Johnson & Johnson Chief Financial Officer Joseph Wolk on Tuesday called a tentative agreement to pay $700 million to settle an investigation brought by 42 states into how the company marketed its talcum-based baby powder an “important step” as it tries to “reasonably put the matter behind us.”
The settlement is the latest chapter in the yearslong litigation and investigation into the safety risks tied to the New Jersey-based company’s talc-based powder and Johnson & Johnson’s marketing of it.
The company is facing more than 50,000 suits accusing it of concealing the cancer risk of one of its most iconic products.
Most of the lawsuits brought against the company were filed by women who claimed they developed ovarian cancer after using the company’s baby powder, which at one point was among Johnson & Johnson’s most popular products. The company has pushed back, insisting that its talc-based powders were asbestos-free, didn’t cause cancer, and had been marketed appropriately for more than a century.
The majority of the cases have been consolidated before a federal judge in New Jersey.
Despite the denials, the company in 2023 proposed paying at least $8.9 billion to resolve tens of thousands of lawsuits. In May, the company said it would set aside $400 million for states’ claims.
While Johnson & Johnson no longer sells talc-based powder, the company separated its consumer-health business into a stand-alone company named Kenvue, which sells a cornstarch-based version of the baby powder. J&J promised to remove all its baby powders containing talcum powder worldwide by the end of 2024.
The company has tried to use Chapter 11 legal protection twice to settle some of the tens of thousands of lawsuits against them, but in 2023, a New Jersey judge forbade the company from doing so, claiming its affiliate LTL Management LLC wasn’t under enough financial distress to warrant Chapter 11 protection.
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Despite the lawsuits, the world’s largest maker of healthcare products on Tuesday said it had topped fourth-quarter earnings estimates, reporting nearly $21.4 billion in quarterly revenue, up from $19.9 billion a year ago. Analysts had forecast $21.1 billion.
Johnson & Johnson expects full-year earnings revenue to be between $87.8 billion and $88.6 billion.