As courtroom losses mount, J&J seeks to limit reputational damage

The company faces more than 13,000 lawsuits claiming there’s asbestos in its talcum powder, posing serious risk to its image and financial future. How should it proceed?

Johnson & Johnson hopes to win a potentially existential argument in the court of public opinion, despite mounting losses in the courtroom.

The company this week was ordered to pay $29 million to a woman who says the asbestos in her baby powder gave her cancer. J&J promises to appeal, citing procedural and evidentiary errors. If the company can’t right the ship, the costs could become staggering, with thousands of lawsuits remaining unresolved.

Reuters reported:

“We respect the legal process and reiterate that jury verdicts are not medical, scientific or regulatory conclusions about a product,” J&J said in a statement on Wednesday.

The New Brunswick, New Jersey-based company denies that its talc causes cancer, saying numerous studies and tests by regulators worldwide have shown that its talc is safe and asbestos-free.

The lawsuit was brought by Terry Leavitt, who said she used Johnson’s Baby Powder and Shower to Shower – another powder containing talc sold by J&J in the past – in the 1960s and 1970s and was diagnosed with mesothelioma in 2017. It was the first of more than a dozen J&J talc cases scheduled for trial in 2019. The nine-week trial began on Jan. 7 and included testimony from nearly a dozen experts on both sides.

The company has remained defiant in the face of accusations that it knowingly sold baby powder containing asbestos.

Medical Marketing & Media reported:

A senior Johnson & Johnson marketer insisted the company had “nothing to hide” as it battles intensified claims of possible asbestos contamination in its baby powders.

Referring to the recent accusations, Sophie Rasmussen, senior marketing director, baby care EMEA, at the FMCG company, commented: “Our approach has been the best approach during a crisis: transparency.”

Rasmussen was speaking at a Havas Meaningful Brands event in London.

Saying that the brand prides itself on “giving babies the best start in life,” Rasmussen said it had shared “all the data it owns on its website,” in order for the public to form its own opinion on the product. She insisted that, despite the accusations, “the facts say it’s safe and cancer free” but that “proactive communication and transparency has been the best choice.”

This mirrors the company’s decades long strategy of categorically denying there were any risks to using its baby powder.

Bloomberg reported:

J&J has refused to put a warning on its recognizable white bottles bearing the powder, even though a separate California jury last year asked a judge to order the company to do so. After the judge refused, that panel ordered J&J to pay a total of $27.5 million in damages to a woman who sued the company over her cancer.

One juror said after Wednesday’s verdict that she probably won’t buy any more J&J baby powder.

“They knew there was asbestos in it, and for me that’s the worst part because they failed to warn the consumer,” said Kate Alessandri, an Oakland librarian.

However, the current trend is not in Johnson & Johnson’s favor, and investors aren’t buying what the company is selling.

CNBC reported:

Johnson & Johnson shares were down nearly 2 percent in premarket trading Thursday after it was ordered by a California jury to pay $29 million to a woman who alleged that asbestos in the company’s talcum-powder-based products caused her cancer.

It was the latest defeat for J&J, which is facing thousands of similar lawsuits. The company denies allegations that its talc causes cancer, saying numerous studies and tests by regulators worldwide have shown that its talc is safe and asbestos-free.

Peril in the marketplace

The fight over Johnson & Johnson’s baby powder might do serious damage to the company’s reputation, making it harder for the organization to fend off future crises.

Unfortunately for J&J, another battering may be right around the corner. New lawsuits allege that the company is an integral, if not leading, part of the opioid epidemic in America.

Axios reported:

Johnson & Johnson may be better known for selling Band-Aids and baby powder, but the company has an extensive history with prescription painkillers.

  • J&J produced raw narcotics in Tasmanian poppy fields, created other active opioid ingredients, and then supplied the products to other opioid makers — including Purdue Pharma.
  • The company boasted at the time that one of its opium poppies “enabled the growth of oxycodone,” and said the morphine content of a different poppy was “the highest in the world,” according to investor slides obtained by Axios.
  • J&J sold the 2 subsidiaries that handled that business, Noramco and Tasmanian Alkaloids, to a private equity firm in 2016 for $650 million.
  • J&J also sold off Nucynta, an opioid pill it had marketed, for $1 billion in 2015. It still sells Duragesic, a fentanyl patch that had peak sales of $2 billion in 2004.

That’s not all: Oklahoma is alleging J&J targeted vulnerable populations, including children and older adults, for painkiller prescriptions. The state also says J&J funded groups that aggressively advocated for easy access to opioids.

All right, PR Daily readers, how would you advise J&J to burnish its reputation? Please offer your thoughts in the comments section.

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