Story related and cannot be missed.
This boss fight is at the end of level 2 and it is a very easy fight even on hard. As soon as the fight starts manual aim ( hold ) and shoot the bomb in Bad Bill's hands before he throws it at you. This will get you the "They Got a Pill for That" achievement and waste a lot of his health. He will then hide and you must kill all his minions to make him come out of hiding and start throwing his bombs again. You can also just spray bullets at him with your gun, that also works well.