Johnson & Johnson Ceases Selling Talcum Powder in the US and Canada – Update


Late last year we discussed here in Financial Regulation Matters the news that Johnson & Johnson had been ordered to pay billions of dollars in damages for the side effects that talcum powder was causing. It had been suggested at the time that the spate of litigation could end up costing the giant conglomerate more than $20 billion and, just today, the news broke that the company would cease selling the product in the US and Canada.

The talc-related saga for J&J is a long one. There has been a vast number of legal actions taken against the company, with a number of claimants being awarded large amounts, with one claim leading to $417 million in damages being awarded, and in another $4.7 billion to 22 women in the US. Interestingly Forbes said recently that J&J stock may be undervalued, but that may be about to change. The Financial Times is leading the way with the reporting that the company has dropped the sale of the product in the North American market, although they have responded as expected. Firstly, the have claimed that the cessation will not be too damaging, as the market only makes up 20% of the global market and the product will remain on sale across the rest of the world. The head of the Consumer Health division, Kathleen Widmer, was quoted in the article as blaming ‘misleading litigation advertising’ as the cause for the drop in demand of the product. The company points towards a mini-legal industry that has emerged looking for claimants, with just under 20,000 lawsuits pending against the company. The company has maintained that its product is safe, although it will now be switching to its cornstarch-based baby powder instead of the talc-based product; also, its claims that the product is widely regarded as being safe is not universally accepted.

The decision will fall into the company’s decision to ‘streamline’ its product offering in light of the COVID-19 pandemic, but in reality it will not stop the avalanche of legal action that is continuously heading its way. However, there may be an opportunity to finally switch to a non-talc based product irreversibly. Yet, the continued demand for the product around the world means that this may be some way off, unless similar legal actions are repeated in other markets.

Keywords – Talc, Johnson & Johnson, retail, business, law, @finregmatters

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