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In the Spotlight

By ALM Staff | Law Journal Newsletters |
May 01, 2003

On May 9, 2003, the U.S. Attorney's Office for the District of Massachusetts announced that Bayer Corporation, the pharmaceutical manufacturer, had been sentenced and ordered to pay a criminal fine of $5,590,800 stemming from its earlier plea of guilty to violating the Federal Prescription Drug Marketing Act by failing to list with the FDA its drug product, Cipro, that was privately labeled for an HMO. Such listing is required under the federal Food, Drug & Cosmetic Act. The Federal Prescription Drug Marketing Act, Pub. L. 100-293, enacted on April 22, 1988, as modified on August 26, 1992 by the Prescription Drug Amendments (PDA) Pub. L. 102-353, 106 Stat. 941, amended sections 301, 303, 503, and 801 of the Federal Food, Drug, and Cosmetic Act, codified at 21 U.S.C. ” 331, 333, 353, 381, to establish requirements for distributing prescription drug samples.

The guilty plea by the company was entered into as part of a global settlement reached with the government that also requires Bayer to pay over $255 million to resolve its civil and criminal liabilities in connection with the scheme by which it allegedly sold re-labeled products to an HMO at deeply discounted prices, and then concealed its obligation to pay millions in rebates to Medicaid. As part of the announced settlement, Bayer agreed to settle its civil liabilities with 49 states and the District of Columbia for losses suffered from the company's failure to report the price of the private label Cipro, and later Adalat CC, as its best price for those drugs.

According to the release, the government's investigation stems from a qui tam suit filed by a former manager at Bayer, who also reported the conduct to law enforcement authorities. The press release is posted at www.usdoj.gov/usao/ma/presspage/May2003/

On May 9, 2003, the U.S. Attorney's Office for the District of Massachusetts announced that Bayer Corporation, the pharmaceutical manufacturer, had been sentenced and ordered to pay a criminal fine of $5,590,800 stemming from its earlier plea of guilty to violating the Federal Prescription Drug Marketing Act by failing to list with the FDA its drug product, Cipro, that was privately labeled for an HMO. Such listing is required under the federal Food, Drug & Cosmetic Act. The Federal Prescription Drug Marketing Act, Pub. L. 100-293, enacted on April 22, 1988, as modified on August 26, 1992 by the Prescription Drug Amendments (PDA) Pub. L. 102-353, 106 Stat. 941, amended sections 301, 303, 503, and 801 of the Federal Food, Drug, and Cosmetic Act, codified at 21 U.S.C. ” 331, 333, 353, 381, to establish requirements for distributing prescription drug samples.

The guilty plea by the company was entered into as part of a global settlement reached with the government that also requires Bayer to pay over $255 million to resolve its civil and criminal liabilities in connection with the scheme by which it allegedly sold re-labeled products to an HMO at deeply discounted prices, and then concealed its obligation to pay millions in rebates to Medicaid. As part of the announced settlement, Bayer agreed to settle its civil liabilities with 49 states and the District of Columbia for losses suffered from the company's failure to report the price of the private label Cipro, and later Adalat CC, as its best price for those drugs.

According to the release, the government's investigation stems from a qui tam suit filed by a former manager at Bayer, who also reported the conduct to law enforcement authorities. The press release is posted at www.usdoj.gov/usao/ma/presspage/May2003/

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