The German chemicals and pharmaceutical giant Bayer has reached a settlement worth up to $10.9 billion for tens of thousands of claims that the weedkiller Roundup caused cancer, hoping to put an end to years of litigation that has weighed on Bayer’s stock price.
Bayer acquired Roundup manufacturer Monsanto in 2018 for $63 billion and inherited the claims against Roundup in the process.
Plaintiffs allege that glyphosate, a herbicide that is Roundup’s key ingredient, causes cancer; Monsanto and now Bayer have maintained that the weedkiller is safe.
Bayer said in a press release that it has earmarked $8.8 billion to $9.6 billion to settle current claims, with another $1.25 billion set aside for potential future claims.
The settlement covers approximately 95,000 cases, according to the press release, but Bayer still faces 25,000 more claims from plaintiffs who did not agree to be a part of the settlement.
The New York Times reported that the coronavirus pandemic, which has shuttered courts across the country, may have contributed to the settlement being reached.
Shares of Bayer perked up Wednesday on the settlement news, rising almost 2.5%.
“It’s rare that we see a consensual settlement with that many zeros on it,” Stanford University law professor Nora Freeman Engstrom told the Times.
What to watch for
Part of the $1.25 billion set aside for future claims will be used to convene an expert panel to determine whether glyphosate causes cancer, and—if it does—what dosage or exposure level is dangerous.
Debate over glyphosate erupted in 2015 when an arm of the World Health Organization said the herbicide could “probably” cause cancer, a pronouncement refuted by the U.S. National Institutes of Health in 2017. A January Environmental Protection Agency report found that glyphosate is not harmful to humans if used as the label instructs, and that it is not a carcinogen. Monsanto said years of research both in laboratories and the field proved that glyphosate was safe.
Shortly after Bayer purchased Monsanto in 2018, a California judge determined that glyphosate caused school groundskeeper Dewayne Johnson’s cancer and awarded him $289 million, and said that Monsanto should have warned consumers of the risk. Two other jury trials in 2018 and 2019 found the same outcomes for two additional plaintiffs, awarding them $80 million and $2 billion, respectively. The plaintiffs’ awards were all reduced by judges at later hearings, but Bayer’s stock price took a beating. In August 2019, Bayer proposed an $8 billion settlement for the cancer claims and made cost-saving moves by selling its animal health business to Elanco, a $7.6 billion deal that was in the closing process as of April 2020. Most recently, on Monday, a federal judge blocked a California ruling that would have required Bayer to label Roundup with a cancer warning.
Bayer Reaches $10.5 Billion Settlement Over Weedkiller Roundup (Wall Street Journal)
Roundup Maker to Pay $10 Billion to Settle Cancer Suits (New York Times)
Bayer Sells Its Animal Health Business For $7.6 Billion Amid Mounting Roundup Cancer Claims (Forbes)