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October 13th, 2004

"Bayer loses first of 1,500 PPA claims pending, just one more headache for company"

In November 2000, the FDA asked companies using PPA (phenlypropanolamine) in their cold products to voluntarily take the products off the market because of possible health risks, including links with hemorrhagic stroke in first time female users. Now, Bayer has lost the first of 1,500 PPA claims against the company after a Texas jury awarded $400,000 to a man who claims he had a stroke after taking Bayer AG''s Alka-Seltzer Plus cold medicine.

Of the 1,500 PPA cases pending, 700 of them are exclusively against Bayer. Bayer is considering whether to appeal the Texas ruling, as this jury award comes after the company is recovering from litigation over its recalled anti-cholesterol drug Baycol. Bayer had agreed to pay more than $1 billion to settle Baycol cases, which was withdrawn in 2001 and has been linked to 100 deaths.

An HVB analyst, Andreas Heine said in a note that if Bayer had to pay the same amount in every PPA case it was exclusively named, the total cost for the company would be $346 million. Heine also said the PPA cases were covered by the same insurance as the Baycol cases, but coverage was being used entirely on Baycol and nothing was left for PPA cases. Bayer has said insurance coverage was “presently provided for the PPA litigation” but that it was not possible to estimate potential PPA liability accurately.

On another note, Bayer has just pleaded guilty and agreed to pay $4.7 million for fixing synthetic rubber prices, the third time this year the company or a subsidiary admitted violating antitrust laws.