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In a recent U.S. Securities and Exchange Commission (SEC) filing, Johnson & Johnson revealed it allocated $4 billion to baby powder cancer settlement and litigation expenses.
The annual report filed with the SEC details expenses and financial performance for the 2020 fiscal year, which ended Jan. 3. In the 157-page filing, Johnson & Johnson revealed it set aside $4 billion for baby powder cancer litigation and settlement expenses in 2020. This was a significant increase from the $400 million the company set aside for the same purposes in 2019.
The SEC filing notes Johnson & Johnson faces “significant” legal proceedings that could result in financial losses, reputation damages, and other outcomes that can negatively affect the business.
As of Jan. 3, the company has faced 25,000 lawsuits in the United States over its baby powder products. However, this number “continues to increase,” according to the company.
“While the Company believes it has substantial defenses in these matters, it is not feasible to predict the ultimate outcome of litigation,” Johnson & Johnson noted in the SEC filing.
“The Company could in the future be required to pay significant amounts as a result of settlements or judgments in these matters, potentially in excess of accruals, including matters where the Company could be held jointly and severally liable among other defendants.”
Johnson & Johnson’s baby powder troubles date back decades, to when consumers first took legal action against the company.
According to plaintiffs in baby powder cancer lawsuits, Johnson & Johnson baby powder played a critical role in thousands of users’ cancer diagnoses.
At first, these claims centered on the dubious safety of talc. Later, lawsuits focused on asbestos contamination in talc.
Although talc has not been confirmed as a health hazard or carcinogen, asbestos has long been known as a carcinogenic material. Because asbestos and talc are mined from the earth near each other, talc mining and product development companies are responsible for ensuring talc is not contaminated with asbestos.
In December 2018, Reuters published an investigation into Johnson & Johnson’s talc products that revealed holes in the company’s talc-testing process. Even as the manufacturer’s testing improves, trace levels of asbestos may still be found in finished consumer items such as baby powder.
This was seen in action when Johnson & Johnson voluntarily recalled one lot of its baby powder in October 2019 due to asbestos contamination.
According to the FDA recall notice, asbestos was detected through routine FDA testing.
In May 2020, Johnson & Johnson made the decision to stop selling talc-based baby powder in Canada and the United States — putting an end to over 100 years of sales, according to CNN.
However, the company still faces countless lawsuits contending asbestos in its talc-based baby powder led to illnesses such as ovarian cancer and mesothelioma.
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