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(Sharecast News) - Johnson & Johnson has proposed a $6.5bn deal to settle thousands of lawsuits claiming its talc products cause cancer, it was confirmed on Wednesday.
Under the deal, J&J will pay out $6.5bn over the next 25 years. The company recorded a $2.7bn charge in the first quarter in expectations of the deal being backed, bringing total reserves for talc claims to around $11bn.
Should 75% of the plaintiffs approve the proposed settlement, the drugmaker will then be able to file for bankruptcy for LTL Management, the subsidiary created to absorb the talc liability.
J&J encouraged the remaining 60,000-plus plaintiffs with claims against it to vote in favour.
Eric Haas, worldwide vice president of litigation, said: "The plan is the culmination of our consensual resolution strategy that we announced last October.
"Since then the company has worked with counsel representing the overwhelming majority of talc claimants to bring this litigation to a close, which we expect to do through this plan."
However, J&J - which has consistently denied that any of its products contain asbestos or cause cancer - also reiterated its belief that the none of the talc-related claims against it have merit.
Said Haas: "The talc claims asserted against the company exemplify the egregious impact on US businesses from meritless litigation and extreme judgements obtained by the plaintiffs' bar."
Ovarian cancer accounts for around 99% of the claims.
A three-month period for plaintiffs to vote on the plan will now get underway.
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