What changed in this filing

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Item 1. Business

2023-02-16 compared with 2022-02-17 · 61 added, 76 removed, 173 unchanged (44% of the section changed)

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This Committee oversees and coordinates the activities of the Company's three business segments:

Consumer Health, Pharmaceutical and Medical Devices.

Consumer Health, Pharmaceutical and MedTech (previously referred to as Medical Devices).

Within the strategic parameters provided by the Committee, senior management groups at U.S.

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The Company is organized into three business segments:

Consumer Health, Pharmaceutical and Medical Devices.

Consumer Health, Pharmaceutical and MedTech.

Additional information required by this item is incorporated herein by reference to the narrative and tabular descriptions of segments and operating results under:

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These products are marketed to the general public and sold online (eCommerce) and to retail outlets and distributors throughout the world.

In November 2021, the Company announced its intention to separate the Company’s Consumer Health business, with the intention to create a new, publicly traded company.

The Company is targeting completion of the planned separation in 18 to 24 months after initial announcement.

In November 2021, the Company announced its intention to separate the Company’s Consumer Health business (Kenvue as the name for the planned New Consumer Health Company), with the intention to create a new, publicly traded company by the end of the fiscal year 2023.

Pharmaceutical

The Pharmaceutical segment is focused on six therapeutic areas:

Immunology (e.g., rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease and psoriasis), Infectious Diseases (e.g., HIV/AIDS and COVID-19), Neuroscience (e.g., mood disorders, neurodegenerative disorders and schizophrenia), Oncology (e.g., prostate cancer, hematologic malignancies, lung cancer and bladder cancer), Cardiovascular and Metabolism (e.g., thrombosis, diabetes and macular degeneration) and Pulmonary Hypertension (e.g., Pulmonary Arterial Hypertension).

The Pharmaceutical segment is focused on the following therapeutic areas:

Immunology (e.g., rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease and psoriasis), Infectious Diseases (e.g., HIV/AIDS), Neuroscience (e.g., mood disorders, neurodegenerative disorders and schizophrenia), Oncology (e.g., prostate cancer, hematologic malignancies, lung cancer and bladder cancer), Cardiovascular and Metabolism (e.g., thrombosis, diabetes and macular degeneration) and Pulmonary Hypertension (e.g., Pulmonary Arterial Hypertension).

Medicines in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use.

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TREMFYA (guselkumab), a treatment for adults with moderate to severe plaque psoriasis and active psoriatic arthritis;

the Janssen COVID-19 vaccine, authorized for use under Emergency Use Authorization (EUA) for active immunization to prevent coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) in individuals 18 years of age and older;

EDURANT (rilpivirine), PREZISTA (darunavir) and PREZCOBIX/REZOLSTA (darunavir/cobicistat), antiretroviral medicines for the treatment of human immunodeficiency virus (HIV-1) in combination with other antiretroviral products and SYMTUZA (darunavir/cobicistat/emtricitabine/tenofovir alafenamide), a once-daily single tablet regimen for the treatment of HIV;

CONCERTA ® (methylphenidate HCl) extended-release tablets CII, a treatment

for attention deficit hyperactivity disorder;

CONCERTA (methylphenidate HCl) extended-release tablets CII, a treatment for attention deficit hyperactivity disorder;

INVEGA SUSTENNA/XEPLION (paliperidone palmitate), for the treatment of schizophrenia and schizoaffective disorder in adults;

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RISPERDAL CONSTA (risperidone long-acting injection), for the treatment of schizophrenia and the maintenance treatment of Bipolar 1 Disorder in adults;

ZYTIGA ® (abiraterone acetate), a treatment for patients with prostate cancer;

(abiraterone acetate), a treatment for patients with prostate cancer;

ERLEADA (apalutamide), a next-generation androgen receptor inhibitor for the treatment of patients with prostate cancer;

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DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), a treatment for multiple myeloma and light chain (AL) Amyloidosis;

PROCRIT ® /EPREX ® (epoetin alfa), a treatment for chemotherapy-induced anemia and patients with chronic kidney disease;

XARELTO (rivaroxaban), an oral anticoagulant for the prevention of deep vein thrombosis (DVT), which may lead to pulmonary embolism (PE) in patients undergoing hip or knee replacement surgery, to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation, and for the treatment and reduction of risk of recurrence of DVT and PE to reduce the risk of major cardiovascular events in patients with coronary artery disease (CAD) and peripheral artery disease (PAD), for the treatment and secondary prevention of thromboembolism in pediatric patients, and for thromboprophylaxis in pediatric patients following the Fontan procedure;

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Many of these medicines were developed in collaboration with strategic partners or are licensed from other companies and maintain active lifecycle development programs.

Medical Devices

The Medical Devices segment includes a broad range of products used in the Interventional Solutions, Orthopaedics, Surgery, and Vision fields.

Medical Devices in Interventional Solutions include Electrophysiology products (Biosense Webster) to treat cardiovascular diseases, Neurovascular care (Cerenovus) that treats hemorrhagic and ischemic stroke;

the Orthopaedics portfolio (DePuy Synthes) is comprised of products in support of Hips, Knees, Trauma, and Spine, Sports & Other;

The MedTech (previously referred to as Medical Devices) segment includes a broad portfolio of products used in the Interventional Solutions, Orthopaedics, Surgery and Vision categories.

Interventional Solutions include Electrophysiology products (Biosense Webster) to treat cardiovascular diseases, Neurovascular care (Cerenovus) that treats hemorrhagic and ischemic stroke and the Heart Recovery portfolio (Abiomed) which includes technologies to treat severe coronary artery disease requiring high-risk PCI or AMI cardiogenic shock.

The Orthopaedics portfolio (DePuy Synthes) comprises products in support of Hips, Knees, Trauma, and Spine, Sports & Other.

The Surgery portfolios include advanced and general surgery offerings (Ethicon), solutions that focus on Breast Aesthetics (Mentor), and Ear, Nose and Throat (Acclarent) procedures.

and Johnson & Johnson Vision products such as ACUVUE ® Brand disposable contact lenses and ophthalmic products related to cataract and laser refractive surgery.

Johnson & Johnson Vision products include ACUVUE Brand contact lenses and ophthalmic technologies related to cataract and laser refractive surgery.

These products are distributed to wholesalers, hospitals and retailers, and used predominantly in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics.

Beginning in the fiscal first quarter of 2022, the Medical Devices segment will be referred to as the MedTech segment.

Geographic Areas

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The Company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being.

The products made and sold in the international business include many of those described above under “– Segments of Business – Consumer Health,” “– Pharmaceutical” and “– Medical Devices.” However, the principal markets, products and methods of distribution in the international business vary with the country and the culture.

The products made and sold in the international business include many of those described above under “– Segments of Business – Consumer Health,” “– Pharmaceutical” and “– MedTech.” However, the principal markets, products and methods of distribution in the international business vary with the country and the culture.

The products sold in international business include those developed in the U.S.

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The Company’s subsidiaries face patent challenges from third parties, including challenges seeking to manufacture and market generic and biosimilar versions of the Company's key pharmaceutical products prior to expiration of the applicable patents covering those products.

Significant legal proceedings and

claims involving the Company's patent and other intellectual property are described in Note 19, “Legal Proceedings— Intellectual Property” of the Notes to Consolidated Financial Statements included in Item 8 of this Report.

Significant legal proceedings and claims involving the Company's patent and other intellectual property are described in Note 19, “Legal Proceedings— Intellectual Property” of the Notes to Consolidated Financial Statements included in Item 8 of this Report.

Sales of the Company’s largest product, STELARA (ustekinumab), accounted for approximately 10.2% of the Company's total revenues for fiscal 2022.

Accordingly, the patents related to this product are believed to be material to the Company.

Accordingly, the patents related to this product are believed to be material to the

Janssen Biotech, Inc., a wholly-owned subsidiary of Johnson & Johnson, owns patents specifically related to STELARA .

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Worldwide sales do not reflect any significant degree of seasonality;

however, spending has been heavier in the fourth quarter of each year than in other quarters.

however, spending has typically been heavier in the fourth quarter of each year than in other quarters.

This reflects increased spending decisions, principally for advertising and research and development activity.

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Similar trends are also evident in major markets outside of the U.S.

The new medical device regulatory framework and the new privacy regulations in Europe and in other countries are examples of such increased regulation.

The new medical device regulatory framework and the evolving privacy, data localization, and emerging cyber security laws and regulations around the world are examples of such increased regulation.

States (California, Connecticut, Colorado, Utah and Virginia) now have comprehensive privacy laws in place and China introduced broad personal information protection and data security regulations in 2022.

With other jurisdictions enacting similar privacy laws, local data protection authorities will force greater accountability on the collection, access and use of personal data in the healthcare industry.

The regulatory agencies under whose purview the Company operates have administrative powers that may subject it to actions such as product withdrawals, recalls, seizure of products and other civil and criminal sanctions.

In some cases, the Company’s subsidiaries may deem it advisable to initiate product recalls.

In some cases, the Company’s subsidiaries may deem it advisable to initiate product recalls regardless of whether it has been required or directed to.

FDA and regulatory agencies around the globe are also increasing their enforcement activities.

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The costs of human healthcare have been and continue to be a subject of study, investigation and regulation by governmental agencies and legislative bodies around the world.

In the U.S., attention has been focused by states, regulatory agencies and congress on drug prices and profits and programs that encourage doctors to write prescriptions for particular drugs, or to recommend, use or purchase particular medical devices.

In the U.S., attention has been focused by states, regulatory agencies and Congress on prices, profits, overutilization and the quality and costs of healthcare generally.

Laws and regulations have been enacted to require adherence to strict compliance standards and prevent fraud and abuse in the healthcare industry.

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Federal and foreign laws governing international business practices require strict compliance with anti-bribery standards and certain prohibitions with respect to payments to any foreign government official.

Payers have become a more potent force in the market place and increased attention is being paid to drug and medical device pricing, appropriate drug and medical device utilization and the quality and costs of healthcare generally.

government actors continue efforts to repeal, modify, or invalidate provisions of the Patient Protection and Affordable Care Act (the ACA) which passed in 2010.

For example, federal legislation repealed the ACA’s individual mandate tax penalty as well as the tax on generous employer-sponsored healthcare plans;

the Center for Medicare & Medicaid Services (CMS) began permitting states to impose work requirements on persons covered by Medicaid expansion plans;

certain federal subsidies to insurers have ended;

and certain short-term insurance plans not offering the full array of ACA benefits have been allowed to extend in duration.

Some of these changes are being challenged in U.S.

courts and so their long-term impact remains uncertain.

The ACA has also been subject to judicial challenge.

In November 2020, the U.S.

Supreme Court heard argument in Texas v.

Azar , which challenges the constitutionality of the ACA.

Pending resolution of the litigation, all of the ACA but the individual mandate to buy health insurance remains in effect.

government also continues to propose and implement changes to the Medicare Part D benefit including the size of manufacturer discounts in the coverage gap and catastrophic phases of the benefit.

There are a number of additional bills pending in Congress and healthcare reform proposals at the state level that would affect drug pricing in the Medicare and Medicaid programs.

This changing federal landscape has both positive and negative impacts on the U.S.

healthcare industry with much remaining uncertain as to how various provisions of federal law, and potential modification or repeal of these laws, will ultimately affect the industry.

Payers and Pharmacy Benefit Managers (PBMs) have become a more potent force in the market place and increased attention is being paid to drug pricing and appropriate drug and medical device utilization.

Our business has been and continues to be affected by federal and state legislation that alters the pricing, coverage, and reimbursement landscape.

At the federal level, in August 2022, President Biden signed into law the Inflation Reduction Act (IRA), which includes provisions that effectively authorize the government to establish prices for certain high-spend single-source drugs and biologics reimbursed by the Medicare program, starting in 2026 for Medicare Part D drugs and 2028 for Medicare Part B drugs.

It is not yet certain which products the federal government will select and subject to government-established prices, or how the federal government will establish prices for selected products, as the IRA specifies a ceiling price but not a minimum price.

One or more of our products could be selected and subject to the government-established price.

The IRA also contains provisions that impose rebates if certain prices increase at a rate that outpaces the rate of inflation, beginning October 1, 2022, for Medicare Part D drugs and January 1, 2023, for Medicare Part B drugs.

Separate IRA provisions redesign the Medicare Part D benefit in various ways, including by shifting a greater portion of costs to manufacturers within certain coverage phases and replacing the Part D coverage gap discount program with a new manufacturer discounting program.

Failure to comply with IRA provisions may subject manufacturers to various penalties, including civil monetary penalties.

The impact of the IRA on our business and the broader pharmaceutical industry remains uncertain, as the federal government has yet to make various IRA implementation decisions.

Additionally, we expect continued scrutiny on drug pricing and government price reporting from Congress, agencies, and other bodies at the federal and state levels.

There are a number of additional bills pending in Congress and healthcare reform proposals at the state level that would affect drug pricing, including in the Medicare and Medicaid programs.

This changing legal landscape has both positive and negative impacts on the U.S.

healthcare industry with much remaining uncertain as to how various provisions of federal and state law, and potential modification or repeal of these laws, will ultimately affect the industry.

The IRA and any other federal or state legislative change could affect the pricing and market conditions for our products.

In addition, business practices in the healthcare industry have come under increased scrutiny, particularly in the U.S., by government agencies and state attorneys general, and resulting investigations and prosecutions carry the risk of significant civil and criminal penalties.

Further, the Company relies on global supply chains, and production and distribution processes, that are complex, are subject to increasing regulatory requirements, and may be faced with unexpected changes such as those resulting from the COVID-19 pandemic and Brexit that may affect sourcing, supply and pricing of materials used in the Company's products.

Of note is the increased enforcement activity by data protection authorities in various jurisdictions, particularly in the European Union, where significant fines have been levied on companies for data breaches, violations of privacy requirements, and unlawful cross-border data transfers.

In the U.S., the Federal Trade Commission has stepped up enforcement of data privacy with several significant settlements and there have been a material increase in class-action lawsuits linked to the collection and use of biometric data.

COVID-19 pandemic and Brexit that may affect sourcing, supply and pricing of materials used in the Company's products.

These processes also are subject to complex and lengthy regulatory approvals.

The global regulatory landscape is also subject to change as the COVID-19 pandemic continues to affect the U.S.

and global economies.

FDA and other health authorities have shifted resources and priorities to meet the many challenges presented by the pandemic.

Pandemic-related disruptions could negatively impact the processing of regulatory submissions and slow agency review times necessary for the approval or clearance of new drugs and devices.

The duration and severity of the COVID-19 pandemic is unpredictable and difficult to assess.

Employees and Human Capital Management

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Contingent workers, contractors and subcontractors are also excluded.

Abiomed headcount has been included in the above table.

2 FTE represents the total number of full-time equivalent positions and does not reflect the total number of individual employees as some work part-time.

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Culture and Employee Engagement

At Johnson & Johnson, employees are guided by Our Credo which sets forth the Company's responsibilities to patients, consumers, customers, healthcare professionals, employees, communities and shareholders.

Employees worldwide are further guided by the Company’s Code of Business Conduct which sets basic requirements for business conduct and serves as a foundation for the Company policies, procedures and guidelines, all of which provide additional guidance on expected employee behaviors in every market where it operates.

The Company conducts global surveys that offer its employees the ability to provide feedback and valuable insight to help address potential human resources risks and identify opportunities to improve.

In 2021, 91% of global employees across 77 countries participated in Our Voice Survey which was offered in 36 languages.

At the Company, employees are guided by Our Credo which sets forth the Company's responsibilities to patients, consumers, customers, healthcare professionals, employees, communities and shareholders.

Employees worldwide must adhere to the Company’s Code of Business Conduct which sets basic requirements and serves as a foundation for the Company policies, procedures and guidelines, all of which provide additional guidance on expected employee behaviors in every market where it operates.

The Company c onducts global surveys that offer its employees the ability to provide feedback and valuable insight to help address potential human resources risks and identify opportunities to improve.

In 2022, 92% of global employees across 77 countries participated in Our Credo Survey which was offered in 36 languages .

Growth and Development

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In furtherance of this objective, the Company deploys a global approach to ensure development is for everyone, regardless of where they are on their career journey.

In 2021, 45.8% of employees in Manager and above job categories took advantage of career opportunities by moving across functions, country or business segment lines (including upward promotion or lateral transfer and excluding employees in the research and development organizations).

In 2022, 46.2% of employees in Manager and above job categories who had movements (including upward promotions or lateral transfers) took advantage of career opportunities by moving across functions, country or business segment lines (excluding employees in the research and development organizations).

The Company's voluntary turnover rate was 9%.

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The Company is committed to workplace diversity and to cultivating, fostering, and advancing a culture of equity and inclusion.

Enabling employees to perform at their best while being themselves is fundamental to the Company's continued success.

In 2022, Johnson & Johnson introduced the Company’s evolved enterprise Diversity, Equity and Inclusion strategy, which recognizes how DEI accelerates the Company’s ability to meet the changing needs of the communities the Company serves to deliver Our Purpose to profoundly change the trajectory of health for humanity.

The Company’s DEI vision is:

Be yourself, change the world.

The Company's DEI strategy focuses on three pillars that reflect the strategic priorities identified to enable the Company to address the challenges and opportunities presented by this evolving understanding of diversity:

• Accelerate the Company’s efforts to advance a culture of inclusion and innovation

• Build a diverse workforce for the future

• Enhance business results and reputation

The Company’s DEI Mission is:

Make diversity, equity and inclusion how we work everyday .

Our evolved enterprise DEI Strategy is aligned to our DEI Vision and Mission and rests on four core pillars:

• Accelerate our global culture of inclusion where every individual belongs

• Build a workforce that reflects the diversity of our communities

• Transform talent and business processes to achieve equitable access and outcomes for all

• Drive innovation and growth with our business to serve diverse markets around the world

The Company’s DEI strategy is guided by internal and external insights, global best practices and continual employee feedback which remind the Company that while diversity changes by location, inclusion is the same everywhere.

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The Company observes legal minimum wage provisions and exceeds them where possible.

The Company's total rewards offerings include an array of programs to support its employees' financial, physical, and mental well-being, including annual performance incentive opportunities, pension and retirement savings programs, health and welfare benefits, paid time off, leave programs, flexible work schedules and employee assistance programs.

The Company's total rewards offerings include an array of programs to support its employees' well-being, including annual performance incentive opportunities, pension and retirement savings programs, health and welfare benefits, paid time off, leave programs, flexible work schedules and employee assistance programs.

In recognition of the Company’s commitment to help employees balance their personal and professional responsibilities, the Company extended its paid parental leave benefit globally from 8 to 12 weeks for all eligible employees.

In the U.S., the benefit was effective on January 1, 2022, with retroactive coverage for new family additions as of July 1, 2021.

Health, Wellness and Safety

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The Company has continuously expanded health and well-being programs throughout the Company and across the globe, incorporating new thinking and technologies to keep its offerings best-in-class and to help employees achieve their personal health goals.

The programs and practices the Company advances for total health—physical, mental, emotional and financial—help ensure employee health protection from emerging health risks.

Safety and COVID-19 Pandemic Response

Protecting and supporting our employees during the COVID-19 pandemic continues to be a top priority and our approach includes:

keeping employees informed of local COVID-19 transmission rates and corresponding risk levels;

promoting the health and safety of our employees in the workplace through robust layers of protection;

The programs and practices the Company advances for total health—physical, mental, emotional and financial—ensure employee health protection for emerging health risks.

Protecting and supporting our employees as the COVID-19 pandemic has evolved continues to be a top priority and the Company’s approach includes:

ensuring the health and safety of our employees in the workplace through robust layers of protection;

enhanced cleaning and access to cleaning supplies and personal protective equipment;

supporting employees with pay continuity, benefits and well-being tools;

and recognizing extraordinary employee contributions at work and in our communities.

In 2021, in recognition of the new way of working, we initiated J&J Flex, a hybrid model that empowers our office-based employees to find the right productivity and balance of in-person and remote work.

This model allows for work to happen seamlessly across a variety of workplaces and is enabled by an array of enhanced collaboration tools and technology to optimize productivity and connection.

J&J Flex rolled out in fourth quarter 2021 globally, and will continue deployment through 2022 as protocol and requirements related to the COVID-19 pandemic allow.

The Company is evaluating flexible work strategies for its on-site workforce, such as virtual on-boarding and training, to help our employees balance their personal and professional lives.

Also, we continued to enhance our benefits offerings with access to wellness tools, on-site vaccine clinics, mental health support resources and delivery of at-home testing kits.

In addition, as COVID-19 vaccines were broadly distributed and administered in 2021, including the one developed by Johnson & Johnson, we adopted policies in the U.S., Puerto Rico, and certain other countries to require proof of vaccination from Johnson & Johnson employees and contingent workers, in order to return to our sites, where permitted by local law and regulation.

and Puerto Rico, this requirement took effect on October 4, 2021, with processes established for granting accommodations to those with medical or religious needs.

Select manufacturing and distribution employees and contractors in the U.S.

and Puerto Rico, as well as certain additional countries, are adopting similar policies through early 2022.

supporting employees with benefits and well-being tools.

The Company continues to address our employees needs through J&J Flex, a hybrid model that empowers the Company’s office-based employees to find the right productivity and balance of in-person and remote work.

Available Information

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Therefore, we encourage investors and others interested in the Company to review the information posted to these websites in conjunction with www.jnj.com, the Company's SEC filings, press releases, public conference calls and webcasts.

In addition, the Amended and Restated Certificate of Incorporation, By-Laws, the written charters of the Audit Committee, the Compensation & Benefits Committee, the Nominating & Corporate Governance Committee, the Regulatory Compliance Committee, the Science, Technology & Sustainability Committee and any special committee of the Board of Directors and the Company’s Principles of Corporate Governance, Code of Business Conduct (for employees), Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers, and other corporate governance materials, are available at www.investor.jnj.com/gov.cfm on the Company's website and will be provided without charge to any shareholder submitting a written request, as provided above.

In addition, the Amended and Restated Certificate of Incorporation, By-Laws, the written charters of the Audit Committee, the Compensation & Benefits Committee, the Nominating & Corporate Governance Committee, the Regulatory Compliance & Sustainability Committee, the Science & Technology Committee and any special committee of the Board of Directors and the Company’s Principles of Corporate Governance, Code of Business Conduct (for employees), Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers, and other corporate governance materials, are available at www.investor.jnj.com/gov.cfm on the Company's website and will be provided without charge to any shareholder submitting a written request, as provided above.

The information on www.jnj.com , www.factsaboutourprescriptionopioids.com, www.factsabouttalc.com and www.LTLManagementInformation.com is not, and will not be deemed, a part of this Report or incorporated into any other filings the Company makes with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business