Johnson & Johnson has reportedly reached a preliminary agreement in illicit advertising of talc-based baby powder, where it will pay approximately $700 million to settle an investigation by over 40 U.S. states.
This investigation concerns allegations that the company improperly advertised its talc-based baby powder without adequately warning of potential health risks, according to sources familiar with the matter.
This settlement aims to prevent possible lawsuits that would allege J&J concealed any connection between its talcum powder and various forms of cancer. The details of the agreement, including specific terms, are still being finalized between J&J and state attorneys general representatives. The agreement's total value, however, has been agreed upon.
J&J's decision to settle is part of its broader strategy to manage a growing number of lawsuits accusing it of hiding the health risks associated with its baby powder. This follows two unsuccessful attempts to use bankruptcy courts to reach a settlement with former users. The ongoing litigation, which has lasted for over a decade, and the potential for future cancer-related lawsuits, have impacted the company's stock value, according to analysts.
In a previous bankruptcy settlement proposal, J&J officials stated they had allocated $400 million to address consumer protection claims from U.S. states. After negotiations and mediation in December, the company agreed to increase this amount.
To date, only Mississippi and New Mexico have filed formal lawsuits against J&J regarding its talcum powder marketing. In an October securities filing, J&J disclosed that 42 states and the District of Columbia had initiated a joint investigation into the company's promotion of its talcum powder products. State attorneys general, including those from Arizona, North Carolina, and Texas, have requested information about J&J's handling of baby powder risks.
J&J, a leading global healthcare product manufacturer, faces significant legal challenges beyond the state-level claims. The company is dealing with over 50,000 lawsuits alleging it hid the cancer risks associated with asbestos in its talc-based powders to protect one of its iconic products. The majority of these lawsuits involve women who developed ovarian cancer, with others linked to mesothelioma, a type of cancer associated with asbestos exposure.
Most of these lawsuits are centralized before a federal judge in New Jersey. As part of its strategy to manage these lawsuits, J&J previously proposed a $9 billion settlement to resolve all current and future claims, which was linked to the bankruptcy filing of one of its subsidiaries.
Despite the numerous lawsuits, J&J consistently asserts that its talc-based products are safe and do not cause cancer. The company emphasizes that it has responsibly marketed its baby powder for over a century. In its defense, J&J has experienced a mix of legal outcomes – winning several cases in court and getting others dismissed before reaching trial.
This situation highlights the complex legal and public relations challenges J&J faces in addressing the widespread concerns and allegations about its baby powder products. The proposed $700 million settlement with U.S. states, if finalized, would represent a significant step in J&J's ongoing efforts to resolve these issues and move forward.
However, the settlement does not address all the outstanding legal challenges and claims facing the company, indicating that J&J's legal battles and the associated scrutiny over its baby powder products are far from over.