Although its name is perhaps most widely associated with babycare and Band-Aids, Johnson & Johnson has long been one of the world's biggest healthcare manufacturers, and got even bigger in 2006 with the purchase of the consumer health division of Pfizer. Yet despite that deal, consumer products are still the group's smallest segment (see separate page). The largest chunk of group revenues comes from pharmaceuticals, including blockbusters such as Remicade, Stelara and Invega, followed by medical devices. The group flavours a highly decentralised structure with a broad portfolio of multiple separately branded subsidiary businesses, operating as Janssen Pharmaceuticals, Depuy and Ethicon among many others, rather than under the Johnson & Johnson banner. Despite its size and standing, Johnson & Johnson has endured repeated challenges in recent years, especially in the US, as a result of a series of manufacturing problems and product recalls that tainted the reputations of several of its best-known consumer healthcare brands. In the early 2010s it was forced to withdraw several of its OTC medicines, including flagship brand Tylenol, over fears of accidental contamination. Shortly afterwards it settled a regulatory lawsuit over off-label promotions of prescription medicines and kickbacks to doctors and pharmacists for a massive $2.2bn, then third largest pharmaceutical-related settlement in US history. Currently, the group is fighting several thousand lawsuits which allege that its talcum powder - a household staple for decades - causes ovarian cancer. Another ongoing battle claims that the group contributed to the US opioid crisis through mismarketing of certain pharmaceutical painkillers. Alex Gorsky is chairman & CEO of Johnson & Johnson. Despite the group's various challenges, revenues edged up to a new high in 2019 of $82.1bn, though net earnings slipped slightly to $15.1bn. The pharmaceutical division - primarily Janssen Pharmaceuticals - accounted for just over half of group revenues, or $42.2bn, while medical devices contributed a further $26.0bn. This division houses a vast array of specialist firms manufacturing products including artificial hip, knee and shoulder joints, cardiovascular and other implants, all types of surgical tools, wound closure devices and countless other items. It also houses the world leading Vision Care business among whose brands are Acuevue contact lenses. Consumer healthcare supplied the remaining $13.9bn of group revenues.
Capsule checked 30th September 2019
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Adbrands Daily Update 30th Oct 2019: Curiouser and curiouser! After subsequent investigation, no traces of asbestos were found in the bottle of Johnson & Johnson talcum powder said a week ago by the FDA to have tested positive for the substance. Two third-party labs conducts 15 tests on that same bottle, and another 48 tests on random samples from the 33,000 other bottles in the same lot. No asbestos was found. However, a portable air conditioner hired by one of the labs was found to be contaminated with the potentially carcinogenic material. "Rigorous and third-party testing confirms there is no asbestos in Johnson's Baby Powder," said the company in a statement. "We stand by the safety of our product."
Adbrands Daily Update 21st Oct 2019: Johnson & Johnson's defence case suffered a serious blow after the US FDA found sub-traces of asbestos in a single canister of talcum powder subjected to routine testing. The company has withdrawn the entire batch from which it derived, comprising around 33,000 bottles. After years insisting on the safety of the product, this is the first time J&J has ever pulled any quantity of its talc off-sale. It is already facing lawsuits from what are now in excess of 15,500 plaintiffs over claims that its talc, a household staple for decades, can cause ovarian and other cancers. The company's main line of defence has revolved around the argument it has never detected asbestos in its own tests in over 40 years. The sample in question was found in a canister purchased from an unnamed online retailer. J&J has launched its own investigation to determine whether the sample was taken from a bottle with its seal still intact, and whether the product tested was authentic or counterfeit.
Adbrands Daily Update 27th Aug 2019: Johnson & Johnson suffered damage on yet another legal front when an Oklahoma judge ruled that the company had caused a "temporary public nuisance" by contributing to the nation's opioid abuse crisis. He ordered J&J to pay $572m towards the costs of substance abuse treatment programmes, public education and medical services in Oklahoma. [Updated: the amount was later reduced on appeal to $465m.] Lawyers for the state had argued that Johnson & Johnson mis-marketed its opioid products, promoting their benefits to treat chronic pain and hiding the risks of long-term addiction. The fine was considerably less than the $17bn that Oklahoma's attorney general had demanded; yet J&J said it will appeal against the verdict: "Neither the facts nor the law support this outcome". However, this first opioid mismarketing case is likely to open the floodgates to a barrage of similar lawsuits against Johnson & Johnson and other manufacturers. The ruling prompted Purdue Pharma - makers of OxyContin - and its owners the Sackler family to propose a class settlement with state and government departments worth up to $12bn.
Adbrands Daily Update 19th Jun 2019: Johnson & Johnson was awarded the Grand Prix in Entertainment at the Cannes Lions festival for a bold 50-minute documentary produced by UM's branded content division in partnership with Highway 61 Films and prodco Saville. '5B' tells the story of the nurses who staffed San Francisco General Hospital's first dedicated ward for for newly diagnosed AIDS patients, as that epidemic spread in the early 1980s. "A brave idea, beautifully told and brilliantly executed," said the judges.
Adbrands Daily Update 26th Mar 2019: Already each facing substantial legal challenges for other products, Bayer and Johnson & Johnson tooks steps to settle a lawsuit over the anticoagulant Xarelto. The drug was developed by Bayer and is co-marketed in the US by J&J. Some 25,600 claims have been filed so far alleging that Xarelto caused severe and sometimes fatal bleeding episodes in some patients. Only six cases have come to trial so far, all of which have been won by the two companies, but they have taken the decision to settle all the remaining cases. "Bayer continues to believe these claims are without merit and there is no admission of liability under the agreement," the company said. "However, this favourable settlement allows the company to avoid the distraction and significant cost of continued litigation." A fund of $775m, split equally between the partners, will settle "virtually all" of the current caseload, allowing Bayer to focus on the legal challenges to its weedkiller Roundup and J&J to continue its defence of its talcum powder.
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