Johnson & Johnson to pay $6.5 billion to resolve nearly all talc ovarian cancer lawsuits in U.S.

Johnson
&
Johnson
on
Wednesday
said
it
plans
to
pay
$6.5
billion
over
25
years
to
settle
nearly
all
of
the
thousands
of
lawsuits
in
the
U.S.
claiming
its
talc-based
products
caused
ovarian
cancer,
pending
approval
of
the
claimants.

Those
cases
have
for
decades
caused
financial
and
public
relations
trouble
for
J&J,
which
contends
that
its
now-discontinued
talc
baby
powder
and
other
talc
products
are safe for
consumers.
About
99%
of
the
talc-related
lawsuits
filed
against
J&J
and
its
subsidiaries
stem
from
ovarian
cancer. 

The
company
recorded
a
charge
of
about
$2.7
billion
in
the
first
quarter
to
raise
its
reserve
for
talc
claims
to
about
$11
billion.

The
deal,
pending
approval
by
claimants,
would
allow
J&J
to
resolve
the
lawsuits
through
a
third
bankruptcy
filing
of
a
subsidiary
company,
LTL
Management. Courts
have
rebuffed
J&J’s
two
previous
efforts
to
resolve
the
lawsuits
through
the
bankruptcy
of
that
subsidiary,
which
was
created
to
absorb
the
company’s
talc
liabilities.

J&J
will
begin
a
three-month
voting
period
for
claimants,
in
hopes
of
reaching
a
75%
support
threshold
needed
for
a
bankruptcy
settlement
that
would
end
the
litigation
entirely
and
prevent
future
lawsuits.
Claimants
did
not
have
the
opportunity
to
vote
in
LTL
Management’s
previous
bankruptcy
cases,
J&J
executives
said
on
a
call
with
investors
on
Wednesday.

J&J
has
the “significant
support
of
the
overwhelming
majority
of
the
claimants”
based
on
conversations
with
their
lawyers
or
representation,
the
executives
added.

“We
firmly
believe
this
plan
is
in
the
best
interest
of
claimants
and
should
receive
a
favorable
and
immediate
confirmation
from
the
bankruptcy
court,”
said
Erik
Haas,
J&J’s
worldwide
vice
president
of
litigation,
during
the
call.

He
contended
the
settlement
is
a
far
better
recovery
for
claimants
than
would
be
likely
in
a
trial.

“As
that
track
record
shows,
most
of
bearing
claimants
have
not
recovered,
nor
are
they
expected
to
ever
recover
anything
at
trial,”
Haas
said. “At
the
rate
at
which
use
cases
have
been
tried,
it
would
take
decades
to
try
the
remaining
cases
meaning
most
claimants
will
never
see
their
day
in
court.”

Still,
litigation
has
resulted
in
some
large
verdicts
for
claimants.
That
includes
a

roughly
$2
billion
award
in
favor
of
22
women
who
blamed
their
ovarian
cancer
on
asbestos
in
J&J’s
talc
products.

Shares
of
J&J
closed
more
than
4%
higher
Wednesday.

J&J
said
the
remaining
pending
lawsuits
relate
to
a
rare
cancer
called
mesothelioma
and
will
be
addressed
outside
of
the
new
settlement
plan. The
pharmaceutical
giant
said
it
has
already
resolved
95%
of
mesothelioma
lawsuits
filed
to
date.

J&J noted
on
Wednesday
that
it
has
reached “final
and
comprehensive”

settlements
to
resolve
an investigation by
a
coalition
of
more
than
40
states
into
claims
the
company
misled
patients
about
the safety of
its talc
baby
powder and
other
talc-based
products.

The
company
has
also
reached
an
agreement
in
principle
to
resolve
claims
brought
by
suppliers
of
its
talc,
which
include
Imerys
Talc
America,
Cyprus
Mines
Corporation
and
their
related
parties.