Consumer Fraud

Whistleblower Lawsuit Against Bayer Revived by U.S. Appeals Court

Pills Stethascope on Money 435x289 Whistleblower Lawsuit Against Bayer Revived by U.S. Appeals CourtA whistleblower suing Bayer A.G. in connection to a statin drug that was pulled from the market in 2001 over health risks has had her case revived by a federal appeals court for the second time.

According to Business Insurance, Laurie Simpson filed a whistleblower lawsuit against the Germany-based drug giant and its units under the False Claims Act, which authorizes private parties to sue on behalf of the U.S. government in cases of suspected fraud targeting taxpayer-funded programs and government agencies.

Ms. Simpson’s whistleblower suit accuses Bayer of misrepresenting the efficacy of its cholesterol-lowering statin Baycol compared with competing drugs. She also alleges Bayer paid illegal kickbacks to physicians to get them to boost Baycol prescriptions among their patients and capture a large share of the statin market.

She also claims Bayer fraudulently induced the Department of Defense into two Baycol-purchasing contracts. These unlawful activities, Ms. Simpson alleges, amounted to submissions of false claims to the government.

Baycol was linked to several fatal cases of rhabdomyolysis, a condition that triggers a breakdown in muscle cells, before the U.S. Food and Drug Administration (FDA) ordered Bayer to pull it from the market in August 2001.

A federal court in Minnesota had dismissed the whistleblower case on the basis that Ms. Simpson failed to demonstrate that she ““had direct or independent knowledge of any communication between Bayer and the (Department of Defense) that form the basis of the fraudulent inducement claim,” Business Insurance reported, citing the ruling.

The Eighth U.S. Circuit Court of Appeals disagreed 2-1 with the lower court’s decision, ruling “Our precedent … does not require Simpson to have direct and independent knowledge of Bayer’s allegedly false communications to the Department of Defense.”

“Rather, ‘direct independent knowledge of any essential element of the underlying fraud transaction’ is sufficient,” the panel said, remanding the back to lower court.