Johnson and Johnson stocks fall after asbestos found in products

The multinational company's stocks tumble after asbestos is found in its popular product.

Johnson and Johnson product
Source: Bloomberg

Johnson and Johnson stock has fallen to its lowest point in 15 years after a bombshell report that the company knew for decades that their products contained asbestos. The multinational business has denied the claim since the report was released.

‘Any suggestion that Johnson and Johnson knew or hid information about the safety of talc is false,’ said the company.

How baby powder turned lethal

Customers have been using Johnson and Johnson baby powder on their skin for decades. However, the talc that the powder is made of is composed of asbestos, a mineral that’s a known carcinogen. The company knew that some of the products contained the cancer-causing material, but insisted it was a small amount that wasn’t harmful to consumers. However, there were internal reports dating as far back as the 1970s that noted that the corporation knew that a large amount of asbestos was found in the talc, but hid that information from the US Food and Drug Administration (FDA).

Reuters reporter, Lisa Girion, noted that Johnson and Johnson appeared to care more about covering up the asbestos finding than warning the public.

‘Company executives, mine managers, scientists, doctors, and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public,’ wrote Girion.

There have been thousands of lawsuits against Johnson and Johnson brought by women claiming that the powder caused them to contract ovarian cancer. The company denied the allegation that the product contained any lethal materials and there hasn’t been any conclusive proof that using baby powder leads to getting cancer. Despite the denial, the corporation settled a lawsuit with 22 women and paid $4.7 billion.

What's next for Johnson and Johnson

The corporation has to do serious damage control in the media in order to overcome this latest crisis. It remains to be seen if Johnson and Johnson can survive the damaging report to prove to customers and investors that it didn’t knowingly put lives at risk.

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