Johnson & Johnson has announced that it is setting aside nearly $9 billion to address claims that its baby powder, which contained talc, caused cancer. This is more than four times the amount that the company had previously reserved for this purpose.
As part of the proposed settlement, a J&J subsidiary will file for Chapter 11 bankruptcy protection and seek court approval for a plan that would result in one of the largest product-liability settlements in U.S. history.
The $8.9 billion will be payable over the next 25 years to the subsidiary, LTL Management. This amount is higher than the $2 billion that J&J had set aside in October 2021. The increased amount is supported by over 60,000 parties who have filed lawsuits alleging harm from J&J talcum powder, according to the company.
Despite the settlement, J&J is not admitting any wrongdoing, and its executives have emphasized that the claims “are specious and lack scientific merit.” However, fighting the lawsuits in court would take decades and be costly, according to Erik Haas, J&J’s worldwide vice president of litigation.
The lawsuits filed against J&J alleged that its talcum powder caused ovarian cancer and mesothelioma, cancer that affects the lungs and other organs, through use for feminine hygiene.
These claims contributed to a drop in J&J’s sales of baby powder, prompting the company to stop selling its talc-based products in 2020. Last year, J&J announced plans to cease sales of the product worldwide.
Following the announcement, J&J’s stock rose 3% in after-hours trading on Tuesday.
