Michael Bawduniak’s heart was racing when the Biogen marketing manager met with his boss at the drug firm’s headquarters in Weston.
His relationship with Tony Kingsley, he says, had soured after Bawduniak balked at what he describes as an increasingly brazen scheme to give doctors millions of dollars in kickbacks to prescribe Biogen’s lucrative multiple sclerosis drugs. But he had more on his mind that day in early 2012 than his bleak future at Biogen.
He was secretly taping the meeting in Kingsley’s office at the FBI’s request. Inside his shirt pocket he had hidden a small audio recorder that authorities hoped would capture incriminating evidence.
“Because of my refusal to perform noncompliant activities,” he recalled telling Kingsley, “my career here is ruined.” Kingsley, who ran commercial operations as executive vice president of the Fortune 500 company, changed the subject. Bawduniak wondered whether he suspected he was being taped.
Bawduniak recorded 11 conversations with Biogen executives for the FBI that winter, he says, and Kingsley was the highest ranking. But federal prosecutors opted not to pursue a criminal case.
Ten years later, however, Bawduniak feels vindicated.
He received $266.4 million last month as a result of a federal whistle-blower lawsuit he filed in 2012 against Biogen, now based in Cambridge. The money is part of $900 million that the firm paid the federal government and 15 states to settle the civil case. His award is the largest in a whistle-blower suit on record, according to his lawyer, Thomas M. Greene, of Boston, who declined to disclose how much he was paid out of the settlement.
The suit alleged that Biogen paid hundreds of doctors for sham speaking and consulting programs that were actually kickbacks and defrauded Medicare and Medicaid, which covered the drugs the physicians prescribed. Federal law allows a private citizen to sue for fraud on behalf of the government and, if successful, obtain part of the award. Biogen’s settlement and Bawduniak’s cut were finalized on Sept. 26.
Now, in his first interview since the announcement, Bawduniak said he never expected such a staggering windfall. He didn’t even inform his wife he had filed the suit for roughly two years because he didn’t want to worry her, and only told his two adult sons last Christmas, nine years after litigation started.
The son of a pharmaceutical executive and a registered nurse, he said he had loved working in the drug industry and knew the suit would ultimately end his career, regardless of its outcome. Nonetheless, Bawduniak said, he couldn’t stomach how Biogen allegedly spent millions to woo doctors to prescribe Avonex, Tysabri, and Tecfidera instead of drugs by rival companies.
“It went from dabbling in a gray area to jumping both feet across the line,” said Bawduniak, 56, who has lived in the Philadelphia area all his life and would stay at hotels for a couple of weeks a month when working on site at Biogen. He filed the suit in April 2012, two months before he left Biogen to work for the French pharmaceutical giant Sanofi in the United States.
The day the settlement was finalized, Biogen denied it did anything wrong and noted that it had not admitted to any liability. The firm said it settled to “remain focused on our patients and strategic priorities.” Biogen recently told the Globe it had nothing to add to that statement.
Kingsley, now chief executive of the privately held New York City-based biotech Stablix, said he didn’t learn that Bawduniak taped him until many years later and was “quite surprised.” He denied Bawduniak’s allegations that Kingsley orchestrated payoffs to doctors.
“I am not aware of any kickback scheme while I was at Biogen,” Kingsley, who left the firm in late 2015, said last month in a Globe interview.
Although accusations of payoffs have buffeted the pharmaceutical industry for decades, Biogen’s purported scheme was unusual because of its breadth and brazenness, according to Jacob Elberg, a former federal prosecutor in New Jersey and health care fraud expert who teaches at Seton Hall Law School.
“It’s a matter of degree,” said Elberg. “The conduct alleged is the kind of thing that was much more common in the industry 20 years ago and is really, many of us like to believe, much less common in the industry now.”
From 2009 to 2014, Biogen held 255 illegitimate meetings with doctors who were high prescribers — the firm called them “key opinion leaders” — of its multiple sclerosis drugs, according to Bawduniak’s trial brief. Biogen fêted doctors at pricey steakhouses and country clubs; provided free annual trips to San Diego for as many as 200 doctors, some of whom played at the renowned Torrey Pines Golf Course; and paid prescribers millions of dollars in honoraria — all under the guise of soliciting “consultant feedback.” It was Bawduniak’s job to help set up events.
The alleged scheme targeted 1,200 doctors who wrote 60 percent of the prescriptions for Biogen’s “immune modulating drugs,” according to the trial brief. Multiple sclerosis patients often begin taking those medicines as relatively young adults and use them for the rest of their lives. Multiple sclerosis is a chronic disease of the brain and spinal cord in which the body’s immune system attacks the protective sheath covering nerve fibers.
The annual cost of Avonex, Tysabri and Tecfidera ranged from $62,394 to $64,233 in 2013, according to a study published two years later in the journal Neurology. The drugs remain on the market.
Bawduniak had worked for two other makers of multiple sclerosis drugs before he joined Biogen in 2004, and noted that allegations of kickbacks weren’t unique to the Massachusetts biotech. His prior employer, EMD Serono, and its affiliates paid $44.3 million in 2011 to settle allegations they paid off doctors from 2002 through 2009 to prescribe Rebif, another medicine for the disease.
But after Kingsley arrived in 2010 and a major competitor, Swiss drug giant Novartis, prepared to roll out the first multiple sclerosis drug in a capsule, Biogen got more audacious in defending its market share, Bawduniak said. He was directed to fill in a spreadsheet of the 50 top prescribers of Biogen’s drugs who were most at risk for switching to Novartis’s new medicine, Gilenya, and to indicate how Bawduniak’s team intended to woo them — to document planned payoffs, in Bawduniak’s view.
“I just said, ‘This isn’t a good idea. I’m not going to do it,’” he said. He went to his firm’s compliance department, which backed him up, he said, but continued to get pressure to do it and refused.
In 2011, Bawduniak said, he received the lowest possible performance evaluation and was demoted from his job as an interim marketing director.
Around that time, he said, he contacted Greene. The lawyer has represented multiple whistle-blowers who have sued corporations under the False Claims Act, the federal law passed during the Civil War to fight fraud by suppliers to the Union Army.
Greene helped arrange a meeting with federal prosecutors who were interested in whether Biogen might have broken criminal laws. FBI agents got Bawduniak to tape conversations with employees in person and on the phone in early 2012. After Bawduniak taped Kingsley, he drove to a nearby Westin Hotel to hand the recorder to an agent.
“I was under a great deal of stress and paranoia,” Bawduniak recalled. “I thought everyone knew I was taping.”
But prosecutors did not pursue a criminal case. A spokeswoman for Rachael S. Rollins, who was confirmed as US attorney for Massachusetts last December, declined to explain why, saying, “We do not comment on internal deliberative processes.”
Reuben Guttman, a whistle-blower lawyer in Washington, D.C., who helped the government obtain large settlements in cases involving criminal and civil allegations against Pfizer in 2009 and Abbott Laboratories in 2012, said he was surprised prosecutors didn’t pursue criminal charges against Biogen. But he noted that criminal cases have a higher burden of proof than civil cases.
Not long after the government’s decision, Bawduniak filed his suit. It was kept under seal for more than three years while the government decided whether to “intervene,” or take it over. Whistle-blower suits lead to settlements more often if the government takes over cases, but prosecutors intervene less than 25 percent of the time, according to veteran whistle-blower lawyers. In July 2015, the government opted not to intervene — Rollins’s spokeswoman again declined to say why — letting Bawduniak’s team of seven attorneys pursue it on its own.
The case was then unsealed and Bawduniak’s name made public. The timing, he said, couldn’t have been worse. He was working as a regional business director at Sanofi and had a performance evaluation scheduled with his supervisor at a Nashville hotel.
Bawduniak entered the hotel restaurant and spotted the supervisor staring at his open laptop at a table. After Bawduniak walked over, he said, the supervisor turned the screen to face him. It was a news story reporting that Bawduniak had blown the whistle on Biogen.
“Do you care to tell me what this is all about?” the Sanofi supervisor said, according to Bawduniak.
“It speaks for itself,” Bawduniak replied.
“Well, everyone at the home office has seen this,” he said the supervisor responded. “No one trusts you any longer. I don’t trust you any longer.”
A Sanofi spokeswoman said the company had no comment.
Bawduniak stayed at Sanofi, however. That firm also makes multiple sclerosis drugs and hired several former Biogen employees while he worked there, he said. Occasionally, he would bump into them at meetings, and they would ignore him.
“People like myself are an anomaly,” he said. “Doing the right thing isn’t always held in the highest of esteem because usually it reveals the wrongdoing of other people.”
A tentative settlement with Biogen was announced on July 26, six days before the case was to go to trial in US District Court in Boston. Under the agreement, Biogen paid $843.8 million to the federal government and $56.2 million to 15 states.
The alleged fraud caused government insurers to pay $640.1 million to $951.7 million for medications that were prescribed as a result of kickbacks, according to Meredith Rosenthal, a health economics professor at the Harvard T.H. Chan School of Public Health hired by Bawduniak to calculate damages.
These days Bawduniak won’t say whether he plans to stay at Sanofi. The nonprofit Taxpayers Against Fraud honored him in October as the Whistleblower of the Year in Washington, D.C. He said he might get more involved in the group.
As for his newfound fortune, Bawduniak said he has no desire to buy anything extravagant.
“I have no plans for mansions and yachts,” he said. “I’m a simple guy.”
Jonathan Saltzman can be reached at email@example.com.