How Johnson & Johnson’s Attempt At A $9 Billion Baby Powder Settlement Impacts Black Women

Pharmaceutical giant Johnson & Johnson
JNJ
wants to do a one-time lump sum payment of at least $8.9 billion to thousands of talc-powder claimants. J&J is still facing more than 38,000 cases that allege its talc products including baby powder caused cancer. For Black women, who were selected by J&J as “the right place” to sell more baby powder to, specifically targeting “under-developed geographical areas,” this is perhaps an opportunity for financial reciprocity.

The Breakdown You Need To Know:

J&J planned to dance a “Texas two-step” through its subsidiary, LTL Management, as part of a legal strategy that allows companies to separate liabilities from assets through a divisive merger and claim bankruptcy, according to Reuters. However, the court ruled that J&J was not in genuine financial distress and noted the spinoff company still has access to its assets, worth an estimated $61.5 billion.

Racial and ethnic disparities in U.S. healthcare are rife, with Black women facing higher risks to their health from discrimination. CultureBanx reported, this is something Johnson & Johnson preyed upon as it began distributing baby powder through a specially curated network of churches and beauty salons targeting Black & Hispanic communities.

Moreover, J&J launched a $300,000 radio advertising campaign in six markets with the prime goal of reaching “curvy Southern women 18-49 skewing African American.” To add insult to injury, an independent investigation discovered that the company knew for decades that asbestos was mixed in with the talcum.

If J&J, the biggest health-products maker
maker
by market capitalization, is able to get this product-liability settlement approved, it would become one of the biggest ever. Currently there are 60,000 talc product related claims against the company. Back in 2021, the company agreed to a $100 million settlement regarding similar talc powder claims. This year the company plans to stop selling talc-based baby powder globally.

What’s Next:

LTL has refiled for bankruptcy protection to seek approval of the new J&J plan. Bankruptcy law requires that 75% of voting claimants must vote in favor of the plan. If approved, LTL wants JNJ to be able to make the payments over 25 years. The company plans to record a first-quarter charge of $6.9 billion.