Bayer Corp. will pay $40 million to resolve alleged use of bribery and misrepresentation of three drugs | USAO-NJ
NEWARK, NJ – Bayer Corp., an Indiana corporation and pharmaceutical manufacturer, and its related entities, Bayer HealthCare Pharmaceuticals Inc., Bayer HealthCare LLC and Bayer AG (collectively “Bayer”), have agreed to pay $40 million dollars to resolve alleged violations of the False Claims Act in relation to the drugs Trasylol, Avelox and Baycol.
The settlement announced today stems from two “whistleblower” lawsuits filed and prosecuted by a former Bayer employee who worked in its marketing department.
In a lawsuit filed in the District of New Jersey, employee Laurie Simpson alleged that Bayer bribed hospitals and doctors to get them to use the drugs Trasylol and Avelox, and also marketed these drugs for off-label uses that were not reasonable and necessary. Simpson further alleged that Bayer downplayed the safety risks of Trasylol. The lawsuit alleged that as a result of this conduct, Bayer caused false claims to be submitted to Medicare and Medicaid programs and violated the laws of 20 states and the District of Columbia. Trasylol is a drug used to control bleeding during certain heart surgeries. Avelox is an antibiotic approved to treat certain strains of bacteria.
Simpson filed a second complaint regarding Bayer’s statin, Baycol, which was later transferred to the District of Minnesota. This lawsuit alleged that Bayer was aware of, but minimized, Baycol’s risks of causing a serious syndrome resulting from the death of muscle fibers and the release of their contents into the bloodstream. The lawsuit further alleged that Bayer misrepresented the effectiveness of Baycol compared to other statins and fraudulently induced the Defense Logistics Agency to renew certain contracts relating to Baycol. Subsequently, Trasylol and Baycol were withdrawn from the market for safety reasons.
“As alleged in the complaints, Bayer – one of the largest pharmaceutical companies in the world – engaged in a series of illegal acts, including paying bribes to doctors and hospitals, marketing off-label and minimizing their safety risks,” the U.S. attorney said. Philip R. Sellinger, District of New Jersey, said. “This resolution should send a message to the pharmaceutical industry that such conduct undermines the integrity of federal health care programs and compromises patient safety. This settlement reflects the importance of the whistleblower’s role in prosecuting False Claims Act actions on behalf of the United States, and we thank Ms Simpson and her attorney for stepping forward and pursue this case to its conclusion.
“Ms. Simpson has been diligently pursuing this case for nearly two decades,” said Senior Assistant Deputy Attorney General Brian M. Boynton, chief of the Justice Department’s Civil Division. highlights the critical role whistleblowers play in effectively using the False Claims Act to combat fraud in federal healthcare programs.”
“We recognize Ms. Simpson for her persistence in this case,” said U.S. Attorney Andrew M. Luger, District of Minnesota. “We are pleased that we were able to work with the parties to facilitate this resolution and help close this long-standing matter.”
Under the terms of the settlement, Bayer will pay $38.9 million to the United States and $1.14 million to the 20 states and the District of Columbia.
The two actions resolved by the settlement were brought under the who tam or the whistleblower provisions of the False Claims Act, which allow private citizens to sue on behalf of the government for false claims and participate in any recovery. The United States can intervene in the action or, as in this case, the whistleblower can pursue the matter. Ms Simpson will receive $11 million of the settlement proceeds.
The resolution achieved in this case was supported by a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey, the Commercial Litigation Division of the Department of Justice Civil Division, Fraud Section, and the U.S. Attorney’s Office of the District of Minnesota.
The government is represented by Assistant U.S. Attorney Kruti D. Dharia of the District of New Jersey’s Opioid Abuse Prevention and Response Unit, Senior Counsel Sanjay M. Bhambhani of the Commercial Litigation Division of the Civil Division, Fraud Section, and First Assistant U.S. Attorney Ann M. Bildtsen of the District of Minnesota.
The cases are subtitled United States ex rel. Simpson v. Bayer Corp. Civil. No. 05-cv-3895 (DNJ), and United States ex rel. Simpson v. Bayer Corp., civil. No. 08-cv-5758 (D. Minn).
The claims settled by this agreement are allegations only and there is no admission of liability.