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No end in sight for Johnson & Johnson’s asbestos woes

There is more trouble for Johnson & Johnson, the embattled baby care products maker facing multiple litigations over sale of hazardous products. The New Jersey-based company this week lost the first trial in a lawsuit related to alleged use of asbestos in its baby care powder, less than a year after being slapped a record $417-million fine in a similar case.

In the latest of a serious of lawsuits filed against the company over the last few years, a state court in New Jersey ruled that J&J’s talc-based baby power contained materials that cause serious health issues like cancer, and ordered the company to pay $37 million to a New Jersey-resident as compensation.

Stephen Lanzo, the complainant, alleged he suffered from mesothelioma, a dangerous form of cancer caused by exposure to asbestos, after using the company’s talc powder products regularly for more than 45 years. While awarding $30 million to Lanzo and $7 million to his wife, the judge held the company and its talc supplier based in France responsible for the plaintiff’s condition.

Meanwhile, J&J dismissed the charges and claimed its baby care products did not contain asbestos and were safe for consumption.

A New Jersey jury ordered J&J to pay $37 million to a man in damages

Since its incorporation more than a century ago, the maker of Band-Aid has faced a number of scandals, product recalls and federal investigations, before getting embroiled in a mesh of talc-related lawsuits over the last decade. Though a South Dakota jury had found the company guilty of negligence in the first trial related to talc in 2013, it did not impose any fine.

What followed was a flood of lawsuits, filed mainly by women who claimed to have developed ovarian cancer after being exposed to the company’s baby powder. As the number of complaints ballooned, jurists combined the pre-trial procedures of several hundreds of lawsuits into a multidistrict litigation for convenience.

As long as the company continues to make profit in billions of dollars, its finances will remain insulated from such setbacks. Unperturbed by the legal entanglements, the company is reportedly developing as many as 11 new pharmaceutical formulations for various diseases and most of them are expected to become ‘megadrugs’ in a few years.

Interestingly, J&J’s stock was impacted only on a few occasions throughout its troubled journey that is marked by fighting cases and paying damages.

But, there is no doubt the world’s largest drugmaker – the lion’s share of J&J’s revenues come from pharmaceutical products and equipment –  has lost its self-proclaimed status of being a ‘people-before-profits’ enterprise.

Among its peers, the firm that comes closest to J&J in the scale of litigations is Merck & Co. (MRK), which coughed up nearly $5 billion by 2007 for settling 27,000 lawsuits involving people affected by its Vioxx painkiller.

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