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Bayer Said to Pay $110 Million in Yaz Birth-Control Cases
By Jef Feeley and Margaret Cronin Fisk – Apr 13, 2012 5:48 PM ET
Bayer AG (BAYN), Germany’s largest drugmaker, will pay at least $110 million to settle about 500 lawsuits over claims that its Yasmin line of birth-control pills caused blood clots, in the first resolution of cases over the product, people familiar with the agreements said.
Officials of Bayer, based in Leverkusen, Germany, agreed to pay an average of about $220,000 a case to resolve the claims that its Yasmin and Yaz contraceptives caused sometimes fatal clots that can lead to heart attacks and strokes, two people familiar with the settlement said. The people sought anonymity because the accords haven’t been made public.
Bayer fell 2.5 percent in German trading today, and its American depositary receipts dropped 3.8 percent. The settlements came after a federal judge in Illinois postponed a Jan. 9 trial of a suit accusing Bayer and some of its units of misleading women about the health risks of its birth-control pills so a mediator could try to negotiate a settlement.
The case was the first set for trial of more than 11,000 lawsuits over injuries allegedly caused by the drugs.
“Sounds to me like mediation is paying off,” Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia, said in a phone interview. “As a German company, Bayer probably would like to avoid the risks and costs of litigation in U.S. courts. Mediation tends to be a less- expensive way to deal with these kinds of cases.”
The settlements come as the U.S. Food and Drug Administration April 10 ordered Bayer and other contraceptive makers to strengthen the blood-clot warnings on their products.
Pills like Bayer’s Yasmin, which contain a synthetic hormone called drospirenone, will have warning labels saying researchers have found they may triple the risk for clots.
Bayer’s contraceptives generated $1.58 billion in sales in 2010, making them the drugmaker’s biggest-selling drugs after Betaseron, a multiple sclerosis medication. The Yasmin drugs have been the focus of regulators who question their safety.
“Bayer HealthCare confirms that some cases pending in the current YAZ/Yasmin litigation in the U.S. are being settled,” Rosemarie Yancosek, a U.S. spokeswoman for the drugmaker, said in an e-mailed statement. She declined to comment on the number of cases settled or the amount of the accords.
Bayer’s American depository receipts, each worth one ordinary share, fell $2.60, or 3.8 percent, to $65.83 in over- the counter trading today. Shares in Germany dropped 1.28 euros, or 2.5 percent, to 50.56 euros.
Bayer officials said in a Feb. 28 U.S. Securities and Exchange Commission filing that the drugmaker has settled 70 cases over the Yasmin line of contraceptives.
Those settlements included “terms and conditions which Bayer views to be reasonable,” officials said in the filing. “Bayer will continue to consider the option of settling individual lawsuits in the U.S. on a case-by-case basis.”
The company is expecting additional suits, officials said in the SEC filing. Last year, the U.S. Food and Drug Administration warned that women taking the pills were 74 percent more likely to suffer blood clots than women on other low-estrogen contraceptives.
The FDA examined data on more than 835,000 women who took pills containing drospirenone, including Bayer’s Yasmin line of birth-control pills, according to the FDA report.
Bayer’s Yasmin was the No. 4 oral contraceptive in the U.S. in 2011, with 4.6 percent of the market as of September, according to data from IMS Health.
Wave of Litigation
Since 2009, the German drugmaker has faced a wave of lawsuits in courts across the U.S. alleging the birth-control pills caused sometimes fatal blood clots. Lawyers suing the drugmaker cited FDA reports of at least 50 deaths tied to the pills from 2004 to 2008.
Lawyers for former Yaz users contend in court filings that Bayer officials sought to market the contraceptive fgor unapproved uses and misled women about the drug’s health risks
The cases filed in federal courts were consolidated before U.S. District Judge David Herndon in East St. Louis, Illinois, for pretrial proceedings.
Herndon scheduled a series of trials for early this year so juries could begin weighing claims that Bayer and its units marketed Yaz and other contraceptives as safer than rivals’ products while knowing they posed a higher clot risk.
At Bayer’s suggestion, Herndon called in Stephen Saltzburg, a George Washington University law professor, to serve as a mediator. Saltzburg’s job was to explore the possibility of “settlements in this litigation,” Herndon said in a December 2011 order. The judge put the trial schedule on hold while Saltzburg met with lawyers for the drugmakers and former Yaz users.
Among the lawyers settling Yaz cases as a result of Saltzburg’s efforts are Mark Robinson, Chris Seeger and Michael Burg, the people familiar with the accords said
Those three lawyers are serving on the so-called plaintiffs steering committee in the cases before Herndon, according to court filings. That group helps decide how the consolidated cases should progress through the litigation process.
Burg, a Denver-based plaintiffs’ lawyer who handles product-liability cases, also is listed in court filings as co- lead plaintiffs’ counsel in the Yaz cases. He declined to comment on the settlements in a interview today.
Seeger, based in New York, and Robinson, a Los Angeles- based attorney, didn’t immediately return calls seeking comment on the settlement.
The case is In re Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Product Liability Litigation, 09-md-02100, U.S. District Court, Southern District of Illinois (East St. Louis).
To contact the reporters on this story: Jef Feeley in Wilmington,