Johnson & Johnson has announced that it is setting aside nearly $9 billion to cover allegations that its baby powder containing talc caused cancer, marking a significant increase from the previous amount set aside to cover potential liability. Under a new proposal, a J&J subsidiary, LTL Management, will re-file for Chapter 11 bankruptcy protection and seek court approval for a plan that would result in one of the largest product-liability settlements in US history.
The proposed settlement is being backed by over 60,000 parties that have filed lawsuits alleging harm from J&J talcum powder. The $8.9 billion would be payable over the next 25 years, up from the $2 billion set aside in October 2021.
Despite the proposed settlement, J&J has not admitted any wrongdoing, a point that company executives emphasised in a statement released on Tuesday, maintaining that the claims are specious and lack scientific merit. J&J’s worldwide vice president of litigation, Erik Haas, stated that fighting the lawsuits in court would be both lengthy and expensive. The lawsuits filed against J&J had alleged that its talcum powder caused users to develop ovarian cancer through use for feminine hygiene or mesothelioma, a cancer that strikes the lungs and other organs.
These claims have contributed to a drop in J&J’s sales of baby powder, prompting the company to stop selling its talc-based products in 2020, and announcing last year its plans to cease sales of the product worldwide. Following the announcement, J&J’s stock rose by 3 per cent in after-hours trading on Tuesday.
With agency inputs