Bayer, a leading drug manufacturer, faces criticism and litigation over several of its products: Mirena IUD, Xarelto and Yaz birth control.
- Bayer HealthCare is focused on pharmaceuticals, nonprescription medications and medical devices.
- Bayer CropScience is focused on crop protection and pest control.
- Bayer MaterialScience manufactures high-tech polymers, which are used in everything from the automotive and construction industries to footwear, wood and textiles.
- Bayer Business Technology and Services was established to support Bayer’s restructuring of North American subsidiaries in 2008, with services like business planning, consulting, HR, accounting, IT and infrastructure support.
At the end of 2013, the Bayer Group employed 113,200 people worldwide, with an established presence in North and South America, Europe, Asia, Africa, Australia and New Zealand. The company considers Europe its home market, with nearly a third of its employees and its headquarters located in Germany.
|Fast Facts About Bayer|
|Founders: Friedrich Bayer and Johann Friedrich Weskott|
|Headquarters: Leverkusen, Germany|
|Size: 113,200 employees worldwide|
|2013 Revenue: $55.9 billion|
Bayer HealthCare is further broken down into four divisions: animal health, consumer care, medical care (diabetes management) and pharmaceuticals. The consumer-care division focuses on nonprescription medications and supplements and introduced the world to both aspirin and heroin. The consumer-care division is responsible for many well-known brands such as Midol, One A Day vitamins, Alka-Seltzer and Aleve. In May 2014, Bayer agreed to buy Merck’s consumer care division for $14.2 billion. This gives it control of Claritin, Coppertone and Dr. Scholl’s products.
The pharmaceutical division consists of two parts: General medicine and specialty medicine, e.g., diagnostic imaging. In the general-medicine sector, popular pharmaceuticals include erectile dysfunction drug Levitra, cancer drug Nexavar, blood-clotting drug Kogenate and multiple-sclerosis drug Betaferon. Bayer’s pharmaceutical division also focuses on women’s health, and has supported family planning since the introduction of The Pill more than 50 years ago. The company manufactures the popular birth-control pills Yaz and Yasmin, as well as Mirena and Skyla, which are both intrauterine devices (IUDs).
Yaz and Yasmin are linked to an increased risk of potentially fatal blood clots. And Mirena can cause uterine perforation and other serious side effects. Bayer faces lawsuits from women injured by its birth-control products. The company could face future claims over its new blood thinner, Xarelto, which shows signs of creating side effects similar to Pradaxa, another blood thinner.
Dye salesman Friedrich Bayer and master dyer Johann Friedrich Weskott founded Bayer in 1863. Approaching the market of synthetic dyes with a research-and-development focus, they set the tone for the company’s future.
Early success and expansion quickly took Bayer from a three-man shop to a 300-person workforce. In 1881, the company’s transition to a joint-stock corporation led to its development as an international chemical company, laid the financial foundation for expansion and established a pharmaceutical division.
It built a scientific laboratory in Wuppertal-Elberfeld, Germany, then site of the company’s headquarters. The company set new standards in research, such as the development of aspirin, which hit the market in 1899. In 1912, Leverkusen became the company’s headquarters. Bayer continued its international expansion, and by 1913 nearly 10 percent of its employees worked outside of Germany.
World War I Halts Progress
During World War I, Bayer began producing war materials like explosives and chemical weapons. However, as with many companies, the war halted progress for Bayer and devastated export markets. Inflation tapped out remaining financial reserves. Foreign assets and patents and trademarks, such as aspirin and heroin, were seized.
From 1925 to 1951, Bayer incorporated into chemical conglomerate IG Farben and did not exist as an individual company. After the Allies dissolved IG Farben into 12 new companies, Bayer reemerged in 1951 as Farbenfabriken Bayer AG, with sites in Leverkusen, Elberfeld, Dormagen and Uerdingen restored to the company, and received the subsidiary Agfa in 1952.
From the 1950s to the 1970s, Bayer’s reconstruction helped the Federal Republic of Germany undergo the Wirtschaftswunder, which means “economic miracle.” While still under control of the Allies, the company was allowed to acquire foreign partnerships and resume international sales, with a focus on Latin America and the United States.
Acquisitions and Growth
The company’s foundation in research and development again took hold, and the subsequent products and inventions contributed to further expansion. Bayer’s acquisition of Cutter Laboratories Inc. and Miles Laboratories, Inc. in the 1970s gave the company footing in the market of U.S. pharmaceuticals and led to increased sales for the region.
The 1990s marked the increasing importance of development in North America. The milestone acquisition of Sterling Winthrop allowed Bayer to regain the rights to the “Bayer” company name and logo in the U.S. for the first time in 75 years. In 1995, its “pharmaceutical research triad” was completed, and its third facility was built in Japan.
In the early 2000s, Bayer HealthCare, Bayer MaterialScience and Bayer CropScience were launched as legally independent subgroups. In 2006, Schering AG became Bayer’s largest acquisition to date, prompting a major expansion of the HealthCare division.
In 2013, the company celebrated its 150th anniversary.
Although Bayer is a trusted name, the company’s commitment to developing innovative health care solutions has not always been successful. The company introduced the world to an illicit narcotic and has seen a great deal of recent scrutiny over its birth control products Yaz, Yasmin and Mirena.
The introduction of blood-thinner Xarelto, from Bayer and Johnson & Johnson, made Bayer vulnerable to the type of lawsuits that Johnson & Johnson currently faces for its blood thinner, Pradaxa; both drugs have similar dangerous side effects.
Bayer marketed and distributed heroin as a non-addictive morphine and cough suppressant. Researcher and chemist Felix Hoffmann, who had just discovered modern-day aspirin two weeks prior, was experimenting to produce codeine, which is less potent and addictive than morphine. Instead, he produced heroin, which is twice as potent as morphine. Bayer even marketed heroin as a cure for morphine addiction until it was discovered that it was actually a faster-acting form of morphine.
In 1913, Bayer stopped producing heroin after rising numbers of heroin-related hospitalizations, reports of tolerance and abuse of the drug. In 1914, the U.S. passed a law to regulate its sale and distribution, but still allowed it to be manufactured, prescribed and sold for medical purposes. Following World War I, Bayer’s trademark rights to heroin and aspirin were seized under the Treaty of Versailles. In 1924, the U.S. Congress banned the sale, production and importation of heroin.
Yaz, Yasmin and Ocella (the generic version) contain a different hormone, called drospirenone, than older birth-control pills. Studies backed by the FDA have warned that drospirenone can triple the risk of potentially fatal blood clots in patients, increasing chances of blood clots, deep vein thrombosis and pulmonary embolism as much as 74 percent.
Yaz was put on the market in 2006. Since then, the company’s advertising practices concerning Yaz have been repeatedly disciplined by the FDA. The FDA has received thousands of complaints regarding the connection between Yaz and blood clots. In an update, the FDA reiterated its concern about the risks of blood clots with Yaz.
More than 10,000 women have filed lawsuits against Bayer and its affiliates over the adverse side effects of Yaz. As of March 2014, it had settled 8,250 cases for $1.7 billion.
Mirena is a long-term, reversible form of birth control known as an IUD. Some women experienced life-threatening side effects. These include perforation of the uterus, pelvic inflammatory disease, device expulsion, ectopic pregnancy and other pregnancy complications.
One of the most dangerous side effects of Mirena is device migration. Migration refers to the IUD perforating the wall of the uterus and entering the abdominal cavity, pelvic organs or blood vessels, which causes pain, infection and organ damage.
Lawsuits filed against Bayer claim the company failed to warn the public of the device’s susceptibility to spontaneously migrate and perforate the uterus, and that Bayer was aware of the dangerous risks and intentionally released a faulty product. Lawsuits also claim Bayer used advertising that oversold the IUD’s benefits and inadequately explained the risks.
Xarelto (rivaroxaban) is an oral medication developed by Bayer and marketed in the United States by Johnson & Johnson. It is a blood thinner used to prevent dangerous blood clots.
With all anticoagulants, patients are more prone to excessive, uncontrolled bleeding. Hundreds of deaths have been attributed to the blood thinner Pradaxa, manufactured by Johnson & Johnson. Unlike older anticoagulants, Xarelto and Pradaxa have no known antidote to stop bleeding.
Boehringer Ingelheim is facing more than 2,000 Pradaxa lawsuits. These lawsuits blame the company for concealing health risks, inadequately warning consumers of the severity of the drug’s bleeding side effects and failing to adequately test the drug before putting it on the market. Because these anticoagulants were released to the public without an antidote, plaintiffs state that the companies are guilty of distributing a defective product. Similar lawsuits over Xarelto are expected to follow.
Future of Bayer
Bayer plans to continue expansion, and reported increased sales in all of its business sectors for 2012. With an eye on growth, Bayer plans to increase spending for research and development. The company plans to develop on the enormous potential of the Asian/Pacific market.
Bayer estimates that five new medicines with release dates between 2012 and 2015 will increase sales by $2.5 billion. Some of these, like the vision-loss medication Eylea and cancer medication Stivarga, have already been approved.
After the scrutiny over Bayer’s contraceptives, the expensive settling of legal claims and the loss of Yaz patents, Bayer is looking to diversify in the area of women’s health. Bayer announced plans to acquire Conceptus, a 300-employee women’s-health company headquartered in California, for $1.1 billion. This deal, which will help Bayer to grow in the contraceptive market, is expected to be completed by mid-2013. Conceptus’s leading Essure procedure, a 10-minute nonsurgical method of permanent birth control, was approved by the FDA in 2002.