New Jersey USA (Global News)_US pharmaceutical giant Johnson & Johnson which has been embroiled in over forty thousand lawsuits on alleged contamination of its baby powder with cancer causing properties, has agreed to a USD 8.9 billion in settlement. It’s the largest ever product liability settlement in US history. As a result of the announcement, J&J’s stock rose 3 percent.
The Company will also end all global sales of the talcum powder which was believed to have contained traces of asbestos which caused ovarian cancer or mesothelioma, a cancer which strikes the lungs and other organs. The formula of the talc will now change to one based on corn starch.
The settlement however still requires the approval of a bankruptcy court which has to, in judicial parlance, equitably and efficiently resolve the claims arising from the litigation.
Despite all the negativity surrounding the product, the Company has never admitted any wrongdoing, although it stopped selling the talc-based powder in the US and Canada in May 2020. This was a direct result due to a massive drop in sales. In a statement, J&J’s Vice President of litigation stated that the claims are specious and lack scientific merit. The Company called the end of global sales a ‘commercial decision’ rather than based on the impact of the bad publicity and resulting fallout from the lawsuits.
The USD 8.9 billion is quadruple the amount Johnson & Johnson had set aside to pay for the potential liability and is payable over the next 25 years. The original amount the Company had envisaged paying was USD 2 billion. A J&J subsidiary LTL Management will re-file for Chapter 11 bankruptcy.
