Johnson & Johnson earnings were down in first quarter of 2019, as Baby Powder lawsuits and other big product liability litigations continued to weigh on the company’s bottom line.
According to Johnson & Johnson’s latest quarterly filing, net earnings fell by 14% during the first three months of the year. The company spent $423 million on litigation expenses during the first quarter, after having already shelled out $1.29 billion for legal costs in the final quarter of 2018.
According to CNBC, about 10% of Johnson & Johnson’s fourth quarter legal expenses were connected to the ongoing talcum powder litigation. The company currently faces around 14,200 personal injury claims that blame Baby Powder and Shower-to-Shower for causing either ovarian cancer or mesothelioma.
Johnson & Johnson has had a mixed record since those cases began going to trial in February 15th, with some plaintiffs winning multi-million verdicts. More than a dozen talcum powder lawsuits will head to trial over the next five months, mostly in California.
The massive litigation has already forced Imery’s Talc America, Johnson & Johnson’s talc supplier, to declare bankruptcy in February.
Johnson & Johnson went on to surprise everyone a month later, when it agreed to settle three talcum powder mesothelioma claims that were either at trial or just about to go before a jury. However, the company insisted that the settlements represented unique situations and promised to continue defending the remaining lawsuits.
Most of Johnson & Johnson’s first quarter legal expenses were related to Xarelto, a blood thinner the company co-markets with Bayer AG that’s the target of more than 27,000 product liability claims pending in U.S. courts.
The companies agreed to pay $775 billion to settle the Xarelto litigation earlier this year, with Johnson & Johnson’s share amounting to $387.5 billion. Xarelto plaintiffs who retained an attorney prior to March 11, 2019 were eligible to participate in the settlement, as long as they registered their claim by March 28, 2019 and filed their lawsuit by April 4, 2019.
The companies reserved the right to withdraw from the Xarelto settlement if certain participation rates are not met.
Johnson & Johnson continues to defend thousands of additional product liability claims over allegedly defective drugs and medical devices that could potentially affect future earnings. For example, the company has yet to resolve more than 13,000 Risperdal lawsuits pending in Pennsylvania, California, and Missouri that blame the antipsychotic medication for gynecomastia.
Another 2,500 cases involve Physiomesh Flexible Composite mesh, a polypropylene hernia implant that was withdrawn by its Ethicon, Inc. subsidiary in March 2016. While Ethicon also faces around 29,500 lawsuits involving its polypropylene transvaginal mesh devices, most of the U.S. litigation has been resolved.
Johnson & Johnson has also settled more than 10,000 lawsuits stemming from the 2010 DePuy ASR hip implant recall, but about 1,700 cases remaining pending. Earlier this year, the company announced a settlement program to resolve about thousands of injury claims involving a metal-on-metal version of the DePuy Pinnacle hip replacement.