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What is the story about?
President Donald Trump created a potentially existential crisis for Tylenol maker Kenvue Inc. with just three words about the company’s most-recognised product: “don’t take it.”
Trump’s warnings about the unproven link between Tylenol use during pregnancy to autism in children risks reinvigorating a barrage of litigation over the issue that the company has sought to put behind it. A federal court in December dismissed lawsuits alleging a link between the active ingredient in the over-the-counter pain treatment and the developmental disorder.
The US Food and Drug Administration has initiated the process for a label change to products containing acetaminophen that will say the ingredient is associated with a higher risk of autism in children when taken by pregnant women. It has also issued a related letter alerting physicians nationwide.
If the FDA succeeds in forcing Kenvue to add the autism risks to Tylenol’s label, consumers who sue to hold the company responsible for their child’s autism will likely be able to use the new warnings as evidence in court, plaintiffs’ lawyers say.
A renewed legal fight risks derailing an already embattled Kenvue that is struggling to revamp its business, turn around slowing sales and keep investors happy under interim CEO Kirk Perry. It also puts the maker of Tylenol in its biggest public relations crisis since seven people died after ingesting Tylenol capsules laced with cyanide in the 1980s.
“The Dear Doctor warning about the potential links between Tylenol and autism for pregnancies breathes new life into lawsuits targeting this long-held suspicion and will bring the issue to the fore once again,” said Mark Lanier, a veteran plaintiffs’ lawyer who won a $4.7 billion verdict in 2018 against Kenvue’s former parent, Johnson & Johnson. Jurors awarded 20 women the money on claims J&J hid the cancer risks of its iconic baby powder. That verdict was later reduced to $2.1 billion, and J&J wound up paying $2.5 billion with interest.
The new warning mandated by the FDA could serve as powerful evidence in front of juries, even if it doesn’t explicitly spell out a causal relationship between the drug and autism, said Stacey Lee, a law professor at Johns Hopkins University. The kinds of research studies that have been done to date investigating a possible link can’t determine causality.
“On litigation, FDA’s notice states that a ‘causal relationship has not been established,’ said a spokesperson for Kenvue. “We stand with the science and believe we will continue to be successful in litigation as claims lack legal merit and scientific support.”
Kenvue could try to sue the federal government, but legal experts say the odds are slim that the company could win such a suit. Courts give the FDA wide latitude when it comes to weighing health risks, especially during pregnancy, said Lee.
“The real question is whether Kenvue will sue simply as an effort to change the narrative, regardless of the legal validity of their claims,” said Elizabeth Burch, a University of Georgia law professor who specialises in product-liability law and the federal system for handling mass-tort cases. “Anyone can sue in this country. Whether that suit is meritorious or in good faith is a separate question for a judge to decide,” she added.
Kenvue’s shares closed 1.6% higher Tuesday as the company avoided a worst-case scenario in which the FDA outright banned or meaningfully limited the treatment. The lack of new scientific evidence behind the government’s warning has also soothed investors. Kenvue’s stock has fallen 19% so far this year.
A Torrid Period
The mounting legal risks come after a torrid period for Kenvue. In the two years after being spun off from Johnson & Johnson, the consumer products company struggled to find solid footing under CEO Thibaut Mongon, spurring activist investors to ramp up the pressure for changes.
Earlier this year, Kenvue installed Jeffrey Smith, chief executive officer of Starboard Value, on its board to sidestep a proxy battle with the hedge fund. TOMS Capital Investment Management amassed a stake in the company with the aim of pushing Kenvue to trim its portfolio. And in April, the Financial Times reported that hedge fund Third Point had built up a stake.
Kenvue announced a series of changes this summer to appease those investors, including installing Perry as interim CEO while the company looks for a permanent replacement. Kenvue also said it was undergoing a strategic review of its brand portfolio, which includes Neutrogena and Band-Aid, among others. The firm is considering the sale of some of its smaller skincare brands, Reuters reported in June.
The economic backdrop has not helped Kenvue’s situation as consumers have been pulling back on shopping under pressure from persistent inflation, a slowing labour market and high interest rates. The company’s organic sales have contracted for two consecutive quarters, a trend that analysts anticipate will continue in the third quarter.
Kenvue slashed its full-year sales target last month as it struggled through execution issues that will likely linger through the remainder of the year.
Tylenol contributes a mid-to-high single-digit percentage of sales, according to Morningstar analyst Keonhee Kim, making it Kenvue’s largest brand.
In addition to exposing the company to a host of legal risks, the government’s warning against Tylenol could damage the brand and reduce consumption, Citi analyst Filippo Falorni wrote in a note to clients. It could also spook a broader set of consumers beyond expecting mothers, pushing them to use other pain reduction methods, Falorni added.
The wider scientific community has warned that the government’s claims could create confusion for people attempting to treat fevers, an especially dangerous condition for pregnant mothers and their children.
Read Also: Super Typhoon Ragasa lashes Hong Kong, death toll climbs to 14 in Taiwan
Trump’s warnings about the unproven link between Tylenol use during pregnancy to autism in children risks reinvigorating a barrage of litigation over the issue that the company has sought to put behind it. A federal court in December dismissed lawsuits alleging a link between the active ingredient in the over-the-counter pain treatment and the developmental disorder.
The US Food and Drug Administration has initiated the process for a label change to products containing acetaminophen that will say the ingredient is associated with a higher risk of autism in children when taken by pregnant women. It has also issued a related letter alerting physicians nationwide.
If the FDA succeeds in forcing Kenvue to add the autism risks to Tylenol’s label, consumers who sue to hold the company responsible for their child’s autism will likely be able to use the new warnings as evidence in court, plaintiffs’ lawyers say.
A renewed legal fight risks derailing an already embattled Kenvue that is struggling to revamp its business, turn around slowing sales and keep investors happy under interim CEO Kirk Perry. It also puts the maker of Tylenol in its biggest public relations crisis since seven people died after ingesting Tylenol capsules laced with cyanide in the 1980s.
“The Dear Doctor warning about the potential links between Tylenol and autism for pregnancies breathes new life into lawsuits targeting this long-held suspicion and will bring the issue to the fore once again,” said Mark Lanier, a veteran plaintiffs’ lawyer who won a $4.7 billion verdict in 2018 against Kenvue’s former parent, Johnson & Johnson. Jurors awarded 20 women the money on claims J&J hid the cancer risks of its iconic baby powder. That verdict was later reduced to $2.1 billion, and J&J wound up paying $2.5 billion with interest.
The new warning mandated by the FDA could serve as powerful evidence in front of juries, even if it doesn’t explicitly spell out a causal relationship between the drug and autism, said Stacey Lee, a law professor at Johns Hopkins University. The kinds of research studies that have been done to date investigating a possible link can’t determine causality.
“On litigation, FDA’s notice states that a ‘causal relationship has not been established,’ said a spokesperson for Kenvue. “We stand with the science and believe we will continue to be successful in litigation as claims lack legal merit and scientific support.”
Kenvue could try to sue the federal government, but legal experts say the odds are slim that the company could win such a suit. Courts give the FDA wide latitude when it comes to weighing health risks, especially during pregnancy, said Lee.
“The real question is whether Kenvue will sue simply as an effort to change the narrative, regardless of the legal validity of their claims,” said Elizabeth Burch, a University of Georgia law professor who specialises in product-liability law and the federal system for handling mass-tort cases. “Anyone can sue in this country. Whether that suit is meritorious or in good faith is a separate question for a judge to decide,” she added.
Kenvue’s shares closed 1.6% higher Tuesday as the company avoided a worst-case scenario in which the FDA outright banned or meaningfully limited the treatment. The lack of new scientific evidence behind the government’s warning has also soothed investors. Kenvue’s stock has fallen 19% so far this year.
A Torrid Period
The mounting legal risks come after a torrid period for Kenvue. In the two years after being spun off from Johnson & Johnson, the consumer products company struggled to find solid footing under CEO Thibaut Mongon, spurring activist investors to ramp up the pressure for changes.
Earlier this year, Kenvue installed Jeffrey Smith, chief executive officer of Starboard Value, on its board to sidestep a proxy battle with the hedge fund. TOMS Capital Investment Management amassed a stake in the company with the aim of pushing Kenvue to trim its portfolio. And in April, the Financial Times reported that hedge fund Third Point had built up a stake.
Kenvue announced a series of changes this summer to appease those investors, including installing Perry as interim CEO while the company looks for a permanent replacement. Kenvue also said it was undergoing a strategic review of its brand portfolio, which includes Neutrogena and Band-Aid, among others. The firm is considering the sale of some of its smaller skincare brands, Reuters reported in June.
The economic backdrop has not helped Kenvue’s situation as consumers have been pulling back on shopping under pressure from persistent inflation, a slowing labour market and high interest rates. The company’s organic sales have contracted for two consecutive quarters, a trend that analysts anticipate will continue in the third quarter.
Kenvue slashed its full-year sales target last month as it struggled through execution issues that will likely linger through the remainder of the year.
Tylenol contributes a mid-to-high single-digit percentage of sales, according to Morningstar analyst Keonhee Kim, making it Kenvue’s largest brand.
In addition to exposing the company to a host of legal risks, the government’s warning against Tylenol could damage the brand and reduce consumption, Citi analyst Filippo Falorni wrote in a note to clients. It could also spook a broader set of consumers beyond expecting mothers, pushing them to use other pain reduction methods, Falorni added.
The wider scientific community has warned that the government’s claims could create confusion for people attempting to treat fevers, an especially dangerous condition for pregnant mothers and their children.
Read Also: Super Typhoon Ragasa lashes Hong Kong, death toll climbs to 14 in Taiwan
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