Pharmaceutical and Healthcare Lawsuits

After years of consumer lawsuits claiming Johnson & Johnson Baby Powder caused cancer, the pharmaceutical giant has proposed spending $8.9 billion to settle all of the cases, which number close to 40,000.

The company continues to deny that talc in the product caused cancer but said it is willing to spend the money to put the issue behind it. In a statement, the company said the claims "are specious and lack scientific merit."

But who exactly would get a share of the money? Personal injury lawyers representing plaintiffs in one of the cases say women who used Johnson & Johnson Baby Powder and were later diagnosed with ovarian cancer – along with their families – would likely be eligible for “significant” compensation.

The firm, Pintus & Mullins, says the talc that was present in the powder also contained asbestos, a known carcinogen. 

“Johnson & Johnson (J&J) has a long history with Asbestos,” the firm says on its website. “The earliest reports of asbestos in J&J talc products date back to 1957-1958. Many victims have been exposed to asbestos through J&J baby powder.”

Johnson & Johnson denies any link to cancer-causing ingredients in its product. Even so, the company removed talc from its baby powder in 2020.

The court must approve

Before anyone receives compensation the settlement must be approved by the court. Legal analysts say approval is likely since a large number of the plaintiffs and their lawyers have backed the proposal.

Johnson & Johnson created a subsidiary corporation, LTL Management, to pay the claims. The subsidiary has already declared bankruptcy.

Mikal Watts of the law firm Watts Guerra and TalcPowderJustice.com said the $8.9 billion settlement would be the largest products liability settlement ever realized after a bankruptcy filing. 

Even if the bankruptcy court approves the settlement plaintiffs might not see any money for years. Lawyers involved in the case said they expect the money to be paid out over a 25-year period.

Johnson & Johnson has reached a settlement with New York Attorney General Letitia James, resolving charges that it helped fuel the opioid crisis. The company will pay $230 million to the state of New York.

“The opioid epidemic has wreaked havoc on countless communities across New York state and the rest of the nation, leaving millions still addicted to dangerous and deadly opioids,” James said in announcing the agreement. “Johnson & Johnson helped fuel this fire, but today they’re committing to leaving the opioid business — not only in New York but across the entire country.”

Under the agreement, James said Johnson & Johnson subsidiary Janssen Pharmaceuticals will no longer manufacture or sell opioid drugs in the U.S. In its own statement, Johnson & Johnson said it decided in 2020 to stop producing painkillers in the U.S.

“The settlement is not an admission of liability or wrongdoing by the company, and it is consistent with the terms of the previously announced $5 billion all-in settlement agreement in principle for the resolution of opioid lawsuits and claims by states, cities, counties and tribal governments,” the company stated. 

The settlement also removes Johnson & Johnson as a defendant in a larger opioid suit brought by the state that is scheduled to begin this week.

How the money will be used

James said the $230 million dollars to be paid by Johnson & Johnson will fund a program to prevent opioid abuse, provide treatment for those who are addicted, and support drug education efforts.

“While no amount of money will ever compensate for the thousands who lost their lives or became addicted to opioids across our state or provide solace to the countless families torn apart by this crisis, these funds will be used to prevent any future devastation,” James said.

The settlement is the latest chapter in a decade-long battle by states and local governments to hold pharmaceutical companies accountable for the epidemic of opioid addiction in the U.S. State and federal actions are pending against a number of companies.

In March, bankrupt Purdue Pharma, which made the opioid painkiller Oxycontin, proposed a payment of $4.28 billion. The offer was an increase from the $3 billion in the original settlement proposal. To date, the offer has not been accepted.

On Tuesday, the Supreme Court rejected Johnson & Johnson’s appeal of a multibillion dollar talcum powder verdict. 

The case was brought by 22 women who said they developed ovarian cancer as a result of using the company’s talc products. Johnson & Johnson argued that it didn’t get a fair trial. Without providing further explanation, the justices decided Tuesday to reject the company’s appeal.  

A Missouri jury initially awarded the women nearly $5 billion, but a state appeals court dropped two plaintiffs from the suit and cut the damage award down to around $2 billion. 

All of the women involved in the case (of which nine have died) used Johnson & Johnson's Baby Powder and Shower to Shower Shimmer Effects. Both products are made with talcum powder, and the suit claims the powder was contaminated with the cancer-causing substance asbestos. 

Company defends itself

Johnson & Johnson has denied that its talc products contain asbestos and that asbestos-laced talc can cause ovarian cancer. 

The company, which is currently facing thousands of lawsuits over the possible link between cancer and talc, called the verdict in the Missouri trial “at odds with decades of independent scientific evaluations confirming Johnson’s Baby Powder is safe, is not contaminated by asbestos and does not cause cancer.” 

However, the Supreme Court wasn’t asked to decide whether the products caused cancer. It was asked to consider the company’s argument that the Missouri courts unfairly combined the cases of the women from different states. The severity of each woman’s cancer varied, and some had a genetic or family predisposition for cancer. 

The justices ruled in favor of the women by rejecting the company’s appeal on Tuesday.

Johnson & Johnson has stopped selling talcum-based baby powder in the United States and Canada, but it remains on the market elsewhere. The American Cancer Society has said "it is not clear if consumer products containing talcum powder increase cancer risk.” 

The state of New York has filed a civil fraud complaint against Johnson & Johnson, charging the pharmaceutical company and its subsidiaries of marketing opioid drug products while downplaying their risks.

The complaint, filed by the New York Department of Financial Services (DFS), contends that the company specifically targeted elderly patients for opioid treatment despite known risks and used its marketing materials to brand opioid addiction as a myth.

"The opioid crisis has taken too many lives and New York state will continue to take action against those who helped fuel this public health catastrophe and bring a measure of justice to families who have lost loved ones," said New York Gov. Andrew Cuomo. "Misrepresentation of opioids to consumers for profit is inexcusable and we will use every tool necessary to help ensure those responsible are held fully accountable."

Johnson & Johnson did not immediately provide a comment or response to media outlets that requested one.

Specific allegations

Regulators say Johnson & Johnson manufactured a number of opioid products in New York, including the Schedule II drugs Duragesic, a fentanyl patch, and Nucynta, a tapentadol drug. The state’s complaint also alleges that the drug company controlled a large portion of the raw opioid supply chain through its patented "Norman Poppy," which at one point was responsible for up to 80 percent of the global supply for oxycodone raw materials.

The crux of the DFS complaint claims that Johnson & Johnson has had a “long-standing and multi-faceted leading role in originating, supplying, facilitating, and actively creating a dangerous market for opioids for chronic pain treatment.”

The complaint alleges that Johnson & Johnson not only tried to sell more of its own opioid drug products but sought to create an environment in which the medical community was comfortable prescribing these powerful painkillers for patients, increasing the demand for Johnson & Johnson’s opioid-related raw materials. 

Charged with violating insurance laws

The state is hanging its case on insurance laws, which may explain why the complaint originated at DFS and not the attorney general’s office. DFS charges Johnson & Johnson of violating two state statutes.

Section 403 of the New York Insurance Law prohibits fraudulent insurance acts, and Section 408 of the Financial Services Law prohibits intentional fraud or intentional misrepresentation of a material fact with respect to a financial product or service, which includes health insurance.

Those laws carry a penalty of up to $5,000 per violation, with the state alleging that each prescription found to be fraudulent constitutes a separate violation.

Johnson & Johnson has recently faced other opioid-related charges in other states, including Ohio and Oklahoma. 

A group of state attorneys general are seeking $26.4 billion from three major drug firms and Johnson & Johnson, The Wall Street Journal reported on Tuesday. 

Citing sources familiar with the matter, the Journal said about a dozen states are seeking to help pay for damages created by addiction to opioid drugs manufactured and sold by the companies. 

The drug companies -- which include McKesson, Amerisourcebergen, and Cardinal Health -- are accused of marketing the pain pills in a way that “overstated” their benefits and minimized their risks. Distributors are also accused of failing to stop an influx of suspicious orders. 

“We believe this latest settlement proposal would be viewed as a favorable outcome and would expect the stocks to react positively to the news as a global settlement would put the uncertainty behind,” JP Morgan analyst Lisa Gill said.

More than 3,000 lawsuits have been filed by states, local governments, and Native American tribes contending that drug companies helped fuel the opioid addiction epidemic through misleading marketing of the drugs. 

Litigation on the issue ultimately prompted OxyContin-maker Purdue Pharma to file for bankruptcy in September 2019.  

A New Jersey state court jury has ordered Johnson & Johnson to pay $750 million in damages to four plaintiffs who claimed asbestos in the company’s talc powder products caused their lung cancer.

The judge in the case said she will lower the amount of the damages, but it will still be the most ever awarded to claimants suing Johnson & Johnson over their illness. The company said it will appeal.

The damages award was the final phase of a trial that began last year. The jury initially awarded the plaintiffs $37.3 million in compensatory damages. Judge Ana Viscomi of New Jersey Superior Court said state law limits punitive damages to five times the amount of compensatory damages, therefore the punitive damage award would be lowered to around $186.5 million.

The trial focused on the safety of two of the company’s powder products, Johnson & Johnson Baby Powder and Shower to Shower.

Plaintiffs claim the products contained asbestos

This was the latest case in which consumers of Johnson & Johnson powder products brought an action against the company, claiming the powder contained small amounts of asbestos, a cancer-causing substance.

Johnson & Johnson has vigorously denied that is the case. In the trial, Johnson & Johnson CEO Alex Gorsky took the stand and testified that the company took extensive measures to make sure that its powder products containing talc were safe and did not contain asbestos.

In rendering its punitive damages verdict, the jury found otherwise. It found Johnson & Johnson was responsible for causing the plaintiffs to suffer from mesothelioma, a form of lung cancer.

Basis of appeal

Attorneys for Johnson & Johnson immediately served notice that they would appeal the court’s verdicts in both phases of the trial. They point to what they called “numerous legal errors” that prevented the jury from hearing “meaningful evidence.”

Johnson & Johnson insists that it has always acted responsibly and points to more than 40 years of testing that it says has confirmed that Johnson’s Baby Powder is safe, doesn’t contain asbestos, and doesn’t cause cancer.

But in a report last year, Reuters quoted officials of the Food and Drug Administration (FDA) as saying it isn’t accurate to say the powder products have always been free of asbestos. The officials noted that Johnson & Johnson had already recalled nearly 33,000 containers of baby powder after the FDA said it found trace amounts of asbestos in powder taken from a container the agency purchased online.

Consumers might rightly wonder how asbestos, a known carcinogen, could end up in a commercial talc powder product. According to Mesothelioma.com, a site sponsored by a law firm handling mesothelioma cases, talc is often naturally found near asbestos in the earth. It says the talc can easily become contaminated by the toxin while being mined.

Fresh off its corporate rebranding campaign to make baby powder more appealing to millennials, Johnson & Johnson is once again facing scrutiny over whether the product is contaminated with asbestos.

Johnson & Johnson shares dipped late last week following the news that a California jury had ordered the company to pay $29 million in the latest lawsuit alleging a link between its talcum powder products and cancer.

Terry Leavitt said that she had used Johnson’s Baby Powder and Shower to Shower gel, both of which contain talc, in the sixties and seventies. She was diagnosed with mesothelioma in 2017. Her lawsuit charging that the products contained talc contaminated with asbestos began in January and concluded last week with a $29.4 million verdict against the company.

"We are disappointed with [Wednesday's] verdict and will pursue an appeal because Johnson's Baby Powder does not contain asbestos or cause cancer,” the company told reporters in a statement responding to the news.

Company continues to defend its product

Last year, Reuters published documents revealing that Johnson & Johnson was aware that its talc products occasionally tested positive for traces of asbestos in the sixties and seventies.

An attorney who handles asbestos litigation told ConsumerAffairs that she avoids all talc-based products over concerns that talc and asbestos are often found together in nature.

Also last year, Johnson & Johnson announced that it was relaunching its baby care line to increase the brand’s appeal among health-conscious millennials. As part of the move, the company released a line of talc-free baby powder, but the company has remained insistent that its baby powder never contained asbestos.

"We are absolutely certain that science shows that our talcum product is safe, and we will defend our brand and defend our product," a company executive told CNBC.

The metal-on-metal hips that Johnson & Johnson subsidiary DePuy reportedly once regarded as the company’s "Billion Dollar Baby” are no longer on the market. After an estimated 150,000 Americans were implanted with the devices, nearly 10,000 of those patients later joined class action lawsuits claiming that they suffered cobalt poisoning, tissue death, or other serious side effects linked to the hips.

The Food and Drug Administration (FDA) subsequently required DePuy to submit more data to prove that the implants are safe. The company followed by pulling its hips off the market in 2013, though the company framed the move as a business decision, not a safety issue.

But how exactly the hips ever made it into doctors’ officers in the first place may not have been clear to some patients. In the wake of continuing lawsuits, including a case last year in which Johnson & Johnson was ordered to pay $247 million to six patients, one team of researchers last year investigated the company’s own research claiming that the hips were safe.

According to a paper published last December by Dr. David Egilman and colleagues from Brown University, DePuy’s metal-on-metal hips are an example of “grave fraudulence in medical device research.”

Analyzing internal company documents that were made public in lawsuits, the researchers determined Johnson & Johnson’s own safety research was actually marketing research, or what scientists refer to as a “seeding trial.”

“Seeding trials are malleable marketing projects, not rigorous scientific studies,” the researchers said, adding that patients who agreed to participate were not made aware that they were contributing to marketing research.

Johnson & Johnson taking action over allegations

The allegations were leveled at Johnson & Johnson last year in the journal Taylor & Francis, but the corporation only recently decided to fight back.

STAT news is now reporting that Johnson & Johnson sent a six-page letter to Taylor & Francis, demanding a retraction while mentioning company attorneys.

Johnson & Johnson biostatistician Jim Lesko reportedly wrote that Egilman’s paper “contains numerous factual errors that undermine its conclusions.”

Egilman is serving as an expert witness for the plaintiffs suing Johnson & Johnson, something that he acknowledged in his paper. Nevertheless, Johnson & Johnson claimed in its response that he failed to disclose that conflict of interest.

Lesko goes on to hint at legal action, writing that  “I have consulted with DePuy’s attorneys in preparing this response.”

Taylor & Francis has yet to retract Egilman's paper, though Johnson & Johnson is still requesting that it do so, a corporation spokesperson told STAT News.

Problems with approval process?

This is hardly the first time that researchers have documented problems with how a device marketed by Johnson & Johnson or other device-makers got approved. Public health researchers say that makers of permanent medical implants are not required to provide rigorous data to the FDA before their products are approved and that the approval process for devices is far less stringent than it is for drugs.

The  metal-on-metal hips were approved via the FDA’s 510(K) process, or a fast-track process in which device makers do not have to provide clinical data because they claim that the new product they are introducing is “substantially equivalent” to other medical devices already on the market.

In 2011, researchers from the Institute of Medicine characterized the entire 510(K) process as “fatally flawed” and demanded reforms from the FDA, but little has changed since then.

Egilman reportedly responded to Johnson & Johnson's demand for a retraction with a lengthy letter stating that the researchers “provided the final draft of our paper to J&J/DePuy for comments and correction one month before publication” but received no response.

“Needless to say this is a baseless request and merely an effort to bully the medical and scientific community to acquiesce to corporate crime never mind irresponsible and unethical conduct,” he added.