Boston: U.S.-based biotechnology company Biogen has agreed to pay approximately ₹162 crore, or $18.9 million, to settle a securities class-action lawsuit filed by investors over its Alzheimer’s drug Aduhelm. The lawsuit alleged that the company misled shareholders about the drug’s commercial prospects, market readiness and expected insurance coverage.
Settlement Filed In Massachusetts Court
The proposed settlement has been filed in a federal court in Massachusetts and will require court approval before it becomes final. If approved, it will end litigation that has been pending since 2022.
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The case drew attention from investors, the pharmaceutical industry and financial markets because of the controversy surrounding Aduhelm’s launch. The drug had been viewed as one of Biogen’s most important products and a potential major revenue driver.
Biogen has denied any wrongdoing or liability. The company maintained that the allegations lacked merit but agreed to resolve the matter to avoid the cost, uncertainty and distraction of prolonged litigation.
Investors Questioned Aduhelm Claims
The dispute traces back to 2021, when Aduhelm received accelerated approval from the U.S. Food and Drug Administration for the treatment of Alzheimer’s disease. Its approval soon became controversial, with scientists, healthcare experts and policymakers questioning whether sufficient evidence existed to show meaningful patient benefits.
According to the lawsuit, Biogen’s statements gave investors the impression that Medicare coverage for Aduhelm would be largely assured after FDA approval. Investors also alleged that the company suggested it had consulted extensively with healthcare payers regarding the drug’s annual price and reimbursement framework.
The plaintiffs argued that these representations created confidence in Aduhelm’s commercial future and led investors to believe that widespread adoption was likely.
Coverage Limits Hit Market Prospects
Medicare later imposed significant restrictions on coverage for Aduhelm, sharply limiting patient access and reducing demand for the drug. The restrictions affected the product’s market prospects and contributed to Biogen’s decision to discontinue commercialization efforts related to Aduhelm.
The lead plaintiff in the case was the Oklahoma Firefighters Pension and Retirement System, which pursued the claims on behalf of affected investors. Court filings indicate that shareholder attorneys may seek legal fees of up to one-third of the settlement fund, along with reimbursement of litigation expenses that could total nearly ₹13 crore.
The settlement comes shortly before the case was scheduled to go to trial. The resolution is expected to be closely watched in the pharmaceutical sector, where companies face growing scrutiny over investor communications about drug approvals, pricing strategies and reimbursement expectations.
