December 3, 2021

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Johnson & Johnson Will Break Itself Up Into Two Firms

Johnson & Johnson Will Break Itself Up Into Two Companies

On the identical time, Johnson & Johnson was additionally below public and authorized hearth for its function within the opioid disaster. The corporate was a producer of probably addictive opiate painkillers, a enterprise it discontinued solely in the US final yr. It faces lawsuits looking for billions of {dollars}, although courts in California and Oklahoma lately handed victories to Johnson & Johnson and different opioid makers.

Johnson & Johnson, like different medical firms, has weathered its share of reputation-threatening controversies. In a 1982 episode that turned a textbook instance of handle a company disaster, the corporate needed to scramble after someone tampered with capsules of Additional-Power Tylenol, turning them deadly with potassium cyanide and killing seven folks. The corporate regained public belief by shortly pulling Tylenol from American cabinets and introducing new tamper-resistant packaging.

All through, the corporate has relied on the “halo impact” created by standard client merchandise, none extra so than its Johnson’s Child line of shampoos, lotions, moisturizers and powder for infants. Such merchandise have skinny revenue margins however have embossed public perceptions of Johnson & Johnson as a benevolent, light firm.

“It offers us a beautiful picture that the majority firms would kill for,” Ralph S. Larsen, the corporate’s chairman on the time, told Forbes in 2001.

However the industrial worth of these manufacturers has weakened over time. At the same time as customers proceed to consult with all plastic bandages as Band-Aids — the uncommon model, like Kleenex and Xerox, whose identify is a stand-in for a whole vary of merchandise — they’ve embraced cheaper, generic rivals. The identical is true for merchandise like Tylenol.

Even lingering affection for the corporate’s client merchandise doesn’t do a lot to advance Johnson & Johnson’s medical companies, that are much more essential to the corporate’s funds.

“Docs and hospitals simply need hips and knees, and medicines that work, at an affordable worth. They’re probably not pondering of Band-Aids,” stated Les Funtleyder, a well being care investor who adopted Johnson & Johnson for years as an analyst.

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