The U.S. EPA Just Gave Bayer a Gift in Its Battle Against Weed Killer Cancer Claims

May 1, 2019, 1:39 PM UTC

The embattled management at Bayer just got a handy boost from the U.S. Environmental Protection Agency (EPA)—a draft report that says glyphosate, the active ingredient in its Roundup weedkiller, does not cause cancer.

This is no change of stance on the EPA’s part, but the timing of the new report should prove beneficial to Bayer, which bought Roundup-maker Monsanto last year and is facing 13,400 claims from people who claim the substance is carcinogenic.

Two juries have already decided that Roundup did cause plaintiffs’ cancer, leading to damages—which Bayer is appealing—totaling $159 million. Amid the verdicts, Bayer’s value has plummeted some 40%. More trials will take place this year, and now Bayer’s lawyers get to point to the EPA’s opinion as backing up their central argument that glyphosate is not carcinogenic.

Glyphosate and cancer

This is no isolated finding. As Secretary of Agriculture Sonny Perdue said in a Tuesday statement, the EPA’s proposed interim decision on the substance’s safety is “consistent with the findings of other regulatory authorities that glyphosate does not pose a carcinogenic hazard to humans.”

However, not all studies have agreed on that point. Notably, the World Health Organization’s International Agency for Research on Cancer (IARC) said in a 2015 report that glyphosate was “probably carcinogenic to humans.” Unlike regulatory agencies, the IARC looked only at studies that were in the public domain and available for independent scientific review—that meant ignoring industry data that could not be independently verified.

In its proposed decision, the EPA defended its use of industry-funded studies by saying it has “rigorous guidelines for how studies should be conducted” and “independently evaluates required studies for scientific acceptability.”

“EPA’s cancer evaluation is more robust than IARC’s evaluation,” the agency claimed, adding that its evaluation was “also more transparent” as its work was open for public comment. By contrast, the IARC’s meetings are closed, it does not allow public comment, and its reports are “final without an external peer review,” according to the EPA

As it happens, the EPA is not the only U.S. agency currently seeking public comment on a glyphosate-related report. The Agency for Toxic Substances and Disease Registry also put out a draft report last month noting that, while most studies found no glyphosate-cancer link, “a possible association between exposure to glyphosate and risk of non-Hodgkin’s lymphoma could not be ruled out, based on conflicting results.”

Interestingly, the EPA draft notes that Bayer and an “unidentified organization” organized separate mass-mail campaigns, including comments from farmers and consumers, urging the agency to “keep glyphosate accessible.” On the other hand, environmental groups organized seven mass-mail campaigns, calling on the EPA to restrict glyphosate’s use, reconsider its view on the cancer link, and protect the monarch butterfly—an insect whose population may be threatened by glyphosate use. One of those organizations was unidentified, too.

Shareholder rebuke

Bayer has consistently maintained that glyphosate is safe to use, but its shareholders are freaking out about the massive liabilities it seems to face in the U.S.

On Friday a majority of investors refused to ratify management’s actions over the last year, on the basis that they had not properly assessed the financial risk of the $63 billion Monsanto acquisition. This was unprecedented for a German corporation, where shareholders almost always back management in such votes by more than 90%.

As a result, Bayer’s board of management, led by CEO Werner Baumann, is in a precarious position, saved only by two factors: the backing of Bayer’s supervisory board, which is led by Baumann mentor Werner Wenning, and the fact that investors are for now loath to introduce more chaos into the equation by bringing in new management.

On Wednesday, Reuters reported that Bayer’s supervisory board would in the next few weeks hold an extraordinary meeting to “discuss a crisis of confidence in its leadership.”

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