Johnson & Johnson offers $5.5bn to settle baby powder lawsuits

Johnson & Johnson has proposed paying up to $5.5bn to resolve tens of thousands of lawsuits linking its baby powder to cancer. The offer marks the latest attempt by the healthcare giant to end years of litigation over allegations that its talc-based products contained asbestos, a known carcinogen. If approved by a US bankruptcy court, the settlement would cover both current and future claims from people who say they developed ovarian cancer or mesothelioma after using the powder. The company has repeatedly denied wrongdoing, stating that its talc is safe and does not cause cancer. However, it stopped selling talc-based baby powder globally in 2023, switching to cornstarch-based alternatives. The proposal relies on a controversial legal strategy: placing a subsidiary into bankruptcy to force all claimants into a single settlement trust. J&J has tried this approach twice before, but courts rejected those attempts because the company was not in financial distress. This third attempt, backed by a preliminary vote from plaintiffs, could face similar scrutiny. Claimants would have to accept compensation from the trust and drop lawsuits. The amount offered is higher than previous proposals, but some attorneys argue it is still too low given the severity of the illnesses. The case now moves to a vote by claimants and eventual court approval, a process that could take months. For J&J, the settlement would remove a major financial uncertainty that has weighed on its stock. For victims, it offers a faster route to compensation than years of court battles. The outcome will be closely watched by other companies facing mass-tort litigation.