Johnson & Johnson Subject of DOJ Investigation

Johnson’s Baby Powder Draws Concerns from Government

Johnson & Johnson is being investigated by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) over claims that the company’s baby powder contains asbestos, ABC News reports.

The investigation comes on the heels of recent lawsuits and reports alleging the company knew their talc-based baby powder could contain asbestos but did nothing about it.

According to ABC News, the investigation began in late December 2018, but was just made public in February 2019 when an annual report about the fiscal year was filed to the SEC.

As part of the investigation, the DOJ and SEC have subpoenaed Johnson & Johnson. This means that the company must turn over documents, studies and data that relate to asbestos and talcum powder, according to the report filed with the SEC.

The request for these documents was made by Senator Patty Murray, a DOJ and SEC member who also is the highest-ranking Democrat on the Senate Health Committee, USA Today reports.

According to ABC, Johnson & Johnson is cooperating with the inquiry.

Just the Latest Chapter

The government investigation is the latest in a string of bad publicity for Johnson & Johnson.

Over the last several years, the company has faced increasing legal action surrounding its talcum powder. The SEC report notes that the number of lawsuits “continues to increase.”

In the last several months, Johnson & Johnson has faced public scrutiny for issues that include:

• A $4.7 billion verdict awarded to a group of women who claimed the company’s baby powder gave them cancer in July 2018
• The company’s failed appeal of that verdict in December 2018
• A December 2018 Reuters investigative report that claimed that the company had covered up evidence of asbestos in its talcum powder since the mid-1950s

These incidents caused the company’s stock to plummet by 14 points at the end of that year. Similarly, the company’s stock fell 1.4 points in mid-February as a result of the subpoena, according to USA Today.

In a letter released by the U.S. Senate Committee on Health, Labor and Pensions, Murray noted that she was disturbed by the recent reports and lawsuits.

“I therefore request documents and information related to Johnson & Johnson’s safety record in order to understand more about efforts by Johnson & Johnson to determine whether there were possible carcinogens in its baby power and how it presented that information to regulators and consumers,” Murray wrote in a letter to Johnson & Johnson CEO Alex Gorsky in January 2019.

Johnson & Johnson has invariably denied all of the allegations and maintains that its baby powder is safe.

In an emailed statement to USA Today, a company spokesman said: “These inquiries are related to news reports about the ongoing talc litigation that adversely impacted our share price in late December 2018.”

The statement goes on to say that these news stories “included inaccurate statements and also withheld crucial information that had already been made public in the litigation and in prior media reports.”

Johnson & Johnson previously questioned the accuracy of the Reuters report when it was first released. The company also continues to promote the safety of talc on its official website.

A Long and Tangled History

Johnson & Johnson is arguably the world’s most prominent baby powder manufacturer. It has sold talc-based baby powder for over 100 years. While Johnson & Johnson was initially one of many companies that sold talcum powder, it is one of only a few that survived into the present.

According to the Reuters investigative report, Johnson & Johnson allegedly found trace amounts of asbestos in their talc shipments from Italy in 1957. By the mid-1970s, asbestos fibers had also allegedly been found in their U.S. supply multiple times in very small amounts.

Instead of reporting this, Reuters suggests that Johnson & Johnson worked to discredit studies linking talcum powder to asbestos through various means.

The report also goes on to state that Johnson & Johnson is facing lawsuits from over 10,000 plaintiffs who claim that talcum powder caused them to develop cancer.

Today, most of Johnson & Johnson’s baby powders are made with corn starch, though some varieties still use talc as a major ingredient.

The SEC filing noted that the company has successfully appealed many lawsuits that claim its talc-based products cause cancer. Johnson & Johnson is currently seeking to appeal the suits it has lost, including the $4.7 billion dollar verdict from 2018.