Johnson & Johnson agrees $5.5bn talc cancer settlement

Johnson & Johnson has agreed to pay an estimated $5.5 billion to settle tens of thousands of lawsuits alleging that its talc-based baby powder

NEW YORK: Johnson & Johnson has agreed to pay an estimated $5.5 billion to settle tens of thousands of lawsuits alleging that its talc-based baby powder and other products caused ovarian cancer.

The proposed settlement covers around 76,000 claims. The cases include lawsuits pending in federal and state courts across the United States.

The agreement could bring an end to a legal battle that has continued for about a decade. However, it will only become final if 95 per cent of eligible ovarian cancer claimants accept the deal.

Lawyers representing the plaintiffs welcomed the settlement. They described it as a reasonable outcome after years of legal proceedings.

Johnson & Johnson has continued to deny that its talc products caused cancer. The company has also rejected claims that its products contained asbestos.

The company said it agreed to the settlement to bring the long-running dispute to an end. Its litigation chief maintained that the claims lacked merit.

Under the proposed agreement, Johnson & Johnson expects to pay about $3 billion in 2027. Additional payments will follow in 2028.

The final cost could be higher. Lawyers involved in the negotiations said the total amount could eventually reach $7 billion or more, depending on the number of claimants who participate.

The settlement does not place a fixed ceiling on the company’s total payments. Individual qualifying claims will receive amounts based on specific criteria.

The agreement follows several important courtroom victories for Johnson & Johnson.

The company has won a number of individual trials. It has also successfully challenged some of the experts used by plaintiffs to support their claims.

A federal judge recently raised questions about whether individual plaintiffs could establish that talc specifically caused their ovarian cancer.

Johnson & Johnson has maintained for years that its talc products were safe.

The company stopped selling talc-based baby powder in the United States in 2020. It replaced the product with a cornstarch-based version.

The legal dispute also involved a controversial bankruptcy strategy. In 2021, Johnson & Johnson moved talc liabilities to a subsidiary that sought bankruptcy protection.

The strategy, commonly known as the “Texas two-step”, was intended to resolve the lawsuits through bankruptcy proceedings. The attempts ultimately failed after courts dismissed the bankruptcy cases.

Before those efforts, Johnson & Johnson had experienced mixed results in talc trials.

In one major case, a jury awarded billions of dollars to 22 women who alleged that the company’s baby powder contributed to their ovarian cancer. Other cases ended in victories for the company, while some awards were later reduced on appeal.

The new settlement differs from the earlier bankruptcy proposals.

It applies only to existing claims. It does not cover potential future lawsuits.

The agreement is also expected to provide faster payments to eligible claimants. Lawyers involved in the deal said payments could be completed within about 18 months.

The settlement now faces an important approval test. At least 95 per cent of ovarian cancer claimants must agree to the deal before it can become final.

If approved, the agreement would significantly reduce one of Johnson & Johnson’s longest-running legal challenges and provide compensation to thousands of people involved in the litigation.