Bayer settles kickback and fraud allegations for $40 million

Sept. 2 (UPI) -- Bayer has agreed to pay $40 million to settle alleged violations of the False Claims Act, according to the Department of Justice. The settlement announced Friday arose from two lawsuits filed by a former Bayer employee.

Lauri Simpson's lawsuit charged that Bayer Corp. and related corporate entities paid kickbacks to hospitals and physicians to get them to use the drugs Trasylol and Avelox in treating patients.

Her suit alleged that Bayer caused false submissions to Medicare and Medicaid, breaking the law in 20 states and District of Columbia.

Simpson will receive some $11 million from settlement proceeds, according to the Justice Department.

"Simpson diligently pursued this matter for almost two decades," said Department of Justice' Civil Division head Brian M. Boynton in a statement. "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."

U.S. Attorney Andrew M. Luger said in the Justice Department statement that as alleged in the lawsuit, Bayer engaged in a series of unlawful acts, including kickbacks and marketing the drugs off-label while downplaying their safety risks.

Simpson's second suit against Bayer related to the statin drug Baycol. That civil action accused Bayer of downplaying the drug's risks and committing fraud by inducing the Defense Logistics Agency to renew contracts for Baycol.

Baycol and Trasylol were withdrawn from the market for safety reasons, according to the Justice Department.