Bayer: What the Price Reports and Sales Messages Left Out

The Bayer pharmaceutical fraud settlement announced in 2022 required the company to pay $40 million over alleged kickbacks and false statements involving Trasylol, Avelox and Baycol. A former marketing employee brought the cases. The allegations reached inside the business: how safety figures changed, how medical messages reached prescribers, and how payments to physicians were recorded.

According to the Department of Justice’s September 2, 2022 announcement, the settlement resolved two whistleblower cases. The New Jersey case concerned Trasylol and Avelox promotion and alleged false claims to Medicare and Medicaid. The Minnesota case concerned Baycol and government purchasing contracts. These pharmaceutical fraud cases followed an earlier Bayer pricing case involving private-label Cipro and Adalat.

Bayer’s Private-Label Prices and Medicaid Rebates

Bayer’s 2003 private-label pricing case concerned discounts to a large health maintenance organization that the government alleged Bayer concealed when calculating Medicaid rebates. The federal health care fraud report for fiscal year 2003 calls it a “lick and stick scheme”: discounted, relabeled sales of Cipro, an antibiotic, and Adalat, a drug for high blood pressure. The inspector general’s account identified the buyer as Kaiser Permanente. In the government’s account, the buyer got cheaper drugs while taxpayers lost the benefit of the rebates those discounts should have generated.

The Medicaid rebate system makes the manufacturer’s commercial prices part of the government’s bill. A sufficiently deep discount to a commercial buyer can therefore increase what the manufacturer owes Medicaid across its covered purchases of that drug.

That is why the label mattered. Medicaid best price includes qualifying prices to health maintenance organizations, and its rules disregard special packaging, labels and product identifiers. Putting another label on a discounted drug does not erase the price paid for it. The alleged advantage was keeping a favored customer’s discount out of the calculation used for the public program.

The government report also says Bayer agreed to extend and strengthen its corporate integrity agreement with the Department of Health and Human Services’ inspector general to improve best-price reporting. The remedy reached the information going to the government, where the alleged rebate shortfall began.

Aventis later faced a separate private-label best-price settlement, involving Azmacort, Nasacort and Nasacort AQ. The government alleged that Aventis repackaged those nasal sprays under private-label agreements with Kaiser Permanente to avoid reporting a lower best price. Different products, the same alleged reporting device: the customer received the discount, and Medicaid’s calculation did not.

Bayer agreed to pay $14 million in an earlier marketing-the-spread case, resolved in 2001. There, the government described inflated reported prices used to attract providers with a larger margin between what they paid and what reimbursement would cover. It said that practice discouraged competition from manufacturers that refused to inflate their reported prices. The private-label case concerned a concealed low price. The spread case concerned an inflated high one.

Trasylol Promotion and the Safety Information Behind It

The Trasylol allegations concerned a drug used to control bleeding during certain heart surgeries. In the later settlement, the former Bayer marketing employee alleged that Bayer paid hospitals and physicians to use it, promoted uses that were not reasonable and necessary, and downplayed safety risks. The claimed connection to public spending was that those practices caused false Medicare and Medicaid claims.

The whistleblower’s amended complaint describes decisions inside marketing and medical affairs about which risks to investigate, what to tell prescribers and which evidence would appear independent of Bayer. The complaint alleges those decisions worked together to expand use of the drug.

The Patient Count Changed the Safety Story

The complaint alleged that a briefing prepared for the Food and Drug Administration’s 2006 advisory committee used patient-exposure counts 30% to 70% higher than figures Bayer had used internally in 2004. A larger patient count made the adverse-event percentages smaller. The safety picture allegedly improved through a change in the denominator.

The complaint also alleged that Bayer pooled lower-risk and higher-risk patients in ways that diluted heart-attack rates, even though most actual Trasylol use was in high-risk patients. For an employee working with clinical data, that is a concrete distinction: the population in the safety analysis and the population receiving the drug.

The alleged changes extended to an internal business plan. A draft prepared for 2003 identified higher heart-attack risk among Trasylol’s weaknesses. According to the complaint, product management directed staff to remove that information from the final plan. The draft and the final version told different stories about the same drug.

Another allegation concerned a trial completed in 1994. The complaint said valve-surgery patients receiving high-dose Trasylol had nearly twice the incidence of heart attack as those receiving placebo, and that Bayer never published the trial.

The complaint also described a meeting about a potential successor drug at which a medical-affairs executive questioned why Bayer should confuse the situation with data after someone raised a safety trial the FDA would want. According to the complaint, Bayer decided against conducting that trial.

Company Influence Presented as Independent Medicine

The complaint’s ghostwriting allegations describe how Bayer allegedly turned its influence over studies into apparent outside support for Trasylol:

In that account, the reprint was part of the sales effort. The alleged value of hiding Bayer’s involvement was that a physician or hospital decision-maker would see independent medical support where the manufacturer had helped shape the message.

Guidelines offered another route. According to the complaint, existing cardiology guidelines did not recommend routine Trasylol use for all patients. The complaint alleged that Bayer encouraged the Society of Thoracic Surgeons to seek a Bayer grant for new guidelines, while physicians connected to Bayer sat on the drafting committee and conflicts were not fully disclosed. It further alleged that Bayer presented those guidelines at Food and Drug Administration advisory meetings as independent evidence without disclosing its role in conceiving, influencing and funding them.

Sales Targets Beyond the Approved Use

The off-label promotion allegations included pediatric surgery, heart-valve procedures, orthopedic surgery and liver transplants. The complaint says Trasylol was not approved for children, yet Bayer put pediatric hospitals on sales representatives’ target lists and assigned quotas to those accounts. It also alleges that Bayer targeted orthopedic surgery as a growth opportunity after deciding against pursuing an orthopedic indication.

Target lists and quotas show whom sales staff were expected to reach. The safety analyses and guidelines show the message those customers were supposed to hear. The whistleblower’s case connected that activity to government-paid care.

Avelox Speaker Payments and Hidden Expenses

The Avelox allegations concerned payments and benefits intended to increase prescribing of Bayer’s antibiotic, approved to treat certain strains of bacteria. The same New Jersey case alleged promotion for uses that were not reasonable and necessary and resulting false claims to Medicare and Medicaid.

The complaint identified $2.7 million budgeted for speaker-alliance costs in 2003. It alleged that Bayer selected speakers willing to deliver its preferred messages, including using Avelox before culture and sensitivity testing. The complaint says the drug’s label directed those tests before treatment. It also described how Bayer allegedly dealt with physicians who favored restraint:

In this alleged speaker program, caution about antibiotic use was a reason to keep a physician off the stage.

Consulting payments allegedly served the same goal. The complaint described Clinical Advisory Panel dinners for high-volume prescribers, with one program paying physicians $250 to attend under consulting agreements. Those payments allegedly came from the Avelox marketing budget. The whistleblower alleged that the real purpose was to increase and reward prescriptions.

Educational grants also allegedly came with an understanding about the result Bayer wanted. According to the complaint, grants described as unrestricted would fund efforts to increase Avelox use, and Bayer or its trained speakers frequently influenced the content. The label on the payment and the instructions behind it pointed in different directions.

The alleged concealment reached the expense records:

A vendor invoice could therefore be part of the alleged prescribing arrangement. The complaint points to the person receiving the benefit, the commercial reason for providing it and the way the cost was hidden. Sales, finance and vendor-management staff may each recognize a different part of that account.

Baycol and the Government’s Purchasing Decision

The separate Baycol case alleged that Bayer downplayed safety risks and misrepresented the statin’s effectiveness compared with other statins to induce the Defense Logistics Agency to renew contracts.

The alleged safety omission concerned rhabdomyolysis. The purchasing allegation turns on what Bayer knew about the drug and what it told the agency to secure another contract.

The announcement also records that Baycol and Trasylol were subsequently withdrawn from the market for safety reasons. The Baycol whistleblower allegation tied the company’s representations to government contracts, giving the case a purchasing theory alongside the prescribing theories involving the other drugs.

The Foundation Fund Built Around Xofigo

Bayer also appears in the government’s allegations about the Patient Access Network Foundation’s copay-assistance funds. In its 2019 foundation settlement account, the government alleged that Bayer approached the foundation about a fund covering only radioactive drugs for metastatic castrate-resistant prostate cancer before Xofigo received Food and Drug Administration approval.

The government described Xofigo as radioactive and said the other major drugs for that condition were not. It alleged that the foundation opened the specially defined fund on May 16, 2013, one day after Xofigo’s approval. Defining assistance around that feature of the drug allegedly narrowed which treatments could benefit.

The foundation’s settlement shows a different alleged commercial decision involving Bayer: how the assistance fund was defined, rather than how a sales representative presented a drug or how a manufacturer reported its price.

What Evidence Is Needed to Prove Fraud?

The Bayer allegations point to records connecting a commercial decision with a government payment: customer discounts and price reports, clinical analyses and promotional messages, physician benefits and expense records, or representations supporting a purchasing contract. Our work with an insider is to connect what they know about those decisions to the public money affected.

The distinction between pricing and promotion also appears in Public Citizen’s 2010 study, Rapidly Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry, 1991 to 2010. It found that overcharging government healthcare programs accounted for the largest number of settlements in its study, while unlawful promotion accounted for the largest amount of financial penalties. Different practices leave different evidence.

The Bayer accounts make that practical. A revised business plan can show what disappeared from a message. A vendor’s expense records can show how a benefit reached a physician. A private-label sales agreement can show a discount missing from government reporting. The connection is between the business’s actual dealings and the account that reached the payer or prescriber.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Justice Department announced that the former Bayer marketing employee would receive approximately $11 million from the settlement proceeds. She brought and pursued both cases.

You Know What the Message Left Out

If you worked with drug-pricing reports, medical marketing, clinical data or physician payments, tell our whistleblower experts what changed between the internal record and the outside message. We work with you to build your strongest pharmaceutical whistleblower case, bring in pharmaceutical fraud whistleblower lawyers who understand the transactions involved, and remain your partners throughout it.