On a recent Wednesday, healthcare giant Johnson & Johnson made headlines by announcing its plans to settle the majority of U.S. lawsuits concerning its talc-based products and their purported link to ovarian cancer. The company has committed to paying an eye-opening sum of $6.475 billion over a period of 25 years, in order to put to rest these ovarian cancer cases. This comprises virtually all (99%) of the talc-related lawsuits currently facing the company.
Previously, Johnson & Johnson attempted to address these lawsuits through two bankruptcy filings by their subsidiary company, LLT Management LLC. Both attempts were unsuccessful. However, the company has now proposed to settle these claims through another bankruptcy filing by LLT Management. This strategic move is aimed at dealing with all current and future ovarian cancer claims associated with the ongoing talc litigation in the U.S.
In order for the proposed settlement to be finalized, it needs to be accepted by at least 75% of the claimants alleging harm caused by Johnson & Johnson's talcum products.
The plans for this resolution go beyond just dealing with the ovarian cancer claims, as it also intends to extend Johnson & Johnson's existing settlements with individuals who filed lawsuits against the company for developing mesothelioma - a type of cancer linked to asbestos exposure. It will also address settlements with various U.S. states where the company has been accused of failing to warn consumers about the potential risks of its talc products.
Highlighting the seriousness of the situation, Johnson & Johnson made provisions in the first quarter, in the form of a charge of around $2.7 billion. This will bolster its reserve for talc-related claims, bringing it up to a total of approximately $11 billion.
