Johnson & Johnson (J&J) announced on Wednesday that it is moving forward with a $6.475 billion proposed settlement to resolve tens of thousands of lawsuits alleging that its baby powder and talc products contain asbestos, leading to ovarian cancer.The proposed settlement aims to resolve the lawsuits through a third bankruptcy filing of a subsidiary company. This move initiates a three-month voting period to reach a consensus on settling all current and future ovarian cancer claims. Notably, ovarian cancer claims constitute 99% of the talc-related lawsuits against J&J, with approximately 54,000 lawsuits consolidated in a New Jersey federal court. Previous Attempts and Current SupportJ&J had faced setbacks in previous attempts to resolve these lawsuits through subsidiary bankruptcies. Despite asserting that its products do not contain asbestos or cause cancer, J&J claims that the proposed settlement has garnered support from a majority of plaintiff attorneys handling cancer-related lawsuits against the company.The company expresses confidence in reaching a 75% support threshold needed for the bankruptcy settlement, which would effectively terminate the litigation, prevent future lawsuits, and dissuade individuals from opting out to pursue separate legal actions.Financial Impact and Litigation HistoryJ&J disclosed an incremental charge of $2.7 billion in the first quarter of 2024 to account for recent talc-related settlements. The proposed deal builds upon previous settlements concerning mesothelioma cases and allegations from U.S. states regarding inadequate product warning.While continuing its legal defense, J&J remains focused on gathering votes for the settlement. The company notes its success rate in ovarian cancer cases over the past six years. However, notable verdicts, including a $2.12 billion award in favor of 22 women citing asbestos exposure, underscore the complexity and financial impact of the ongoing litigation.Future Proceedings and Scientific ReviewRecent legal developments include a federal judges decision to dismiss the latest bankruptcy case in July 2023, allowing trials to resume. In March, J&J received an opportunity to contest scientific evidence linking talc to ovarian cancer, prompting a fresh review of the cases in New Jersey federal court. J&J plans to present new arguments on the scientific aspects by late July, maintaining its commitment to defending against these lawsuits while pursuing the proposed settlement.
