Johnson & Johnson has been battling for years against lawsuits claiming its talc powders cause cancer, but now investors are getting a sense of what the litigation could cost the drug giant. And it's about twice as much as J&J had figured on last year.
In an annual filing with the Securities and Exchange Commission (SEC), J&J said its multibillion-dollar 2020 litigation expense is “primarily associated with talc related reserves and certain settlements” worth $3.9 billion. The company faces 25,000 lawsuits alleging the household products cause cancer, and it's still in the process of appealing a massive verdict out of Missouri.
After a St. Louis jury in 2018 ordered the drugmaker to pay $4.7 billion, an appeals court reduced the figure to $2.1 billion last summer. With additional interest, the verdict is now $2.5 billion, and J&J is appealing the case to the U.S. Supreme Court. Its application to transfer the case to the Missouri Supreme Court failed in November, and at the time J&J said it would set aside a reserve of $2.1 billion in its 2020 results.
J&J “continues to believe that it has strong legal grounds for the appeal of this verdict, as well as other verdicts that it has appealed,” the company said in its SEC filing.
In some cases, though, J&J has chosen to settle. Last year, Bloomberg reported that the company had moved to settle about 1,000 cases for more than $100 million.
During J&J’s yearslong talc defense, juries in multiple states have ordered the company to pay sizable verdicts. The company's appeals have succeeded in many instances, but some awards against the company still stand. Last November, a court in New York ordered J&J to pay $120 million to a Brooklyn couple for their talc cancer claims, Reuters reports.
And last year, amid the business disruptions from COVID-19, J&J pulled talc-based powders from the U.S. market, citing a portfolio review prompted by the pandemic and not the thousands of lawsuits.