Johnson & Johnson’s Connection to Asbestos
In April 2023, Johnson & Johnson proposed an $8.9 billion trust fund to settle its talc lawsuits. A federal appeals court rejected the company’s initial bankruptcy plan for talc claims in January 2023.
Johnson & Johnson announced in October 2021 that its talc subsidiary was filing for Chapter 11 bankruptcy protection. The company had previously set aside nearly $4 billion to cover lawsuits claiming its iconic Johnson’s Baby Powder causes cancer, including ovarian cancer and mesothelioma. To date, courts have awarded billions of dollars to plaintiffs.
The U.S. Department of Justice launched a criminal investigation in July 2019 to determine if Johnson & Johnson purposefully misled the public about asbestos fibers in its talcum powder. This investigation may take years to resolve. Members of Congress requested an update on the investigation in August 2022, but officials have yet to provide that information.
In 2018, a Reuters investigative report exposed company knowledge of asbestos contamination in J&J’s talc products tracing back decades. Tests from different labs found asbestos in Johnson & Johnson’s talc from 1971 to the early 2000s, but the company failed to report the findings to the U.S. Food and Drug Administration.
FDA, Talcum Powder and Asbestos
Retailers throughout the U.S. pulled J&J’s talc-based baby powder from shelves in October 2019 after the U.S. Food and Drug Administration found asbestos in one of the containers. The container was part of a 33,000-bottle batch that the company voluntarily recalled on Oct. 18, 2019. The discovery occurred when the FDA conducted a review of 43 cosmetic samples and found asbestos contamination in nine of them.
For years, scientists and companies have known that many sources of talc are naturally contaminated with asbestos, which causes mesothelioma. The two minerals often occur in the same geological formations.
Laws regulate asbestos at federal, state and local levels of government. No government agency regulates talc. The cosmetics industry is responsible for regulating its own use of talc, which has resulted in asbestos contaminating consumer products. Despite this, J&J did not focus on the issues of asbestos contamination in baby powder, which is one of its flagship consumer products.
The FDA conducted more tests of cosmetics products in 2022 and did not find asbestos in 50 new samples.
Johnson & Johnson’s Talcum Powder and Asbestos
Court documents have revealed that Johnson & Johnson knew its talc contained asbestos as early as the 1950s. By 2018, J&J was paying out multimillion-dollar verdicts over asbestos exposure from contaminated talcum powder.
Johnson & Johnson announced in August 2022 it would discontinue global sales of talcum powder in 2023. It ended sales of its talc-based baby powder in the U.S. and Canada in 2020 but continued to sell it internationally. Retailers kept selling stock of the product until it ran out. The company will continue to make a cornstarch-based version of its Johnson’s Baby Powder available worldwide.
J&J sold Shower to Shower, a line of talcum powder products made by J&J, to Valeant Pharmaceuticals (now Bausch Health) in 2012, prior to the advent of the first lawsuits in 2016. The company launched Johnson’s Baby Powder in 1894.
J&J Denied Talcum Powder-Cancer Connection
Johnson & Johnson has always publicly denied its talcum powder products cause cancer, much like many other companies accused of using asbestos in their products. However, documents unsealed in court revealed J&J company executives were aware of asbestos liabilities as early as the 1950s.
Internal company reports highlighted the need to suppress concerns over asbestos contamination at talc mines in Vermont and Italy. In addition, despite J&J decision-makers considering switching baby powder’s main ingredient from talc to cornstarch to avoid liability, the company never stopped selling talcum powder.
Tests conducted in the latter half of the 20th century revealed asbestos in J&J’s talc, which the company covered up, failing to report the contamination. Some of the talc originated in the Windsor Materials talc mine in Vermont, where one official recommended adding citric acid to help hide the presence of chrysotile asbestos fibers. Now juries are holding Johnson & Johnson accountable for asbestos-related cancers its products caused.
J&J Faces Baby Powder Lawsuits
In April 2023, J&J proposed a new bankruptcy plan to settle its talc lawsuits. Johnson & Johnson wants to establish an $8.9 billion trust fund through its talc subsidiary, LTL Management, to handle current and future talc claims. The company currently faces at least 51,000 talc lawsuits.
Two groups of law firms representing talc plaintiffs disagree on the plan. One group approves of the new plan, while the other says LTL Management is not in financial distress and does not qualify for bankruptcy protection. U.S. Bankruptcy Judge Michael B. Kaplan instructed the opposing sides to create a new reorganization plan with the help of two mediators.
Additionally, the U.S. Trustee, which is part of the U.S. Department of Justice, filed a motion to dismiss the new bankruptcy plan. The department also filed a similar motion to dismiss the original plan.
Johnson & Johnson initially offered to fund the trust with $2 billion. However, the U.S. Court of Appeals for the Third Circuit rejected the original bankruptcy plan in January 2023.
An advocacy group representing cancer victims accused J&J of withdrawing an initial funding agreement with the subsidiary of $61.5 billion to signal financial distress and justify the bankruptcy filing. The appeals court ruling found the company did not file for bankruptcy in good faith because it still had access to those assets.
J&J has reportedly spent approximately $1 billion on its legal defense for talc claims. Settlements and verdicts have cost the company an additional $3.5 billion. Johnson & Johnson had set aside $3.9 billion for talc-related litigation in February 2021, according to a regulatory filing with the Securities and Exchange Commission.
Subsidiary Seeks Bankruptcy Protection for Talc Lawsuits
In October 2021, under the weight of tens of thousands of lawsuits, Johnson & Johnson created a subsidiary, LTL Management, to hold its talc liabilities. The subsidiary soon filed for Chapter 11 bankruptcy to halt all outstanding and unresolved talc lawsuits against the company.
Bankruptcy Judge Craig Whitley moved the case from North Carolina to New Jersey, where Johnson & Johnson is headquartered, in November 2021. The move took the case from a jurisdiction considered favorable to J&J’s bankruptcy plan to one that is unfavorable based on past proceedings.
In February 2022, a court gave preliminary approval for the company’s original bankruptcy plan. The plan began to unravel by September that year when attorneys representing talc victims challenged it before the U.S. Court of Appeals for the Third Circuit in Philadelphia.
Public Perception and Brand Image
Johnson & Johnson’s brand, once known for its commitment to health, safety and trust, has faced a significant blow to its image following reports of asbestos contamination in its baby powder. The contamination raised serious concerns among consumers, leading to widespread scrutiny and legal battles.
According to YouGov BrandIndex, a market research firm that tracks consumer attitudes, J&J’s brand reputation has fluctuated significantly in recent years. The company’s development of a COVID vaccine had a positive impact on its brand image. But the brand has suffered over reports of asbestos contamination, faulty pelvic mesh devices and the company’s role in the opioid epidemic.
Johnson & Johnson discontinued talcum powder sales throughout the world in 2023, possibly in an attempt to restore its brand image and avoid future talc liabilities. Consumers had already lost trust in J&J’s iconic Baby Powder by the time the company ended global sales. Some consumers saw J&J’s decision to discontinue talcum powder as an admission of guilt, while the company said it was a commercial decision.
Asbestos contamination and other controversies have dealt a significant blow to J&J’s brand. Restoring the company’s image will require transparency and a continued focus on consumer safety.