Bayer agrees to pay $1.6bn to settle US Essure claims

Bayer AG agreed to pay $1.6 billion to resolve most of the U.S. litigation over its now-withdrawn Essure contraceptive device, which some women said failed to prevent pregnancies and caused excessive bleeding and pelvic pain.

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 $1.1 billion Bayer paid in 2013 to acquire Conceptus Inc., 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 $12.1 billion plan in June to settle lawsuits over some products it inherited with the $63 billion takeover of Monsanto Co. But Bayer still hasn’t resolved tens of thousands of current cancer claims linked to its Roundup weedkiller or reached a deal for handling future claims over the herbicide.

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, and Chief Executive Officer Werner Baumann has come under increasing pressure to chart a path forward. Bayer insists that Roundup is safe and has appealed three lost trials over the product.

The Essure settlement was largely expected after Bayer said earlier this month that it had reserved 1.25 billion euros ($1.47 billion), primarily to settle litigation over the contraceptive implant. None of the claims had yet to go 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.

Thousands of women accused Bayer and Conceptus of failing to properly report injury complaints linked to Essure in order 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 last month.

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

(Updates with background from the lawsuits, comment from company.)