavish resorts all expenses paid by the company. What is even more alarming in this case is that the Biogen compliance personnel tried to intercede and audit the agreements and events however marketing played coy and refused to provide information. Compliance officers and departments are only effective if they have full authority from the top level of management who will enforce auditing efforts and vigilant oversight of marketing programs. While many will focus on the large whistleblower recovery amount there are even more important lessons here about having full CEO/BOD buy in to your compliance program and making sure compliance has all the resources and authority needed to avoid large record breaking settlements like the Biogen case. Additionally DOJ announced in May of this year (Dep AG Monaco Memo) that CEOs and CCOs will need to certify certain corporate resolutions when they are facing regulatory investigations and enforcement action. All of this highlights the critical need for Life Science companies to engage a Chief Compliance Officer at an executive level position and provide all necessary resources for the compliance department to carry out its responsibilities and regularly report to the CEO and BOD.