Drugs Health Medical Pharma

J&J raises talc settlement to $8.9 billion, unit files for a second bankruptcy

U.S. Bankruptcy Court for the District of New Jersey

HQ Team

April 5, 2023: Johnson and Johnson, a US multinational making pharmaceuticals and medical devices, has offered to pay $8.9 billion to settle tens of thousands of lawsuits claiming its talc-based products cause cancer.

The New Jersey-based company’s subsidiary has filed for bankruptcy protection again to seek a “reorganization” plan to “equitably and efficiently” resolve the claims in North America.

The company has agreed to contribute up to $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, an increase of $6.9 billion over the $2 billion previously committed by the subsidiary during the initial bankruptcy filing in October 2021.

The subsidiary company, LTL Management, also has “secured commitments from over 60,000 current claimants to support a global resolution on these terms,” according to a J&J statement.

J&J has been trying to resolve the lawsuits in bankruptcy court since 2021, after creating LTL Management and holding it responsible for the claims. An earlier bankruptcy court ruling found LTL was not in financial distress and could not use the bankruptcy system to resolve the lawsuits.

Ovarian cancer, mesothelioma

The claims are premised on the allegation that cosmetic talc causes ovarian cancer and mesothelioma. This position has been rejected by independent experts and governmental and regulatory bodies for decades, according to J&J.

Asbestos exposure is the primary risk factor for mesothelioma, with some of the 40,000 claimants alleging that talcum powders contain the cancer-causing agent.

Living with someone who works with asbestos may also increase an individual’s risk of developing mesothelioma, as asbestos particles can travel on skin and clothing.

“The company continues to believe that these claims are specious and lack scientific merit,” said Erik Haas, Worldwide Vice President of Litigation at Johnson & Johnson.

“However, as the Bankruptcy Court recognized, resolving these cases in the tort system would take decades and impose high costs on LTL and the system, with most claimants never receiving any compensation,” Mr Haas said.

‘Equitable, efficient’

Resolving claims through the proposed reorganization plan “is both more equitable and more efficient, allows claimants to be compensated promptly, and enables the company to remain focused on our commitment to profoundly and positively impact health for humanity,” he said the statement.

In most legal systems, a tort is any instance of harmful behavior, such as a physical attack on a person or interfere with one’s possessions or the use and enjoyment of one’s land, economic interests, honor, reputation, and privacy. 

“The J&J subsidiary’s original filing nor this re-filing is an admission of wrongdoing, nor an indication that the company has changed its longstanding position that its talcum powder products are safe,” according to the statement.

“Notwithstanding the lack of scientific validity to these claims, plaintiff trial lawyers continue to relentlessly advertise for talc claims, supported by millions of dollars of litigation financing, all in the hopes of a massive return on investment,” said John Kim, Chief Legal Officer of LTL.

The subsidiary’s intention has always been to resolve these claims quickly, efficiently, and fairly for the pending and future claimants and not incentivize abuse of the legal system, he said.

J&J stopped sales of its talc-based baby powder, sold worldwide for 130 years, in the US in 2020, stating “misinformation” about the product had lowered demand.

In 2022, it announced plans to end sales globally.

The company has won the vast majority of cosmetic talc-related jury trials prosecuted to date. It reiterates that no talc-related claims against the company have merit, according to the company statement. 

Leave a Reply

Your email address will not be published. Required fields are marked *