September 19, 2000  Bayer Corporation

Bayer Corporation has agreed to pay $14 Million Dollars to settle claims asserted in a qui tam case filed by a private relator. The allegations were that Bayer had engaged in a practice known as “marketing the spread.”   Marketing the spread is a scheme in which a drug manufacturer sets two prices for the same drug, which include the actual price and an inflated price. The inflated price, which is higher than the actual price, is provided directly or indirectly to the federal government for the purpose of having government health care programs reimburse health care providers who purchase the drug, at this higher price. At the same time, the health care providers are only paying the actual price, and they get to keep the difference known as “the spread.”

The larger the spread, the more profit for the health care provider, and the greater the incentive for them to buy the manufacturer’s drugs.

As part of the settlement, the private relator who filed the qui tam action, will receive $2.8 Million Dollars for having filed the case.

See U.S. Dept of Justice Press Release 9/19/00

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