December 2, 2008
For Bayer Healthcare LLC, November was a busy month with a near $100 million settlement and a new class action in New Jersey brought by consumers.
Bayer’s settlement with the Department of Justice (DOJ) ended a federal investigation into whether Bayer paid kickbacks to medical equipment suppliers who deal with diabetes patients. The largest kickback Bayer paid was approximately $2.5 million according to public reports. The payment allegedly went to Liberty Medical supply, the diabetes equipment supplier famous for its television ads featuring actor Wilford Brimley. Smaller amounts, a total of approximately $375,000, went to 10 other companies according to DOJ.
In exchange for the cash payments from Bayer, the suppliers allegedly recommended to their diabetes customers that they use Bayer electronic monitors and testing strips. Bayer and the suppliers disguised the kickbacks as payments for advertising. The suppliers were not charged in the investigation.
The suppliers who were paid the kickbacks by Bayer contract with the government to provide Medicare patients, meaning they submitted claims to Medicare for Bayer, from the late 1990s through last year. Kickback schemes like these are typically disclosed through whistleblowers who report potential fraud on the government through schemes such as this one where drug companies kickback money to suppliers.
Separately, consumers filed a proposed nationwide class action lawsuit against Bayer in federal court in New Jersey in mid-November. The class action is completely unrelated to the conduct at issue in the settlement with DOJ and follows a warning letter issued by the FDA to Bayer in early November over two over-the-counter drugs, Bayer Aspirin with Heart Advantage and Bayer Women’s Low Dose Aspirin + Calcium. The consumer class action in New Jersey against Bayer alleges that Bayer evaded FDA requirements in marketing the two aspirin-based drugs. Both products are marketed by Bayer as over-the-counter medications and one allegedly reduces the risk of heart disease and the other the risk of osteoporosis in women. According to the lawsuit, such claims require an approved new-drug application to be considered legal for marketing purposes. The lawsuit further alleges that Bayer used illegal marketing tactics aimed at patients fearing high cholesterol and heart disease and women who are combating osteoporosis.
The purported class action is being brought by consumers under the New Jersey Consumer Fraud Act and claims that one of the reasons that Bayer marketed the drug was to be able to charge customers a higher price than what is charge for over-the-counter aspirin.
Bayer also currently faces lawsuits over Cipro, which recently received a Black Box warning by the FDA relating to tendon ruptures and Trasylol, which was recalled in 2007.
If you or a loved one has been injured by a Bayer drug or purchased Bayer Aspirin with Heart Advantage and Bayer Women’s Low Dose Aspirin + Calcium, contact us today for further information about your legal rights and potential compensation.
