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Cash-starved Medicaid programs got more relief in April from Bayer Corporation’s record $257.2 million settlement than from any painkiller the U.S. subsidiary of the German pharmaceutical giant could offer. Bayer decided to settle a civil investigation into False Claims Act violations and plead guilty in the simultaneous criminal investigation. The move followed a dramatic videotaped trial deposition of a deceased former Bayer executive, George Couto. The government has awarded Couto’s estate a record $34 million. The investigation centered on the “best price” requirement under Medicaid, which requires drug suppliers to review their sales records at the end of each quarter and pay Medicaid the difference between what the government paid for a drug and the lowest price for which that drug had been sold. Under a scheme known as “lick and stick,” Bayer sold its antibiotic Cipro and high blood pressure drug Adalat to Kaiser Permanente Medical Care Program at a 40 percent discount that it hid from the government by relabeling the packages to disguise their origin. As head of marketing for Cipro, Couto learned of the practice and notified his bosses. After seeing no response to his complaints, Couto turned to Neil Getnick, whose firm specializes in qui tam suits. (Qui tam enables private citizens to sue on behalf of the federal government.) In February 2000 Getnick presented the case to the Massachusetts U.S. attorney’s office, whose health care fraud unit is renowned for its successful investigations. Couto was diagnosed with terminal pancreatic cancer in April 2002, so his trial testimony was videotaped in August. Couto, 39, died in November. For plaintiff George Couto (Boston) Getnick & Getnick (New York): Margaret Finerty, Neil Getnick, Lesley Ann Skillen, and of counsel Michael Getnick. Getnick & Getnick has been involved in qui tam cases involving health care fraud since 1993. Tucker, Heifetz & Saltzman (Boston): Scott Tucker and associate Scott Kremer. Tucker and Getnick have known each other for years. For plaintiff U.S. Government (Washington, D.C.) U.S. Attorney’s Office, District of Massachusetts (Boston): Health care fraud: assistant U.S. attorney Susan Winkler. Criminal: assistant U.S. attorney George Vien. Winkler led the civil litigation, and worked with Vien on the criminal investigation. U.S. Department of Justice (Washington, D.C.): Trial attorney � civil division Andy Mao. Mao reviewed the settlement agreement. U.S. Department of Health and Human Services, Office of Counsel to the Inspector General (Washington, D.C.): Senior counsel Mary Riordan. Riordan negotiated the corporate integrity agreement to allow HHS to monitor Bayer’s future conduct. National Association of Medicaid Fraud Control Units (Washington, D.C.): Assistant state attorneys general E. Christopher Abruzzo of Pennsylvania, David Lunden of Maryland, and David Waterbury of Washington. NAMFCU, an association of state Medicaid fraud units, appointed three members, all directors of their state fraud units, to negotiate on behalf of the states. For defendant Bayer Corporation (Pittsburgh) In-house: Senior vice president, chief legal officer, and secretary George Lykos and vice president, general counsel, and secretary Paul Berry. Sidley Austin Brown & Wood (Chicago): Food and drug: I. Scott Bass and Nathan Sheers. Health care: Paul Kalb and associates Stephen Payne and James Stansel. Litigation: Thomas Green. (All are in the firm’s Washington, D.C., office.) Sidley Austin has worked with Bayer, particularly on health care and food and drug work, since the mid-1990s.

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