Johnson & Johnson Settles Talc Lawsuits for $6.5 Billion

Johnson & Johnson Settles Talc Lawsuits for $6.5 Billion

Willem van der Berg
2 min read

Johnson & Johnson to Pay $6.5 Billion to Settle Talc Lawsuits

Johnson & Johnson has unveiled a plan to disburse $6.5 billion over 25 years to resolve numerous lawsuits alleging that its talc-based products were responsible for causing ovarian cancer. Despite the company's assertions regarding the safety of its talc products, it is initiating a three-month voting phase to secure a 75% support threshold for a bankruptcy settlement. This approach, involving a subsidiary bankruptcy strategy, follows two previously unsuccessful attempts to address the lawsuits. It's important to note that this settlement plan will not encompass mesothelioma-related lawsuits. Furthermore, Johnson & Johnson has also finalized arrangements to resolve state investigations and claims brought by talc suppliers.

Key Takeaways

  • Johnson & Johnson intends to pay $6.5 billion over 25 years to resolve talc-related lawsuits
  • Approximately 99% of the lawsuits allege that J&J's talc-based products led to ovarian cancer
  • J&J reported a $2.7 billion charge in Q1, bolstering its talc claims reserve to $11 billion
  • The settlement's fruition hinges on the approval of claimants and would bring the cases to a close via LTL Management bankruptcy
  • J&J is seeking 75% support from claimants during a three-month voting period to conclude the litigation


Johnson & Johnson's $6.5 billion settlement spanning 25 years is designed to address the multitude of lawsuits asserting that its talc-based products were the cause of ovarian cancer. The agreement involves a three-month voting period necessitating a 75% approval from claimants. If successful, it will bring an end to the litigation through LTL Management bankruptcy. This subsidiary bankruptcy tactic comes after two failed attempts to resolve the lawsuits. It's worth noting that mesothelioma-related claims are exempted. Following a $2.7 billion charge in Q1, the settlement elevates J&J's talc claims reserve to $11 billion.

The decision made by J&J will have ramifications for manufacturers of talc-based products as they may encounter heightened scrutiny and potential lawsuits. Simultaneously, talc suppliers, consumers, and shareholders could confront more stringent product regulations, increased insurance premiums, and diminished trust in the brand. Long-term consequences may include a greater consumer preference for talc-free alternatives and potential growth opportunities for competitors. Governments might introduce stricter regulations pertaining to talc-based products, thereby propelling the industry toward safer alternatives.

Did You Know?

  • Talc-based products: Talc is a mineral commonly utilized in personal care items like baby powder due to its moisture-absorbing and rash-preventing properties. Nevertheless, studies have indicated a potential connection between talc and various forms of cancer, including ovarian cancer.
  • Bankruptcy settlement: This legal process facilitates a company's debt and finance reorganization under the protection of bankruptcy court. In this instance, J&J has established a subsidiary, LTL Management, which will initiate bankruptcy proceedings to address the talc lawsuits.
  • Voting period and 75% support threshold: The voting period refers to the three-month timeframe during which talc claimants can vote on the proposed bankruptcy settlement. A 75% support threshold mandates that at least 75% of the voting claimants must endorse the settlement for it to be valid. This requirement is common in bankruptcy cases as it ensures substantial creditor support for the proposed reorganization plan.

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