In April 2003, Bayer Corporation paid a $251 million civil settlement and a $5.6 million criminal fine to settle a qui tam law suit brought by Getnick & Getnick LLP on behalf of a former Bayer marketing executive. The lawsuit alleged that Bayer engaged in a fraudulent “private labeling” scheme to avoid paying rebates to Medicaid for two popular drugs, Cipro and Adalat CC. The rebates are required by law to ensure that Medicaid receives the same discounts that drug makers give their commercial customers. Bayer gave deep discounts to two HMOs on the two drugs and put the HMOs’ drug code numbers on the labels instead of its own. Bayer then pretended that the HMOs were responsible for paying the rebate on this “private label” product even though it knew that the HMOs did not sell drugs to Medicaid or pay rebates. Getnick & Getnick’s client was awarded $34 million, representing 24% of the federal portion of the civil recovery.

See:

“Big Suits: U.S. v. Bayer,” The American Lawyer, June 2003.

Heather Smith, “Blowing the Whistle on Bayer,” The American Lawyer , June 2003.

Melody Peterson, “Bayer Agrees to Pay U.S. $257 Million in Drug Fraud, The New York Times, April 17, 2003.

Alice Dembner, “Dying executive drove landmark Medicaid case,” The Boston Globe, April 17, 2003.

Jennifer Heldt Powell, “Money wasn’t reason for alert on Bayer,” The Boston Herald, April 18, 2003.

Interview with Neil V. Getnick about $257 million qui tam settlement with Bayer Corporation, Corporate Crime Reporter, Vol. 17 No. 16, April 21, 2003.