Whistleblower Laurie Simpson, a former Bayer employee who worked in the marketing division, claimed that the company breached the federal False Claims Act
The US Department of Justice (Justice Department) announced that Bayer has agreed to pay $40m to resolve claims over the alleged use of kickbacks and false statements pertaining to three prescription drugs Trasylol, Baycol, and Avelox.
The settlement is the result of lawsuits filed in 2005 and 2006 by whistleblower Laurie Simpson, a former employee of Bayer who was in the marketing unit. Simpson claimed that the firm violated the federal False Claims Act.
Bayer was accused of marketing the medications for off-label applications that were not reasonable nor essential. The company was accused by the whistleblower of offering kickbacks to hospitals and doctors to persuade them to use Trasylol and Avelox.
Additionally, the firm was charged with exaggerating Baycol’s efficacy. Bayer was also accused by Simpson of underplaying the safety risks of Trasylol. Along with the statin medication Trasylol was taken off the market for safety reasons.
Department of Justice Civil Division head principal deputy assistant attorney general Brian Boynton said “Simpson diligently pursued this matter for almost two decades.
“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.”
According to Simpson’s allegations, Bayer’s actions led to the submission of bogus Medicare and Medicaid claims for Avelox and Trasylol as well as the fraudulent renewal of some contracts for Baycol by the Defense Logistics Agency.
According to the Justice Department, Bayer will pay the federal government $38.9m. The company will also pay $1.1m to the 20 states and Washington, D.C., whose laws were allegedly breached.
Simpson will be paid nearly $11m of the settlement funds, said the department.
US Attorney for the District of New Jersey Philip Sellinger : “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.”
However, the pharma firm did not admit wrongdoing and said that the accord “reflects a business decision by the company that resolution was preferable to continuing already protracted litigation.”