• Bayer: 2003- $251 million
• brought by Bayer marketing executive, George Couto in Massachusetts
• fraud in the form of private labeling

• 1990: Medicaid rebate program mandated drug makers give Medicaid same discounts they give big commercial customers like HMO’s, hospitals and pharmacy chains
• 1995: Bayer gives Kaiser Permanente a 40% discount
• To avoid giving Medicaid the same rebate Bayer “private labeled” the bottles of Cipro sold to Kaiser and merely changing the 4 digit national drug code. Thereafter Bayer said the pricing was Kaiser’s not theirs. Other than the label, the two bottles were identical.
• notwithstanding the 40% discount to Kaiser, Bayer gave Medicaid the best price corresponding discount of only 15%
• in addition to a $251 million civil settlement, Bayer pled guilty to concealing the Cipro discount to the FDA leading to a $5.6 million fine
• the drug adalat also led to hefty fines for the company involving the same practice

• GSK also had $88 million dollar settlements for the same practices with paxil and flonase

• George Couto came forward after being troubled by the “private labeling” programs.
• despite numerous internal complaints to Bayer’s upper management, his concerns were not addressed
• shorlty after filing his qui tam case, Mr. Couto resigned from Bayer and relocated his family. He developed pancreatic cancer two years later.
  
• his qui tam relator share of 24% of the settlement from Bayer went to his estate

• marketing the spread:
• case study Lupron: Tap Pharmaceuticals (2001-$559.5 million) and Astrazeneca (2003-$291 million)
• prostate cancer drugs lupron and zoladex in direct competition with each other

• an industry term which inflates the average wholesale price used by medicare as the basis for reimbursement of the drug, while deeply discounting the price paid by physicians (or giving it to them for free)
• the net effect is kickbacks to doctors by pharmaceutical reps competing for business

• case study in Florida

• PIP provides personal injury protection for any covered individual who was injured in a motor vehicle accident
• designed to offer automatic payments regardless of fault in order to encourage accident victims to seek medical treatment
• PIP insurace in the Florida case paid 80% of most reasonable medical expenses
• the conspiracy: various chiropractic and physical therapy clinics making false and fradulent claims
• same course of treatment (3 months no matter the injury)
• fabricated false medical reports to avoid a final and accurate physician assessment

• if you suspect health care fraud, contact an attorney and the appropriate authorities
• over 70 million babyboomers will be over 65 in the year 2008
• safeguarding governmental resources is not only our duty but it also aids in protecting our tax dollars in the future

You may reach me any time if you have any information on health care fraud at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or visiting Flores Law Firm or toll free at 1-888-259-5721 or 361-887-8670