Containers of Johnson and Johnson baby powder are displayed on a shelf at Walgreens on April 5, 2023 in San Anselmo, California.
Justin Sullivan | fake images
Johnson and Johnson has reached a tentative agreement to resolve an investigation by more than 40 states into claims that the company misled patients about the safety of its baby powder and other talc-based products, the company said in a statement to CNBC on Tuesday.
In particular, the settlement does not resolve tens of thousands of consumer lawsuits, some of which are scheduled to go to trial this year, alleging that such talc-based products caused cancer.
Those cases have for decades caused financial and public relations problems for J&J, which maintains that its now-discontinued talcum powder products are safe for consumers.
J&J said in an October securities filing that 42 states and Washington, D.C., had launched a joint investigation into its marketing of talc-based products. The company will pay $700 million to resolve the investigation, its chief financial officer, Joseph Wolk, told the Wall Street Journal on Tuesday.
Last year, J&J only set aside about $400 million to resolve consumer protection claims from U.S. states.
Erik Haas, J&J's global vice president of litigation, confirmed the deal in a statement to CNBC. He did not provide the amount of the payment or further details about the agreement.
“Consistent with the plan we outlined last year, the company continues to pursue several paths toward a complete and final resolution of the talc litigation,” Haas told CNBC. “As leaked last week, that development includes an agreement in principle that the Company reached with a consortium of 43 State Attorneys General to resolve its talc claims.”
Bloomberg first reported on the deal earlier this month, citing sources familiar with the matter.
J&J, which reported fourth-quarter results on Tuesday, has twice attempted to resolve the consumer talc cases by transferring those liabilities to a subsidiary, LTL Management, and having that unit file for Chapter 11 bankruptcy protection.
In July, a New Jersey bankruptcy judge rejected the second bankruptcy attempt, saying LTL Management was not in sufficient financial distress. In April, a U.S. appeals court threw out the first bankruptcy attempt for the same reason.
As part of the latest failed bankruptcy attempt, J&J proposed paying $8.9 billion to talc plaintiffs.
J&J said late last year that it is considering a third bankruptcy attempt as it tries to move forward with that proposal.
The company ended sales of its talc-based baby powder globally last year.
