Bayer to pay $1.6bn to end Essure lawsuit, but legal bills are piling up

Delaware/Munich — Bayer agreed to pay $1.6bn to resolve most of the US litigation over its now-withdrawn Essure contraceptive device, which some women said caused excessive bleeding and pelvic pain or failed to prevent pregnancies.

The deal will resolve about 90% of the 39,000 lawsuits consolidated in courts in California and Pennsylvania, Bayer said Thursday in a statement. The proposed payout is considerably more than the $1.1bn Bayer paid in 2013 to acquire Conceptus, the company that developed the device. Bayer stopped selling Essure in 2018.

Legal bills are piling up at Bayer. The Leverkusen, Germany-based company announced a $12.1bn plan in June to settle lawsuits products it inherited with the $63bn takeover of Monsanto, including Roundup weedkiller. But Bayer still hasn’t resolved tens of thousands of current Roundup cancer claims or reached a deal for handling future suits over the herbicide, which would be covered by the plan.

Investors have punished Bayer for its legal troubles. The shares are down by more than a third since the Monsanto acquisition closed in June 2018. CEO Werner Baumann has come under increasing pressure to chart a path forward, though investors gave him a vote of confidence in April. Bayer insists that Roundup is safe and has appealed against three lost trials over the product.

The shares rose 0.5% early Friday in Frankfurt.

The Essure settlement was largely expected after Bayer said earlier in June that it had reserved €1.25bn, primarily to settle litigation over the contraceptive implant. No cases have proceeded to trial.

Bayer sought a deal on the Essure claims to remove the “distractions and uncertainties associated with this litigation,” according to its statement. The company said the settlement didn’t amount to an admission of wrongdoing or liability.

Fidelma Fitzpatrick, the lead plaintiffs’ lawyer in the California Essure litigation, welcomed the agreement while noting that she and others had been prepared to allow juries to decide whether Bayer should be held liable for injuries.

The settlement “would provide expedited relief to thousands of women,” Fitzpatrick, a partner in US law firm Motley Rice, said in an e-mailed statement. “Women have suffered for years not only physically, but also emotionally and financially from the often enormous Essure-related medical bills they face.”

Thousands of women accused Bayer and Conceptus of failing to properly report injury complaints linked to Essure to protect hundreds of millions of dollars in sales. Experts hired by plaintiffs’ lawyers said the under-reporting of injuries — which included unwanted pregnancies, excessive bleeding, organ damage, migraines and miscarriages — kept Essure on the market without adequate safety warnings for a decade, according to files made public by a California judge in July.

The judge unsealed the files, which included some Conceptus and Bayer internal records and e-mails, at the request of Public Justice, a nonprofit advocacy group backed by plaintiffs’ lawyers. In those filings, Bayer’s experts disputed allegations that its complaint-reporting systems were flawed and said they routinely passed US Food and Drug Administration audits

Safety warning

In 2016, the FDA ordered Bayer to beef up safety information on Essure’s warning label. Sales fell, and the device maker stopped selling the implant two years later, calling it a “business decision”. At the time, thousands of women had launched a campaign on social media to have regulators order its removal from the market. The group was known as the “E-Sisters.”

The first US trial of Essure claims was set to start in state court in Oakland, California, earlier in 2020 but was delayed by the coronavirus pandemic that closed businesses and courts. About 29,000 cases had been consolidated before judge Winifred Smith with other cases being litigated in state and federal courts in Philadelphia, according to court records.

In its release, Bayer said Thursday’s settlement only applied to US suits. Lawyers for UK women who also got the implants complained their clients had been left out of discussions to resolve the cases. Harris Pogust, a lawyer for the women, said more than 100,000 women in Britain also got the devices.

“Do women in the UK not feel the same pain? Have they not endured the same suffering?” Pogust said in a release. “It’s now time for Bayer to be held to account and to compensate the thousands of women in the UK who have suffered avoidable pain and suffering.”

The California case is Essure Products Cases, JCCP No. 4887, Superior Court for Alameda County, California (Oakland).

Bloomberg