(Reuters) — Bayer AG agreed to pay $40 million to settle claims over its alleged use of kickbacks and false statements related to three prescription drugs, the U.S. Justice Department said on Friday.
The settlement arose out of lawsuits filed in 2005 and 2006 in New Jersey by Laurie Simpson, a former Bayer employee who worked in its marketing department, accusing the German company of violating the federal False Claims Act.
Bayer did not admit wrongdoing when he agreed to settle.
In a statement, it said the settlement “reflects a business decision by the company that a settlement was preferable to continuing already protracted litigation.”
Bayer was accused of paying kickbacks to doctors and hospitals to get them to use Avelox, which treats strains of bacteria, and Trasylol, which controls bleeding in heart surgery, and marketed the drugs for off-label uses that weren̵7;t reasonable or necessary.
It was also accused of downplaying the risks of Trasylol and the statin drug Baycol, both of which were withdrawn from the market for safety reasons, and of overstating Baycol’s effectiveness.
Bayer’s conduct allegedly resulted in the submission of false Medicare and Medicaid claims for Avelox and Trasylol, and fraudulently induced the Defense Department’s Office of Combat Logistics to renew certain contracts related to Baycol.
“Such conduct undermines the integrity of federal health care programs and jeopardizes patient safety,” U.S. Attorney Philip Sellinger of New Jersey said in a statement.
The Justice Department said Bayer will pay $38.9 million to the United States and $1.1 million to 20 US states and Washington, DC, whose laws were allegedly violated.
Mrs. Simpson will receive $11.1 million in settlement proceeds. The Baycol trial was moved in 2008 to Minnesota.
The False Claims Act allows whistleblowers to sue on behalf of the US government and share in recoveries.