Johnson & Johnson withdraws Talcum baby Powder Globally after Lawsuits Mount

    Johnson & Johnson will stop selling its talc-based baby powder globally in 2023. The legacy-based product was already discontinued in Canada and US, but the company continued legal battles.




    After assessing its product portfolio, the health conglomerate had decided to use cornstarch instead of talc powder for commercial reasons. J&J maintains that the product is safe after having faced a decade-long lawsuit alleged that the company hid cancer risks associated with baby talc powder.

    The shares of Johnson and Johnson rose nearly 1 % Thursday in post-market trading. The stock has lost 2.3% this year through market close on Thursday.

    J&J pulled out of its talc-based baby powder in May 2020, citing a commercial decision from declining sales in Canadian and US markets. This was after thousands of lawsuits accused the company of causing cancer to some users.

    Talcum Powder 

    Talcum powder was used in baby products as they contain minerals that keep skin dry and prevent rashes from diapers.

    The mines producing powder can also produce asbestos, a building insulation material linked to cancers. Several consumer companies have discovered that corn starch can provide similar benefits to talc without the asbestos risk factor.

    J&J said that the position of their cosmetic talc remains the same. According to the filing with SEC, the company faced 40,300 lawsuits in the US alone over its talc-based baby powders last month.

    J&J has spent years trying to contain legal liabilities. The newly created LTL Management LLC asked for bankruptcy protection, arguing that it could not contain the thousands of lawsuits.

    Trust for claim settlement

    The healthcare conglomerate has deposited $2 billion in a trust as a part of its bankruptcy cover to settle all current and future talc claims at present and in the future. A judge had ordered the case to proceed for settlements in February; however, his ruling has been appealed against.

    The talc users’ lawyers have challenged the company’s move to seek protection under chapter 11 for the talc unit. On September 19 in Philadelphia, a federal’s appeal court will hear the argument from that plaintiff’s side. The argument is that the bankruptcy move by J&J is in bad faith as the company’s financial position is not threatened by the talc unit litigation.

    The J&J lawyers, in their filings, have sad that their client has faced stumbling blocks in trying to work out global settlements for the talc cases and faced legal costs. The company has already spent $1 billion on legal fees in the past five years and faced inconsistent court verdicts. So far, J&J has paid $3.6 billion towards talc case settlements as per the bankruptcy filings.

    In the meantime, the company plans to hive off its consumer health division into a separate standalone entity next year. According to legal experts, this move can help the company isolate its liabilities if the chapter 11 move does not materialize.



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