$8.9B! Johnson & Johnson Makes "the Largest" Compensation for Talc

Some cosmetic practitioners believe that there are now many alternatives to talcum powder. But due to its high cost effectiveness, there are currently no ingredients that can completely replace talcum powder in every aspect.

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On April 4, US-based Johnson & Johnson said it plans to pay $8.9 billion in compensation over the next 25 years to settle claims related to the alleged carcinogenicity of its baby powder and other products containing talc.

Johnson & Johnson said in a statement that LTL Management, the subsidiary involved in the claims, had re-filed for Chapter 11 bankruptcy protection with a view to entering into a reorganization plan that would "fairly and efficiently" resolve the claims against its talc-containing products.

Johnson & Johnson's offer of $8.9 billion is a significant increase from the $2 billion promised by LTL Management when it first filed for bankruptcy in October 2021. The settlement has been pledged by more than 60,000 claimants, the statement said.

Johnson & Johnson, however, still denies allegations that its talc-containing products caused cancer. The statement said that neither the first nor the second bankruptcy filing by LTL Management is an admission of wrongdoing. Johnson & Johnson's position on the safety of its talc-containing products remains unchanged.

Stop selling baby powder made with talcum powder by 2023

In recent years, Johnson & Johnson's baby powder and other products have been repeatedly caught up in the cancer controversy. Some consumers have accused its baby powder and other talcum powder products of containing asbestos, causing cancer in long-term users.

According to CHAILEEDO, as early as 2012, Johnson & Johnson was sued several times for causing cancer from talcum powder-related products.

In 2016, an Alabama woman sued Johnson & Johnson for ovarian cancer allegedly caused by using Johnson & Johnson baby powder. Johnson & Johnson was eventually awarded $72 million. In 2018, Johnson & Johnson was ordered to pay $4.69 billion in damages to 22 women, one of the largest personal injury judgments in US history. In February 2019, Johnson & Johnson USA also received a subpoena from the US government over baby talcum powder.

In 2019, Johnson & Johnson recalled more than 33,000 bottles of its own baby powder for the first time over asbestos. Wells Fargo had said that the recall would lead to more lawsuits and prompt Johnson & Johnson to seek a broader settlement. A settlement could cost Johnson & Johnson between $2 and $6 billion. In the wake of this incident, the company has said it will stop selling talcum powder baby powder in North America by 2020.

In response, Johnson & Johnson is also undertaking a series of measures. According to public information, Johnson & Johnson split out its LTL Management as a new subsidiary in 2021. It transferred $2 billion to its subsidiary to protect Johnson & Johnson's parent company from talcum powder lawsuits. Then LTL Management filed for bankruptcy to settle such lawsuits. However, the approach was challenged and rejected by the US Court of Appeals in January 2023, which ruled that bankruptcy was not the right way to resolve the issue.

In 2022, Johnson & Johnson said it would stop selling talc-based baby powder worldwide in 2023 and would replace asbestos with corn starch.

Meanwhile, Johnson & Johnson's stance on the safety of cosmetic talcum powder remains unchanged, despite a decade of controversy over the carcinogenic nature of talcum powder. Johnson & Johnson has repeatedly stated that all of its products have been tested repeatedly in laboratories. It said that the talc used by Johnson & Johnson is cosmetic-grade talc, each batch has been tested and did not contain the cancer-causing ingredient asbestos. There is no risk in terms of safety. They have insisted on appealing in the face of claims.

Today, CHAILEEDO asked Johnson & Johnson’s official flagship shop on Tmall. The customer service responded that the products have no quality and safety issues and comply with relevant laws and regulations to. Independent scientific analysis by medical experts around the world has confirmed that Johnson & Johnson baby powder based on cosmetic talc is safe, asbestos-free and non-carcinogenic.

(Credit: The response from Johnson & Johnson official store on the Chinese e-commerce platform Tmall)

Talcum powder cannot be completely replaced

However, the lawsuit allegations suffered in recent years have also affected the reputation of the century-long brand and the growth of its baby care business.

The financial figures for Johnson & Johnson's baby care segment between 2018 and 2022 show that its growth of sales was only achieved in 2021. According to the latest 2022 fiscal year figures released by Johnson & Johnson, the baby care segment recorded $1.461 billion, down 6.7% year-over-year (reported).

(Credit: data from financial results of Johnson & Johnson)

The company paid $7.4 billion in litigation costs between 2020 and 2021, according to an annual filing. Johnson & Johnson said that talcum powder litigation was the main source of its legal expenses during those years.

In response, some people involved in the cosmetics industry believe that the poor performance of Johnson & Johnson's baby care business is also linked to the lawsuits that have been filed against Johnson & Johnson in recent years.

Disputes over talcum powder-induced cancer cases cannot be ignored. The discontinuation of talcum powder by brands is also objective. Especially in the field of baby powder, talcum powder has been retreated. So what impact will it have on the cosmetics industry?

"No significant impact." Li Jianyu, Chief Engineer of Guangzhou Zaomengying Biotechnology Co Ltd, said, "There are already many alternatives to talcum powder. But talcum powder has a strong combination of properties like good compaction, smoothness, gloss and thixotropy, all of which are valued by powder products. There is no raw material that can completely replace talcum powder in every aspect. "

He further adds, "Even with such an alternative ingredient, there can be a huge difference in price. So the products whether they used talcum powder in the market have a huge price gap. Changing out the talcum powder may result in a change in cost. As for whether there will be an impact in terms of makeup effect and experience, it depends on the specific formula architecture."

As companies abandoning talcum powder, Liu Chao, president of operations for Japan's make-up makotokamata China, said, "Many companies abandoning talcum powder are more likely to be trying to show the safety of the ingredients. But the fact is that for mineral-based cosmetic additives, similar mineral powders and synthetics should be added despite talcum powder. What really needs to be done is to ensure a compliant manufacturing process and make sure the ingredients meet the standards."

CHAILEEDO asked Johnson & Johnson officials whether they would abandon talcum powder in the future and whether they would look for other ingredients to replace it, but did not receive a response by press time.

In light of that, talc still has its place. But as the concept of clean and sustainable skincare continues to permeate, the search for better solutions and the phasing out of talc will be a trend.