Yaz, Yasmin Lawsuit Settlements Top $402 Million

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Bayer AG has reported that settlements of U.S. lawsuits involving its controversial line of Yaz and Yasmin birth control pills have increased to more than $402 million. The Leverkusen, Germany-based pharmaceutical giant has resolved nearly 1,900 cases in which it’s alleged that Yaz and Yasmin caused blood clots that have the potential to lead to heart attacks and strokes. In all, the settlements have averaged out to about $212,000 a case.

Yaz / Yasmin Lawsuit Update 3/21/13: This week, Bayer Healthcare reportedly agreed to pay out as much as $24 million to settle gallbladder disease lawsuits involving its controversial Yaz and Yasmin birth control pills. Specifically, the company agreed to settlement payments of $2,000 to women who suffered gallbladder injuries, and $3,000 for women’s injuries which were so severe that their gallbladders had to be removed.

What’s the problem?

In anticipation of settling the lawsuits, Bayer announced that it had more than doubled its reserve for Yaz cases, setting aside a total of approximately $610.5 million. The company set aside nearly $250 million in 2010 and 2011, according to securities filings.

“We believe we have made appropriate provisions for most of the cases we consider to be worthy of settlement with these accounting measures,” a Bayer official announced in an e-mailed statement. Industry insiders have speculated that Bayer may have to shell out more than $2 billion total to resolve all of the cases over Yaz and Yasmin.

In April, the FDA ordered Bayer and other contraceptive manufacturers to strengthen blood clot warnings on their products’ labeling. Yaz, Yasmin and other birth control pills from the same class contain a newer, so-called ‘fourth generation’ synthetic progestin known as drospirenone, which has been linked to a significantly increased risk of blood clots over older types of contraceptives.

According to data from IMS Health, Yasmin was the 4th best-selling oral birth control pill in 2011, with nearly 5% of the market as of September. Bayer’s contraceptives combined for a total of $1.1 billion in sales in 2011, making them the company’s best-selling drugs behind Betaseron, a multiple sclerosis medication and Kogenate, a drug used to treat hemophilia.

The $610.5 million Bayer reserved is to cover costs beyond what insurance will pay to handle legal fees and accords, including cases that haven’t been settled. The company hasn’t disclosed the amount insurance has agreed to pay. In its stockholders’ newsletter, Bayer announced that it was still facing more than 12,000 lawsuits filed over its Yasmin line of contraceptives, including claims that they caused blood clots in some women and gallbladder disease in others. To date, Bayer has reportedly agreed to settle nearly 1,900 lawsuits in which women allege the company’s birth control pills caused blood clots in their veins.

“Such injuries are alleged in about 6,000 claims and therefore in fewer than half the cases served to date,” Bayer officials said in the newsletter.

Over the past three years, Bayer has faced a seemingly endless wave of lawsuits over its line of birth control pills. Between 2004 and 2008, the FDA received reports of over 50 deaths linked to the contraceptives. Plaintiffs’ lawyers have argued that Bayer marketed the drugs for off-label uses and misled users about their risks. The Yaz and Yasmin litigation has been consolidated before U.S. District Judge David Herndon in East St. Louis, Illinois, for pretrial handling.

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