The drugmaker reached a settlement with the US Department of Justice, which alleged Bayer paid kickbacks to diabetic suppliers, prompting them to submit false claims to Medicare. The feds claimed Bayer engaged in a ‘cash-for-patient’ scheme by paying 11 diabetic suppliers to convert their patients to Bayer products from products - such as glucose monitors and testing strips - made by competitors.

According to the Justice Department Bayer allegedly paid Liberty Medical Supply, one of the largest direct-to-patient suppliers, approximately $2.5 million to convert patients to Bayer supplies. The alleged kickbacks were based on the number of patients that Liberty successfully converted to Bayer products and were disguised as payments for advertising. In addition, Bayer allegedly paid kickbacks of approximately $375,000 to 10 other diabetic suppliers to convert patients to Bayer supplies (DOJ statement).

Under the terms of the agreement, Bayer will pay $97.5 million to the government, plus interest, and enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General. The Bayer divisions covered by the CIA sell products to federal agencies, such as the Veterans’ Administration, and sell products for which claims are submitted for reimbursement. These units include Bayer HealthCare Diabetes Care, Bayer HealthCare Pharmaceuticals, Medrad (including Possis), Intendis and Viterion TeleHealthcare.

In a statement, Bayer maintains a deal was struck to “avoid the time, uncertainty, and expense of litigation” and that “compliance processes have undergone continuous improvement in all areas of the company in the past years…and Bayer HealthCare will review and enhance these compliance programs and employee training.”

“We are satisfied that the issues in question in Bayer HealthCare Diabetes Care have been resolved. The last several years have been a period of continuing positive change and growth for our company,” Bayer chairman Arthur Higgins says in the statement, “and we are eager to move forward, focus on our current business and most importantly, continue to be a valued and respected Health Care provider.”