Johnson & Johnson (J&J) has said it is offering $8.9bn to resolve the tens of thousands of lawsuits it faces in North America that claim its talc-based products cause cancer.
The company continues to maintain that the products are safe, but hopes that the proposed settlement could help bring the litigation to a swift conclusion.
The figure, which will be paid over 25 years, is a huge increase from the original $2bn that J&J previously committed and reportedly has significant support from current claimants.
Erik Haas, worldwide vice president of litigation at J&J, said: “Resolving this matter through the proposed reorganisation plan is both more equitable and more efficient, [and] allows claimants to be compensated in a timely manner…”
J&J has been trying to resolve the more than 38,000 lawsuits since 2021, assigning a subsidiary to manage the claims, before filing a bankruptcy petition – a move sometimes referred to as a ‘Texas Two-Step’.
A bankruptcy judge had initially ruled in favour of the move back in February 2022, but the strategy faltered earlier this year when LTL Management’s petition was rejected on the grounds that neither it nor J&J had a legitimate need for bankruptcy protection because they were not in ‘financial distress’.
LTL had attempted to delay the final ruling to keep the company in bankruptcy while it pursued a US Supreme Court appeal – a request which was denied last week by the Court of Appeals for the Third Circuit.
John Kim, chief legal officer of LTL, said: “LTL’s goal has always been to resolve these claims quickly, efficiently and fairly for the claimants, both pending and future, and not incentivise abuse of the legal system. We filed the original action in good faith, and, heeding the Third Circuit’s guidance, have filed this new case to effectuate that intent.”
J&J has previously said it will stop selling talc-based products worldwide this year and shift production to cornstarch versions. The announcement came around two years after the company discontinued sales of its talc-based products in the US and Canada.