Johnson & Johnson has reached a tentative settlement to resolve an investigation by more than 40 states into claims the company misled patients about the safety of its talc baby powder and other talc-based products, the company said in a statement to CNBC on Tuesday.
Notably, the settlement does not resolve the tens of thousands of consumer lawsuits, some of which are slated to go to trial this year, alleging that those talc-based products caused cancer.
Those cases have for decades caused financial and public relations trouble for J&J, which contends that its talc-based products and now-discontinued talc baby powder are safe for consumers.
J&J said in an October securities filing that 42 states and Washington, D.C., had launched a joint investigation into its marketing of talc-based products. The company will pay $700 million to settle the probe, its CFO Joseph Wolk told The Wall Street Journal on Tuesday.
Last year, J&J only set aside about $400 million to resolve U.S. state consumer protection claims.
A J&J spokesperson refused to confirm the settlement figure to CNBC.
Erik Haas, J&J's worldwide vice president of litigation, confirmed the deal in a statement without providing additional details.
"Consistent with the plan we outlined last year, the company continues to pursue several paths to achieve a comprehensive and final resolution of the talc litigation," Haas told CNBC. "As was leaked last week, that progress includes an agreement in principle that the Company reached with a consortium of 43 State Attorneys Generals to resolve their talc claims."
Bloomberg first reported about the settlement earlier this month, citing sources familiar with the matter.
J&J, which reported fourth-quarter results on Tuesday, has twice tried to resolve the consumer talc cases by offloading those liabilities into a subsidiary, LTL Management, and having that unit file for Chapter 11 bankruptcy protection.
A New Jersey bankruptcy judge in July rejected the second bankruptcy attempt, stating that LTL Management wasn't in sufficient financial distress. A U.S. appeals court in April dismissed the first bankruptcy attempt for the same reason.
As part of the latest failed bankruptcy attempt, J&J proposed to pay $8.9 billion to talc claimants.
Haas said during an earnings call in October that the company is asking the Supreme Court to overturn the lower court rulings denying bankruptcy protection to LTL Management.
J&J also said late last year that it is considering a third bankruptcy attempt as it tries to push forward with that proposal.
J&J ended sales of its talc-based baby powder globally last year.
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Johnson & Johnson to settle talc baby powder investigation, will reportedly pay $700 million - CNBC
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