Dr. Rath Health Foundation

Dr. Rath Health Foundation

Responsibility for a healthy world Dr. Rath Research Institute 100+ Studies Published In PubMed

The Baycol / Lipobay - Scandal

Bayer claims vindication from U.S. court ruling

Bayer won a big victory in its campaign to clear its name in the Baycol affair when a US federal district court rejected an attempt to create a nationwide class-action lawsuit against the German drug maker late Wednesday. The company said the decision proved right its defence against wrongdoing in the Baycol affair.

(Financial Times / September 19, 2003) -- The company was forced in 2001 to withdraw the cholesterol-lowering treatment, known as Lipobay outside the US . The drug was linked to more than 100 deaths and thousands of claims of serious side effects, including rare muscle wasting and kidney disorders.

Bayer shares rallied more than 6 per cent yesterday to &euro20.99 in late Frankfurt trading.

Phil Beck, Bayer's lead US lawyer on the Baycol case called the ruling a "significant milestone" in the litigation.

"It is a victory for Bayer which we believe vindicates our legal position," said Mr Beck.

The ruling may also make it easier for Bayer to find a pharmaceutical partner willing to take a strategic stake. Bayer's attempts to bring a partner into its drugs unit - which it needs because its pharmaceuticals operations are struggling - have been complicated by its reluctance to give up entrepreneurial leadership of the unit as well as by the Baycol situation.

The ruling follows two landmark decisions in Mississippi and Texas earlier this year, in which the courts also ruled in favour of Bayer.

About 4,000 plaintiffs had asked the federal court in Minneapolis to bundle their claims in a single class-action suit.

The court ruled that plaintiffs must proceed on an individual basis.

"We are delighted that we are able to defend ourselves on an individual basis and not that thousands will be lumped together in one gigantic trial," Mr Beck said.

Bayer always argued that a class-action suit was inappropriate because the claims were too individually different. It also said it believed a class action suit would have been "unmanageable".

Bayer has so far settled 1,342 Baycol-related cases for payments totalling about $477m. Overall, about 11,200 cases are still pending, the vast majority in the US .

Bayer said it would continue pursuing a policy of trying to agree on fair compensation for those patients who can prove serious side effects, while never admitting liability.

In all other cases, Bayer insists it will "defend itself vigorously".

This year, a Texas court rejected an elderly man with rhabdomyolysis, a rare muscle disorder, claiming $550m in punitive damages, and a Mississippi court had rejected a woman's $50,000 claim. Both jurisdictions are known for their hostility toward big corporate defendants.