In this photo, a container of Johnson and Johnson baby powder is seen on April 5, 2023 in San Anselmo, California.
Justin Sullivan | Getty Images
Johnson & Johnson has reached a test settlement to solve one research from more than 40 states on allegations that the company misled patients about the security of baby talcum powder and other talc-based products, the company said in a statement to CNBC on Tuesday.
Notably, the settlement does not resolve the tens of thousands of consumer lawsuits, some of which are set to go to trial this year, alleging that these talc-based products caused cancer.
Those cases caused decades of financial and public relations trouble for J&J, which claims its talc-based products and now-talc-free baby powder are safe for consumers.
J&J said in October securities deposit that 42 states and Washington, DC, had launched a joint investigation into the marketing of talc-based products. The company will pay $700 million to settle the investigation, CFO Joseph Wolk said said the Wall Street Journal on Tuesday.
Last year, J&J allocated only about $400 million to resolve consumer protection claims in the US.
A J&J representative declined to confirm the amount of the settlement to CNBC.
Erik Haas, J&J’s global vice president of litigation, confirmed the settlement in a statement without providing additional details.
“Consistent with the plan we outlined last year, the company continues to pursue multiple avenues to reach a comprehensive and final resolution of the talc dispute,” Haas told CNBC. “As leaked last week, this progress includes an agreement in principle reached by the Company with a consortium of 43 Attorneys General to resolve the talc claims.”
Bloomberg reported first about the settlement earlier this month, citing sources familiar with the matter.
J&J, which reported fourth-quarter results on Tuesday, has tried twice to resolve the consumer talc cases by offloading those liabilities to a subsidiary, LTL Management, and having that unit file for Chapter 11 bankruptcy protection .
A New Jersey bankruptcy judge in July dismissed the second bankruptcy attempt, saying LTL Management was not in sufficient financial distress. A US appeals court in April dismissed the first bankruptcy attempt on the same grounds.
As part of its latest failed bankruptcy attempt, J&J proposed paying $8.9 billion to talc claimants.
Haas said during an earnings call in October that the company is asking the Supreme Court to overturn lower court rulings denying bankruptcy protection to LTL Management.
J&J also said late last year that it was considering a third bankruptcy attempt as it tries to move forward with that proposal.
J&J ended sales of the talc-based baby powder globally last year.
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