Bayer proposes $7.25 billion Roundup settlement as Supreme Court case looms

A new $7.25 billion settlement between Bayer and a group of cancer patients could wrap up a huge wave of lawsuits against the company over allegations that it didn’t warn consumers about cancer risks associated with the weedkiller Roundup.

Bayer faces more than 180,000 claims over Roundup, which contains the herbicide glyphosate – the chemical at the center of the controversy. Most of those claims are from people who used the weedkiller, which is sold at any hardware or garden store, at home. The lawsuits have prompted Bayer to pull glyphosate out of many products under the Roundup brand, though glyphosate is still commonly used by farmers and in the agriculture business broadly.

The science around glyphosate is controversial. The Environmental Protection Agency has said that glyphosate is not likely to cause cancer in users if applied as directed, and does not require companies selling it to include a warning about links to cancer. The World Health Organization’s cancer agency classified the chemical as a substance likely to cause cancer in humans more than a decade ago, though those findings faced scrutiny a few years later over reports that the published version differed from a draft. 

Just last month, a landmark study determining that glyphosate didn’t pose a risk to human health was retracted, 25 years after its publication. The retraction, prompted by emails revealing Monsanto’s influence, undermines a longstanding regulatory foundation that has cited the key research for decades.

A long battle

The Supreme Court is set to hear arguments over Bayer’s effort to fend off an onslaught of cancer-related lawsuits over Roundup in April. While the new settlement proposal won’t affect that case, it could help both Bayer and the plaintiffs hedge their bets if the Supreme Court doesn’t side in their favor.

Bayer, a German pharmaceutical and biotech giant, is best known for making the common pain reliever Aspirin. The company acquired Roundup maker Monsanto in 2018 for $63 billion, betting that owning a major player in the agriculture business would diversify its business and pay dividends down the road as farming supplies boomed. That hasn’t come to pass, and Monsanto’s costly litigation has further dragged Bayer’s share price down from its highs around a decade ago. Today, Bayer is worth less than the price it once paid for Monsanto.

Hundreds of thousands of lawsuits

Out of the cases against Bayer over Roundup so far, only a sliver were decided by a jury, yielding 13 decisions favoring the pharmaceutical giant and 11 siding with plaintiffs. Last year, a jury in Georgia ordered Bayer to pay $2.1 billion in damages to a plaintiff who suffers from non-Hodgkin’s lymphoma, a cancer that begins in white blood cells. Some other cases have been resolved in separate settlements, but many remain unresolved.

Under the terms of the proposed settlement, Bayer would make payments into a designated fund on a yearly basis for 21 years, which could total up to $7.25 billion, to resolve most of the outstanding Roundup lawsuits. That money would then be doled out to people based on their Roundup usage, age of cancer diagnosis and the severity of their disease. 

Under the settlement’s terms, agricultural and industrial workers who faced regular exposure to the product’s chemicals could receive an average of $165,000 if they were diagnosed with non-Hodgkin lymphoma under the age of 60. Residential users, those diagnosed later in life, and those with less aggressive cancer could receive tens of thousands in compensation.

Bayer has said that it could still cancel the settlement, which does not yet have court approval, if too many plaintiffs decide to opt out and reject its terms.

Supreme Court poised to decide

Last month, the Supreme Court said that it would hear a case on the issue in order to determine if federal laws protect Bayer, which complies with the Environmental Protection Agency’s rules, from lawsuits filed in state courts. The EPA does not require products including glyphosate to be sold with a cancer warning. 

Bayer praised the Supreme Court’s decision to take the case, arguing that farmers need regulatory clarity around the widely used product and calling the milestone an important part of its effort to “significantly contain” litigation around Roundup. “It is time for the U.S. legal system to establish that companies should not be punished under state laws for complying with federal warning label requirements,” Bayer CEO Bill Anderson said.