The U.S. Department of Justice has launched a criminal probe into allegations Johnson & Johnson lied to the public about the cancer risks associated with Baby Powder and other popular talc-based powders.
Bloomberg News reported the probe last week, after “people with knowledge” confirmed a Washington D.C. grand jury was examining documents related to the matter. The FBI and the U.S. Securities and Exchange Commission could also be involved.
According to Henry Klingeman, a former federal prosecutor, the probe is likely focused on whether internal documents contradict Johnson & Johnson’s frequent public denials regarding talcum powder and cancer.
“Since J&J is a public company, they are probably looking at whether their statements amounted to fraudulent statements to consumers and regulators,” he told Bloomberg. “I’d also think they’d be looking at whether they violated securities-fraud laws.”
Earlier this, Johnson & Johnson confirmed receiving subpoenas related to talcum powder and cancer. However, it wasn’t known if the federal investigation was criminal or civil in natural.
Johnson & Johnson currently faces more than 14,000 talcum powder lawsuits that blame Baby Powder for causing ovarian cancer or mesothelioma. Documents revealed in the course of the litigation indicate the company was aware of these risks by the early 1970s, but chose not to warn consumers or regulators.
Last December, a Reuters investigation also suggested executives at Johnson & Johnson knew since the early 1970s that its raw-talc and finished talcum powders had periodically tested positive for small amounts of asbestos, a toxic mineral tied to mesothelioma. However, they apparently concealed the test results out of concern that such a revelation would undermine Johnson & Johnson’s image as a “caring company.”
Months later, Reuters reported that Johnson & Johnson had decided to shift its talcum powder marketing strategy to target African-American, Hispanic, and overweight women sometime in 2006. That same year, the World Health Organization’s International Agency for Research on Cancer declared talc-based powders “possibly carcinogenic” when applied to the female genitals.
A dozen juries in courts throughout the United States have concluded that Johnson & Johnson failed to disclose cancer risks to consumer, awarding plaintiffs more than $5 billion over the past three years. While the company has been able to have multiple verdicts dismissed, Bloomberg indicated that talcum powder settlements could ultimately cost Johnson & Johnson as much as $15 billion.