Bayer No Scofflaw in Misbranded Drug Case
(CN) - Bayer did not violate the Food, Drug, and Cosmetic Act by seeking payment for an allegedly misbranded drug, Trasylol, under federal health care programs, a federal judge ruled.
In a New Jersey federal qui tam action, relator Laurie Simpson alleges that Bayer, Bayer HealthCare Pharmaceuticals, and Bayer HealthCare concealed health risks and unlawfully marketed Avelox (moxifloxacin hydrochloride), an extremely powerful antibiotic, and Trasylol (aprotinin), which aims to reduce bleeding during complex surgery.
Bayer allegedly retaliated against Simpson, who held various marketing and analytical positions with the company from 1998 to 2005, for expressing concerns about kickbacks, numerous patient deaths, and a multidistrict litigation stemming from cholesterol drug Baycol.
Simpson alleges Bayer later downplayed the risks of Trasylol, "including hypersensitivity and anaphylaxis, heart attack, adverse graft patency and clotting, and renal dysfunction."
The relator says she was excluded from Trasylol's business planning process after she complained that cardiac team meetings were "fraudulent, promotional in nature, involved kickbacks, violated Bayer's corporate compliance policy, and were illegal."
Simpson was replaced by a less qualified employee a month after the drug's marketing director, Stan Horton, said in August 2004 that he needed a "supportive" market researcher, though Bayer attributed her firing to a workforce reduction, according to the complaint.
Hundreds filed suit after the Food and Drug Administration asked the 150-year-old company to suspend marketing of Trasylol in 2007, so the product was recalled the next year.
The government declined to intervene in Simpson's suit on Feb. 19, 2010, but filed a statement of interest in connection after Bayer moved to dismiss last June.
After U.S. District Judge Jose Linares partially denied Bayer's motion Aug. 28, Simpson filed an eighth amended complaint, which asserts 30 claims under the False Claims Act of 21 states and the District of Columbia, as well as workplace retaliation and emotional distress.
The judge called for a ninth amended complaint April 11, tossing aside six counts alleging that Bayer's claims for payment for Trasylol falsely implied that "the drug was not misbranded and was permitted in interstate commerce."
Linares refused to reconsider May 20, however, finding it "unclear" whether Bayer must comply with the Food, Drug, and Cosmetic Act (FDCA) in order to receive federal funds under the Civilian Health and Medical Program of the Department of Veterans Affairs, the Federal Employees Health Benefits Program, Medicaid, Medicare, or Tricare.
"[W]hile compliance with the FDCA's misbranding provisions is a condition, it is not a condition impacting whether the government might actually refuse payment for a drug," Linares wrote.
Though the Department of Justice has sued companies that misbranded drugs in the past, this does not show that the feds may refuse payment based on misbranding, the ruling states.
"Critically, Simpson has not pointed the court to any language in the FDCA's misbranding provisions that allows the government to refuse to pay for a drug under the aforementioned healthcare programs because the drug's manufacturer failed to comply with the FDCA's misbranding provisions," Linares wrote. "Second, Simpson's contention improperly conflates the [Department of Justice] DOJ's ability to bring and settle misbranding claims against pharmaceutical companies with the government's ability to refuse to pay for drugs under a number of government healthcare programs."
The court also rejected Simpson's "unavailing" claim that it incorrectly characterized as a legal conclusion her allegation that "[i]f the United States had known that Trasylol was misbranded and prohibited from interstate commerce, it would not have paid for it."
Bayer AG reportedly netted about $14.4 billion this quarter, after reaping a total revenue of over $54.7 billion last year.