Bayer AG settles US Medicaid fraud claims

Bayer AG of Germany has agreed to pay $14 million to the US federalgovernment and 45 states to settle claims that it caused health care providers to submit fraudulently-inflated reimbursement claims to Medicaid, as an inducement to purchase its products rather than those of its rivals (Marketletters passim), reports Reuters.

An investigation of a whistle-blower suit in 1995 found that Bayer had falsely inflated drug prices used by state governments to set Medicaid reimbursement rates, said the Justice Department. It had set extremely high prices for its products used to treat hemophilia and immune deficiency diseases, and then sold them to physicians at dramatic discounts, enabling them to profit from reimbursement paid to them under Medicaid, it added.

Bayer confirmed the settlement but said it believes its actions were lawful. It also said it is the first firm to work with the government in the Medicaid fraud cases.