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Bayer Judge Postpones First Yaz Trial, Orders Birth-Control Cases Mediated

By Jef Feeley and Naomi Kresge
January 05, 2012 12:31 PM EST

Bayer AG (BAYN), Germany’s largest drugmaker, won’t face the first trial next week over claims its birth-control pills caused blood clots after a judge appointed a mediator in hopes of settling the cases.

U.S. District Judge David Herndon in Illinois last week postponed the Jan. 9 trial of a lawsuit accusing Bayer and some of its units of misleading women about the health risks of its Yasmin family of birth-control pills. The case was the first of more than 10,000 suits over injuries allegedly caused by the drugs, which include the Yaz contraceptive.

Instead, Herndon ordered Bayer and lawyers for women suing the company to meet with mediator Stephen Saltzburg, a George Washington University law professor, to explore the possibility of “settlements in this litigation,” the judge said in a Dec. 31 order.

Bayer’s contraceptives generated $1.58 billion in sales in 2010, making them the Leverkusen, Germany-based company’s biggest-selling drugs after Betaseron, a multiple sclerosis medication. The contraceptives, which contain the hormone drospirenone, have been the focus of regulators who question their safety.

“While continuing to defend the litigation, the company is engaged in mediation and settlement discussions,” Rosemarie Yancosek, a Bayer spokeswoman, said in an e-mailed statement today.

Bayer rose 1.5 percent to 52.27 euros in Frankfurt trading. The shares have fallen 3.8 percent during the past 12 months.

FDA Scrutiny

Last year, the U.S. Food and Drug Administration warned that women taking the pills were 74 percent more likely to suffer blood clots than women on other low-estrogen contraceptives. The FDA examined data on more than 835,000 women who took pills containing drospirenone, including Bayer’s Yasmin line of birth-control pills, according to the FDA report.

Bayer’s Yasmin was the No. 4 oral contraceptive in the U.S. last year with 4.6 percent of the market as of September, according to data from IMS Health.

Since 2009, the German drugmaker has faced a wave of suits in courts across the U.S. alleging the birth-control pills caused sometimes fatal blood clots. Lawyers suing the drugmaker cited FDA reports of at least 50 deaths tied to the pills from 2004 to 2008.

The cases filed in federal courts were consolidated before Herndon in East St. Louis, Illinois, for pretrial information exchanges.

‘Outside the Courtroom’

Herndon scheduled a series of trials for early this year so juries could begin weighing claims that Bayer and its units marketed Yaz and other contraceptives as safer than rivals’ products while knowing they posed a higher risk of clots.

After Bayer officials protested that so-called bellwether trials wouldn’t provide much guidance on the validity of plaintiffs’ claims, Herndon called in Saltzburg as a mediator, Michael Papantonio, a Pensacola, Florida-based lawyer for women suing Bayer, said earlier this week. He was slated to be one of the lead lawyers for Kerry Sims, whose case was scheduled to begin Jan. 9.

“Bayer didn’t want to go to trial and the judge decided to see whether they wanted to seek a solution outside the courtroom,” Papantonio said. “He’s giving both sides a chance to be creative.”

AstraZeneca Mediation

Starting in 2010, Saltzburg served as a mediator in suits against London-based drugmaker AstraZeneca Plc (AZN) over its Seroquel antipsychotic medicine. The company later set aside more than $600 million to resolve more than 26,000 claims and Saltzburg won praise for his work in that litigation.

“He’s a smart and hardworking individual who doesn’t just push to settle cases at any price,” said Michael Kelly, a lawyer who represented AstraZeneca in the Seroquel cases and worked with Saltzburg.

The law professor “has a strong sense of right and wrong and he works to come up with a fair valuation on the cases that everyone can live with,” said Kelly, chairman of McCarter & English, a Newark, New Jersey-based law firm.

Herndon hasn’t set a time limit on Saltzburg’s mediation efforts, Papantonio said. If the talks falter, the judge is prepared to reset Yaz cases for trial, the lawyer said.

“We’re ready to try cases, but we’re also willing to talk if Bayer wants to make a good-faith effort,” Papantonio said.

Bayer also was slated to face Yaz trials in state court in Philadelphia this month. A judge put the first case on hold while the Pennsylvania Supreme Court decides whether to hear a procedural issue,Mark Robinson, a lawyer for women suing the company over the contraceptives, said earlier this week.

The case is In re Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Product Liability Litigation, 09-md-02100, U.S. District Court, Southern District of Illinois (East St. Louis).

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net; Naomi Kresge in Berlin at nkresge@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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