Bayer agrees to pay $40 million to settle whistleblower claims

On Friday, the Justice Department announced that Bayer Corporation agreed to pay $40 million to settle allegations that it violated the False Claims Act by providing kickbacks and false statements related to three drugs.

Laurie Simpson, a former marketing department employee of Bayer, filed two whistleblower lawsuits against the company in 2005 and 2006, Reuters reported.

Simpson accused the manufacturer of paying kickbacks to physicians and hospitals for using two of the company’s drugs, Avelox and Trasylol. Avelox is an antibiotic used to treat certain bacteria. Trasylol was used to reduce bleeding during heart surgeries.

She further accused Bayer of marketing the two drugs for off-label uses that were not considered reasonable and necessary.

The lawsuits stated that the company understated the risks of using Trasylol and Baycol, lipid-lowering medication, consequently submitting false claims to Medicare and Medicaid.

Simpson argued that Bayer knew about the risks of the drugs but chose to downplay their associated side effects and overstate their effectiveness.

The alleged false submissions to Medicare and Medicaid caused the Defense Logistics Agency to renew contracts related to Baycol fraudulently. The lawsuits led to both Trasylol and Baycol being removed from the market.

“Simpson diligently pursued this matter for almost two decades,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “Today’s recovery highlights the critical role that whistleblowers play in the effective use of the False Claims Act to combat fraud in federal healthcare programs.”

“As alleged in the complaints, Bayer – one of the largest pharmaceutical companies in the world – engaged in a series of unlawful acts, including paying kickbacks to doctors and hospitals, marketing them off-label, and downplaying their safety risks,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “This resolution should send a message to the pharmaceutical industry that such conduct undermines the integrity of federal health care programs and jeopardizes patient safety. This settlement reflects the importance of the whistleblower’s role in litigating False Claims Act actions on behalf of the United States, and we thank Ms. Simpson and her counsel for stepping forward and pursuing this case to conclusion.”

Bayer Corporation agreed to settle the lawsuits for $40 million but did not admit wrongdoing. Simpson will receive $11 million in the settlement. Approximately $1.1 million of the funds will be paid to Washington D.C. and the 20 states where false claims were submitted. The rest of the money will be paid to the United States.