Ethics Problems Are Business as Usual at Bayer
Bayer will pay the Justice Department $97.5 million plus interest to settle allegations that it paid kickbacks to a number of diabetic suppliers and caused those suppliers to submit false claims to Medicare. Here’s the nut:
Between 1998 and 2002, Bayer allegedly paid Liberty Medical Supply Inc., one of the largest direct-to-patient diabetic suppliers, approximately $2.5 million to convert its patients to Bayer supplies. The alleged kickbacks were based on the number of patients that Liberty successfully converted to Bayer supplies and were disguised as payments for advertising. In addition, Bayer allegedly paid kickbacks of approximately $375,000 to 10 other diabetic suppliers to convert patients to Bayer supplies.
Bayer is also currently worried about the continent-wide probe by European authorities into anti-competitive practices among drug companies there. Bayer HealthCare Chief Executive Arthur Higgins, who also heads the European Federation of Pharmaceutical Industries and Associations, told the Reuters Health Summit last week:
They have looked at major industries in the past and there has never been a positive sector inquiry … There are always negative implications that come from it.
BNET readers know this is not the first ethics issue to arise at Bayer. The firm has a history of errant behavior of this type. Drum roll, please:
- In October, the FDA slammed Bayer with two warning letters today for allegedly unlawfully selling two unapproved aspirin products.
- In 2007 the FTC extracted a $3.2 million settlement from Bayer after the company falsely claimed its One-A-Day WeightSmart multivitamins could somehow help with weight loss.
- That the FTC order came after Bayer had already violated a pre-existing FTC not to market OTC products unless those products can “be supported by competent and reliable scientific evidence.”
- In July 2007, the National Advertising Division said Bayer should discontinue its advertising for its All-Day Energy multivitamin, which, er, doesn’t last all day.
- In June 2007, NAD said Bayer was not telling the truth when it said Aleve was the No. 1 medicine among orthopedic surgeons.
- In March 2007, NAD said Bayer was making unsubstantiated claims about rivals to its Ascencia diabetes blood glucose monitor.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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