Bayer to pay US$97.5M to settle kickback probe

  • Business
  • Wednesday, 26 Nov 2008

WASHINGTON (AP) - German medical conglomerate Bayer will pay $97.5 million to settle U.S. government allegations that it paid kickbacks to medical suppliers to boost sales of its diabetes products.

The Justice Department said Tuesday that the settlement resolves an investigation into whether Bayer bribed 11 diabetic suppliers into switching patients to its products from competitors.

Tarrytown, New York-based Bayer Healthcare makes electronic monitors and testing strips used to measure blood sugar levels.

Bayer did not admit or deny any wrongdoing in the case, and a spokeswoman said the company is "satisfied that the issues in question have been resolved.''

Justice Department officials said Bayer paid Liberty Medical Supply Inc., one of the largest diabetic suppliers, about $2.5 million to convert patients to Bayer supplies between 1998 and 2002.

Liberty Medical, based in Port St. Lucie, Florida, did not immediately return calls for comment Tuesday afternoon.

The Justice Department also alleged Bayer paid $375,000 in kickbacks to 10 other diabetes equipment companies.

A government spokesman said the settlement does not include any penalties against the suppliers.

All 11 companies provided equipment to patients enrolled in Medicare, the government's health care plan for seniors.

The settlement resolves false claims filed by suppliers between 1998 through 2007."If medical device manufacturers want to serve Medicare beneficiaries they must follow the law,'' said Gregory Katsas, an assistance attorney general with the Justice Department.

"Paying health care suppliers to place a particular brand of device with Medicare beneficiaries violates the law and will not be tolerated.''

Under the settlement, Bayer agreed to a corporate integrity agreement which requires it to review and update its policies for working with Medicare.

"For a period of years now we've already had programs in place to assure compliance,'' said Bayer spokeswoman Susan Yarin.

"So these actions will be in addition to what we're doing already.''

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