Johnson & Johnson was founded in 1886 by brothers Robert Wood Johnson, James Wood Johnson, and Edward Mead Johnson, initially selling ready-to-use sterile surgical dressings. In 2023, the company spun off its consumer healthcare sector into a new publicly traded entity, Kenvue, allowing J&J to focus solely on pharmaceutical prescription drugs and medical device technologies.

As one of the world’s most valuable companies, Johnson & Johnson is notable for being one of only two U.S. firms with a AAA prime credit rating. Based in New Brunswick, New Jersey, the corporation is publicly traded on the New York Stock Exchange, part of the Dow Jones Industrial Average, and ranked No. 40 on the 2023 Fortune 500 list. With approximately 130,000 employees, J&J is led by CEO Joaquin Duato and also ranked 40th in the 2023 Forbes Global 2000.

A Brief History of Johnson & Johnson
Before Johnson & Johnson (1873–1885)
Robert Wood Johnson began his pharmaceutical journey at age 16 as an apprentice at his mother’s cousin’s apothecary. In 1873, he co-founded Seabury & Johnson, known for its medicated plasters. At the 1876 World’s Fair, he was introduced to antiseptic surgery by Joseph Lister. Johnson parted ways with his partner in 1885, paving the way for a new venture.

Founding of Johnson & Johnson (1886)
In 1886, Robert joined his brothers, James and Edward, to create Johnson & Johnson, launching a line of ready-to-use sterile surgical dressings. The company started with 14 employees in a factory in New Brunswick, New Jersey, focusing on sterile surgical supplies and medical guides, marked by a logo resembling James’s signature. Robert served as the first president.

Early History (1887–1942)
The company quickly gained fame for products like the world’s first sterile surgical sutures and gauze. They published “Modern Methods of Antiseptic Wound Treatment,” distributing 85,000 copies to medical professionals. In 1888, they created the first commercial first aid kit for railroad workers. Fred Kilmer was hired as the first scientific director, leading innovative research.

By 1894, the workforce expanded to over 400 employees, and the company introduced its first baby product, Johnson’s Baby Powder. Notably, during the Spanish-American War, J&J provided 300,000 packaged dressings for soldiers. By 1910, Robert Wood Johnson had passed away, succeeded by his brother James.

During WWI, J&J ramped up production of sterile surgical products and opened international manufacturing sites in Canada and England. They developed the Band-Aid in 1920, and the first prescription contraceptive gel, Ortho-Gynol, was introduced in 1931.

Going Public and Expanding (1943–1999)
In 1943, Robert Wood Johnson drafted “Our Credo,” a guiding document for the company’s values, before its IPO in 1944. The company made numerous acquisitions, including McNeil Laboratories and Janssen Pharmaceuticals, expanding its product range significantly.

The 1982 Tylenol tampering incident under CEO James Burke set a new standard for crisis management in the industry. Throughout the late 20th century, J&J expanded into Eastern Europe and continued acquiring notable consumer health brands.

Recent Developments (2000–present)
In the 2000s, under the leadership of CEO Alex Gorsky, J&J continued its trajectory of acquisitions and innovations, including the launch of new healthcare products and expanding its portfolio with major acquisitions like Pfizer’s consumer healthcare business in 2006 and Actelion in 2017.

In 2021, J&J announced the split of its consumer healthcare sector, creating Kenvue, which went public in May 2023. Recent acquisitions include Abiomed for $16.6 billion in December 2022 and ongoing negotiations for generic tuberculosis treatments in 2023.

With a commitment to innovation and a rich history of medical advancements, Johnson & Johnson continues to play a significant role in the global healthcare landscape.

Johnson & Johnson’s Strategic Response to the COVID-19 Pandemic:

Johnson & Johnson’s Pandemic Response: In a major initiative during the COVID-19 pandemic, Johnson & Johnson committed over $1 billion to develop a not-for-profit vaccine. This effort was carried out in collaboration with the Biomedical Advanced Research and Development Authority (BARDA) at the U.S. Department of Health and Human Services. Paul Stoffels, the company’s Chief Scientific Officer, underscored the importance of rapid collaboration, focusing on getting the vaccine to market without a profit motive.

Vaccine Development: Janssen Vaccines, a Johnson & Johnson subsidiary, partnered with Beth Israel Deaconess Medical Center to develop a COVID-19 vaccine candidate using technology that had previously been used for their Ebola vaccine. The vaccine entered phase 1 trials in September 2020.

Increased Production: With demand for Tylenol quadrupling in March 2020, Johnson & Johnson ramped up production worldwide, including continuous operations at their Puerto Rico plant. Additionally, in response to a shortage of ventilators, the company’s subsidiary, Ethicon, partnered with Prisma Health to develop the VESper Ventilator Expansion Splitter, enabling one ventilator to serve two patients.

Vaccine Trials and Government Support: By June 2020, Johnson & Johnson announced clinical trials for the vaccine, with phase 3 trials involving 60,000 participants beginning in September. The U.S. government entered into a $1 billion agreement for 100 million vaccine doses, with an option for 200 million more. Although trials were briefly paused in October due to a participant’s illness, they resumed after it was determined the illness was not related to the vaccine.

Sales and Market Impact: By April 2021, Johnson & Johnson reported $100 million in sales from their COVID-19 vaccine, which represented a relatively small portion of the company’s total revenue.

Business Structure

Sectors of Operation:

• Johnson & Johnson operates through two main sectors:
  • Innovative Medicine: Focuses on six therapeutic areas, including:
    • Immunology
    • Infectious diseases
    • Neuroscience
    • Oncology
    • Cardiovascular health
    • Pulmonary hypertension
  • MedTech: Includes areas such as:
    • Interventional solutions
    • Orthopedics
    • Surgery
    • Vision care

Financial Overview:

• Fiscal Year 2023 Earnings: $35.15 billion
• Total Revenue: $85.16 billion (a 10.57% increase from the previous year)
• Stock Value: Over $160 per share
• Market Capitalization: Exceeded $386.7 billion as of July 2024

Leadership and Governance
As of 2023, Johnson & Johnson’s board of directors includes notable figures such as Joaquin Duato (Chairman and CEO), Marillyn A. Hewson, and Jennifer A. Doudna. The executive committee also features Duato alongside other key executives responsible for guiding the company’s strategic initiatives and operations.

Johnson & Johnson Board of Directors (2023):

• Joaquin Duato: Chairman and CEO
• Marillyn A. Hewson: Board Member
• Jennifer A. Doudna: Board Member
• The executive committee also includes Duato and other key leaders responsible for steering the company’s strategic initiatives and operations.

Chairmen of Johnson & Johnson (Timeline):

• 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)

Ownership Structure (As of December 2023):

• Institutional investors hold over 70% of Johnson & Johnson’s shares.
• Largest shareholders include:
  • The Vanguard Group: 9.52%
  • BlackRock: 7.73%
  • State Street Corporation: 5.52%
  • Geode Capital Management: 2.13%
  • Morgan Stanley: 1.73%
  • State Farm: 1.32%
  • JPMorgan Chase: 1.24%
  • Northern Trust: 1.23%
  • Capital International Investors: 1.20%
  • Norges Bank: 1.08%

Environmental Initiatives:

• Johnson & Johnson ranks among the top three U.S. companies in Newsweek’s “Green Rankings.”
• Environmental efforts include:
  • Reducing water and energy use
  • Minimizing waste
  • Enhancing packaging sustainability (transitioning to non-polyvinyl chloride containers)
• The company is involved in programs such as:
  • Climate Northwest
  • EPA’s National Environmental Performance Track
• It operates Pennsylvania’s largest solar power generator.

Recalls and Legal Challenges

1982 Tylenol Murders: The company faced a major crisis when several individuals died after consuming cyanide-laced Tylenol. Johnson & Johnson executed a swift recall of 31 million bottles, leading to reforms in packaging standards and anti-tampering laws. Their crisis management approach has since been regarded as a gold standard.

2010 Children’s Product Recall: McNeil Consumer Healthcare recalled 43 over-the-counter children’s medications due to manufacturing defects. The recall affected various international markets, and Johnson & Johnson undertook a comprehensive quality review across its operations.

2010 Hip Replacement Recall: DePuy recalled its ASR hip prostheses after data revealed high revision rates. The fallout included extensive lawsuits, with a jury ordering the company to pay $8.3 million in damages in 2013.

2010 Tylenol Recall: Additional recalls were issued for some over-the-counter products due to contamination from packaging materials.

Shareholder Lawsuit: A group of shareholders alleged systemic failures and illegalities dating back to the 1990s. Although the case was initially dismissed, it was later allowed to be refiled, leading to a proposed settlement that included new oversight measures.

Risperdal Marketing Practices: Johnson & Johnson faced significant legal challenges over the marketing of its antipsychotic medication, Risperdal, including allegations of concealing adverse effects and promoting it for unapproved uses. The company settled with multiple states for substantial sums, including a $2.2 billion settlement with the U.S. Department of Justice in 2013.

Johnson & Johnson continues to navigate a complex landscape of corporate governance, legal scrutiny, and environmental responsibility while maintaining its position as a leading global health care company.
Legal and Regulatory Challenges Faced by Johnson & Johnson
Foreign Bribery
In 2011, Johnson & Johnson settled with the U.S. Securities and Exchange Commission under the Foreign Corrupt Practices Act, paying approximately $70 million in fines and disgorgement. The investigation revealed that J&J employees had engaged in bribery and kickbacks to doctors in Greece, Poland, and Romania to secure sales of drugs and medical devices, as well as to officials in Iraq to obtain contracts under the Oil for Food program. J&J cooperated fully with the investigation once these issues were uncovered.

Consumer Fraud Settlements
In May 2017, Johnson & Johnson agreed to pay $33 million to several states to resolve allegations of consumer fraud related to its over-the-counter drugs.

Use of the Red Cross Symbol
Johnson & Johnson registered the Red Cross as a U.S. trademark in 1905, using it since 1887. Although the Geneva Conventions reserve the emblem for specific uses, J&J’s prior registration allowed its continued use in the U.S. A 2007 lawsuit against the American Red Cross, seeking to stop its use of the symbol for commercial products, led to a settlement allowing both parties to use the emblem.

Boston Scientific Lawsuits
Since 2003, Johnson & Johnson and Boston Scientific have litigated over patent infringements regarding heart stent devices. The dispute was settled in September 2009 when Boston Scientific agreed to pay $716 million, followed by an additional $1.73 billion in February 2010. The litigation resurfaced in 2014 over a contract dispute.

Patent Infringement Against Abbott
In 2007, Johnson & Johnson sued Abbott Laboratories over the arthritis drug Humira, claiming it infringed on technology licensed exclusively to J&J’s Centocor division. J&J won the case, resulting in a total award of $1.84 billion, the largest patent-infringement judgment in U.S. history at that time.

Vaginal Mesh Implants
Numerous lawsuits have emerged from women experiencing severe complications from vaginal mesh implants. In Australia, over 700 women launched a class action in 2017, alleging inadequate warnings and marketing of the implants. The Federal Court found J&J negligent, and a compensation agreement of A$300 million was reached in 2022, pending court approval. In the U.S., J&J settled claims with 41 states and the District of Columbia for $117 million related to deceptive marketing of transvaginal mesh devices.

Baby Powder Litigation
Johnson & Johnson faces over 26,000 lawsuits claiming its talc-based baby powder causes ovarian cancer, allegedly due to asbestos contamination. In 2016, a jury ordered J&J to pay $72 million to the family of a woman who died from ovarian cancer, and subsequent lawsuits resulted in awards exceeding $4.7 billion for multiple claimants. Despite ongoing legal challenges, J&J announced it would stop selling talc-based baby powder in the U.S. and Canada by 2023, shifting to cornstarch-based products. In 2023, J&J reportedly offered $9 billion to settle all related lawsuits.

Opioid Epidemic Involvement
By 2018, Johnson & Johnson faced significant scrutiny over its role in the U.S. opioid crisis, with over 500 lawsuits filed against the company. Notably, in August 2019, a judge ordered J&J to pay $572 million for its contributions to the crisis. In January 2022, the company agreed to pay up to $5 billion as part of a larger settlement related to the epidemic.

Public Engagement and Philanthropy
Collaboration with Academia and Activism
Johnson & Johnson actively supports various research and advocacy initiatives, including matching gifts to the Institute for Advanced Study and partnerships with organizations like the Human Rights Campaign and Women Deliver.

Political Lobbying
J&J engages in lobbying efforts in the U.S. and internationally, contributing millions to the Foundation for the National Institutes of Health and participating in trade associations like the Biotechnology Innovation Organization (BIO) and the Pharmaceutical Research and Manufacturers of America (PhRMA).

Research and Development Support
The company has provided substantial funding for research initiatives, including grants to the C. D. Howe Institute, to advance medical research and innovation.

Conclusion: Sustaining Leadership and Innovation for the Future

In summary, Johnson & Johnson’s leadership, ownership structure, and environmental initiatives reflect the company’s commitment to long-term growth, sustainability, and corporate responsibility. With strong leadership under Joaquin Duato, significant institutional backing, and continued efforts to reduce environmental impact, Johnson & Johnson remains a key player in both the healthcare industry and global sustainability efforts. Their ongoing focus on innovation and environmental stewardship positions the company for continued success in an evolving marketplace.