In a tentative agreement, pharmaceutical giant Johnson & Johnson is on track to pay approximately $700 million to settle an investigation involving over 40 U.S. states. The claims allege that the company wrongfully marketed its talc-based baby powder without adequately warning consumers about potential health risks. Individuals familiar with the deal revealed that the initial offer to settle all current and future baby powder claims amounted to $9 billion during the bankruptcy filing of one of the company's units.

As part of this initial offer, Johnson & Johnson earmarked $400 million to address consumer protection claims from U.S. states. However, following mediation sessions in December, the company has agreed to increase the payout, according to insiders.

J&J spokesperson Clare Boyle refrained from immediate comment on the settlement, while Kylie Mason, spokesperson for Florida Attorney General Ashley Moody, stated that the multi-state investigation remains ongoing, with no finalized settlement agreements at this time. Representatives for Texas Attorney General Ken Paxton did not respond to requests for comment.

Mississippi and New Mexico are the only states thus far to file lawsuits against Johnson & Johnson regarding the marketing of talc-based baby powder. Nevertheless, court filings revealed that 42 states and the District of Columbia have jointly investigated the company's marketing practices. Attorneys general from states such as Arizona to North Carolina have sought information from J&J.

The proposed settlement does not encompass the lawsuits brought by Mississippi and New Mexico, as they seek higher settlements due to ongoing litigation. For instance, Mississippi aims to hold J&J accountable for selling over 6 million bottles of baby powder in the state without a cancer warning over nearly five decades, potentially resulting in damages of around $6 billion under state law.

Johnson & Johnson, recognized as the world's largest maker of healthcare products, faces extensive legal exposure beyond state claims. The company is confronted with over 50,000 lawsuits alleging that it concealed the cancer risks associated with asbestos in its talc-based powders. While J&J maintains that its talc-based products do not cause cancer, former users argue that executives were aware of trace amounts of asbestos in the product since the early 1970s.

Legal battles have seen mixed outcomes for J&J, with some cases resulting in substantial damages awarded to consumers. The company withdrew its talc-based powders from the U.S. and Canada in 2020, citing declining sales. It replaced talc with a cornstarch-based version and pledged to eliminate all baby powders containing talcum powder worldwide by the end of the previous year.

The consolidated federal case is titled "In Re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation" and is in the U.S. District Court, District of New Jersey (Trenton). The settlement, if finalized, could mark a significant development in a protracted legal battle for Johnson & Johnson, adding to the company's efforts to address concerns related to its talc-based products.