Earlier this year, Johnson & Johnson disclosed that it had received federal subpoenas into its talcum powder products, but the company didn’t say whether the investigations were civil or criminal. Now, Bloomberg reports the company is under a criminal probe at the Department of Justice (DOJ).
Federal investigators are likely looking into whether the company misled the public with statements that its talc has always been asbestos-free, Bloomberg reports, citing legal experts. Amid a swell of talc litigation, documents from the 1960s and 1970s have surfaced showing J&J employees detected asbestos in the product and debated internally about how to respond.
J&J maintains there’s nothing new in the reporting, with a spokeswoman telling the publication it has “been fully cooperating with the previously disclosed 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,” she added, as quoted by the news service.
Investors saw things differently, sending the company’s shares down 5% Friday after the news. Bloomberg also reports a grand jury has been empaneled as part of the probe.
The company in February disclosed subpoenas from the DOJ, Securities and Exchange Commission and office of U.S. Senator Patty Murray. After a high-profile Reuters report last year that J&J’s talc has contained asbestos, Sen. Murray reached out to J&J CEO Alex Gorsky asking for answers.
As the federal and congressional investigations play out, J&J is also defending against thousands of lawsuits claiming the iconic product caused harm. While J&J has had success defending itself in many cases, juries have hit the company with billions of dollars in verdicts. In the case of each loss, J&J has said it’ll appeal. It’s succeeded in overturning every case that’s made it through appeals, a spokeswoman said last month.