Kessler Topaz Meltzer & Check, LLP: Bayer Corporation to Pay $40 Million to Settle Whistleblower Claims Alleging Fraud in Marketing Three Drugs

The law firm of Kessler Topaz Meltzer & Check, LLP (www.ktmc.com) announces today that Bayer Corporation (“Bayer”) has agreed to pay $40 million to resolve claims in two longstanding, whistleblower lawsuits alleging that Bayer violated anti-fraud laws in selling and promoting three drugs, Trasylol, Avelox and Baycol. In addition, Bayer agreed to pay a separate amount to resolve claims that it unlawfully retaliated against the whistleblower who raised her concerns to superiors.

The cases were brought under the False Claims Act by a former Bayer employee, on behalf of the United States and numerous states. The settlement covers two whistleblower lawsuits. The first, U.S. ex rel. Simpson v. Bayer Corp., et al. (D.N.J.) filed in 2005, alleged that Bayer paid illegal kickbacks in connection with two drugs, Trasylol and Avelox; promoted Trasylol for uses that were not reasonable and necessary under Medicare’s payment rules; and terminated the whistleblower for raising concerns internally. In the Complaint, Bayer was alleged to have paid illegal kickbacks to healthcare providers in the form of honoraria, grants, speaker program fees, entertainment, travel and other benefits, including to attend medical meetings that were alleged to be promotional. Bayer was further alleged to have promoted Trasylol, an inpatient drug indicated for specific types of heart surgeries, for off label and unreasonable uses by, among other things, misrepresenting its safety risks and overstating its efficacy.

The second lawsuit, U.S. ex rel. Simpson v. Bayer Corp, et al. (D. Minn.), filed in 2006, alleged that Bayer fraudulently induced the U.S. Department of Defense to enter into contracts for its statin drug, Baycol, by misrepresenting and omitting information related to serious adverse effects associated with the drug.

Both cases were filed under the False Claims Act, which encourages private citizens to fight fraud against the government by bringing a whistleblower lawsuit. Under the FCA, successful whistleblowers may receive a monetary reward of between 15 and 30 percent of the government’s recovery. The False Claims Act also prohibits retaliation against whistleblowers.

Kessler Topaz has represented the whistleblower since 2014, with the whistleblower and her counsel devoting extensive time and expense towards litigating these non-intervened cases. Resolving these cases involved extensive discovery and the review of millions of pages of documents; the retention of multiple expert witnesses; and the litigation of numerous dispositive motions, discovery motions and appeals. It resulted in several important judicial opinions at both the appellate and district court level.

“This case again reaffirms the critical role that whistleblowers can play. Our client courageously stepped forward to challenge Bayer’s conduct and demonstrated incredible dedication and sacrifice in pursuing these matters for so long,” said David Bocian, a former federal prosecutor and head of Kessler Topaz’s Whistleblower and False Claims Act Litigation practice group. Kessler Topaz Counsel, Asher Alavi, whose practice is dedicated to whistleblower representation, added that the Trasylol case demonstrates that the False Claims Act and the Anti-Kickback Statute are powerful tools in addressing how pharmaceutical companies promote and sell inpatient drugs to hospitals and other providers. Alavi cited the published opinion on the parties’ cross-motion for partial summary judgment, which held that the Government’s payment mechanism for inpatient drugs cannot be used to insulate a defendant from liability for fraud.

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Kessler Topaz specializes in the prosecution of complex litigation on a contingent basis, litigating matters against the largest multi-national corporations and the most sophisticated defense firms. Since the Firm’s founding it has recovered billions of dollars for its clients, developed a worldwide reputation for success, and repeatedly been named as one of the nation’s most prominent plaintiffs firms. The litigation team additionally included the firm of Carella, Byrne, Cecchi, Brody & Agnello, P.C., led by partner James E. Cecchi, a leading law firm in the New Jersey - New York metropolitan area that serves a diverse clientele ranging from small businesses to Fortune 500 corporations.

Kessler Topaz’s Whistleblower and False Claims Act Litigation practice group includes former federal and state prosecutors with extensive experience litigating health care, securities, corporate and government contract fraud and attorneys who dedicate their practice to representing whistleblowers. The practice group is run by Partner, David Bocian and Counsel, Asher Alavi.

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