Johnson & Johnson To Stop Selling Talc-Based Baby Powder Globally From 2023 As Lawsuits Mount

J&J has said that it had made the “commercial decision” to transition all its baby powder products to use cornstarch instead of talcum powder after conducting an assessment of its portfolio

J&J has been forced to pay about $3.5 billion in settlements so far to resolve talc cases, according to the company's bankruptcy filings.

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Johnson & Johnson (J&J) on Friday announced that the company plans to stop selling its legacy talc-based baby-powder products globally in 2023, news agency Bloomberg said. According to the report, this move by J&J comes amid continued legal battles and years after the firm discontinued the product in the US and Canada.

US-based J&J on Thursday said that it had made the “commercial decision” to transition all its baby powder products to use cornstarch instead of talcum powder after conducting an assessment of its portfolio.

According to the Bloomberg report, the health conglomerate, which maintains the product is safe, has for almost a decade faced lawsuits accusing it of hiding cancer risks tied its talc-based baby powder.

J&J spokesperson Melissa Witt said, “We continuously evaluate and optimize our portfolio to best position the business for long-term growth. Today’s decision is part of a worldwide portfolio assessment, which evaluated several factors, including differences in demand for our products across geographic regions and evolving consumer trends and preferences.”

Shares of J&J, New Jersey-based firm, rose less than 1 per cent in post-market trading and had fallen 2.3 per cent so far this year through Thursday’s close.

As J&J navigated thousands of lawsuits accusing the product of causing some users' cancers, the company in May 2020 pulled its talc-based powders from the US and Canadian markets, saying another “commercial decision” based on declining sales.

Leigh O’Dell, a lawyer for former talc users, said, “After decades of selling talc-based products the company knew could cause deadly cancers to unsuspecting women and men around the world, J&J has finally done the right thing. They stopped sales in North America more than two years ago. The delay in taking this step is inexcusable.”

Talcum powder issue

The issue regarding J&J’s 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 yield asbestos, a mineral once used in products such as building insulation that researchers have linked to cancers.

Some consumer companies have found corn starch can offer the same benefits of talc without the asbestos risk.

The company has spent years seeking ways to contain its legal liabilities and faces 40,300 lawsuits in the US over its talc-based powders, according to a company filing last month with the US Securities and Exchange Commission.

J&J sought bankruptcy protection for its newly created LTL Management LLC unit last year after arguing it was struggling to contain the lawsuits.

J&J’s $2 billion trust

To settle all claims, future and current, J&J put $2 billion into a trust as part of the unit’s bankruptcy. In February, a judge said the case could proceed in order to seek settlements, but his ruling is being appealed.

Lawyers for former talc users have challenged J&J's move to have the unit seek 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" bankruptcy filing because they contend J&J's financial position wasn't threatened by the talc litigation.

In court filings, J&J's lawyers have noted the company ran into stumbling blocks in working out a global settlement of the talc cases and faced mounting legal costs. The company’s attorneys noted it paid more than $1 billion in legal fees over the past five years in the talc cases and had to deal with inconsistent jury verdicts.

J&J has been forced to pay about $3.5 billion in settlements so far to resolve talc cases, according to the company's bankruptcy filings.

A 2018 jury verdict out of state court in St. Louis ultimately forced J&J to pay $2.5 billion to 20 women who targeted its baby powder for their ovarian cancer.

Meanwhile, J&J plans to break off its consumer health business into a standalone company next year in a move that legal experts say could help it isolate liability should the Chapter 11 vehicle not succeed.