Bayer Cholesterol Drug FCA Suit Survives Dismissal Bid

 In False Claims Act, Recent News

A Minnesota federal court judge on Tuesday kept alive a long-running False Claims Act suit alleging that Bayer AG misled the U.S. Department of Defense about the risks of its now-defunct cholesterol drug Baycol, finding that the relator had presented enough evidence to show that she had direct knowledge of the alleged fraud.

U.S. District Court Judge Michael J. Davis said Laurie Simpson, a former senior market research analyst at Bayer, had presented sufficient proof that she had direct knowledge of the health risks associated with Baycol usage and the alleged downplaying of those risks by the company, and that her claim is not barred by the statute of limitations.

The case was on remand from the Eighth Circuit, with the majority of a split panel ruling in September 2017 that the district court must determine whether Simpson directly and independently knew that Bayer allegedly had evidence that Baycol was not as effective as represented and that it increased the risk of rhabdomyolysis, a rare disorder that leads to the breakdown of muscle fibers.

Judge Davis had previously dismissed Simpson’s suit in 2015 after finding that she was not an original source of the information underlying her claims, which had been previously disclosed in lawsuits, news reports and medical literature. But in his Tuesday order, he noted that the appeals court panel had cited Minnesota Association of Nurse Anesthetists v. Allina Health System Corp., an Eighth Circuit decision that concluded that a relator need not have personal knowledge of all the elements of a cause of action in order to bring a qui tam complaint.

To support her argument that she is a direct source for claim, Simpson presented evidence that included her attendance at meetings where the risks of rhabdomyolysis were topics of discussion, the filing of FOIA requests with the U.S. Food and Drug Administration seeking information on adverse events associated with Baycol use, and the writing up of reports on her findings. Taking into account evidence put forward by Bayer, Judge Davis said there was enough to show that Simpson had direct knowledge of the allegations underlying her case.

“For purposes of determining subject matter jurisdiction, the court finds that relator has alleged sufficient facts to show she has direct and independent knowledge that Bayer possessed evidence showing that Baycol was not as efficacious as represented and caused increased risks of rhabdomyolysis,” Judge Davis said.

David Bocian, an attorney for Simpson, told Law360 in an email Wednesday that he and his client “are very gratified that the court has ruled in our favor and allowed this case to proceed. We look forward to working towards vindicating the rights of our client and the interests of the taxpayers.”

Baycol, also known as cerivastatin, was used to lower cholesterol in patients with heart disease or those who were at risk of developing the disease. Sales of the drug in the United States were roughly $290 million in 2000. Bayer pulled the drug from the market in August 2001 when rhabdomyolysis was linked to its use, according to the amended complaint.

Simpson bought her original qui tam suit in 2006, claiming that the DOD’s decision to pay for Baycol, which was pulled from the market after 31 deaths were linked to its use, was tied to the alleged fraudulent marketing of the product by the drugmaker.

Her claims were dismissed, and then revived by an Eighth Circuit panel in 2013. That panel found that Simpson’s accusations that Bayer fraudulently induced the DOD to enter into a roughly $11.9 million contract extension for the purchase of Baycol sufficiently identified the “who, what, where, when and how” of the alleged fraud to survive a motion to dismiss.

The panel in 2013 further found that Simpson’s amended complaint properly alleged that the government paid Bayer under the fraudulently induced contracts. The complaint claimed that approximately 400,000 Baycol prescriptions were filled in military treatment facilities between October 2000 and when the drug was pulled from the market, with the government shelling out at least $12 million during that time.

Representative for Bayer did not immediately respond to requests for comment Wednesday.

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