Bayer To Reserve Extra $4.5B Provision For Future Roundup Claims

Bayer announced to investors on Thursday it will book an additional $4.5 billion provision to cover its potential exposure for future claims from plaintiffs related to litigation which alleges that its weedkiller Roundup can cause cancer.

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CEO Werner Baumann shared the news during a call to update investors on a five-point plan to deal with potential future Roundup claims, saying that the future of the litigation hinges in large part on whether the German company succeeds in appealing a recent case to the U.S. Supreme Court.

“It is important for the company, our owners and our customers that we move on and put the uncertainty and ambiguity related to the glyphosate litigation behind us, and focus on the substance, value and the perspective of our business instead,” Baumann said.

The decision comes after a U.S. judge in May rejected Bayer’s plan to try to limit the costs of future class action suits over claims that Roundup causes cancer.

Bayer has said decades of studies have shown Roundup, and key ingredient glyphosate, are safe for human use, but thousands of users have alleged Roundup caused their non-Hodgkin lymphoma.

Bayer said it would file a petition later this summer with the U.S. Supreme Court seeking review of a lower court ruling in favor of Roundup user Edwin Hardeman. The company stated a ruling in its favor by the Supreme Court would effectively end all Roundup-related litigation. But it set aside the new $4.5 billion provision for the the possible scenario that the court declines to hear the matter or ends up favoring the plaintiff.

In addition, Bayer said that it was working on replacing glyphosate-based products with alternative ingredients starting in 2023 for its U.S. residential customers, however glyphosate formulas would remain the same for U.S. professional and agricultural markets.

Other tactics included in the company’s five-point plan include creating a website with scientific studies about Roundup’s safety, discussing whether to continue to sell glyphosate-based products in the U.S., creating a future claims settlements and science panel to research alternative solutions to address future claims, and continuing its efforts to settle existing claims.

“We believe that the U.S. Supreme Court should give strong consideration to accepting our petition to review the Hardeman case and render a positive ruling,” Baumann said.

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