J&J Said to Eye Bankruptcy for Baby Powder Unit
A month after buying its way out of prosecution in the long-running US litigation against opioid makers for $263 million, Johnson & Johnson is now said to be weighing plans to offload liabilities from lawsuits charging that its talc-based baby powder causes ovarian cancer or mesothelioma and, alternatively, that it contains asbestos.
Citing seven unnamed sources, the Reuters news agency said an attorney for the new Jersey-based US healthcare giant has told plaintiffs’ lawyers it might carve out the baby powder activities into a newly created business that would then seek bankruptcy protection.
The route known in legal jargon as a Texas two-step bankruptcy could result in lower payouts for those who didn’t settle beforehand, the sources said, noting that this is a strategy other companies facing asbestos litigation have used in recent years.
In a statement, Johnson & Johnson Consumer, the unit responsible for the baby powder portfolio, told Reuters it had not decided on any particular course of action in this particular litigation other than to “continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate.”
As issues with its Covid-19 vaccine continue to dog the company, J&J already has its back to the wall with an estimated 300,000 lawsuits from women claiming they were harmed by the allegedly asbestos-laced powder. The company has repeatedly denied that the powder contains asbestos.
Last month, J&J ‘s case was dealt another blow, as the US Supreme Court declined to hear its appeal against a $2 billion lower court judgment in favor of 22 ovarian cancer sufferers.
In a 2018 investigation into the asbestos charges, Reuters said it found that J&J “knew for decades” that its baby powder contained the cancer-causing mineral. The company stopped selling the talc-based powder in the US and Canada last year, replacing it with a cornstarch formulation. In other jurisdictions, including Europe, it continues to market both formulations.
In the opioid case, Johnson & Johnson had been ordered to pay $527 million. As part of the settlement, it agreed to permanently end its manufacturing and distribution of the drugs throughout the US.
According to the US Centers for Disease Control (CDC), the opioid crisis has killed some 500,000 across the US over the past two decades. Drugmakers and distributors face more than 3,400 lawsuits alleging that their products contributed to the crisis.
Author: Dede Williams, Freelance Journalist
