Between Baby Powder and Opioid Lawsuits, J&J Says It Will Defend Itself in About 16,000 Cases

JOHNSON & JOHNSON BATTLES LAWSUITS OVER TALC-BASED BABY POWDER AND PROMOTING ADDICTIVE OPIOID DRUGS

NEW BRUNSWICK, NJ–Johnson & Johnson (J&J) is now the subject of a U.S. Justice Department (DOJ) probe into whether it lied to consumers regarding potential cancer risks of its namesake talc-based baby powder, according to reports. 

Yet the Hub City-based health-care giant has been fighting back quite hard. A recent regulatory filing showed it allotted $190 million for talc-related defense costs during a recent three-month business quarter. 

While civil settlements over talc lawsuits could reportedly cost J&J some $15 billion to defend itself, the consumer giant “says it has no liability because [its] products are safe,” reports Bloomberg News. 

J&J, now facing some 14,200 talc-based lawsuits, has been ordered to pay more than $5 billion to plaintiffs over the last three years.

While some suits culminated in a hung jury, or have been tossed on appeal, there are several factors to consider, said Peter Henning, a Professor at Wayne State University Law School. 

The plaintiffs and their attorneys are likely to “sit back and watch and wait to see how [the criminal investigation] plays out,” Henning said on the Bloomberg Law podcast

“Will J&J… have to plead guilty to having made false statements or perhaps filing false documents with the government?” asked Henning, noting “any type of criminal resolution” would provide an “advantage” in litigation.

A regulatory investigation is already taking place, he said, highlighting the difference in penalties.

Johnson & Johnson worldwide headquarters on Albany St.

J&J is a corporation, so it would only be subject to fines or civil monetary penalties, with respect to regulatory issues, whereas, a criminal resolution would include a “Statement of Facts,” according to the professor. 

But since the DOJ would dictate the terms of what J&J might agree to, he said, the company could be “on hook for some type of penalty — whether it be civil or criminal.” While J&J would be expected to cooperate, “federal prosecutors can threaten individuals,” he said, citing a climate of “enormous pressure.”

The consumer giant “would have to offer up individuals who’ve engaged in wrong doing… and if they want credit for cooperation they are going to have to offer up any individuals who might have made either false statements or misstatements, and any kind of public filings or regulatory filings,” added Henning. 

The suits allege that J&J perpetuated the opioid crisis and that its iconic Johnson’s Baby Powder caused ovarian cancer or mesothelioma. 

Together with subpoenas from the DOJ and Securities and Exchange Commission, J&J is clearly spending large sums of money to defend itself and is expected to continue.  

J&J Chief Financial Officer Joseph Wolk indicated on a recent conference call with analysts that the company practices responsible corporate governance. The CFO also implied that baby powder is not harmful, whatsoever.

“So we’ll continue to pursue defense of the company’s actions, as well as the product going forward,” said Wolk on the call, according to a CNBC report. 

“As a CFO, I consider costs as a potential settlement opportunity, but our overarching strategy is to continue to defend ourselves for this product when the facts are so overwhelmingly on our side,” Wolk added. 

Beginning on July 22, a federal judge in Trenton will weigh whether available evidence is admissible in a federal case that is approaching trial.

Judge Freda L. Wolfson may reportedly need weeks or months to reach her decision.  While no trial dates have been scheduled, the multi-district litigation covers more than three-quarters of the outstanding claims against J&J.

But the federal cases in Trenton only deal with those implicating J&J’s iconic baby powder as causing ovarian cancer, rather than the smaller amount of asbestos-related talc cases brought by plaintiffs who have allegedly developed mesothelioma, a rare and serious form of cancer. 

Separately, the State of Oklahoma is suing J&J for allegedly fueling the state’s opioid crisis. The company sold opioid painkillers Duragesic and Nucynta, while allegedly growing and importing raw materials for other opioid manufacturers to use. 

“We agree that there’s an epidemic with opiate addiction,” said Wolk. “However it’s going to be multiple factorial in terms of the solution set and it’s going to require many sophisticated parties to make sure that we’ve got the right remedies in place for people who suffer from that.” 

In a statement, J&J said it has been fully cooperating with the DOJ investigation and will continue to do so.

“Johnson’s Baby Powder does not contain asbestos or cause cancer, as supported by decades of independent clinical evidence,” stated J&J spokeswoman Kim Montagnino. 

Oklahoma County, Oklahoma recently hired a law firm to sue opioid manufacturers such as Johnson & Johnson for damages from the nation’s opioid problem. Some 50 cities and counties in Oklahoma, a state severely affected by addiction and overdose deaths, are reportedly prosecuting drug companies over opioid distribution. 

The move comes on the heels of the State of Oklahoma’s trial against J&J. 

J&J and its business units reportedly “created a public nuisance by aggressively promoting the highly addictive drugs,” reported the Associated Press, noting that the state may receive as much as $17.5 billion in abatement costs.

While Oklahoma’s opioid trial in state court came to a head last week, the judge has not announced a verdict. 

Two other makers of opioids, both defendants in the case as well, settled with Oklahoma. Purdue Pharma and Teva Pharmaceuticals payed $270 million, and $85 million respectively. 

Drug manufacturers and vendors maintain they did not foster unnecessary prescriptions that prompted a crisis. They cite a lack of evidence. 

J&J’s position is that Oklahoma closed its eyes to the fact that its own drug review board and prescription monitoring program, over many years, took no action. The company also says the state cannot pinpoint any death directly to the use of its Duragesic fentanyl patch, or Nucynta, the opioid pill it stopped making. 

With a slew of lawsuits to resolve, J&J has “won a few and they’ve lost a few,” Henning, the law professor, told Bloomberg Law.

“Investors don’t like the uncertainty that comes with a criminal investigation.” 

J&J issued a statement on July 12: “As we previously disclosed in our February 2019 SEC filing, we have received a subpoena from the U.S. Department of Justice. We are fully cooperating with the DOJ investigation,” saying that it has made documents available online at:  https://www.factsabouttalc.com/.

“These documents establish that Johnson’s Baby Powder does not contain asbestos or cause cancer, as supported by decades of independent clinical evidence.”