This is Chapter 26 of my new book, working title “The Industry Playbook: Corporate Cartels, Corruption and Crimes Against Humanity” that is being published online chapter by chapter.
Since we just covered the topic of asbestos, I figured it was worth discussing a more contemporary example that involves such.
Johnson & Johnson is a big company. They were ranked 36 in 2021 on the Fortune 500 list, as one of the largest US corporations.
In addition, J&J has been held up as one of the most honest corporations. Back in 1982, Tylenol was its biggest seller, representing one third of its profit. When someone replaced capsules inside the bottle with one’s laced with cyanide in Chicago, seven people died.
J&J immediately went to the media to tell people to stop taking their product. They issued a nationwide recall to determine the extent of the problem. This is regarded as one of the great cases of a corporation doing the right thing, at tremendous cost to itself. They acted to save the public and they bounced back quickly because of doing so. Plus, to prevent future problems tamper-proof bottles were invented and rolled out.
I applaud the leadership in charge at that time. However, that doesn’t mean everything they do or did was squeaky clean. In fact, you’ll see that while that event went on, they were busy covering up another deadly crime, just one with a longer time horizon.
J&J’s baby powder was launched in 1894. Late in 2019, J&J recalled 33,000 bottles of its baby powder. The FDA found asbestos inside. J&J claimed they had stringent tests, never found asbestos, and that it was safe. Here’s a PR piece put out in newspapers after some of the initial lawsuits against them for this gained traction in 2018.
Some of the blatant lies, as you’ll come to see from court discovery reads:
- “It doesn’t contain asbestos and never will.”
- “The FDA has tested Johnson’s talc since the ‘70’s and has confirmed – every single time – that it did not contain asbestos.”
- “We did not hide anything. Ever.”
- “We have always acted with the utmost transparency in this matter.”
- “There is irrefutable scientific evidence that our talc is safe and beneficial to use.”
The PR website FactsAboutTalc.com continues the spin.
After all, if you’re giving babies cancer that won’t be developed for many years, lying about it is easy enough to do.
Here are the actual facts. Concerns had been raised back as early as 1971 and many times since.
New York Times reported “An executive at Johnson & Johnson…recommended to senior staff in 1971 that the company ‘upgrade’ its quality control of talc. Two years later, another executive raised a red flag, saying the company should no longer assume that its talc mines were asbestos-free…In hundreds of pages of memos, executives worried about a potential government ban of talc, the safety of the product and a public backlash over Johnson’s Baby Powder, a brand built on a reputation for trustworthiness and health.”
Discovery from civil litigation showed what was known and when.
In this case, they covered it up every possibly way they could. In 1976, Arthur Langer at the Mount Sinai Medical Center found asbestos in talcum powders. The president of Mount Sinai issued a news release to say that these were older powders and new ones were safe, though that wasn’t the case.
Why did the president do this? Mount Sinai received funding from the Robert Wood Johnson Foundation, started in the early 1970’s with $1.2 billion of J&J stock. J&J CEO Philip Hofmann also served on the foundation board. Philanthropy obviously can be used for good…and philanthropy can also be used for power and control to protect profits. This is another industry playbook tactic that we’ll dive deeper into later.
J&J put pressure on the FDA to not release what it deemed “untrue information”. This despite scientists reporting “incontrovertible asbestos,” or asbestos fiber counts that “seemed rather high.” They pressed the FDA to use a subpar method that wouldn’t detect amounts under 1%, which FDA officials were okay with. Controlling regulation is straight out of the playbook too.
In 1974, Johnson & Johnson told the FDA that, “…if the results of any scientific studies show any question of safety of talc, Johnson & Johnson will not hesitate to take it off the market.” This was a lie to the regulators.
An internal J&J memo, marked strictly confidential, from a research director, says how science was to be handled. “Our current posture with respect to sponsorship of talc safety studies has been to initiate studies only as dictated by confrontation. This philosophy, so far, has allowed us to neutralize or hold in check data already generated by investigators who question the safety of talc. The principal advantage for this operating philosophy lies in the fact that we minimize the risk of possible self-generation of scientific data which may be politically or scientifically embarrassing.”
The facts were that the earliest reports come from 1957 and 1958. An Italian mine which J&J used for production was found to contain 1 to 3 percent contamination.
This coverup continued. Reuters reported, “An early 1970s study of 1,992 Italian talc miners shows how it worked: J&J commissioned and paid for the study, told the researchers the results it wanted, and hired a ghostwriter to redraft the article that presented the findings in a journal.”
Some of their own scientists proposed a simple solution. Switch from talc to corn starch. Why didn’t they? Talc was cheaper.
This was just a small sampling of the 60 plus year conspiracy and coverup of known but subtle dangers by one of the largest and most successful companies around. We’ll see more of J&J’s crimes, specifically surrounding the opioid epidemic, later on in the section on pharmaceuticals.
How have these court cases ended?
Johnson & Johnson has stopped selling its talc powder. But only in the USA and Canada. Other countries will continue to receive it. That’s the going worldwide strategy once again.
The company decided to stop selling “in large part to changes in consumer habits and fueled by misinformation around the safety of the product and a constant barrage of litigation advertising.” They claim misinformation while their internal documents show that their PR campaigns are the ones that are misinforming.
The Supreme Court rejected an appeal from J&J to undo $2.1 billion in damages awarded to plaintiffs.
As a result of this, J&J created a new subsidiary, LTL Management LLC, to shield itself from tens of thousands of lawsuits. J&J moved $2 billion in settlement money to this subsidiary, then filed for Chapter 11 bankruptcy. By doing this they’re holding a limited amount of assets to handle the court cases while protecting the bigger company. LTL’s liabilities are estimated between $1 and $10 billion. This legal maneuver was used widely by asbestos companies facing litigation.
Key Takeaways on Johnson & Johnson’s Asbestos Talc Powder
- Johnson and Johnson has been held up as one of the most ethical companies due to their handling of the poisoning of Tylenol and how they recalled these in 1982.
- But even while that event came and passed, J&J was already lying about and covering up that their baby powder, made of talc, was contaminated with asbestos. They’ve known about this, and internally debated it, for at least five decades.
- Scientific research as early as 1957 showed the contamination of talc by asbestos. Internal research and documentation makes this abundantly clear.
- Their own scientists advised switching to corn starch, but talc was cheaper and profit was the bottom line.
- J&J was able to influence the FDA to use a less powerful test that wouldn’t find the asbestos contamination.
- Their influence extended through philanthropic giving and company executives also sitting on foundation boards.
- J&J’s public relations shows outright lies. They spread misinformation while stating that the other side is doing so in a classic case of projection.
- J&J is using bankruptcy protection methods, isolating the liability to a subsidiary setup for such, to make sure this doesn’t do bigger harm to the main company.
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Links to all published chapters of The Industry Playbook can be found here.
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