Johnson & Johnson Will Break Itself Up Into Two Companies

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At the identical time, Johnson & Johnson was also beneath community and legal hearth for its job in the opioid disaster. The business was a maker of likely addictive opiate painkillers, a enterprise it discontinued completely in the United States very last calendar year. It faces lawsuits searching for billions of dollars, nevertheless courts in California and Oklahoma recently handed victories to Johnson & Johnson and other opioid makers.


Nov. 12, 2021, 5:03 p.m. ET

Johnson & Johnson, like other health care organizations, has weathered its share of reputation-threatening controversies. In a 1982 episode that became a textbook case in point of how to take care of a company disaster, the organization experienced to scramble after anyone tampered with capsules of Excess-Strength Tylenol, turning them lethal with potassium cyanide and killing seven men and women. The firm regained community rely on by rapidly pulling Tylenol from American shelves and introducing new tamper-resistant packaging.

Throughout, the business has relied on the “halo effect” developed by preferred customer goods, none far more so than its Johnson’s Baby line of shampoos, lotions, moisturizers and powder for infants. This kind of merchandise have skinny financial gain margins but have embossed community perceptions of Johnson & Johnson as a benevolent, mild organization.

“It presents us a fantastic image that most organizations would destroy for,” Ralph S. Larsen, the company’s chairman at the time, explained to Forbes in 2001.

But the industrial value of those brands has weakened about time. Even as people continue to refer to all plastic bandages as Band-Aids — the rare model, like Kleenex and Xerox, whose title is a stand-in for an full selection of products and solutions — they have embraced much less expensive, generic rivals. The exact is true for products like Tylenol.

Even lingering passion for the company’s customer goods does not do a great deal to progress Johnson & Johnson’s health care organizations, which are far much more critical to the company’s finances.

“Doctors and hospitals just want hips and knees, and drugs that work, at a low-priced selling price. They’re not actually pondering of Band-Aids,” mentioned Les Funtleyder, a well being care investor who adopted Johnson & Johnson for a long time as an analyst.