Bayer’s reputation does not permit period two renegotiation of the
If Bayer were subsequently to discover large
numbers of high-valuation plaintiffs with high expected probabilities of
recovery at trial, its strategy would be sorely tested.
above, Bayer could have reached secret settlements with high-valuation
second-period plaintiffs for amounts off the schedule.
The Bayer strategy also does not suffer from the problem of
an agreement is a has arisen around
settlement and when an agreement is a
recent case one plaintiff received from the defendant after extensive
a substantially negotiations in
higher amount ($50m) the judge’s chambers
led to a “judgment” in its favor.
The earlier-settling plaintiffs who
had negotiated $20m settlements with MFN agreements claimed that this
outcome triggered the MFN.
The defendant argued that
the outcome a ruling by
The cerivastatin strategy does not suffer from the problem of
defining a judgment or settlement and the associated incentives that the
defendant and second-period parties have in creatively labeling agreements.
The cerivastatin by courts and the
is also perceived more Bayer has been able to
positively than successfully tout
the transparency benefits of its approach. Indeed, one federal court
efforts of only
in rejecting class-action certification (Langley, limited legal relevance to the certification of
Interview with George Lykos (2007). In fact, Bayer’s counsel acknowledged that the strategy would
have been plaintiff
very difficult to maintain in the face
of even (2007).
33 While most judgments occur after formal trial, this judgment was entered by the court after both parties consented to its jurisdiction.