Johnson & Johnson drops talcum powder globally as lawsuits mount

Johnson & Johnson said it plans to stop selling its old talc-based baby powder products globally in 2023, a move that comes amid ongoing legal battles and years after the company dropped the produced in the United States and Canada.

J&J said Thursday it made the “business decision” to switch all of its baby powder products to cornstarch instead of talc after conducting an assessment of its portfolio. The health conglomerate, which maintains the product is safe, has faced lawsuits for nearly a decade accusing it of hiding cancer risks linked to its talc-based baby powder.

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“We are continually evaluating and optimizing our portfolio to best position the business for long-term growth,” spokeswoman Melissa Witt said in an emailed statement. “Today’s decision is part of a global portfolio assessment, which assessed several factors, including differences in demand for our products between geographic regions and changing consumer trends and preferences.”

Shares of the New Brunswick, New Jersey-based company rose less than 1% in post-trade trading and had fallen 2.3% so far this year through Thursday’s close .

In May 2020, as J&J navigated thousands of lawsuits accusing the product of causing cancer in some users, the company pulled its talc powders from the US and Canadian markets, citing another “trade decision” based on the decrease of sales.

“After decades of selling talc products the company knew they could cause fatal cancers to unsuspecting women and men around the world, J&J finally did the right thing,” said Leigh O’Dell, lawyer for former talc users, in an email. statement Thursday. “They stopped sales in North America over two years ago. The delay in taking this action is inexcusable.

Talcum powder

Talcum powder has long been used in baby products because the mineral keeps skin dry and prevents diaper rash. However, the mines that produce the powder can also produce asbestos, a mineral once used in products such as building insulation that researchers have linked to cancers. Some consumer companies have found that cornstarch can provide the same benefits as talc without the asbestos risk.

J&J said Thursday that its “position on the safety of our cosmetic talc remains unchanged.”

The healthcare conglomerate has spent years looking for ways to contain its legal liabilities. It faces 40,300 lawsuits in the United States over its talc powders, according to a company filing last month with the United States Securities and Exchange Commission.

J&J filed for bankruptcy protection for its new unit LTL Management LLC last year after arguing it was struggling to contain lawsuits.

$2 billion trust

The company has invested $2 billion in a trust as part of the unit’s bankruptcy to resolve all current and future talc claims. In February, a judge said the case could continue to seek settlements, but his decision was appealed.

Lawyers for former talc users challenged J&J’s decision to have the unit file for Chapter 11 protection to deal with the talc unit. A federal appeals court in Philadelphia will hear plaintiffs’ arguments Sept. 19 that the move amounted to a “bad faith” filing for bankruptcy because they argue that J&J’s financial condition was not threatened by the litigation over the talc.

In court filings, lawyers for J&J noted that the company had encountered obstacles in seeking a comprehensive settlement of the talc cases and had to deal with mounting legal costs. Lawyers for the drugmaker noted that it had paid more than $1 billion in legal fees over the past five years in the talc cases and faced inconsistent jury verdicts.

J&J has been forced to pay about $3.5 billion in settlements so far to resolve the talc cases, according to the company’s bankruptcy records. A 2018 jury verdict in a St. Louis state court ultimately forced J&J to pay $2.5 billion to 20 women who targeted its baby powder for ovarian cancer. The Missouri Supreme Court and the United States Supreme Court declined to overturn the verdict.

Meanwhile, J&J plans to spin off its consumer healthcare business into a standalone company next year, which legal experts say could help it insulate liability for Chapter 11 vehicle failures.