Bayer to Lose Billions in Yaz Cases?

Bayer, manufacturer of oral contraceptives Yasmin and Yaz, is reportedly settling about 500 lawsuits with plaintiffs who claim the birth control pills caused dangerous blood clots. The payout? It may be to the tune of $110 million.

For a drug that brought in $1.58 billion in sales in 2010 alone, this may not seem like much of a financial strain on Yasmin profits. However, the 500 lawsuits account for less than 5% of the cases currently pending against the drug maker.  If Bayer continues settling Yasmin and Yaz lawsuits at the alleged rate of the first 500, the total payout for the more than 11,000 suits currently filed would be at least $24 billion.

Although the exact payout has not been officially announced by Bayer or by plaintiffs who have settled, Bayer HealthCare representative Rosemarie Yancosek did confirm that the company is in the process of settling some Yasmin and Yaz cases in the U.S.

Sales vs. Safety: is the Payout Worth the Profit?

Pharmaceutical companies are profit-driven entities with the goal of earning a return on investment for their shareholders. For all the benefits the drugs they produce may bring to people, manufacturers have shown again and again that their main concern is financial gain.

Drug companies have been accused of knowingly selling a dangerous drug without disclosing the side effects, knowing that they may make enough in sales to counteract the cost of lawsuits once the side effects are discovered. Unfortunately, for those who have suffered life-altering or fatal consequences of bad drugs, this is much more than a numbers game. People’s futures and lives hang in the balance between what is right and what is profitable. Oftentimes, even after settling hundreds or even thousands of lawsuits, the pharmaceutical company still makes money. This, unfortunately, encourages the dangerous trend of hiding information from the public to push more drugs.

It is unknown whether Bayer attempted to take this approach with Yaz and Yasmin, but if so, the numbers indicate that this wasn’t a smart gamble for the drug maker. Bayer has sold Yasmin since 2001, but since Yaz’s inception in 2006, sales for the two drugs have surpassed $6 billion, or €5.1 billion. Yaz and Yasmin brought in a remarkable amount of money for Bayer, only to cause widespread harm and enormous financial losses in settlements that may exceed the two drugs’ profits. Bad call on that one, Bayer.

Your Opinion

Do you think pharmaceutical companies have an ethical responsibility to their consumers that should exceed their financial interests? What would you do, if you were the CEO of a pharmaceutical company and you knew one of your drugs could have complications that weren’t listed in the warning label? Leave your feedback, ideas, opinions and stories in the comments below.

April 26 Update:

Bayer’s payout has reached $142 million to resolve some 651 cases, reports Bloomberg news.


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