Johnson & Johnson Nears $700 Million Settlement in Talc-Based Products Investigation

Johnson & Johnson Nears $700 Million Settlement in Talc-Based Products | The Enterprise World

(Source – The Messenger)

Healthcare giant Johnson & Johnson (J&J) has announced a preliminary agreement with over 40 US states, signaling progress in the ongoing investigation into the marketing of its talc-based baby powder and related products. The company is set to pay approximately $700 million (£552 million) as part of this tentative deal, affirming a previously reported figure.

This development is a crucial step within a more extensive settlement framework that J&J has been actively pursuing to address concerns surrounding the safety of its products. Despite the company asserting the safety of its talc-based items for consumers, it currently faces over 50,000 legal cases from individuals alleging a link between the use of the baby powder and the development of cancer. Some claimants specifically contend that the product contains cancer-causing asbestos.

Johnson & Johnson handles the claims through bankruptcy court

To manage these lawsuits, Johnson & Johnson established a subsidiary, which is responsible for handling the claims through bankruptcy court. In the previous year, the company proposed a nearly $9 billion settlement, describing the claims as “specious” and expressing a desire to move past the contentious issue. However, attempts to implement this plan were thwarted by judges who ruled that the subsidiary was not in financial distress, thereby preventing its use of the bankruptcy system to resolve the legal challenges.

While state officials have refrained from commenting on the tentative deal, Erik Haas, the worldwide vice president of litigation for Johnson & Johnson, emphasized the company’s commitment to achieving a broader resolution. Haas explained, “The company continues to pursue several paths to achieve a comprehensive and final resolution of the talc litigation.”

The healthcare giant has encountered legal setbacks despite prevailing in a majority of talc lawsuits, maintaining that its products are asbestos-free and do not cause cancer. Notable losses include a case where 22 women were awarded a judgment exceeding $2 billion. Analysts predict that Johnson & Johnson may ultimately spend over $10 billion to resolve these legal battles.

The 130-year history of selling the iconic baby powder

A lawyer representing some claimants welcomed the reported resolution of state matters, describing it as “good news” for clients as it eliminates “distractions.” Ronald Miller, the attorney, stressed the need for attention to be focused on achieving a global talc powder settlement in 2024.

In response to concerns and changes in market dynamics, Johnson & Johnson ceased US sales of its talc-based baby powder in 2020, citing “misinformation” that adversely affected product demand. The company later extended its decision to end global sales. Before these actions, Johnson & Johnson had a nearly 130-year history of selling the iconic baby powder. Although the talc-based version is no longer available, the company continues to market a variant containing corn starch.

Also Read: Judge Rejects Johnson and Johnson’s Effort to Limit Talc-Related Liabilities

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