Bayer to Pay $40 Million Over Whistle-Blower’s Bribe Claims

Bayer AG agreed to pay $40 million to resolve US lawsuits linked to allegations that company officials bribed hospitals and physicians to use its drugs.

The settlement stems from two “whistle-blower” suits filed by ex-marketing employee Laurie Simpson almost two decades ago and subsequent litigation by the US government, the US Justice Department said Friday in a statement. Simpson will receive about $11 million from the settlement, the department said.

Bayer didn’t admit wrongdoing as part of the deal with federal prosecutors, some state attorney generals and Simpson. The accord “reflects a business decision by the company that resolution was preferable to continuing already protracted litigation,” Chris Loder, a Bayer spokesman, said in an email.

The German-based company was accused of violating the US False Claims Act in connection with the drugs Trasylol, Avelox and Baycol, the department said. The lawsuits alleged unlawful actions, including paying kickbacks, marketing drugs off-label and downplaying their safety risks.

Bayer pulled Trasylol, a drug used in heart surgeries, off the market in 2007 after a Canadian study suggested that it increased death rates. The drugmaker also is accused of wrongfully downplaying the drug’s health risks. The company

In 2008, Bayer sent warning letters to doctors in Europe about incidents of severe liver and skin side effects in patients taking its Avelox antibiotic. Simpson alleged Bayer marketed Avelox for “off-label uses that were not reasonable and necessary,” according to the DOJ.

Three years later, Bayer withdrew its top-selling Baycol cholesterol-lowering drug over concerns about muscle weakness in some users and 31 deaths, according to the whistle-blower’s federal lawsuit filed in Minnesota. She sued Bayer over Trasylol and Avelox in New Jersey.

Simpson also alleged Bayer and some US units caused the submission of false claims to Medicare and Medicaid programs and violated the laws of 20 states and Washington, D.C. In court filings, Simpson said Bayer engaged in wrongful Trasylol marketing, including “off-label marketing and payment of kickbacks” to beef up its market share.

While individual doctors may prescribe an approved drug for any reason, companies can market them in the US only for purposes authorized by the Food and Drug Administration. Trying to get physicians to sell drugs for non-approved uses amounts to wrongful off-label marketing.

In securities filings, Bayer officials acknowledged they paid more than $1.1 billion to settle with more than 3,000 ex-Baycol users who sued over injuries they blamed on the drug.

The case is Simpson v. Bayer, 05-cv-3895, US District Court, District of New Jersey (Newark).

Photo: The Bayer AG logo sits on banners outside the Bayer CropScience AG research and development facility in Frankfurt, Germany. Photographer: Alex Kraus/Bloomberg

Topics Claims