Johnson & Johnson (J&J) has agreed to pay $8.9 billion to 70,000 plaintiffs alleging that the company’s talcum powder products caused cancer.
The proposed settlement is expected to be paid out over 25 years through a subsidiary that filed for bankruptcy to enable the $8.9 billion trust. If approved by a bankruptcy court, the agreement will resolve all current and future claims involving Johnson & Johnson products containing talc, such as baby powder.
According to lawyers, the new bankruptcy approval process will begin in the coming weeks.
A group of lawyers representing nearly 70,000 plaintiffs, including families of people who died from ovarian cancer and mesothelioma, called the settlement a landmark victory for the tens of thousands of women suffering from gynecological cancers caused by J&J’s talc-based products.
To make the agreement final, the court still has to accept a new bankruptcy filing by Johnson & Johnson subsidiary LTL Management, as well as the settlement itself. Conversely, the company must also persuade enough claimants to support the settlement plan.
Johnson & Johnson initially formed LTL in 2021 to avoid talc litigation, but an earlier bankruptcy filing by the unit was challenged and courts ruled that bankruptcy wasn’t the best way to resolve the matter. But today’s development offers a different picture altogether.
With today’s settlement offer, if approved, the payout would put an end to a long-running legal saga that had harmed Johnson & Johnson’s reputation. Although not a top seller, its baby powder is one of the company’s most recognizable brands, and many of the petitioners alleged that the talc used in the product was tainted with asbestos, a known carcinogen.
Pertinently, the company announced in 2020 that it would stop selling talc-based baby powder in the United States and discontinue global sales of the product this year, replacing it with a cornflour version. J&J further intends to spin off its consumer health business, which includes brands like baby powder, Neutrogena, and Tylenol, into a separate company called Kenvue. The pharmaceutical and medical divisions of Johnson & Johnson will remain in place.