Johnson and johnson руководство

Johnson & Johnson

Headquarters at One Johnson and Johnson Plaza in New Brunswick, New Jersey
Type	Public
Traded as	NYSE: JNJ DJIA component S&P 100 component S&P 500 component
ISIN	US4781601046
Industry	Pharmaceutical Medical Technology
Founded	January 1886; 137 years ago in New Brunswick, New Jersey, United States
Founders	Robert Wood Johnson I James Wood Johnson Edward Mead Johnson
Headquarters	Johnson and Johnson Plaza, New Brunswick, New Jersey , U.S. 40°29′55″N 74°26′37″W / 40.49861°N 74.44361°W
Area served	Worldwide
Key people	Joaquin Duato (Chairman & CEO)
Products	List of Johnson & Johnson products and services
Revenue	US$94.94 billion (2022)
Operating income	US$21.73 billion (2022)
Net income	US$17.94 billion (2022)
Total assets	US$187.4 billion (2022)
Total equity	US$76.80 billion (2022)
Number of employees	130,000 (August 2023)
Subsidiaries	Abiomed Acclarent Actelion Cilag DePuy Synthes Ethicon Janssen Biotech Janssen Pharmaceuticals Janssen Vaccines Johnson & Johnson Vision Mentor Synthes
Website	jnj.com
Footnotes / references [1]

Johnson & Johnson (J&J) is an American multinational, pharmaceutical, and medical technologies corporation headquartered in New Brunswick, New Jersey, and publicly traded on the New York Stock Exchange. Its common stock is a component of the Dow Jones Industrial Average, and the company is ranked No. 40 on the 2023 Fortune 500 list of the largest United States corporations. Johnson & Johnson has a global workforce of approximately 130,000 employees who are led by the company’s current chairman and chief executive officer, Joaquin Duato.

Johnson & Johnson was founded in 1886, by three brothers Robert Wood Johnson, James Wood Johnson, and Edward Mead Johnson selling ready-to-use sterile surgical dressings. In 2023, the company split off its consumer healthcare business sector into a new publicly traded company, Kenvue. The company is exclusively focused on developing and producing pharmaceutical prescription drugs and medical device technologies.

Johnson & Johnson is one of the world’s most valuable companies and is one of only two U.S.-based companies that has a prime credit rating of AAA.^[2]

History[edit]

1873–1885: Before Johnson & Johnson[edit]

Robert Wood Johnson began his professional training at age 16 as a pharmaceutical apprentice at an apothecary run by his mother’s cousin, James G. Wood, in Poughkeepsie, New York.^[3][4]: 12 Johnson co-founded his own company with George Seabury in 1873. The New York-based Seabury & Johnson became known for its medicated plasters.^{[5]: 675 [4]: 15} Robert Wood Johnson represented the company at the 1876 World’s Fair.^[6][7] There he heard Joseph Lister’s explanation of a new procedure: antiseptic surgery.^[4]: 31 Johnson parted ways with his business partner Seabury in 1885.^[4]: 38

1886: Founding of Johnson & Johnson[edit]

Robert Wood Johnson joined his brothers, James Wood Johnson and Edward Mead Johnson, and created a line of ready-to-use sterile surgical dressings in 1886. They founded Johnson & Johnson in 1886^{[5]: 675 [4]: 38} with 14 employees, eight women and six men.^[4]: 43 Johnson & Johnson opened its first factory building in the old Janeway and Carpenter factory on Neilson Street in New Brunswick, New Jersey.^[8]
They manufactured sterile surgical supplies, household products, and medical guides.^[9] Those products initially featured a logo that resembled the signature of James Wood Johnson, very similar to the current logo.^[10] Robert Wood Johnson served as the first president of the company.^[5]: 675

1887–1942: Early history[edit]

The company sold medicated plasters such as Johnson & Johnson’s Black Perfect Taffeta Court Plaster^[11] and also manufactured the world’s first sterile surgical products, including sutures, absorbent cotton, and gauze.^[12] The company published «Modern Methods of Antiseptic Wound Treatment», a guide on how to do sterile surgery using its products, and in 1888, distributed 85,000 copies to doctors and pharmacists across the United States.^{[13]: 3–99} The manual was translated into three languages and distributed worldwide.^[13] The first commercial first aid kit was designed in 1888 to support railroad construction workers, who were often hundreds of miles from medical care.^[13] The kits included antiseptic emergency supplies and directions for field use. In 1901, the company published the Handbook of First Aid, a guide on applying first aid.^[13]

In 1889, the company hired pharmacist Fred Kilmer as its first scientific director, who led its scientific research and wrote educational manuals.^[13] Kilmer’s first achievement as scientific director was developing the industrial sterilization process.^[13] He was employed at the company until 1934.^[13]

Johnson & Johnson had more than 400 employees and 14 buildings by 1894.^[13][14] In 1894, the company began producing Johnson’s Baby Powder, the company’s first baby product.^[9]

The company introduced the world’s first maternity kit in 1894 to aid at-home births, called Dr. Simpson’s Maternity Packet, presumably after Scottish obstetrician James Young Simpson. The kit included a washcloth; safety pins; sterile sutures, sponges, and gauze; antiseptic soap; an obstetric sheet and ligatures; flannel to wrap the baby in; and a chart for keeping birth records.^[15][9] The products were later marketed separately, including «Lister’s Towels», the world’s first mass-produced sanitary napkins.^[16][17] Kilmer wrote «Hygiene in Maternity», an instructional guide for mothers before and after delivery.^[18] In 1904, the company expanded its baby care products with «Lister’s Sanitary Diapers», a diaper product for infants.^[19]

During the Spanish–American War, Johnson & Johnson developed and donated 300,000 packaged compressed surgical dressings for soldiers in the field^[4]: 78 and created a trauma stretcher for field medics. The company donated its products in disaster relief efforts of the 1900 Galveston hurricane^[4]: 79 and the 1906 San Francisco earthquake.^[4]: 81

Johnson & Johnson vaccinated all of its employees against smallpox during the 1901 smallpox epidemic. The firm employed more than 1,200 people by 1910.^[20] Women accounted for half of the company’s workforce and led a quarter of its departments.^[20]

Robert Wood Johnson died in 1910, and he was succeeded as president of the company by his brother James Wood Johnson.^[4]: 195

During World War I, Johnson & Johnson factories increased production to meet wartime demands for sterile surgical products.^[21][22] In 1916, the company acquired Chicopee Manufacturing Company in Chicopee Falls, Massachusetts, to meet demand.^{[22][4]: 129} Near the end of World War I, the 1918 flu pandemic broke out. The company invented and distributed an epidemic mask that helped prevent the spread of the flu.^[23][24]

In 1919, Johnson & Johnson opened the Gilmour Plant near Montreal, its first factory outside of the United States,^[24] which produced surgical products for international customers. In 1924 the company’s first overseas manufacturing facility was opened in Slough, England.^[24]

In 1920, Earle Dickson combined two Johnson & Johnson products, adhesive tape and gauze, to create the first commercial adhesive bandage. Band-Aid Brand Adhesive Bandages began sales the following year.^[24][4] In 1921, the company released Johnson’s Baby Soap.^[25] Named after its Massachusetts facility, Johnson & Johnson built a textile mill and company town, Chicopee, outside of Gainesville, Georgia.^[4]: 170 In the 1930s, the company expanded operations to Argentina, Brazil, Mexico, and South Africa.^[26] In 1931, Johnson & Johnson introduced the first prescription contraceptive gel marketed as Ortho-Gynol.^[27]

Robert Wood Johnson II became president of the company in 1932.^[4]: 195

During The Great Depression Johnson & Johnson kept all its workers employed and raised wages by 5%.^[4]: 191 In 1933, Robert Wood Johnson II wrote a letter to Franklin D. Roosevelt, calling for a federal law to increase wages and reduce hours for all American workers.^[4]: 199 The company also opened a new facility in Chicago during that period.^[4]: 191 Johnson wrote and distributed «Try Reality: A Discussion of Hours, Wages, and The Industrial Future» to persuade business leaders to follow his lead, advocating that business is more than profit and that companies have responsibilities to consumers, employees, and society. In «Try Reality», the section titled «An Industrial Philosophy» would later become the company’s credo.^{[4]: 224 [24]}

In 1935, Johnson’s Baby Oil was added to its line of baby products.^[28][29] Both male and female Johnson & Johnson employees were drafted and enlisted during World War II.^[30][31] The company ensured no one would lose their job when they returned home. Robert Wood Johnson II was appointed head of the Smaller War Plants Corporation in Washington, D.C. His work ensured U.S. factories with under 500 employees were awarded government contracts.^[32][33]

1943: Credo and going public[edit]

In 1943, as the company was preparing for its initial public offering (IPO), Robert Wood Johnson wrote what the company would call, «Our Credo»,^[34] a defining document that has been used to guide the company’s decisions over the years.^[35] The company completed its IPO and became a public company in 1944.^[36]

In 1943, Vesta Stoudt identified a need for waterproof tape for ammunition boxes in World War Two. She wrote to Franklin D. Roosevelt with the idea; the president commissioned Revolite, a subsidiary of Johnson & Johnson at the time, to develop and manufacture a cloth-based adhesive tape.^[37]

1944–1999: Acquisitions and international expansion[edit]

In 1944, the company began selling Johnson’s Baby Lotion. The same year, the company established Ethicon Suture Laboratories. In 1947, G. F. Merson Ltd. was acquired to expand the company’s suture business in the United Kingdom. The company was rebranded and absorbed into Ethicon.^[38]

Johnson & Johnson Chairman of the Board Robert Wood Johnson published Or Forfeit Freedom in 1947. The book outlined that businesses need to develop sustainable methods of using natural resources for the future of business and the planet.^[39]

In 1955, Ethicon developed a micro point reverse—‐cutting ophthalmic needle attached to the suture. Micro-point surgical needles and sutures allowed for advances in modern vision surgery.^[40][41] In 1956, the company open its first Asia-based operating company in the Philippines.^[42] The following year, an operating company opened in India.^[43][44][45]

In 1959, Johnson & Johnson acquired McNeil Laboratories.^[46] A year later, the company sold Tylenol for the first time without a prescription.^[46] In the same year, Cilag Chemie joined Johnson & Johnson as Cilag.^[46] In 1961, Janssen Pharmaceutica was acquired by Johnson & Johnson. Janssen Pharmaceutica was founded in 1953 by Belgian scientist Dr. Paul Janssen.^[46]

In 1963, Philip B. Hofmann succeeded Robert Wood Johnson as Chairman and CEO. He was the first non-Johnson family member to become chief executive. Hofmann also helped found the Robert Wood Johnson Foundation.^[47] In the same year, the Food and Drug Administration approved a synthetic hormone contraceptive pill, Ortho-Novum.^[48]

In 1965, Johnson & Johnson acquired Codman & Shurtleff. The acquired company produced neurovascular devices and neurosurgery technologies.^[49] In 1968, the company developed the RhoGAM Vaccine. The vaccine prevented Rh hemolytic disease in newborns.^[50]

In 1969, Ortho Diagnostics, a company subsidiary, launched the Sickledex Tube Test for detecting anemia.^[51] The same year, the FDA approved the Johnson & Johnson arterial graft.^[52] In 1971, the company launched Hapindex Diagnostic Test, a rapid hepatitis B test for blood donors. The test was developed to prevent the spread of hepatitis B through blood transfusions.^[53]

In the 1970s, Johnson & Johnson hired Henry N. Cobb from Pei Cobb Freed & Partners to design its new Headquarters.^[54] The firm designed Johnson & Johnson Plaza across the railroad tracks from the older section of the Johnson & Johnson campus.^[55]

In 1973, Richard Sellars became Chairman and CEO of Johnson & Johnson.^[56] In 1976, James E. Burke became the company’s Chairman and CEO.^[46] During Burke’s tenure, he managed the 1982 Tylenol tampering incident. It became a case study on crisis management. Under his leadership, the company recalled 31 million bottles of Tylenol, relaunched the product with a triple tamper-evident seal, and urged consumers not to use if tampered with. These practices became the pharmaceutical and packaged food industry norm.^[57]

Johnson & Johnson opened operating companies in China and Egypt in 1985.^[46] In 1987, Acuvue contact lenses became the first disposable contact lenses available to consumers. The lenses lasted up to one week, reducing the cost of contact lenses. In the same year, the company launched One Touch, a blood glucose monitoring system. In 1989, Ralph S. Larsen was appointed Chairman and CEO of the company.^[58]

After the Dissolution of the Soviet Union, Johnson & Johnson expanded into eastern Europe. By 1991, the company had a presence in Hungary, Russia, the Czech Republic, and Poland.^[59] In the 1990s, the company acquired many familiar consumer health brands that made up the Johnson & Johnson family of companies. These acquisitions included Clean & Clear, Neutrogena, Motrin, and Aveeno.^[47]

Johnson & Johnson opened an operating company in Israel in 1996.^[60] In 1997, Johnson & Johnson acquired Biosense Webster. DePuy was acquired by Johnson & Johnson in 1998, rolling it into the Medtech business group.^[47]

2000–present[edit]

William C. Weldon was appointed Chairman and CEO of the company in 2002.^[61] In 2003, Ethicon launched Vicryl Plus Antibacterial Sutures. The products prevent post-surgery infection within stitches. In 2006, Johnson & Johnson acquired Pfizer’s consumer healthcare business and merged it with its consumer healthcare business group. The acquisition added brands like Listerine, Bengay, and Neosporin to the company’s portfolio.^[62] In the same year, Johnson & Johnson’s Janssen Pharmaceuticals, launched Prezista, a protease inhibitor for patients with failed previous HIV therapies.^[63][64]

In 2008, Johnson & Johnson acquired Mentor Corporation for $1 billion and merge its operations into Ethicon. In 2009, the company acquired HealthMedia, later renamed to Health & Wellness Solutions and the Human Performance Institute. In October 2010, J&J acquired Crucell for $2.4 billion. The subsidiary operates as the centre for vaccines, within Johnson & Johnson pharmaceuticals business group.^[65]

In 2012, Alex Gorsky became Chairman and CEO of Johnson & Johnson.^[66] In November 2015, Biosense Webster, Inc. acquired Coherex Medical Inc. expanding the company’s range of treatment options for patients with atrial fibrillation.^[67]

In 2017, Johnson & Johnson acquired Abbott Medical Optics from Abbott Laboratories for $4.325 billion, adding the new division into Johnson & Johnson Vision Care, Inc. in 2017.^[68] The same year, Johnson & Johnson acquired Actelion in a $30 billion deal, the largest ever purchase by the company. After the purchase, Johnson & Johnson spun off Actelion’s research and development unit, into a separate legal entity.^[69] In July 2017, Johnson & Johnson Vision Care, Inc acquired TearScience. In September 2017, the company acquired subscription-based contact lens startup Sightbox. In September of the same year Johnson & Johnson Medical GmbH acquired Emerging Implant Technologies GmbH, manufacturer of 3D-printed titanium interbody implants for spinal fusion surgery.^[70]

In March 2019, the FDA approved esketamine for the treatment of severe depression, which is marketed as Spravato by Janssen Pharmaceuticals.^[71][72] In 2019, Johnson & Johnson announced the release of photochromic contact lenses. The lenses adjust to sunlight and help eyes recover from bright light exposure faster. The lenses contain a photochromic additive that adapts visible light amounts filtered to the eyes and are the first to use such additives.^[73]

In November 2020, Johnson & Johnson acquired Momenta Pharmaceuticals for $6.5 billion.^[74]

In January 2022, Joaquin Duato became CEO of Johnson & Johnson.^[75]

In November 2022, Johnson & Johnson announced that it would acquire Abiomed Inc for $16.6 billion.^[76] The deal closed on December 22.^[77][78]

Johnson & Johnson began the separation of their consumer healthcare business sector in November 2021.^[79] In September 2022, Johnson & Johnson chose Kenvue as the new name for its Consumer Health business. Kenvue went public through an IPO in May 2023, with Johnson & Johnson maintaining a controlling stake of around 91 percent.^[80] On July 24, 2023, Johnson & Johnson Launched an exchange offer to split-off Kenvue.^[81] Following the completion of the exchange offer, Johnson & Johnson will retain approximately 9.5% of the outstanding shares of Kenvue common stock.^[82]

Coronavirus (COVID-19) response[edit]

Johnson & Johnson committed over $1 billion toward the development of a not-for-profit COVID-19 vaccine in partnership with the Biomedical Advanced Research and Development Authority (BARDA) Office of the Assistant Secretary for Preparedness and Response (ASPR) at the U.S. Department of Health and Human Services (HHS).^[83][84] Paul Stoffels of Johnson & Johnson said, «In order to go fast, the people of Johnson & Johnson are committed to do this and all together we say we’re going to do this not for profit. That’s the fastest and the best way to find all the collaborations in the world to make this happen so we commit to bring this at a not-for-profit level.»^[85]

Janssen Vaccines, in partnership with Beth Israel Deaconess Medical Center (BIDMC), is responsible for developing the vaccine candidate, based on the same technology used to make its Ebola vaccine. The vaccine candidate is expected to enter phase 1 human clinical study in September 2020.^[83][86][87]

Demand for the product Tylenol surged two to four times normal levels in March 2020. In response, the company increased production globally. For example, the Tylenol plant in Puerto Rico ran 24 hours a day, seven days a week.^[88]

In response to the shortage of ventilators, Ethicon, with Prisma Health, made and distributed the VESper Ventilator Expansion Splitter, which uses 3D printing technology, to allow one ventilator to support two patients.^[89]

Janssen COVID-19 vaccine[edit]

In June 2020, Johnson & Johnson and the National Institute of Allergy and Infectious Diseases (NIAID) confirmed its intention to start a clinical trials of J&J’s vaccine in September 2020, with the possibility of Phase 1/2a human clinical trials starting at an accelerated pace in the second half of July.^[90][91][92]

On August 5, 2020, the US government agreed to pay more than $1 billion to Johnson and Johnson (medical device company) for the production of 100 million doses of COVID-19 vaccine. As part of the agreed-upon deal, the U.S. can order up to 200 million additional doses of SARS-CoV-2 vaccine.^[93]

In September 2020, Johnson & Johnson started its 60,000-person phase 3 adenovirus-based vaccine trial.^[94] The trial was paused on October 12, 2020, because a volunteer became ill,^[95] but the company said it found no evidence that the vaccine had caused the illness and announced on October 23, 2020, that it would resume the trial.^[96][97]

In April 2021, the company reported that its COVID-19 vaccine achieved $100 million sales in the first quarter, accounting for less than 1% of its total revenue.^[98][99]

Patent on tuberculosis-treating drug, bedaquiline[edit]

Johnson & Johnson holds a patent on the tuberculosis-treating drug bedaquiline, with secondary patents in at least 25 out of 43 countries with a high burden of tuberculosis blocking affordable generic versions of the drug, preventing millions of people from accessing the life-saving treatment. Though the patent was set to expire in many countries in 2023, Johnson & Johnson applied to extent the patent.^[100][101] Evidence suggests that company did so to maximize its profits through the monopoly on the drug, despite knowing that making affordable generic versions more widely-available would save millions of lives.

In April 2023, the international medical humanitarian organization Médecins Sans Frontières/Doctors Without Borders (MSF) demanded that Johnson & Johnson publicly commit to not enforce its secondary patents on the drug n all countries with a high burden of TB, and allow generic manufacturers to supply more affordable, quality-assured generic versions of this lifesaving drug to everyone, everywhere who needs it.

On July 11, 2023, best-selling American author, YouTube video blogger, and philanthropist John Green began advocating via Twitter and YouTube for Johnson & Johnson to allow the patent on bedaquiline to expire so that millions of vulnerable people worldwide could access the life-changing treatment via generic brands.[1] Green, a long-time public health advocate, led thousands of people in Nerdfighteria and from among his online following in contacting Johnson & Johnson to protest the company’s efforts to evergreen the patent and hold the company responsible for violating its own credo under the Twitter hashtag #patientsnotpatents.[2][3]

In response, Johnson & Johnson released a statement on Twitter in response, claiming that the company’s patents have allowed them to ship 660,000 courses of SIRTURO (bedaquiline) to 159 countries and asserting that «the most significant barrier to treatment access for patients today is the fact that millions of patients with TB go undiagnosed every year.»[4] The statement was «community noted», as Twitter users fact-checked the statement, refuting it with evidence of Johnson & Johnson’s efforts to limit the lower pricing of bedaquiline and contrasting the millions of deaths from tuberculosis with the comparatively small number of SIRTURO courses provided to low-income countries.

On July 13, 2023, Stop TB Partnership announced that after negotiations with Johnson & Johnson, they had been granted licenses to produce generic versions of the drug.^[102]

Business sectors[edit]

The company’s business is divided into two business sectors: Innovative Medicine and MedTech.

Johnson & Johnson Innovation, LLC (JJI) is a subsidiary of Johnson & Johnson.^[103] JJI focuses on early-stage, life science, and technology innovations to advance the company’s research and development pipeline.^[104] JJI provides startups with sourcing, infrastructure, and capital equipment at JLABS, financing & venture capital at JJDC, Inc., and collaborations leading to the potential development of medical device technologies, pharmaceuticals, and therapeutics.^[105] There are 4 JJI Innovation Centers located in London,^[106] Shanghai, Boston (Cambridge),^[107] and the San Francisco Bay Area. There are 13 JLABS incubators located in the Bay Area (San Francisco and South San Francisco),^[108] Belgium (Beerse), Boston (Cambridge and Lowell), Houston (TMC),^[109] New York, Philadelphia, San Diego, Shanghai, Toronto, and Washington, D.C.^[110]

Johnson & Johnson Business Sectors

Innovative Medicine[111]	MedTech[112]
Immunology Cardiovascular & Metabolic Disease Pulmonary Hypertension Infectious Diseases & Vaccines Neuroscience Oncology	Interventional Solutions Orthopaedics Surgery (General & Advanced) Vision

Innovative Medicine[edit]

The Innovative Medicine (formerly known as pharmaceuticals) segment is focused on six therapeutic areas: Immunology (rheumatoid arthritis, inflammatory bowel disease and psoriasis); Infectious Diseases (HIV/AIDS); Neuroscience (mood disorders, neurodegenerative disorders and schizophrenia); Oncology (prostate cancer and hematologic malignancies); Cardiovascular, Metabolism, & Retina (thrombosis and diabetes), and Pulmonary Hypertension (Pulmonary Arterial Hypertension).^[111][113]

MedTech[edit]

The Cardiovascular & Specialty Solutions Group includes electrophysiology products that diagnose and treat cardiac arrhythmias; devices used in the endovascular treatment of hemorrhagic and ischemic stroke; solutions that focus on breast reconstruction and aesthetics, and ear, nose and throat procedures.^[114]

The orthopaedics portfolio is composed of specialties including joint reconstruction, trauma, extremities, craniomaxillofacial, spinal surgery and sports medicine, in addition to the VELY digital surgery portfolio.^[115]

The surgery portfolio includes advanced surgical innovations and solutions such as sutures, staplers, energy devices, and advanced hemostats along with interventional ablation, surgical robotics, and digital solutions.^[116]

The Johnson & Johnson Vision portfolio includes contact lens, intraocular lens, automated treatment for dry eye, and four brands of laser vision correction systems.^[112][113]

Finance[edit]

For the fiscal year 2022, Johnson & Johnson reported earnings of $17.9 billion, with an annual revenue of $94.94 billion, an increase of 1.25% over the previous fiscal cycle. Johnson & Johnson’s shares traded at over $175 per share, and its market capitalization was valued at over $439.8 billion in September 2022.^[117]

Year	Revenue in million US$	Net income in million US$	Employees[118]
2005	50,514	10,060	115,600
2006	53,324	11,053	122,200
2007	61,095	10,576	119,200
2008	63,747	12,949	118,700
2009	61,897	12,266	115,500
2010	61,587	13,334	114,000
2011	65,030	9,672	117,900
2012	67,224	10,853	127,600
2013	71,312	13,831	128,100
2014	74,331	16,323	126,500
2015	70,074	15,409	127,100
2016	71,890	16,540	126,400
2017	76,450	1,300	155,000
2018	81,581	15,297	134,000
2019	82,059	15,119	132,200
2020	82,584	14,714	134,500
2021	93,775	20,878	141,700
2022	94,943	17,941	155,800

Corporate governance[edit]

As of 2023, the members of the board of directors of Johnson & Johnson are Joaquin Duato, Darius Adamczyk, Mary C. Beckerle, D. Scott Davis, Jennifer A. Doudna, Marillyn A. Hewson, Paula A. Johnson, Hubert Joly, Mark B. McClellan, Anne M. Mulcahy, Mark A. Weinberger, and Nadja Y. West.^[119]

As of 2023, the members of the Executive Committee of Johnson & Johnson are Joaquin Duato, Vanessa Broadhurst, Peter Fasolo, Liz Forminard, William N. Hait, Ashley McEvoy, John C. Reed, James Swanson, Jennifer Taubert, Kathy Wengel, and Joseph J. Wolk.^[120]

Joaquin Duato is chairman and chief executive officer.^[121][122]

Chairmen[edit]

• Robert Wood Johnson I (1887–1910)
• James Wood Johnson (1910–1932)
• Robert Wood Johnson II (1932–1963)
• Philip B. Hofmann (1963–1973)
• Richard B. Sellars (1973–1976)
• James E. Burke (1976–1989)
• Ralph S. Larsen (1989–2002)
• William C. Weldon (2002–2012)
• Alex Gorsky (2012–2022)
• Joaquin Duato (2023–Present)^[123]

Environmental record[edit]

Johnson & Johnson has set several positive goals to keep the company environmentally friendly and was ranked third among the United States’s largest companies in Newsweek‘s «Green Rankings».^[124] Some examples are the reduction in water use, waste, and energy use and an increased level of transparency.^[125] Johnson & Johnson agreed to change its packaging of plastic bottles used in the manufacturing process, switching their packaging of liquids to non-polyvinyl chloride containers.^[126] The corporation is working with the Climate Northwest Initiative and the EPA National Environmental Performance Track program.^[127] As a member of the national Green Power Partnership, Johnson & Johnson operates the largest solar power generator in Pennsylvania at its site in Fort Washington, Pennsylvania.^[128]

Recalls and litigation[edit]

1982 Chicago Tylenol murders[edit]

On September 29, 1982, a «Tylenol scare» began when the first of seven individuals died in Chicago metropolitan area, after ingesting Extra Strength Tylenol that had been deliberately laced with cyanide.^[129] Within a week, the company pulled 31 million bottles of capsules back from retailers, making it one of the first major recalls in American history.^[129] The incident led to reforms in the packaging of over-the-counter substances and to federal anti-tampering laws. The case remains unsolved and no suspects have been charged. Johnson & Johnson’s quick response, including a nationwide recall, was widely praised by public relations experts and the media and was the gold standard for corporate crisis management.^{[130][131][132]}

2010 children’s product recall[edit]

On April 30, 2010, McNeil Consumer Healthcare, a subsidiary of Johnson and Johnson, voluntarily recalled 43 over-the-counter children’s medicines, including Tylenol, Tylenol Plus, Motrin, Zyrtec and Benadryl. The recall was conducted after a routine inspection at a manufacturing facility in Fort Washington, Pennsylvania, United States, revealed that some «products may not fully meet the required manufacturing specifications».^[133][134] Affected products may contain a «higher concentration of active ingredients» or exhibit other manufacturing defects.^[134] Products shipped to Canada, Dominican Republic, Mexico, Guam, Guatemala, Jamaica, Puerto Rico, Panama, Trinidad and Tobago, the United Arab Emirates, Kuwait and Fiji were included in the recall.^[133] In a statement, Johnson & Johnson said «a comprehensive quality assessment across its manufacturing operations» was underway.^[133][134] A dedicated website was established by the company listing affected products and other consumer information.^[134]

2010 hip-replacement recall[edit]

On August 24, 2010, DePuy, a subsidiary of American giant Johnson & Johnson, recalled its ASR (articular surface replacement) hip prostheses from the market. DePuy said the recall was due to unpublished National Joint Registry data showing a 12% revision rate for resurfacing at five years and an ASR XL revision rate of 13%. All hip prostheses fail in some patients, but it is expected that the rate will be about 1% a year.^[135]
Pathologically, the failing prosthesis had several effects. Metal debris from wear of the implant led to a reaction that destroyed the soft tissues surrounding the joint, leaving some patients with long term disability. Ions of cobalt and chromium – the metals from which the implant was made – were also released into the blood and cerebral spinal fluid in some patients.^[136]

In March 2013, a jury in Los Angeles ordered Johnson & Johnson to pay more than $8.3 million in damages to a Montana man in the first of more than 10,000 lawsuits pending against the company in connection with the now-recalled DePuy hip.^[137]

Some lawyers and industry analysts have estimated that the suits ultimately will cost Johnson & Johnson billions of dollars to resolve.^[137]

2010 Tylenol recall[edit]

In 2010 and 2011, Johnson & Johnson voluntarily recalled some over-the-counter products, including Tylenol, due to an odor caused by tribromoanisole.^[138][139] In this case, 2,4,6-tribromophenol was used to treat wooden pallets on which product packaging materials were transported and stored.^[138]

Shareholders lawsuit[edit]

In 2010 a group of shareholders sued the board for allegedly failing to take action to prevent serious failings and illegalities since the 1990s, including manufacturing problems, bribing officials, covering up adverse effects and misleading marketing for unapproved uses. The judge initially dismissed the case in September 2011, but allowed the plaintiffs opportunity to refile at a later time.^[140] In 2012 Johnson and Johnson proposed a settlement with the shareholders, whereby the company would institute new oversight, quality and compliance procedures binding for five years.^[141]

Illegal marketing of Risperdal[edit]

Juries in several US states have found J&J guilty of concealing the adverse effects of Janssen Pharmaceuticals’ antipsychotic medication Risperdal, produced by its unit, in order to promote it to doctors and patients as better than cheaper generics, and of falsely marketing it for treating patients with dementia.^[142] States that have awarded damages include Texas ($158 million), South Carolina ($327 million), Louisiana ($258 million), and most notably Arkansas ($1.2 billion).^[143]

In 2010, the United States Department of Justice joined a whistleblowers suit accusing the company of illegally marketing Risperdal through Omnicare, the largest company supplying pharmaceuticals to nursing homes.^[144][145] The allegations include that J&J were warned by the FDA to not promote Risperdal as effective and safe for elderly patients, but they did so, and that they paid Omnicare to promote the drug to care home physicians.^[146] The settlement was finalized on November 4, 2013, with J&J agreeing to pay a penalty of around $2.2 billion, «including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion».^[147]

Johnson & Johnson has also been subject to congressional investigations related to payments given to psychiatrists to promote its products and ghost write articles, notably Joseph Biederman and his pediatric bipolar disorder research unit.^[148]

Foreign bribery[edit]

In 2011, J&J settled litigation brought by the US Securities and Exchange Commission under the Foreign Corrupt Practices Act and paid around $70M in disgorgement and fines.^[149] J&J’s employees had given kickbacks and bribes to doctors in Greece, Poland, and Romania to obtain business selling drugs and medical devices and had bribed officials in Iraq to win contracts under the Oil for Food program.^[150] J&J fully cooperated with the investigation once the problems came to light.^[151]

Consumer fraud settlements[edit]

In May 2017, J&J reached an agreement to pay $33 million to several states to settle consumer fraud allegations in some of the company’s over-the-counter drugs.^{[152][153][154]}

Use of the Red Cross symbol[edit]

Johnson & Johnson registered the Red Cross as a U.S. trademark for «medicinal and surgical plasters» in 1905 and has used the design since 1887.^[155] The Geneva Conventions, which reserved the Red Cross emblem for specific uses, were first approved in 1864 and ratified by the United States in 1882. However, the emblem was not protected by U.S. law for the use of the American Red Cross (ARC) and the U.S. military until after Johnson & Johnson had obtained its trademark. A clause in this law (now 18 U.S.C. 706) permits this pre-existing use of the Red Cross to continue.^{[156][157][158]}

A declaration made by the U.S. upon its ratification of the 1949 Geneva Conventions includes a reservation that pre-1905 U.S. domestic uses of the Red Cross, such as Johnson & Johnson’s, would remain lawful as long as the cross is not used on «aircraft, vessels, vehicles, buildings or other structures, or upon the ground», i.e., uses which could be confused with its military uses.^[159] This means that the U.S. did not agree to any interpretation of the 1949 Geneva Conventions that would overrule Johnson & Johnson’s trademark. The American Red Cross continues to recognize the validity of Johnson & Johnson’s trademark.^[160]

In August 2007, Johnson & Johnson filed a lawsuit against the ARC, demanding that the charity halt the use of the red cross symbol on products it sells to the public, though the company takes no issue with the charity’s use of the mark for nonprofit purposes.^[161] In May 2008, the judge in the case dismissed most of Johnson & Johnson’s claims, and a month later the two organizations announced a settlement had been reached in which both parties would continue to use the symbol.^[162]

Boston Scientific lawsuits[edit]

Since 2003, Johnson & Johnson and Boston Scientific have both claimed that the other had infringed on their patents covering heart stent medical devices. The litigation was settled when Boston Scientific agreed to pay $716 million to Johnson & Johnson in September 2009 and an additional $1.73 billion in February 2010.^[163] Their dispute was renewed in 2014, now on the grounds of a contract dispute.^[164]

Patent-infringement case against Abbott[edit]

In 2007, Johnson & Johnson sued Abbott Laboratories over the development and sale of the arthritis drug Humira, claiming Abbott used technology licensed exclusively to Johnson & Johnson’s Centocor division. Johnson & Johnson won the court case, and in 2009 Abbott was ordered to pay Johnson & Johnson $1.17 billion in lost revenues and $504 million in royalties.^[165] The judge also added $175.6 million in interest to bring the total to $1.84 billion.^[166] This was the largest patent-infringement award in U.S. history^[165] until the 2013 decision against Teva in favor of Takeda and Pfizer for over $2.1 billion.^[167] In 2010 Abbott appealed the verdict^[166] and in 2011 won the appeal.^[168]

Vaginal mesh implants[edit]

Tens of thousands of women worldwide have taken legal action against Johnson & Johnson after suffering serious complications following a vaginal mesh implant procedure.^[169] In Australia, more than 700 women began a class action against the company in the Federal Court of Australia in 2017, telling the court they «suffered irreparable, debilitating pain after the devices began to erode into surrounding tissue and organs, causing infections and complications». The class action alleged that Johnson & Johnson, which «aggressively marketed» the implants «failed to properly warn patients and surgeons of the risk, or test the devices adequately».^[170] Emails between executives show the company was aware of the risks in 2005 but still went ahead and made the product available.^[171] In November 2019 the Federal Court of Australia found Johnson & Johnson negligent.^[172] The judgment was appealed, with the appeals court upholding all findings of Justice Anna Katzman.^[173] Ethicon then sought a High Court decision but this was not permitted by the High Court of Australia. Subsequently (September 2022) a A$300,000,000 compensation agreement was reached between Shine Lawyers and J&J but this agreement remains subject to approval by the Federal Court of Australia.^[172]

In the US in 2016 the U.S. states of California and Washington filed a lawsuit against the company, accusing it of deception.^[169] In October 2019, the company and its subsidiary, Ethicon, Inc. reached a settlement with 41 states and the District of Columbia, with no admission of liability, in a suit alleging deceptive marketing of transvaginal surgical-mesh devices. The suit also alleges that the company failed to disclose risks associated with the product, which J&J pulled from the US market in 2012. The amount settled in the suit was about $117 million.^[174]

Baby powder[edit]

J&J has been the subject of over 26,000 lawsuits claiming that its baby powder causes ovarian cancer. The lawsuits focus on claims that the talc-based powder is contaminated with asbestos, a known carcinogen commonly found in places where talc is mined.^[175]

In 2016, J&J was ordered to pay $72 million in damages to the family of Jacqueline Fox, a 62-year-old woman who died of ovarian cancer in 2015. The company said it would appeal.^[176] A year later, over 1,000 U.S. women had sued J&J for covering up the possible cancer risk from its Baby Powder product. The company says that 70% of its Baby Powder is used by adults.^[177] Later that year, a California jury ordered Johnson & Johnson to pay $417 million to a woman who claimed she developed ovarian cancer after using the company’s talc-based products like Johnson’s Baby Powder for feminine hygiene. The verdict included $70 million in compensatory damages and $347 million in punitive damages. J&J said they would appeal the verdict.^[178] The Missouri Eastern District appeals court later negated a $72 million jury verdict in the Jacqueline Fox lawsuit, ruling it lacked jurisdiction in Missouri because of a U.S. Supreme Court decision that imposed limits on where injury lawsuit can be filed. Subsequently, this ruling killed three other recent St. Louis jury verdicts of more than $200 million combined. Fox, 62, of Birmingham, Alabama, died in 2015, about four months before her trial was held in St. Louis Circuit Court. She was among 65 plaintiffs, of whom only two were from Missouri.^[179]

A St. Louis jury awarded nearly $4.7 billion in damages to 22 women and their families in 2018 after they claimed that asbestos in Johnson & Johnson talcum powder caused their ovarian cancer.^[180] In August, J&J said that it removed several chemicals from baby powder products and re-engineered them to make consumers more confident that products were safer for children.^[181] The company was forced to release internal documents with 11,700 people suing J&J over cancers allegedly caused by baby powder. The documents showed that the company had known about asbestos contamination since at least as early as 1971 and had spent decades finding ways to conceal the evidence from the public.^[182]

The company lost its request to reverse a jury verdict that ruled in favor of the accusers, which required the company to pay $4.14 billion in punitive damages and $550 million in compensatory damages.^[183] A large study performed in 2003 found that ovarian cancer risk increased from a baseline of 0.0121% to 0.0161% in people who reported regularly using talc in the genital area. Two more studies over the next twelve years, which also relied on self-reporting, had similar results; however, none of the three studies showed a relationship between how long someone used talc and how much their cancer risk increased, which is expected in experiments with carcinogens and other toxic substances (see dose–response relationship).^[184]

Conversely, a St. Louis jury ruled in favor of Johnson & Johnson in the case of a single plaintiff who had used the company’s talc-containing baby powder for thirty years with a similar claim.^[185] The company’s CEO, Alex Gorsky, declined to appear at a United States congressional hearing on the safety of J&J’s Baby Powder and other talc-based cosmetics. J&J spokesman Ernie Knewitz said that the subcommittee had rejected the company’s offers to send a talc testing expert or a J&J executive in charge of consumer products.^[186] In response to declining demand, J&J announced it would discontinue the sale of talc-based baby powder in the United States and Canada in 2020, but would continue to sell it in other markets. In a statement, the company said that the existing retail inventory of the talc-based powder will sell until it runs out, while the company’s cornstarch-based baby powder will continue to sell in the United States and Canada.^[187]

The Supreme Court of Missouri refused to consider J&J’s appeal of a $2.12 billion damages award to women who blamed their ovarian cancer on its talc-based products.^[188][189]

The Supreme Court of the United States also refused to consider an appeal from J&J, leaving in place a judgment from a state appeal court that had cut the original award to $2.1 billion.^[190] Two of the justices had to recuse: Samuel Alito because either he and/or his wife owning or recently owning stock in J&J, and Brett Kavanaugh, whose father led an industry group lobbying against safety warnings on talc products. Representing the affected women during the trial, Mark Lanier remarked that the Supreme Court’s decision sent «a clear message to the rich and powerful: You will be held to account when you cause grievous harm under our system of equal justice under law.»^[191][192] J&J had argued that the combined claims in the St. Louis trial were too different, yet the short jury deliberation and identical payouts were, therefore, a violation of the company’s due process and also that the high punitive award was unconstitutional.^[175]

In 2021, Johnson & Johnson subsidiary LTL Management LLC, using a process called a Texas divisional merger, filed for Chapter 11 bankruptcy in North Carolina. The process allowed by Texas law lets a company create a separate subsidiary to take over liabilities, with the existing company operating normally. The new company, with a different name, can locate in a state such as North Carolina where bankruptcy laws are different, and then declare bankruptcy, paying less than the original company would have. In the case of LTL, a $2 billion trust will be created, compared to $25 billion if Johnson & Johnson had declared bankruptcy. According to the filing, a company known as Old JJCI took on the baby powder related liabilities in 1979, while Johnson & Johnson remained a defendant. LTL and New JJCI were created with LTL taking the baby powder related liabilities and some assets, and New JJCI taking the remaining assets. Johnson & Johnson says LTL is now based in New Jersey.^[193][194]

The company announced that it would stop making talc-based powder by 2023 and replace it with cornstarch-based powders. The company says the talc-based powder is safe to use and does not contain asbestos.^[195]

In 2023, the number of lawsuits regarding talc-based baby powder has exceeded 40,000 as more claimants come forward to say that the company’s product caused them to have cancer. Johnson & Johnson have now reportedly offered $9 billion to settle all the lawsuits against the company, up from the previous figure of $2 billion.^[196]

Opioid epidemic[edit]

By 2018, the company had become embroiled in the opioid epidemic in the United States and had become a target of lawsuits.^[197][198] Over 500 opioid-related cases have been filed as of May 2018 against J&J and its competitors.^[199] In Idaho, J&J is part of a lawsuit accusing the company for being partially to blame for opioid-related overdose deaths.^[200] The first major trial began in Oklahoma in May 2019.^[201] On August 26, 2019, the Oklahoma judge ordered J&J to pay $572 million for their part in the opioid crisis,^[202] and in October J&J paid $20.4 million to two Ohio counties fighting the opioid epidemic.^[203] In January 2022, Johnson & Johnson agreed to pay up to $5 billion as part of a $26 billion settlement which included McKesson, AmerisourceBergen, and Cardinal Health.^[204] Had the states gone to court, the companies could have faced up to $95 billion in penalties.^[205]

Northeastern Ohio Settlement[edit]

In October 2019, the company agreed to a settlement of $20.4 million with two Ohio counties – Cuyahoga (Cleveland) and Summit (Akron). The settlement allows the company avoidance of a trial accusing J&J and many other pharmaceutical manufacturers of helping to spark the US opioid epidemic. The trial was thought to be an indicator for thousands of opioid-related lawsuits against many drug manufacturers. The arrangement, which contains no admission of liability by the company, provides the counties $10 million in cash, $5 million for legal expenses and $5.4 million in contributions to opioid-related nonprofit organizations in the counties.^[206]

Public-private engagement[edit]

Johnson & Johnson and its subsidiaries engage with the public and private sectors in a variety of settings including to promote research and development, academic funding, event sponsorship, philanthropy, and political lobbying.

Academia[edit]

• J&J is a matching gift donor to the Institute for Advanced Study.^[207]

Activism[edit]

• J&J is a corporate partner of Human Rights Campaign, a large LGBT advocacy group.^[208]
• J&J is a financial supporter of Women Deliver.^[209]

Political lobbying[edit]

Johnson & Johnson is engaged in various forms of lobbying in the United States, Canada and internationally, including through corporate philanthropy and membership in lobbying organizations.

• J&J is one of the largest donors to the Foundation for the National Institutes of Health (FNIH), having donated $5–10 million from 2000 to 2020.^[210]
• J&J is a partner of the Pandemic Action Network.^[211]
• J&J is a member company of Pharmaceutical Research and Manufacturers of America (PhRMA), a trade association that lobbies the U.S. Government on behalf of the pharmaceutical industry.^[212] PhRMA has offices in Washington, D.C., Japan and the United Arab Emirates.^[212]
• J&J is a member of the Personalized Medicine Coalition, a medical research advocacy group that lobbies on behalf of the pharmaceutical industry to increase funding for personalized medicine research and development.^[213]
• J&J is a member company of the National Pharmaceutical Council (NPC), a nonprofit that advocates for expanded research funding and innovation.^[214]

Research and development[edit]

J&J has provided research grants and major funding to the C. D. Howe Institute.^[215]

See also[edit]

• Zodiac (schooner)

References[edit]

External links[edit]

• Official website
• Business data for Johnson & Johnson:
  • Google
  • SEC filings
  • Yahoo!

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Максим Кузнецов
Фото: Philips

Максим Кузнецов, председатель совета директоров Ассоциации международных производителей медицинских изделий (IMEDA), назначен генеральным директором ООО «Джонсон & Джонсон», об этом сообщили в пресс-службе компании. В J&J Кузнецов пришел 30 декабря 2022 года на пост управляющего директора подразделения медицинских технологий, проработав 17 лет в Philips на руководящих постах.

Однако в J&J уточнили, что позиция генерального директора ООО «Джонсон & Джонсон» является ротационной. Это означает, что Максим Кузнецов, в дополнение к управлению подразделением медтеха, будет выполнять ряд административных функций, в том числе представление «Джонсон & Джонсон» в государственных органах РФ.

С апреля 2019 года пост генерального директора компании занимала Катерина Погодина, проработав в Janssen с 2001 года. Погодина продолжит работать в J&J на посту управляющего директора подразделения фармацевтических товаров.

Американская Johnson&Johnson, основанная в 1886 году, является одним из крупнейших в мире производителей лекарств, косметических и санитарно-гигиенических товаров и медицинского оборудования. У J&J 265 дочерних компаний, расположенных в 60 странах мира, в которых работают более 126 тысяч сотрудников. В России функционируют три подразделения компании: потребительских товаров, фармацевтической продукции и изделий медицинского назначения и оборудования. По данным СПАРК-Интерфакс, выручка ООО «Джонсон & Джонсон» составила 77,2 млрд рублей в 2022 году.

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Founded in 1866 as a family business, Johnson & Johnson now has over 130,000 employees in 60 countries worldwide. What started off as a small, three-person business, the company has now expanded across the globe and was named a “2017 Fortune’s Most Admired Company”. One may wonder, how did brothers Robert, James, and Edward Johnson set the foundation for the next 130 years to come? This success can be attributed to Johnson & Johnson’s Strategic Framework, which is at the root of all decision-making. The company’s Strategic Framework is comprised of three main components: The Foundation, Strategic Principles, and Growth Drivers. All three sections of the Strategic Framework include insight into Johnson & Johnson’s Management Approach, which guides the company’s philosophy for continuous success.

The Foundation includes the Credo, which establishes the values incorporated into the decision-making process. The Credo can be seen in every single office and corner of Johnson & Johnson facilities. The Credo is a reminder of the standards that are upheld in correspondence with the company’s aspirations. The Strategic Principles include the company’s organizational approach, which is a decentralized structure in management for the long term. Lastly, the Growth Drivers are the areas of focus for growth and innovation, which include the Leadership Imperatives of Connect, Shape, Lead, and Deliver. These four Leadership Imperatives are considered the “4 Pillars” of Johnson & Johnson and are the main attributes the company looks for when seeking employment. The company is leadership-driven and needs leaders of employees to act as such. These three components support why Johnson & Johnson’s Strategic Framework is at the core of the business’ continued success for the past 130 years.

Mission and Vision

The mission of Johnson & Johnson is to, “Make diversity & inclusion how we work every day”. The purpose of a mission statement is to outline the foundation of the company’s goals and objectives. This mission is supported by the company’s vision of, “Be yourself, change the world”. Johnson & Johnson’s vision is a broader representation of where the firm plans to go in the future. These two statements validate why the company is listed as #16 of “The Happiest Companies to Work For in 2017”. Johnson & Johnson aspires to bring in natural-born leaders who are comfortable being themselves across a multitude of diverse backgrounds. Being comprised of 130,000 employees, the company wants to advance its unique culture to “spark solutions that create a better, healthier, world”. According to Forbes Patrick Hull, there are 4 essential questions that need to be answered in a mission statement. These four questions include the what, how, whom, and value brought. Johnson & Johnson’s mission is lacking half of these qualities because of how short and simple its statement is. The statement includes the what- diversity, and the value- inclusion; however, the statement does not go into the how or whom it addresses. Yet, one can imply the “how “by working across a range of diverse nations and the “whom” by those included in The Credo (patients, employees, communities, and shareholders). The statement is clear and concise but requires more implications than other traditional missions.

Johnson & Johnson is a company that is constantly pursuing its mission. This can be seen in its “Health for Humanity 2020 Goals”. The company’s “Health for Humanity 2020 Goals” are 15 goals that should be completed in a 5-year term to make “the places we live and work in healthier” across the world. These objectives are already being completed as seen in making and donating more than 160 million doses of medicine to children in underprivileged communities. These actions support the company’s mission by providing medicine to various societies and prioritizing physical well-being. The company’s mission, vision, and goals for 2020 align with The Foundation of the Strategic Framework, by always putting the people first.

Form of Organization

Johnson & Johnson converted from a private to a public corporation in 1944. Converting to a public corporation gave its shareholders and the public more visibility to the operations of the firm. Johnson & Johnson’s information can now be viewed on sources such as the NYSE. According to Zacks Investment Research, “being publicly traded is a two-edged sword”. This statement is due to the visibility that can put the company at a higher risk of failure exposure. If operations are not going as well as planned, this could reflect negatively in the company’s annual report and be used to a competitors’ advantage. Disclosing information that private firms are not required to do can have its perks as well as its downfalls. Shareholders appreciate the creditability as it allows them to access their day-to-day return, but this can also be put into a negative perspective if their return happens to plummet. Fortunately, Johnson & Johnson has had a consistent dividend growth for 55 years, which helps ensure its 2,419 shareholders (valued at $236 billion) that the company is in constant growth.

Besides being publicly traded, there are also advantages and disadvantages to being a corporation. The top three advantages of a corporation include limited liability, the ability to raise more money for investment, and size. Johnson & Johnson optimizes its limited liability and size capacity. Having limited liability is crucial for a large corporation like Johnson & Johnson. Since the company is in the consumer, pharmaceutical, and medical devices markets, it is vital for its owners to have limited losses in the company. This extra protection for its owners is extremely necessary right now with the issuance of lawsuit claims against the company for as much as $417 million. If the owners were liable for all the losses exceeding their investment, the owners may be entirely wiped out by now. Not only could this include the owners’ investment in the company, but it could also include their houses, cars, retirement funds, etc. Johnson & Johnson also leverages its size against competitors in its markets. Since the firm is so massive, it can accumulate enough profit and power every year to invest, acquire, and grow assets in the company.

On the other hand, the top three disadvantages of a corporation include extensive paperwork, double taxation, and difficulty of termination. Johnson & Johnson’s most evident disadvantages are double taxation and difficulty of termination. Since the company is a corporation, it is required to pay taxes twice: first, before it can distribute its income as dividends, and second, once the shareholders receive the dividends. Double taxation decreases the original net income that the firm annually earns. However, Johnson & Johnson acquires enough income to steadily grow every year, even with being taxed twice. It is almost impossible for the company to terminate now that it has expanded worldwide. The main downfall of impossible termination is if the company goes into large sums of debt, and ends up abandoning its employees as a result. The closing of the company would devastatingly leave over 130,000 people unemployed. Therefore, the firm needs to ensure profitable growth every year. Luckily, bankruptcy should not be a problem for Johnson & Johnson anytime soon, as it is currently one of the two AAA-rated companies in the United States for exceptional credit. Understanding the advantages and overcoming the disadvantages of being a corporation is why Johnson & Johnson has been so successful the past 130 years. The execution of its organizational form corresponds with the Strategic Principles in the Strategic Framework by managing for the long term.

Organization Size and Scope

The most recent data of 2017 Second-Quarter Results details Johnson & Johnson to currently have approximately 132,500 employees. These 132,500 employees are distributed among 250 different operating units with over a dozen research facilities in North America, Europe, Asia, and the Middle East, to touch the lives of over a billion people every day, throughout the world. The company operates on a multi-divisional organizational structure, which is the most common organizational structure of large companies with multiple business units. The 250 operating units are restructured to incorporate leadership designed for each facility. A multi-divisional structure is the best way for Johnson & Johnson to maximize return and results, as the appropriate leadership can focus its expertise on its specific segments and business lines within the company.

Johnson & Johnson accumulated $18.8 billion in sales for Q2 which is up 1.9% versus a year ago. The $18.8 billion sales were broken down by $3.5 billion in consumer, $8.6 billion in pharmaceutical, and $6.7 billion in medical devices. The annual sales revenue of Johnson & Johnson in 2016 was $71.94 billion, and the company is projected to surpass this revenue at $76.1 billion by the end of 2017. The company utilizes its size and scope capacity to extend its services to the rest of the world, which resembles the Connect and Lead of the Growth Drivers in Johnson & Johnson’s Strategic Framework by being a leading provider in the consumer health, pharmaceutical, and medical devices industries.

Operations

One crucial element to a successful business is executing proper operational activities. Johnson & Johnson has recently extended its company base to include Supply Chain Management. For example, less than one year ago the Supply Chain Team in Buffalo Grove for major retailer Walgreens Co. started out as a two-person team. Within one year, the team now has over ten members and plans to grow by the year. Supply Chain now makes up 45% of employees working for Johnson & Johnson. Supply Chain has become crucially important to Johnson & Johnson’s Strategic Framework in the Foundation of the Credo. It is essential for the firm to not only allocate its resources efficiently but also environmentally friendly. Given a highly competitive atmosphere, Johnson & Johnson wants to advance its company with eco-friendly sustainability, which provides aid to the community aspect of the Credo.

For Johnson & Johnson to provide eco-friendly resource measures, the company must sustain proper inventory management. One tactic the company uses to handle its inventory is the FIFO valuation method. Johnson & Johnson implements a “first-in, first-out” inventory management approach to ensure proper product chain allocation. This means that the first goods purchased are the first ones sold. The advantage of this method is it reduces the risk of items becoming obsolete or outdated. Since Johnson & Johnson manufactures thousands of products with expiration dates, it is important for the company to use this resource measure when managing its inventory.

When the company produces its primary products, it also tries to implement end-to-end supply chain optimization. The end-to-end tool is used to eliminate as many “middle layers” as possible to increase efficiency and costs. The company is partnered with approximately 80,000 suppliers, broken down into 30 categories and grouped into 5 families. Johnson & Johnson has enrolled in the “Sustainable Procurement Program” to focus on supplier efficiency with regulatory system assessments. The hope for the company is to become as efficient, effective, and eco-friendly as possible. In 2016, 58% of packaging, 46% of marketing materials, and 61% of furniture were derived from forest materials.

Johnson & Johnson’s resource process begins with obtaining the raw materials and components needed for product configuration by outsourcing from one of its 80,000 suppliers. Once the materials are received, the product is created by one of its manufacturing plants worldwide. The product is sorted in a case, that is then put with others onto a pallet. The pallet is then shipped by truck, boat, or airplane to one of the major 14 distribution centers. From the distribution center, the product’s case is pulled from the pallet and then shipped to the customer warehouse distribution center. The customer distribution center then receives the products and ships them to the appropriate store locations, which finally sells the product to the end consumer.

As an example, Johnson & Johnson sources its raw materials for its 8 Hour Tylenol 24 count pack from its supplier, produces the pack at its manufacturing plant in Puerto Rico, then ships by boat or airfreight to its three major US consumer distribution centers located in Tobyhanna PA, Mooresville IN, and Fontana CA. The distribution center then sends the product to Walgreens’ two distribution centers located in Woodland CA and Marino Valley CA. Walgreens’ warehouse distribution centers further ship the product by truck to its brick and mortar store locations nationwide. The distribution center the product ships from is dependent on its proximity to the retail store. Once receiving the product from the closest geographical warehouse distribution center, the store places the product on the shelf, for a Walgreens customer to purchase. 

Organizational Structure

Since the company has vastly widened geographically to 250 different operating units, it makes sense for Johnson & Johnson to delegate more freedom to its managers and employees in each unit. Johnson & Johnson’s facilities incorporate a decentralized structure with more empowerment for its workers in various levels of management. Implementing a decentralized structure allows each operating unit to adapt to the needs of the people in each differing location. In a decentralized structure, authority is delegated down the organizational chain. Since Johnson & Johnson is so massive with over 130,000 employees, the pyramidal structure is also quite tall. Having a tall organizational structure means that there are various levels of management and reporting relationships. Generally tall, decentralized structures are inefficient because of the lack of communication across multiple segments and levels. However, Johnson & Johnson is one of the few large companies that has used this structure to its advantage by adapting to the local needs in proximity to each operating unit. The company’s diversified organizational structure is affiliated with the Strategic Principles of Johnson & Johnson’s Strategic Framework of a long-term decentralized organizational approach.

The two main advantages of a decentralized structure include higher morale and faster decision-making. Imagine if a low-level manager had to ask its boss’ boss’ boss’ boss for approval on a decision. Increasing empowerment in its various levels of employees improves time management and provides employees with higher levels of satisfaction. The two main disadvantages of a decentralized structure include less top-management control and a weakened corporate image. However, these two disadvantages are in fact advantages for Johnson & Johnson as the company leverages its decentralized structure for a happier working environment which increases its corporate image to the public. It can also be assumed that Alex Gorsky, CEO of Johnson & Johnson, does not want nor has the time capacity to oversee 130,000 employees on his own. Instead, the decentralized structure includes multiple operating units that have different functional and divisional groups within.

For example, the Customer Focused Team in Buffalo Grove IL, is divided between Health & Wellness and Beauty & Personal Care. Within each division, there are different functions and responsibilities for each employee. Both divisions have Customer Development Managers that oversee specific brand lines, as well as Supply Chain Representatives that have the task of managing inventory allocation for specific brand lines. 

Financial Condition

Johnson & Johnson is labeled as one of, “The 10 Most Profitable American Companies in the Fortune 500”. For a company to be profitable, it must sustain substantial cash flow. One of the most relevant indicators of wealth in financial statements is the statement of cash flows. Johnson & Johnson’s statement of cash flows provides crucial insight into the success of the company’s profitability. The statement of cash flows is segmented by operating, investing, and financing activities. Currently for Q2 2017, Johnson & Johnson has $5.77 billion, -$12.25 billion, and -$1.92 billion in operating, investing, and financing activities, respectively. These numbers in Q2 2016, were $4.99 billion, $1.32 billion, and -$1.46 billion in operating, investing, and financing activities, respectively. When comparing the differing activities, the operating and financing segments seem relatively similar to the prior year. However, there is a huge difference between Q2 2017 investing activities (-$12.25 billion) versus prior Q2 2016 investing activities ($1.32 billion). This can be explained by Johnson & Johnson’s quarterly report. In Q2 2017, Johnson & Johnson finalized the acquisition of Actelion Ltd. for $30 billion in cash. The acquisition of a leading biopharmaceutical company such as Actelion Ltd. is substantial compared to the prior-year acquisition of Vogue International LLC for $3.3 billion in cash.

Both purchases appear in the investing activities section under the statement of cash flows. The range of purchases is the main reason behind the difference in investing activities versus the prior year. Nevertheless, this is not a bad sign to be negative in investing activities. In fact, it is a positive sign to see a negative in the investing portion of the statement of cash flows because growing companies spend increased amounts of money on new assets. In this case, Johnson & Johnson bought out Actelion, which is an immense contribution to the company’s assets. For a company to grow substantially, it must acquire more power and ownership in the market. In this case, Johnson & Johnson acquired a much larger company this quarter versus the prior year which will propel growth and profit in the future.

In regard to the other two sections of the statement of cash flows with operating and financing activities, there is not a significant difference between the two quarters. Both sections indicate positive, stable growth for the company. The operating activities increased by $.78 billion versus the prior year. It is always a good sign for the company to attain positive operating activities. This data showcases that Johnson & Johnson is making money off its goods and services. The increase can be explained by new technology and the entrants of new products. In Q2 2017, new products DARZALEX® (daratumumab) and IMBRUVICA® experienced rapid growth, resulting in the increase of operating activities for the quarter. On the other hand, financing activities can fluctuate on positivity versus negativity. The company’s financing activities of Q2 2017 are similar to Q2 2016 in the respect of both requiring the payment of cash dividends and the repurchase of common and preferred stock. This payment and repurchase allow Johnson & Johnson to diminish its debt and advance capital. Having sustainable flows of cash corresponds to Deliver of the Growth Drivers in the Strategic Framework by delivering the best results and maintaining a stable statement of cash flows.

Industry/Competitive Environment

With a highly competitive industry, Johnson & Johnson is focused on the segment that contributes the most to the overall success of the company. Johnson & Johnson’s pharmaceutical industry has reported continued growth for Q2 2017 and amounted to roughly 46% of the company’s total revenue. Pharmaceuticals has continued to account for the largest segment of revenue within the company for the past three years. In the pharmaceutical industry, Johnson & Johnson’s three main competitors include Pfizer, Novartis, and Eli Lilly & Co. Considering the pharmaceutical business includes more than two major competitors owning a significant market share, Johnson & Johnson is considered an oligopoly. An important characteristic of oligopolies is the strategic interdependence between competitors. This statement means that any change in one influences the other- especially when it comes to products or prices. Johnson & Johnson, Pfizer, Novartis, and Eli Lilly & Co create similar medicines designed to cure and treat specific diseases. Therefore, price reliance is not as much of a focus as the differentiation of advantages and benefits associated with its products. Each company heavily relies on innovation within its own laboratories to outdo rival firms. Introducing new products to the pharmaceutical market can heavily impact competitor profits. One way these four oligopolies expand their market share in the industry is by using their size capacity to facilitate large research and development budgets to create new drugs and medicines.

Over the course of the past ten years, Johnson & Johnson has increased its research and development budget, giving them a competitive advantage over the other three firms. This supports Johnson & Johnson’s Credo to support its doctors and patients in the Foundation section of its Strategic Framework. According to Endpoints News, Johnson & Johnson is #2 on the list of “The 15 Top R&D Spenders in the Global Biopharma Business” in 2016. The company’s research and development budget has increased significantly over the years, where their budget originally was lacking behind competitors at $6.4 billion in 2005. Ever since Johnson & Johnson has made it a priority to improve innovation by increasing the budget. As of 2016, the company’s budget spend was $9.1 billion, followed by #3 Novartis at $8.4 billion, #4 Pfizer at $7.8 billion, and lastly #9 Eli Lilly at $5.4 billion. Allocating more money on research and development provides Johnson & Johnson with a competitive advantage by enabling the company to create more product differentiation with the entrance of new products.

The competitive advantage of an increased research and development budget is shown in Johnson & Johnson’s announcement to introduce at least ten new products by 2019 that each have the potential to generate over $1 billion in sales. The new products also include more than 40 line extensions of existing and new medicines. Another competitive advantage Johnson & Johnson has over competitors Pfizer, Novartis, and Eli Lilly & Co, is the protection of its diversified product portfolio. While the company’s competition has other various pharmaceutical products, Johnson & Johnson has much more intellectual property on its inventions. In “Top 300 Organizations Granted U.S. Patents in 2016”, Johnson & Johnson had 932 patents, whereas Pfizer had 152, Novartis had 247, and Eli Lily did not even make the list at less than 110 patents. The competitive advantage Johnson & Johnson gains from obtaining the most patents for the recent year is its exclusivity to create, use, and sell its products for up to twenty years. There is a direct relationship between its research and development budget with its intellectual property. By prioritizing a larger emphasis on research and development, Johnson & Johnson can produce more innovative processes and patent them, giving the company a step ahead of its competition in the marketplace.

Marketing

One promise Johnson & Johnson makes time after time is quality assurance. The company strives to achieve the most efficient yet effective products as displayed in Deliver of the Growth Drivers in the Strategic Framework. One way the company executes this is by segmenting its market. It creates products for all ages, genders, and races. It targets each segment by providing a solution to a particular need. For example, teenagers are prone to have more acne- so Johnson & Johnson create products specifically designed for acne treatment and launches “solvemyacne” on its Neutrogena website. “Solvemyacne” includes a personalized questionnaire for a teenager to fill out that ultimately recommends a suitable regimen. This segmentation can be seen across multiple markets, but one market the company is continuously trying to capture and deliver to is its mothers.

Product

Johnson & Johnson assumes that mothers are willing to go the extra mile to provide the best care for their children as stated in their Johnson’s® Baby mission: “We’re helping moms and dads like you safely care for your babies. We know you don’t want to take any risks”. Therefore, Johnson & Johnson, owner of Johnson’s® Baby, creates products of premium quality for those mothers that want the best for their child. The company manufactures all the necessary products a mother may want to be created with the gentlest ingredients. This is supported by “Johnson’s® 5-Step Safety Assurance Process” which constantly tests and evaluates its formula ingredients. The company’s product line contains baby shampoos, oils, body washes, wipes, powders, lotions, etc. Johnson & Johnson knows mothers will pay for the premium product, and therefore designs its products to include the purest, eco-friendly, non-chemical ingredients, that are proven to be the safest and least harmful to children.

Price

Since Johnson & Johnson labels its products to maintain the “highest standards”, its prices reflect this as well. Johnson’s® Baby products are set at a premium yet affordable price, usually higher than private-label or other generic brands. The company utilizes its scientific development and research to provide the safest products while still sustaining an affordable price. Known as cost-based pricing, Johnson’s® Baby products require higher retail prices due to increased material costs associated with better quality. An example of this can be seen with Johnson’s® Baby Head-to-Toe Wash Original Formula 15 oz priced at $5.49 on Walgreens.com, versus Walgreens private-label brand Well Beginnings Baby Wash 15 oz priced at $3.99. The difference in pricing between the private-label brand and the name brand is evident, but not extensive. The company also captures the mother market by using psychological pricing, which sets its product at price points of .49 or .99. This deceives the mother into thinking she is getting the item for $5 when $5.49 versus $5.50 is essentially the same price. However, if the pricing was $5.50 instead, the orders would not be sufficient as the mother then perceives the price as more expensive at $6.

Place

Johnson & Johnson guarantees product placement with its Johnson’s® Baby products to further incentivize mothers to purchase its items. First, the company confirms its products are readily available in the baby section of every large major retail store. These stores include nationwide locations of Walgreens, CVS, Rite-Aid, Kroger, Target, and Walmart. The company ensures its products are an option for the mother. To begin with, the company pushes for product purchasing by implementing on-shelf availability. The company negotiates thousands of dollars to place its baby care products at eye level and within reach on the shelf, for both the mother and the child. This product placement is essential to its marketing technique. By placing the product at eye level for the mother, it is the first baby brand the mother looks at when debating a purchase. Secondly, by placing the product at eye level for the child, the child is then able to grab the product and ask his/her mom to buy it. Allocating on-shelf availability in an accessible manner motivates the mother to purchase the product, whether that be by the decision herself or the pressure from her child.

Promotion

Although Johnson & Johnson’s pricing is at a reasonable premium level, it allows for the expense of discounts and bundles. The markup on pricing gives the company wiggle room to promote its products at lower prices. Promotions include BOGOs (buy one get one), coupons, or FSIs (free-standing insert). All three promotions lessen the purchasing prices of the items. If vendors expense a promotional spend, the price can be less than the generic brand. This can be seen with the same Johnson’s® Baby Head-to-Toe Wash Original Formula 15 oz priced at $5.49 that currently has a $2 off coupon. This coupon brings the retail price down to $3.49, which is less than the generic Walgreens Well Beginnings Baby Wash 15 oz priced at $3.99. In this case, Johnson’s® Baby is utilizing a high-low pricing strategy, where it is cheaper to buy the name brand than to buy the generic brand when on promotion. Promoting discounts and deals builds a relationship that returns mothers back to the Johnson’s® Baby brand and stimulates growth in the company.

Summary and Conclusion

As shown, Johnson & Johnson continues to outpace the market by delivering maximum benefit across the globe. From the organization’s mission to its size and structure, Johnson & Johnson has proven to be one of the leading healthcare providers in the consumer, pharmaceutical, and medical devices industries. Back in 1866, brothers Robert, James, and Edward Johnson set the foundation of what was at the time small family business. Today, this business has expanded worldwide and makes an impact on more than a billion lives every day. This advancement of Johnson & Johnson for the past 130 years can be attributed to its core Strategic Framework of the Foundation, Strategic Principles, and Growth Drivers for ultimate success.