A federal appeals court has given a former Bayer employee a second chance at pressing a whistleblower lawsuit that accuses the drugmaker of illegally and deceptively marketing its Baycol cholesterol drug. However, the suit can only proceed on the grounds that Bayer cheated the US Department of Defense, not federal healthcare programs such as Medicare and Medicaid, of millions of dollars.
The lawsuit, which was filed seven years ago by a former market research manager named Laurie Simpson, may become a coda in the troubled saga of the cholesterol pill. Amid controversy, Bayer withdrew Baycol in 2001 after 52 deaths and hundreds of injuries were attributed to rhabdomyolysis, a breakdown of muscle fibers that led to kidney failure. The problem appeared to occur at higher doses.
Simpson, who also filed a separate whistleblower suit against Bayer over marketing of its Trayslol drug, alleges the drugmaker exaggerated Baycol efficacy and safety, downplayed risks, and concealed info about the dangers from doctors, the federal government and consumers. The lawsuit also claimed Bayer paid kickbacks to doctors and other providers to influence them to prescribe the pill, and these scripts would never have been written or paid for by the government had everyone been properly informed (the lawsuit is in two sections and can be read here and here).
Last year, a federal court judge dismissed the case and ruled that Simpson failed to meet the threshold for rule 9b of the False Claims Act, which refers to fraud claims with “sufficient specificity,” which is another way of saying that a whistleblower must provide very specific info about false claims a drugmaker submitted to the government for payment.
This level of detail may include amounts charged, drugs prescribed, patient diagnosis and individuals involved in billing. Toward that end, Simpson had submitted a spreadsheet listing over 30,000 examples of specific claims made through Medicaid programs in several states. But the appeals court upheld the lower court ruling that she failed to include specific allegations of how any product defect or failure may have influenced government payment decisions.
However, the US Court of Appeals for the Eighth Circuit did reverse the part of the lower-court ruling concerning the Department of Defense, which contracted with Bayer in 1999 – the year after Baycol was launched in the US – to provide the pill to service members. The initial, 18-month contract was worth $11.5 million, according to court documents.
Within a year, however, Department of Defense personnel were questioning Bayer over reports of rhabdomyolysis, but were repeatedly told there was either no evidence or insufficient data to suggest a relationship existed between Baycol and the malady. The Department of Defense subsequently renewed the contract for a one-year term that was worth nearly $11.9 million.
In her lawsuit, Simpson alleges that Bayer made false statements in order to induce the Department of Defense to renew its contract and that, had those assurances not been given, the agency would not have done so. And the appeals court agreed that the issue should be pursued and remanded the case for further proceedings. “We fail to see how these allegations are insufficient to state a claim for relief under a theory of fraud-in-the-inducement,” the appeals court wrote (here is the opinion).
We asked Bayer for comment and will update you accordingly. [UPDATE: A Bayer spokeswoman writes us to say the drugmaker is evaluating its options.]
Four years ago, by the way, Bayer agreed to pay $18.5 million to settle shareholder litigation over Baycol marketing. The lawsuits charged the drugmaker failed to disclose serious health risks and misrepresented its “prior knowledge” of Baycol dangers, while understating its potential liability for claims from patients and payors.
Last month, a federal court judge narrowed the claims for proceeding with the Trasylol lawsuit. US District Court Judge Jose Linares decided that government payments for Trasylol and the Avelox antibiotic were not conditional on off-label marketing. But he did allow Simpson to press her claims that Bayer engaged in kickbacks to generate prescriptions (here is the lawsuit and here is the ruling).
Trayslol was withdrawn from many markets, including the US, after a study called BART was halted early because patients given the drug had a more than 50 percent higher death rate than patients who got other, cheaper drugs. By then, Trasylol was already mired in controversy thanks to allegations that Bayer withheld side effect data, a charge the drugmaker refuted. Last year, though, the EMA decided the Trasylol suspension should be lifted after a review (back story).
STORY ENDS HERE
whistle pic thx to katerha on flickr