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Johnson & Johnson to pay out US$700 million to settle investigation by US states

THE WHAT? Johnson & Johnson has reached a US$700 million settlement with 42 US states and Washington DC. The health care manufacturer was under investigation for allegedly misleading shoppers into believing its talc products were harmless.

THE DETAILS Under the terms of the deal, Johnson & Johnson is not admitting to any wrongdoing, and the company stands by its claim that its talc products are safe and do not cause cancer.

THE WHY? The settlement is the latest in series of court battles Johnson & Johnson is facing over its baby powder. It is attempting to resolve outstanding litigation via a type of bankruptcy filing known as the Texas two-step, which will funnel liabilities into a dedicated company. It has set aside US$11 billion for this purpose.  

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