New Jersey: According to a report by the Reuters, Johnson & Johnson knew for decades that asbestos, a carcinogenic substance, was present in its Baby Powder. The report added that the company had commissioned and paid for studies conducted on its baby powder franchise and even hired a ghostwriter to redraft the article that presented the findings in a journal.
A Reuters examination of company memos, internal reports and other confidential documents found that J&J knew about the presence of small amounts of asbestos in its products from as early as 1971.
At least three tests by three different labs between 1972 and 1975 found asbestos in the company’s talc, but in 1976, J&J assured the U.S. Food and Drug Administration (FDA) that no asbestos was “detected in any sample” of talc produced between December 1972 and October 1973.
J&J has, however, denied the allegations, and said that it would continue to defend the safety of its product. Responding to the report, the copmpany said “any suggestion that Johnson & Johnson knew or hid information about the safety of talc is false.”
In an email response, Ernie Knewitz, J&J’s vice president of global media relations, wrote: “This is all a calculated attempt to distract from the fact that thousands of independent tests prove our talc does not contain asbestos or cause cancer.”
The company has been facing more than 10,000 talc-related lawsuits and their products have also been linked with mesothelioma, a fatal form of cancer that affects the tissue that lines the body’s cavities.
J&J has been dominating the talc powder market for more than 100 years, making baby powder essential to its image as a caring company.
All the company’s attempts at damage control seem to have failed as its shares fell by 10 percent on Friday. The fall in the shares prices erased about $40 billion from the company’s market capitalisation. Around 28 million shares exchanged hands by 18:30 GMT, more than three times its 25-day moving average.
A few Wall Street analysts also stated that the stock appeared to be oversold on the news. BMO Capital Markets analyst Joanne Wuensch said, “In our opinion litigation overhangs are real, and we do not minimize the situation, but the stock pull back does seem over done to us.”
J.P. Morgan analysts said, “We believe it is highly unlikely the company’s exposure to this talc issue will even come close to the $40 billion in lost market cap today.”
