Rulings Linking Baby Powder to Cancer Dent J&J Image

Baby Product Sales Also Falter as Band-Aid and Tylenol Remain Unscathed

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Credit: Johnson & Johnson/YouTube

Johnson & Johnson has faced many litigation problems in recent years, but the one that seems to be hurting its reputation most is over Johnson's Baby Powder – specifically two recent legal judgments finding talc in the products caused ovarian cancer.

Since the first of those judgments in February, J&J's YouGov BrandIndex Buzz score has declined by more than two-thirds.

The score is the net percentage of people in tracking surveys who report having heard something positive about the company less those who have heard something negative, either through advertising, news or word of mouth. And while it's still positive, J&J went from a recent high of 18.1 in Februrary to a low of 5.4 last week. That's the company's lowest score in three and a half years, according to YouGov.

The publicity may also be weighing on Johnson's Baby product sales, which were down 5.7% for the four weeks ended April 23 and 1.6% for the 12 weeks ended then, though they were up 0.8% for the full year, according to Nielsen data from Deutsche Bank.

J&J has said it will appeal rulings in the talc cases and denies any link between talcum powder and ovarian cancer.

A J&J spokeswoman said in a statement that the company hadn't analyzed the YouGov data but said: "We recognize that reputation tracking is done most effectively over a long horizon and we manage our activities accordingly. We are steadfast in our commitment to put the safety of our consumers first. We are confident in more than 20 years of science and regulatory review, and we intend to continue to aggressively educate the public using the scientific evidence that supports the safety of talc."

Recent news for J&J hasn't been flattering broadly, including reports this week of lawsuits by attorneys general in California and Washington charging the company's Ethicon unit didn't properly disclose risks of pelvic mesh to women or their doctors, and judgments against the company in lawsuits charging its Risperdal antipsychotic drug caused breast growth in males. The company has denied wrongdoing in those cases, though it has settled some of the Risperdal lawsuits. Overall, the company has paid $5 billion in judgments, settlements or fines related to its drugs and medical devices since 2013, Bloomberg reports.

Publicity surrounding the baby powder cases, in which two juries in Missouri awarded plaintiffs a combined $127 million in damages, appear to be what's driving J&J reputation scores lower now, based on the timing of the impact, said Ted Marzilli, CEO of YouGov's BrandIndex. "The other issues may be more niche, whereas baby powder is a more widely used product," he said.

The bad publicity may not go away soon. The multi-district federal talc litigation consolidated in St. Louis includes more than 1,000 more cases.

Still, two of J&J's key consumer brands – Band-Aid and Tylenol – appear entirely unaffected by the news, according to YouGov. And J&J remains in positive buzz territory, which is considerably better than, say, Chipotle, which went from a positive 8 to negative 29 in the past year during its food safety crisis, said Mr. Marzilli. Target, which has faced protests from conservative groups over its transgender bathroom policy in recent months, has seen its positive buzz decline slightly more than J&J – from around 18 to 3.

J&J's sales of pain remedies and overall company consumer products are equal to or better than the full-year figures, though sales of adhesive bandages were down slightly the past 12 weeks. Overall J&J consumer product sales, also including such brands as Neutrogena and Listerine, rose 4% for the 52-week period. The company has been gaining share in most categories, particularly its bigger ones, according to the Nielsen data.

J&J consumer sales have recovered steadily in recent years as the company implemented a 2011 consent decree with the Food and Drug Administration to resolve manufacturing quality issues. Tylenol and other products were largely absent from shelves or in short supply for years after safety recalls more than six years ago.

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