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Johnson & Johnson CEO testifies for the first time in Baby Powder Cancer trial

Published on 28/01/20 at 11:17am

Johnson & Johnson CEO Alex Gorsky faced questions around stock sales and his knowledge of asbestos in the company's baby power, during a trial in New Jersey.

Gorsky testified in a case in New Jersey where the lawyers are trying to persuade the jury that Johnson & Johnson failed to do enough to ensure the purity of its product. It follows the liability phase of the trial where another jury awarded $37.2 million to four plaintiffs who have mesothelioma. They alleged that it was caused by exposure to Baby Powder during infancy.

Gorsky was first asked about his decision to sell company shares in November 2018, which were worth $38.6 million. It came two days after a Reuters reporter had contacted the company after her review of documents showed Johnson & Johnson had known about small amounts of asbestos in their talc-powder since 1971. Following the report being published, a sell-off wiped $40 billion from the company’s market value.

Gorsky said he had not seen the article before selling his shares, testifying he had followed the appropriate process with the board of directors and the company’s legal team in the sale. He said he notified the company of his intention to sell the stocks two days before Reuters got in touch, which Reuters could not independently confirm.

In regard to his knowledge about the presence of asbestos in Baby Power, Gorsky claimed he had not read internal reports that prevously outlined this. He said: “I was told by the experts in their fields that we were using the most appropriate, most up-to-date technology to make sure our talc was safe. I did not read all the documents, but I would rely on the experts in these fields.”

Johnson & Johnson had fought against the subpoena that brought Gorsky to testify in the trial. They argued that he had no first-hand knowledge about the potential safety concerns of the powder, and the case involved corporate misconduct that occurred decades before he joined. The New Jersey Supreme Court upheld the subpoena, and denied the company’s request to suspend it last week.

Conor Kavanagh

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