Johnson & Johnson has been facing a tough time after allegations that its talc-based baby powder was cause of ovarian cancer and mesothelioma leading to multiple court cases. The company has also been facing charges that it was behind the opiod crisis in the United States.
The company however has pledged to create a solid defense for itself to challenge all the related lawsuits in both the charges.
The controversy and allegations over its talc-based baby powder causing cancer has put the iconic health-care company face to face with more than 14,000 lawsuits. It is also facing subpoenas from the US Justice Department and the US Securities and Exchange Commission.
The company believes that the baby powder is “safe” and the company acted “responsibly”, J&J Chief Financial Officer Joseph Wolk told analysts during a call to discuss the quarterly earnings results of the company.
“So we’ll continue to pursue defense of the company’s actions, as well as the product going forward,” he said.
The company has already set aside a total of $190 million as a charge recorded in its earnings report for the second quarter by J&J that would be used to fight the court cases related to the talc-based baby powder. No money has been set aside by the company for any potential settlements or liability payments, Wolk said.
“As a CFO, I consider costs as a potential settlement opportunity, but our overarching strategy is to continue to defend ourselves for this product when the facts are so overwhelmingly on our side,” Wolk said in an interview with CNBC while discussing the quarterly results.
J&J believes that the next phase of major events would start on July 22, noted Wolk, when it would be evaluated whether the available evidence against the company is admissible in court proceeding which is known as Daubert hearings, by a federal judge. About 58 per cent of the outstanding cases would be covered by the the multi-district litigation, Wolk said.
In a separate litigation, J&J is also facing a court case filed by the state of Oklahoma over the alleged role of the company in fueling the opioid crisis in the state. The company has been charged by the state to have been played the role of the “kingpin” in the entire crisis because the painkillers at the center of the opiod crisis were sold by J&J. the company has also been charged with growing and importing of the raw materials that were used by other manufacturers of opiod.
“The facts simply just don’t align to what the state is claiming,” said Wolk about the issue.
“We agree that there’s an epidemic with opiate addiction,” he said. “However it’s going to be multiple factorial in terms of the solution set and it’s going to require many sophisticated parties to make sure that we’ve got the right remedies in place for people who suffer from that.”
(Adapted from CNBC.com)