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Once a leader in baby products, why is ‘Johnson & Johnson’ shutting down?

Tejasvi Malhotra by Tejasvi Malhotra
13 August 2022
in Analysis
Johnson & Johnson powder

PC: Getty Images

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If we could remember any fragrance as infants, then it would undoubtedly be Johnson & Johnson baby powder. Almost every child in the 90s or 2000s for that matter has rejoiced in the smooth and soft skin scenting with its powder. The company’s products soon became more than mere cosmetics resulting in the consumption of ‘adults’ as well. However, it soon got surrounded by a huge sway of controversies. Its legitimacy over the safety of its products got under scrutiny. And now, the company powders are under the loom of becoming a product of history.

Closing of J&J talc powders

A recent report revealed that the US pharmaceutical giant Johnson & Johnson announced that it will be discontinuing the sales of its controversial talc-based baby powder globally in the year 2023. The announcement comes two years after J&J halted its sales in the USA and Canada.

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In a statement clarifying its transition from talc-based powders to cornstarch-based baby powder, the company stated, “As part of a worldwide portfolio assessment, we have made the commercial decision to transition to an all cornstarch-based baby powder portfolio. As a result of this transition, talc-based J&J Baby Powder will be discontinued globally in 2023.”

In the wake of Johnson & Johnson becoming a household name and an all-time preference for mothers, it is now set to close its baby powders. According to a Reuters report, the company knew about the harmful effects of its products, and thus apparently, it moved to double down the production of J&J baby powders.

History of J&J controversies

For years, J&J talcum powder, particularly baby powder, has been at the centre of controversy for carrying cancer-causing carcinogenic materials, asbestos, in its products. Over 38,000 lawsuits have been filed by the consumers and survivors who have been allegedly harmed by the use of the product.

However, the well-known pharmaceutical giant denied all the allegations and reiterated that its products were safe. In a statement, the company opined, “Our position on the safety of our cosmetic talc remains unchanged. We stand firmly behind the decades of independent scientific analysis by medical experts around the world that confirms talc-based J&J Baby Powder is safe, does not contain asbestos, and does not cause cancer.”

Apart from this, as per the 2018 report of WION, the Central Drugs Standard Control Organization (CDSCO), India’s drugs regulator had earlier warned about the company’s product safety to consumers. It ordered Johnson & Johnson to stop manufacturing its baby powder using raw materials in two of its Indian factories until test results prove that they are free of asbestos.

As per The Guardian, the pharmaceutical giant has faced more than 34,000 lawsuits, which include many complaints from women who used the baby powders and later developed ovarian cancer.

All these controversial cases eventually led the household name company under rigorous backlashes. Johnson & Johnson has itself led the decades-old reputation into ruins. However, the initial phase of the giant was quite different.

Also Read: Business 101: Adani’s self-seller self-consumer model is simply phenomenal

Once a household name, J&J is now on the verge of shutting down

The 1886 established American multinational corporation started by developing medical devices, pharmaceuticals, and consumer packaged goods. With the passage of time, Johnson & Johnson became one of the most valuable companies in the world, achieving USA’s prime credit rating of AAA, apparently higher than the United States government.

On one hand, the total sales of Johnson & Johnson increased drastically from US$ 70,074 million in 2015 to straight up to US$ 93,775 million in the year 2021. Currently, pharmaceuticals are responsible for around 56 per cent of the company’s total sales. Apart from this, the company also made an entry in the production of COVID-19 vaccines. Additionally, its vaccine initially gained an attraction with its requirement of just one shot. However, it too faced a sway of controversies, where its vaccines were under immense scrutiny.

On the other hand, Johnson & Johnson continuously encountered various safety lawsuits, resulting in a ravaged state of reputation. A special investigation was laid down when the company’s talc powder tested positive for containing small quantities of asbestos. According to a report, Johnson & Johnson’s shares fell around 10 per cent, following the case.

With the continuous diminishing reputation of the pharmaceutical giant, Johnson & Johnson is no more able to maintain its historic legacy of dominating the market. Probably, the gradual shutting down of Johnson & Johnson has taken the first step with the barring of its talc baby powders.

 

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