Johnson & Johnson To Pay $700M in Talc Baby Powder Controversy

In a major development, Johnson & Johnson (J&J), the healthcare retailer, has agreed to pay $700 million. This hefty sum is to settle an investigation led by over 40 U.S. states. They’ve been scrutinizing J&J’s claims regarding the safety of its talc baby powder and other talc-based products.

However, this agreement doesn’t cover the numerous consumer lawsuits J&J faces right now — some of them are even due in court this year. The claimants believe that the healthcare company’s talc-based products could potentially cause cancer.

For years, these lawsuits have been a thorn in J&J’s side, both financially and from a public relations standpoint. But J&J has consistently argued that its talc-based products, including its discontinued talc baby powder, pose no harm to consumers.

Last year, the company disclosed that a joint investigation had been launched by 42 states and Washington, D.C., into how J&J marketed its talc-based products. The outcome of this investigation is the agreement to settle for $700 million, as confirmed by the company’s CFO, Joseph Wolk.

Just last year, the company had only set aside $400 million to deal with consumer protection claims in the U.S. The details of the settlement were confirmed by Erik Haas, J&J’s worldwide vice president of litigation, yet he did not disclose the payment amount or further specifics of the deal.

J&J has twice attempted to offload the consumer talc cases onto a subsidiary, LTL Management. The idea was to let this unit take the hit by filing for Chapter 11 bankruptcy protection. But both attempts ended in failure, with courts deciding that LTL Management wasn’t financially distressed enough to justify such a move. During the latter attempt, J&J suggested paying $8.9 billion to talc claimants.

Today, the company is even floating the idea of making a third bankruptcy attempt as it strives to push its proposal through. J&J finally discontinued global sales of its talc-based baby powder last year, marking an end to a controversial chapter of its history. However, it now has to navigate the stormy seas of ongoing investigations and consumer lawsuits while trying to restore faith in its brand.