Johnson & Johnson has tentatively agreed to pay approximately $700 million in an effort to resolve an investigation by more than 40 US states regarding claims that the company wrongfully marketed its talc-based baby powder without sufficient warnings about health risks. Specific settlement terms are still under negotiation.
This step towards a settlement is part of J&J’s strategy to deal with a growing number of lawsuits accusing the company of concealing potential health risks associated with its baby powder. This issue has been a major influence on J&J’s stock price, according to market analysts.
Despite having faced an 11% decrease in stock price in the previous year, the company’s shares showed a slight gain on Monday, following the initial disclosure of the proposed settlement.
It is important to note that this agreement does not cover lawsuits already filed by Mississippi and New Mexico, who are seeking higher settlements due to their advanced litigating status. They aim to penalize J&J for marketing and selling its baby powder without cancer warnings over the course of almost half a century, dating back to 1974.
Beyond the states’ allegations, J&J’s legal exposure expands to more than 50,000 suits that claim the company hid evidence of asbestos in its talc-based powders, a factor known to contribute to the development of cancer. Most of these claims come from women who developed ovarian cancer, but others are linked to mesothelioma, a type of cancer specifically tied to asbestos exposure.
Despite these claims, the company maintains that its talc-based products don’t cause cancer and that it has appropriately marketed its baby powder for over a century. However, former users of the baby powder allege that J&J executives knew about trace amounts of asbestos in the product since the early 1970s.
In more recent years, numerous juries have awarded a total of more than $6.5 billion in damages to consumers who claimed that the powders caused their cancers. In response to declining sales and ongoing legal battles, J&J removed its talc-based powders from the market in the US and Canada in 2020 and replaced talc with a cornstarch-based version. The company has pledged to phase out all its baby powders containing talcum powder worldwide.