On Wednesday, Johnson & Johnson (J&J) proposed paying $6.48 billion over a 25-year period to settle most of its lawsuits in the U.S. claiming its talc-based products, including Johnson’s Baby Powder, caused ovarian cancer

The pharmaceutical and cosmetics giant has faced years of legal battles, and the newest move to settle comes amidst increasing financial pressure on the company. 

J&J’s proposal aims to settle nearly all current and future claims related to talcum powder causing ovarian cancer, which would account for more than 99% of its pending talc lawsuits

The settlement would exclude cases related to mesothelioma, a rare and deadly cancer caused by asbestos. The company announced its intention to handle those cases separately. J&J has consistently said its products do not contain asbestos and do not cause cancer.

How the Proposed Settlement Would Work

  • The proposed settlement relies on a subsidiary company’s third bankruptcy filing. If approved, J&J would file a “prepackaged” Chapter 11 bankruptcy for its subsidiary, LTL Management.
  • Plaintiffs would have three months to vote on whether to accept the settlement.
  • The plan would only receive approval if 75% of plaintiffs agree to it.

Lawsuits Wear on J&J’s Bottom Line

As of May 2024, the company faced 53,950 lawsuits in multidistrict litigation in a New Jersey federal court. Other cases are playing out in state courts around the U.S.

Recent talcum powder trials have yielded contrasting outcomes. In April 2024, an Illinois jury awarded $45 million to the family of Theresa Garcia, attributing her mesothelioma to J&J’s talcum-based baby powder. However, a Sarasota, Fla. jury ruled in favor of J&J the same week in a case involving ovarian cancer, highlighting the complexity of proving talc caused the conditions these lawsuits claim.

Past verdicts, such as the $2.1 billion awarded in June 2021 to 22 women with ovarian cancer, have intensified the pressure on J&J’s bottom line. 

The legal battle has also taken a toll on J&J’s public perception. If successful, the newly proposed settlement could relieve some of the financial strain and close a legal battle that’s gone on for decades.

In the face of mounting legal challenges and public scrutiny, J&J continues to assert the safety of its products.

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Talc Settlement Still Not Guaranteed

This is the third time J&J has tried to settle talc lawsuits through bankruptcy. Courts have twice shot down the company’s plans to take this route. Each time, J&J proposed taking bankruptcy through the same subsidiary — LTL Management — created primarily to absorb liability for the company.

The new agreement depends on three-quarters of plaintiffs agreeing to the offer within three months. J&J didn’t offer this voting option in the two previous bankruptcy attempts.

J&J set aside an additional $2.7 billion in the first quarter of 2024 to address talc lawsuit claims. The company now has $11 billion earmarked for current and future claims.