By Terry Baynes
(Reuters) - Bayer AG set aside over $1.5 billion in 2012 to
cover litigation expenses tied to its Yasmin and Yaz oral
contraceptives, which resulted in a drop in earnings, the
company said in its annual report last week.
Germany's largest drugmaker has already reached agreements
to pay $1 billion to settle claims by 4,800 women or their
representatives in the United States who say the pills caused
blood clots that resulted in heart attacks, strokes and death,
the report said. There are currently 10,000 lawsuits in addition
to 1,200 claims that haven't been filed in court, according to
Since 2009, Bayer has been hit by a wave of lawsuits
claiming that the company knew or should have known of the
health risks of the contraceptives and failed to warn users. The
lawsuits are consolidated in multidistrict litigation in the
Southern District of Illinois. Bayer is also facing 13 class
actions over the drugs in Canada.
In 2011 U.S. District Judge David Herndon, who is overseeing
the consolidated litigation, put the first trials on hold,
sending the parties to mediation with Stephen Saltzburg, a
professor at George Washington School of Law.
After an investigation, the Food and Drug Administration in
April 2012 ordered revised labels on birth control pills,
including Yasmin and sister drug Yaz to strengthen blood clot
Bayer is only settling claims in the United States for blood
clot injuries such as deep vein thrombosis or pulmonary embolism
on a case-by-case basis, the annual report said. It said that
3,200 of the unsettled claims alleged those types of injuries.
The company said it is expecting additional lawsuits, and that
the $1.5 billion reserve will cover projected defense costs as
well as expected future settlements.
While Bayer is insured for product liability to the extent
customary in the industry, its calculated exposure for the
Yasmin and Yaz claims exceeds the available coverage, the report
In addition to the lawsuits, Bayer is also facing an
investigation by the U.S. Attorney for the Eastern District of
New York over allegations that it promoted Yasmin and Yaz
off-label. The company said it is cooperating with the probe.
A spokeswoman for Bayer declined to comment beyond the
contents of the report.
The multidistrict litigation is In re Yasmin and Yaz
(Drospirenone) Marketing, Sales Practices and Products Liability
Litigation, U.S. District Court, Southern District of Illinois,
For the plaintiffs: Mark Niemeyer of The Onder Law Firm;
Michael Burg of Burg Simpson Eldredge Hersh & Jardine; Michael
London of Douglas & London; Roger Denton of Schlichter, Bogard
For Bayer: Adam Hoeflich of Bartlit Beck Herman Palenchar &
Scott; John Galvin and Terry Lueckenhoff of Fox Galvin.
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