Bayer AG agreed to pay nearly $11 billion as a settlement for thousands of lawsuits over its product, Roundup. Plaintiffs filed lawsuits all across the US alleging that the herbicide causes cancer.
Bayer has been involved in lawsuits for almost two years. Currently, there have been around 125,000 suits claiming that the product was the direct cause of cancer diagnoses. The settlement takes care of almost 100,000 of those cases, most of which were set for trial. However, the manufacturer doesn’t admit to any wrongdoing or liability for its product.
The manufacturer has maintained that the active ingredient, glyphosate, is safe for use as intended. Independent studies have provided indications otherwise. The long battle has impacted the shares for the company as investors waited to see what would happen with the claims.
Bayer Inherits Problems with Roundup
Bayer was the heir for the claims when it purchased Monsanto, the company that made Roundup. The transaction was completed about two years ago, just as the first of the lawsuits began to gain traction.
This $11 billion settlement is the largest out of court agreement for any single product. It overtakes the deal from Merck over the painkiller Vioxx, which resulted in a $5 billion settlement.
According to a spokesperson for the company, Bayer will continue to manufacture and sell Roundup to customers. However, it will not include a label for cancer warning on the product. The settlement doesn’t prevent future cases from being filed.
Several agencies have claimed that glyphosate is safe for use and doesn’t cause cancer. Among those agencies are the European Chemicals Agency and the US Environmental Protection Agency. However, the World Health Organization claimed that the ingredient was a probable carcinogen. This decision came in 2015, and three juries in the US agreed with the determination after listening to evidence for both views.
Independent Scientific Research
Bayer still wants to clear its product from the shadow of accusations and prevent future litigation by allowing an independent study. Details have not been released on the proposal, but the company is betting that science will back the claim that Roundup is safe to use.
A federal judge will have to approve the proposal which must still have the details worked out. It is expected that both sides will have to agree on the panel of scientific experts. Bayer is prepared to pay $1.25 billion for the research needed by the panel. This amount doesn’t include future settlement payouts.
The review is expected to take as long as four years with the results being binding to both Bayer and any future plaintiffs. If the product is found to be safe, people who have used it up to now couldn’t sue. If it’s determined to be carcinogenic, it could open Bayer up to numerous new lawsuits that will have even more support of scientific research.
Even if the proposal is approved, it may face challenges in court. While scientific panels have been used in mass tort cases, they haven’t been included as part of the settlement agreement.