Nate Raymond

(Reuters) – Johnson & Johnson (NYSE:) on Friday said it would split into two companies, hiving off its consumer health division that sells Band-Aids and Baby Powder from its pharmaceuticals and medical devices business.

Each company will need to share various legal obligations. The following are the most important:

JOHNSON’S BABY PUOWDER

Nearly 40.000 lawsuits were brought against Baby Powder for allegedly containing asbestos. This was a claim that the product and other talc products caused cancer. However, the company strongly denies. Women with ovarian cancer, and other mesothelioma patients are some of the plaintiffs. J&J has offered to contribute $2 billion toward resolving remaining talc litigation as part of the newly created subsidiary’s bankruptcy reorganization.

OPIOIDS

J&J and the three largest U.S. drug distributors – McKesson Corp (NYSE:), AmerisourceBergen (NYSE:) Corp and Cardinal Health Inc (NYSE 🙂 agreed in July to pay as much as $26 Billion to end lawsuits filed by states and local governments that claimed they were responsible for the rise of the opioid crisis. J&J, which was named in 3,300 lawsuits, would pay up to $5 billion. It is not finalized, and 8 states will not participate in the agreement. The Oklahoma Supreme Court on Tuesday overturned a $465 million judgment against J&J in lawsuit by the state alleging it deceptively marketed painkillers in ways that downplayed their addictive risks.

SUNSCREENS

Johnson & Johnson and Costco Wholesale Corp (NASDAQ:) on Oct. 29 in a court filing said they had reached a tentative agreement to settle lawsuits over the presence of a cancer-causing substance in several recalled J&J sunscreen products. J&J had voluntarily recalled four Neutrogena aerosol sunscreen products and one from Aveeno on July 14, after finding small amounts of benzene, a carcinogen. Consumers brought suit against J&J over Aveeno-branded Neutrogena aerosol sunscreen products.

RISPERDAL

J&J on Oct. 29 disclosed that it had settled most of the lawsuits it faced by thousands of men who claimed its anti-psychotic drug Risperdal caused them to develop excessive breast tissue and said it recorded $800 million in expenses in connection with the agreement. Over 9,000 lawsuits were pending. One case was covered by the deal. It resulted in an $8Billion punitive damages award for 2019, which a Philadelphia judge reduced to $6.8M.

HIP IMPLANTS

J&J’s DePuy Orthopaedics unit in 2013 announced it would pay up to $2.5 billion to resolve cases by people alleging injuries caused by its metal-on-metal ASR hip-replacement systems. Further agreements were reached in 2015 and 2017. These deals allowed it to settle over 10,000 additional cases. J&J says it has reached settlements in related class actions in Australia and Canada.

Pinnacle’s metal-on–metal hip implant, for which the company is being sued, also led to lawsuits against it. It settled thousands of cases after being handed down several negative jury verdicts. Lawsuits continue to be filed and J&J says 5,400 are pending.

PELVIC MESH

J&J and other manufacturers of pelvic mesh products have faced thousands of lawsuits by women claim they suffered painful injuries and difficulty in removing of the devices. More than 104,000 cases against seven manufacturers including J&J were consolidated before a federal judge in West Virginia and by 2019 had resulted in more than $7.25 billion in settlements. J&J in its Oct. 30 quarterly report said it had resolved the majority of cases but still faced 10,700 claims.