Johnson & Johnson said on Thursday that it had made the “commercial decision” to transition all its baby powder products to use cornstarch instead of talcum powder after conducting an assessment of its portfolio. The health conglomerate, which maintains the product is safe, has for almost a decade faced lawsuits accusing it of hiding cancer risks tied to its talc-based baby powder. 

“We continuously evaluate and optimise our portfolio to best position the business for long-term growth,” spokesperson Melissa Witt said in an emailed statement. “Today’s decision is part of a worldwide portfolio assessment, which evaluated several factors, including differences in demand for our products across geographic regions and evolving consumer trends and preferences.”

Shares of the New Brunswick, New Jersey-based company rose less than 1% in post-market trading and had fallen 2.3% so far this year through to Thursday’s close.

In May 2020, as J&J navigated thousands of lawsuits accusing the product of causing some users’ cancers, the company pulled its talc-based powders from the US and Canadian markets, citing another “commercial decision” based on declining sales. 

“After decades of selling talc-based products the company knew could cause deadly cancers to unsuspecting women and men around the world, J&J has finally done the right thing,” Leigh O’Dell, a lawyer for former talc users, said in an emailed statement on Thursday. “They stopped sales in North America more than two years ago. The delay in taking this step is inexcusable.”

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Talcum powder

Talcum powder has long been used in baby products because the mineral keeps skin dry and prevents nappy rash. The mines that produce the powder, however, can also yield asbestos, a mineral once used in products such as building insulation that researchers have linked to cancers. Some consumer companies have found corn starch can offer the same benefits of talc without the asbestos risk.

J&J said on Thursday that its “position on the safety of our cosmetic talc remains unchanged”.

The health conglomerate has spent years seeking ways to contain its legal liabilities. It faces 40,300 lawsuits in the US over its talc-based powders, according to a company filing last month with the US Securities and Exchange Commission. 

J&J sought bankruptcy protection for its newly created LTL Management LLC unit last year after arguing it was struggling to contain the lawsuits.

$2-billion trust

The company put $2-billion (R32.5-billion) into a trust as part of the unit’s bankruptcy to resolve all current and future talc claims. In February, a judge said the case could proceed in order to seek settlements, but his ruling is being appealed.

Lawyers for former talc users have challenged J&J’s move to have the unit seek Chapter 11 protection to deal with the talc unit. A federal appeals court in Philadelphia will hear plaintiffs’ arguments on 19 September that the move amounted to a “bad faith” bankruptcy filing because they contend J&J’s financial position wasn’t threatened by the talc litigation.

In court filings, J&J’s lawyers have noted the company ran into stumbling blocks in working out a global settlement of the talc cases and faced mounting legal costs. The drugmaker’s attorneys noted it paid more than $1-billion in legal fees over the past five years in the talc cases and had to deal with inconsistent jury verdicts.

J&J has been forced to pay about $3.5-billion in settlements so far to resolve talc cases, according to the company’s bankruptcy filings. A 2018 jury verdict out of state court in St Louis ultimately forced J&J to pay $2.5-billion to 20 women who targeted its baby powder for their ovarian cancer. Both the Missouri Supreme Court and the US Supreme Court refused to overturn the verdict.

Meanwhile, J&J plans to break off its consumer health business into a standalone company next year in a move that legal experts say could help it isolate liability should the Chapter 11 vehicle not succeed.

A 2018 Reuters investigation found that J&J knew for decades that asbestos, a carcinogen, was present in its talc products. Internal company records, trial testimony and other evidence showed that from at least 1971 to the early 2000s, J&J’s raw talc and finished powders sometimes tested positive for small amounts of asbestos.

In response to evidence of asbestos contamination presented in media reports, in the courtroom and on Capitol Hill, J&J has repeatedly said its talc products are safe, and do not cause cancer.

Sold since 1894, Johnson’s Baby Powder became a symbol of the company’s family-friendly image. An internal J&J marketing presentation from 1999 refers to the baby products division, with Baby Powder at the core, as J&J’s “#1 Asset”, Reuters reported, although the baby powder accounted for only about 0.5% of its US consumer health business when the company pulled it off the shelves. BM