Bayer and Johnson & Johnson have successfully defended the safety of their big-selling clotbuster Xarelto in court, but as the case count continues to climb, the companies have agreed to shell out $775 million to wrap them up.
The drugmakers will split the settlement 50-50, Bayer says. The deal will resolve “virtually all” of about 25,000 outstanding cases, which claim Xarelto caused severe and sometimes fatal bleeding episodes. Bayer expects its liability insurance to cover part of the settlement costs.
“Bayer continues to believe these claims are without merit and there is no admission of liability under the agreement,” the company said. “However, this favorable settlement allows the company to avoid the distraction and significant cost of continued litigation.”
Sarah Freeman, a representative for Johnson & Johnson, said the company believes the settlement is the “right thing to do for patients and their doctors.” The deal doesn’t include an admission of liability for J&J, she added.
Plaintiff’s attorney Andy Birchfield said in a statement that the deal is a “fair and just resolution for thousands of consumers who have substantial claims.” Under the deal, a claims administrator and special master will manage the payouts to plaintiffs.
In an annual filing released last month, J&J said it faced about 25,600 product liability cases filed by Xarelto patients and had been accruing for costs related to the litigation. In that filing, the company also said the number of lawsuits continues to rise.
J&J is “steadfast that the claims raised in the litigation contradict years of scientific data and the U.S. Food and Drug Administration’s repeated confirmation of Xarelto's safety and efficacy,” Freeman said.
The partners have won all six cases that went to trial but opted to settle for several reasons, J&J said in a statement. For one, “complex litigation demands an enormous amount of time and resources” even if the companies are winning.
“Because of this litigation, our talented scientists and researchers, our employees and many doctors across the country have had to spend numerous hours answering questions from plaintiff lawyers, compiling documents those lawyers have asked for, and otherwise being pulled away from their passion for patient care,” the company said.
Further, news coverage of the lawsuits and lawyers advertising for new plaintiffs “have caused confusion and concern among patients,” J&J said. Such ads can carry deadly consequences, the company argues. During the litigation, the company said, some patients stopped taking Xarelto after seeing the TV ads and suffered strokes and deaths.
J&J and Bayer launched Xarelto back in 2011, and the drug has climbed up their sales charts. Last year, J&J reported $2.48 billion in Xarelto sales in the U.S. Bayer markets the drug internationally and reported €3.63 billion ($4.11 billion) in Xarelto revenue last year. Bayer also receives license revenues on U.S. sales.