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settlement.

As a result, it was actually in Bayer’s

interest

to

foster

communication

among

plaintiffs

and

their

attorneys.

This finding potentially has broad implications for policymakers

interested in encouraging transparency in the civil justice system. be sure, the transparency that resulted from this litigation was very

To

limited – the settlement

plaintiffs.

Nor

was

the

terms were never made public by Bayer information learned by the plaintiffs

or the during

the discovery process made public. in more transparency and horizontal

But the settlement process resulted equity among plaintiffs than is

common in tort litigation.

To the extent

they made

should consider it possible.

adopting

policies

to

policymakers value this result encourage the conditions that

In the following sections, I briefly review the history of cerivastatin, describe the economic literature on settlements and mass torts, and informally analyze cerivastatin litigation using the economic

models developed in consider the public

the economic and legal literature. welfare and policy implications of

To conclude, I these findings.

THE RISE AND FALL OF CERIVASTATIN

In launched fanfare.

April of 1997, the pharmaceutical division of Bayer A.G. its new cholesterol-reducing drug, cerivastatin, with great This statin, marketed as Baycol in the United States and by

a

4 variety of other names elsewhere, reduced “bad” LDL-cholesterol. It also had important business implications for Bayer. Competitors had already released other statins, which had proved to be a

countries

including

Baycol,

Lipobay,

Lipoban,

Liogis,

Liposterol,

Certa,

Vervasta,

Cholstat,

Eltina,

Staltor,

Stativa,

Vaslip,

Vazqol, and

Zenas.

as cerivastatin.

It was marketed under a variety of names in different

3 I focus primarily upon the incentives because as the only party involved in all of most critical role in structuring settlement

4

For the purposes of consistency, this

faced by the defendant the litigation, it has the agreements. chapter refers to this drug

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