Back in December 2018, with Johnson & Johnson reeling from a bombshell Reuters article on talc, CEO Alex Gorsky appeared in a video to reassure customers that the product is safe. That appearance and another TV spot led him to the witness stand Monday.
And there, the J&J exec didn't just face questions about potential asbestos contamination in talc, but also his own share trades just before the exposé published.
During the punitive damages stage of a case involving four mesothelioma patients, Gorsky told the court he “did not read all the documents" about talc safety. "I would rely on the experts in these fields,” he said, as quoted by Reuters.
It was the first time the CEO has testified in the talc litigation saga, although he had been deposed in another case. J&J resisted plaintiffs’ attorneys' requests to call Gorsky to the stand, but the judge said the CEO's December 2018 video and a CNBC interview made his testimony relevant.
The four mesothelioma patients allege J&J's talc powder caused their cancer, and a separate jury awarded them $37.3 million in compensation. The case is playing out in a New Jersey courtroom close to J&J’s headquarters.
The CEO's video and TV appearance came after the Reuters article stated the company had known about asbestos contamination in its talc for decades. The article decimated the company’s share price, wiping off tens of billions in market value. J&J’s stock has since climbed higher than it was before the report.
Gorsky also faced questions about a stock trade before the article published. Attorneys for the plaintiffs asked the CEO about his sale of $38.6 million in J&J shares in November 2018, two days after a Reuters reporter contacted J&J about the forthcoming story. Gorsky testified that he didn’t know about the reporter’s email when he made the trade, according to the news service.
Even as Gorsky was forced to testify on Monday in a federal court, he previously turned down requests to appear at a Congressional hearing on talc testing. The House Subcommittee on Economic and Consumer Policy last month called witnesses on asbestos testing in consumer talc, and the company didn’t send a representative.
A J&J spokesman told Reuters the company “respectfully declined” the invitation as Gorsky isn’t “an expert in the stated subject of the hearing.” J&J offered to send a talc testing expert, but the subcommittee rejected the offer, he added.
J&J faces about 16,800 lawsuits alleging harm from talc, but has had success defending itself lately. The company has won several cases in recent months and has convinced appeals courts to overturn prior verdicts. In all cases that have made it through the appeals process, J&J has prevailed, a spokeswoman said last month.
But the company’s defense hit another setback last fall when FDA tests turned up “sub-trace” levels of asbestos in one talc bottle, prompting a recall of the entire batch. J&J later tested the bottle and others in the batch and found no asbestos, but the agency stood by its own result.