J&J strikes US states deal over baby powder claims

J&J strikes US states deal over baby powder claims
talc on shelfReuters

Johnson & Johnson (J&J) has said it has reached a tentative deal with more than 40 US states over their investigation of the marketing of its talc-based baby powder and other products.

The healthcare giant said it expected to pay $700m (£552m), confirming a figure that had been reported earlier.

The deal would be part of a far bigger settlement the firm has been trying to reach to resolve claims around the safety of the products.

J&J says they were safe for consumers.

But it is facing more than 50,000 cases from people who claim using its talc-based baby powder caused cancer, including some who allege the product contained cancer-causing asbestos.

The company created a subsidiary responsible for the claims in an effort to resolve the lawsuits in bankruptcy court.

Last year, it proposed a nearly $9bn settlement, saying the claims were “specious” but it wanted to move on from the issue.

But judges have blocked those plans, ruling that the subsidiary was not in financial distress and could not use the bankruptcy system to resolve the lawsuits.

State officials did not comment on the tentative deal.

Erik Haas, worldwide vice president of litigation for Johnson & Johnson, said the company was continuing to work on a wider resolution.

“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,” he said in a statement.

“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.”

Johnson & Johnson has won a majority of the talc lawsuits against it and has maintained the products did not contain asbestos and did not cause cancer.

But it has been stuck with some significant losses, including one decision in which 22 women were awarded a judgement of more than $2bn.

Analysts estimate the company will end up spending more than $10bn to resolve the legal battles.

A lawyer representing some of the cases from former customers said earlier this month that the reported resolution of the state matters was “good news” for his clients because it cleared out “distractions”.

“We need… attention focused on getting to a global talc powder settlement in 2024. This helps,” Ronald Miller said in a statement.

Johnson & Johnson stopped US sales of its talc-based baby powder in 2020, citing “misinformation” that had sapped demand for the product, applied to prevent nappy rash and for other cosmetic uses, including dry shampoo. It later announced plans to end sales globally.

Before that decision, the company had sold the baby powder for almost 130 years. It continues to sell a version of the product that contains corn-starch.

Source: bbc.co.uk

By David Ryckman