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A federal appeals court has once again reinstated a whistleblower lawsuit filed against Bayer A.G. in connection with a drug that was removed from the market in 2001, in a divided opinion.
Laurie Simpson filed a whistleblower suit against Leverkusen, Germany-based Bayer and its units under the False Claims Act in connection with Baycol, a cholesterol-lowering statin drug, according to Friday’s ruling by the 8th U.S. Circuit Court of Appeals in St. Louis in Laurie Simpson v. Bayer Healthcare et al.
There were reports that the drug caused fatal cases of rhabdomyolysis, a condition that results in muscle cell breakdowns, according to the Food and Drug Administration’s withdrawal notice.
Ms. Simpson alleged, among other charges, that Bayer had misrepresented Baycol’s efficacy when compared to competing drugs and had paid illegal kickbacks to physicians to increase its share of the market for statin drugs. She asserted Bayer had fraudulently induced the Department of Defense to enter into two contracts for Baycol’s purchase.
The U.S. District Court in Minneapolis dismissed her case on the basis she had not demonstrated she “had direct or independent knowledge of any communication between Bayer and the (Department of Defense) that form the basis of the fraudulent inducement claim,” according to the ruling.
“Our precedent, however, does not require Simpson to have direct and independent knowledge of Bayer’s allegedly false communications to the Department of Defense,” said the majority, 2-1 ruling.
“Rather, ‘direct independent knowledge of any essential element of the underlying fraud transaction’ is sufficient,” said the panel, in quoting an earlier case. The case was remanded for further proceedings.
The dissenting opinion said it would affirm the lower court’s ruling for the reasons it stated.
This was the second time the appeals court has reinstated Ms. Simpson’s case.
A whistle-blower lawsuit against Bayer A.G. alleging it knowingly sold an unsafe drug to the Department of Defense can proceed based on the precision of its allegations, an appeals court has ruled.