Johnson & Johnson makes a deal with US states over baby powder marketing

Johnson & Johnson has announced a preliminary agreement with over 40 US states concerning their inquiry into the marketing practices of its talc-based baby powder and other items.

The healthcare giant confirmed its intention to pay $700 million, a figure previously reported. This tentative deal is part of a more extensive settlement J&J is seeking to address concerns surrounding the safety of its products.

In 2020, J&J ceased US sales of its talc-based baby powder, citing “misinformation” impacting product demand. The company, in operation for almost 130 years, continues to sell a corn-starch-based version of the product globally.

J&J contends that their products were safe for consumers, despite facing over 50,000 lawsuits alleging that their talc-based baby powder led to cancer, with some claimants asserting the presence of cancer-causing asbestos in the product.

To navigate the legal challenges, the company established a subsidiary tasked with handling the claims in bankruptcy court. In the past year, it proposed a nearly $9 billion settlement, asserting that the claims were baseless, but it wished to put the issue behind them.

However, these plans were rejected by judges who ruled that the subsidiary wasn’t financially distressed and couldn’t use bankruptcy proceedings to settle the lawsuits.

State officials have not commented on the preliminary deal. Johnson & Johnson, despite prevailing in a majority of talc lawsuits, has suffered significant setbacks, including a case where 22 women were awarded a judgment exceeding $2 billion. Analysts predict the company may spend over $10 billion to resolve these legal battles.

A lawyer representing some claimants welcomed the reported resolution of state matters, stating it was positive for clients as it cleared distractions, allowing attention to focus on achieving a global talc powder settlement in 2024.

Erik Haas, vice president of litigation for Johnson & Johnson, said in a statement, “The company continues to pursue several paths to achieve a comprehensive and final resolution of the talc litigation. As was leaked last week, that progress includes an agreement in principle that the company reached with a consortium of 43 state attorneys general to resolve their talc claims. 

We will continue to address the claims of those who do not want to participate in our contemplated consensual bankruptcy resolution through litigation or settlement.”