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What changed in Johnson & Johnson's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Johnson & Johnson's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+279 added−262 removedSource: 10-K (2023-02-16) vs 10-K (2022-02-17)

Top changes in Johnson & Johnson's 2023 10-K

279 paragraphs added · 262 removed · 205 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

42 edited+15 added−14 removed31 unchanged
Biggest changeKey products in the Pharmaceutical segment include: REMICADE ® (infliximab), a treatment for a number of immune-mediated inflammatory diseases; SIMPONI ® (golimumab), a subcutaneous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis, active ankylosing spondylitis and moderately active to severely active ulcerative colitis; SIMPONI ARIA ® (golimumab), an intravenous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis and active ankylosing spondylitis and active polyarticular juvenile idiopathic arthritis (pJIA) in people 2 years of age and older; STELARA ® (ustekinumab), a treatment for adults and children with moderate to severe plaque psoriasis, for adults with active psoriatic arthritis, for adults with moderately to severely active Crohn's disease and treatment of moderately to severely active ulcerative colitis; 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 1 for attention deficit hyperactivity disorder; INVEGA SUSTENNA ® /XEPLION ® (paliperidone palmitate), for the treatment of schizophrenia and schizoaffective disorder in adults; INVEGA TRINZA ® /TREVICTA ® (paliperidone palmitate), for the treatment of schizophrenia in patients after they have been adequately treated with INVEGA SUSTENNA ® for at least four months; 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; ERLEADA ® (apalutamide), a next-generation androgen receptor inhibitor for the treatment of patients with prostate cancer; IMBRUVICA ® (ibrutinib), a treatment for certain B-cell malignancies, or blood cancers and chronic graft versus host disease; DARZALEX ® (daratumumab), a treatment for multiple myeloma; 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; INVOKANA ® (canagliflozin), for the treatment of adults with type 2 diabetes; INVOKAMET ® /VOKANAMET ® (canagliflozin/metformin HCl), a combination therapy of fixed doses of canagliflozin and metformin hydrochloride for the treatment of adults with type 2 diabetes; and INVOKAMET ® XR (canagliflozin/metformin hydrochloride extended-release), a once-daily, fixed-dose combination therapy of canagliflozin and metformin hydrochloride extended-release, for the treatment of adults with type 2 diabetes; OPSUMIT ® (macitentan) as monotherapy or in combination, indicated for the long-term treatment of pulmonary arterial hypertension (PAH); UPTRAVI ® (selexipag), the only approved oral and intravenous, selective IP receptor agonist targeting a prostacyclin pathway in PAH.
Biggest changeKey products in the Pharmaceutical segment include: REMICADE (infliximab), a treatment for a number of immune-mediated inflammatory diseases; SIMPONI (golimumab), a subcutaneous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis, active ankylosing spondylitis and moderately active to severely active ulcerative colitis; SIMPONI ARIA (golimumab), an intravenous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis and active ankylosing spondylitis and active polyarticular juvenile idiopathic arthritis (pJIA) in people 2 years of age and older; STELARA (ustekinumab), a treatment for adults and children with moderate to severe plaque psoriasis, for adults with active psoriatic arthritis, for adults with moderately to severely active Crohn's disease and treatment of moderately to severely active ulcerative colitis; TREMFYA (guselkumab), a treatment for adults with moderate to severe plaque psoriasis and active psoriatic arthritis; 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; INVEGA SUSTENNA/XEPLION (paliperidone palmitate), for the treatment of schizophrenia and schizoaffective disorder in adults; INVEGA TRINZA/TREVICTA (paliperidone palmitate), for the treatment of schizophrenia in patients after they have been adequately treated with INVEGA SUSTENNA for at least four months; RISPERDAL CONSTA (risperidone long-acting injection), for the treatment of schizophrenia and the maintenance treatment of Bipolar 1 Disorder in adults; ZYTIGA 1 (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; IMBRUVICA (ibrutinib), a treatment for certain B-cell malignancies, or blood cancers and chronic graft versus host disease; DARZALEX (daratumumab), a treatment for multiple myeloma; DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), a treatment for multiple myeloma and light chain (AL) Amyloidosis; 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; INVOKANA (canagliflozin), for the treatment of adults with type 2 diabetes; INVOKAMET/VOKANAMET (canagliflozin/metformin HCl), a combination therapy of fixed doses of canagliflozin and metformin hydrochloride for the treatment of adults with type 2 diabetes; and INVOKAMET XR (canagliflozin/metformin hydrochloride extended-release), a once-daily, fixed-dose combination therapy of canagliflozin and metformin hydrochloride extended-release, for the treatment of adults with type 2 diabetes; OPSUMIT (macitentan) as monotherapy or in combination, indicated for the long-term treatment of pulmonary arterial hypertension (PAH); UPTRAVI (selexipag), the only approved oral and intravenous, selective IP receptor agonist targeting a prostacyclin pathway in PAH.
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 Company considers these trademarks in the aggregate to be of material importance in the operation of its businesses. Seasonality 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. This reflects increased spending decisions, principally for advertising and research and development activity.
The Company considers these trademarks in the aggregate to be of material importance in the operation of its businesses. Seasonality Worldwide sales do not reflect any significant degree of seasonality; 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.
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.
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 4 COVID-19 pandemic and Brexit that may affect sourcing, supply and pricing of materials used in the Company's products.
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.
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—ensure employee health protection for emerging health risks.
Accordingly, the patents related to this product are believed to be material to the Company. Janssen Biotech, Inc., a wholly-owned subsidiary of Johnson & Johnson, owns patents specifically related to STELARA ® . The latest expiring United States composition of matter patent expires in 2023. The latest expiring European composition of matter patent expires in 2024.
Accordingly, the patents related to this product are believed to be material to the 2 Company. Janssen Biotech, Inc., a wholly-owned subsidiary of Johnson & Johnson, owns patents specifically related to STELARA . The latest expiring United States composition of matter patent expires in 2023. The latest expiring European composition of matter patent expires in 2024.
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.
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.
Item 1. BUSINESS General Johnson & Johnson and its subsidiaries (the Company) have approximately 141,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. Johnson & Johnson is a holding company, with operating companies conducting business in virtually all countries of the world.
Item 1. BUSINESS General Johnson & Johnson and its subsidiaries (the Company) have approximately 152,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. Johnson & Johnson is a holding company, with operating companies conducting business in virtually all countries of the world.
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.
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.
Each subsidiary within the business segments is, with limited exceptions, managed by residents of the country where located. Segments of Business The Company is organized into three business segments: Consumer Health, Pharmaceutical and Medical Devices. Additional information required by this item is incorporated herein by reference to the narrative and tabular descriptions of segments and operating results under: “Item 7.
Each subsidiary within the business segments is, with limited exceptions, managed by residents of the country where located. Segments of Business The Company is organized into three business segments: 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: “Item 7.
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.
Culture and Employee Engagement 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.
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.
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).
Pharmaceutical 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).
This Committee oversees and coordinates the activities of the Company's three business segments: Consumer Health, Pharmaceutical and Medical Devices. Within the strategic parameters provided by the Committee, senior management groups at U.S. and international operating companies are each responsible for their own strategic plans and the day-to-day operations of those companies.
This Committee oversees and coordinates the activities of the Company's three business segments: 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. and international operating companies are each responsible for their own strategic plans and the day-to-day operations of those companies.
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.
Baby Care includes the JOHNSON’S ® and AVEENO Baby ® line of products. Oral Care includes the LISTERINE ® product line. Major brands in Women’s Health outside of North America are STAYFREE ® and CAREFREE ® sanitary pads and o.b. ® tampon brands. Wound Care brands include the BAND-AID ® Brand Adhesive Bandages and NEOSPORIN ® First Aid product lines.
Oral Care includes the LISTERINE product line. Major brands in Women’s Health outside of North America are STAYFREE and CAREFREE sanitary pads and o.b. tampon brands. Wound Care brands include the BAND-AID Brand Adhesive Bandages and NEOSPORIN First Aid product lines.
Significant legal proceedings and 2 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 9.7% of the Company's total revenues for fiscal 2021.
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.
Sales of the Company’s second largest product, collectively DARZALEX ® (daratumumab) and DARZALEX FASPRO ® (daratumumab and hyaluronidase-fihj), accounted for approximately 6.4% of the Company's total revenues for fiscal 2021. Accordingly, the patents related to this product are believed to be material to the Company.
Sales of the Company’s second largest product, collectively DARZALEX (daratumumab) and DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), accounted for approximately 8.4% of the Company's total revenues for fiscal 2022. Accordingly, the patents related to this product are believed to be material to the Company.
Over-the-Counter (OTC) medicines include the broad family of TYLENOL ® acetaminophen products; SUDAFED ® cold, flu and allergy products; BENADRYL ® and ZYRTEC ® allergy products; MOTRIN ® IB ibuprofen products; NICORETTE ® smoking cessation products outside the U.S.; ZARBEE’S ® products, inspired by nature, and the PEPCID ® line of acid reflux products.
Over-the-Counter (OTC) medicines include the broad family of TYLENOL acetaminophen products; SUDAFED cold, flu and allergy products; BENADRYL and ZYRTEC allergy products; MOTRIN IB ibuprofen products; NICORETTE smoking cessation products outside the U.S.; ZARBEE’S products, inspired by nature, and the PEPCID line of acid reflux products. Baby Care includes the JOHNSON’S and AVEENO Baby line of products.
Employee data may not include full population from more recently acquired companies and individuals on long-term disability are excluded. Contingent workers, contractors and subcontractors are also excluded. 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.
Employee data may not include full population from more recently acquired companies and individuals on long-term disability are excluded. 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.
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.
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.
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.
Many of these medicines were developed in collaboration with strategic partners or are licensed from other companies and maintain active lifecycle development programs. MedTech 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.
In some cases, the Company’s subsidiaries may deem it advisable to initiate product recalls. The U.S. FDA and regulatory agencies around the globe are also increasing their enforcement activities. If the U.S.
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. The U.S. FDA and regulatory agencies around the globe are also increasing their enforcement activities. If the U.S.
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). The Company's voluntary turnover rate was 8%.
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%.
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.
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.
The duration and severity of the COVID-19 pandemic is unpredictable and difficult to assess. 4 Employees and Human Capital Management As of January 2, 2022 and January 3, 2021, the number of employees were approximately: 2021 2020 Employees 1 144,300 136,400 Full-time equivalent (FTE) positions 2 141,700 134,500 1 “Employee” is defined as an individual working full-time or part-time, excluding fixed term employees, interns and co-op employees.
Employees and Human Capital Management As of January 1, 2023, and January 2, 2022, the number of employees were approximately: 2022 2021 Employees 1 155,800 144,300 Full-time equivalent (FTE) positions 2 152,700 141,700 1 “Employee” is defined as an individual working full-time or part-time, excluding fixed term employees, interns and co-op employees.
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.
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 prices, profits, overutilization and the quality and costs of healthcare generally.
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; 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.
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 benefits and well-being tools.
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.
Various transparency laws and regulations require disclosures of payments and other transfers of value made to physicians and teaching hospitals and, beginning with disclosures in 2022, to certain non-physician practitioners. 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.
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.
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 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.
The Company's objective is to foster a learning culture that helps shape each person’s unique career path while creating a robust pipeline of talent to deliver on the Company’s long-term strategies. 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.
Growth and Development To continue to lead in the changing healthcare landscape, it is crucial that the Company continue to attract and retain top talent. The Company believes that its employees must be equipped with the right knowledge and skills and be provided with opportunities to grow and develop in their careers.
The Company believes that its employees must be equipped with the right knowledge and skills and be provided with opportunities to grow and develop in their careers. Accordingly, professional development programs and educational resources are available to all employees.
Geographic Areas Johnson & Johnson and its subsidiaries (the Company) have approximately 141,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. 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 Company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being.
The new medical device regulatory framework and the new privacy regulations in Europe and in other countries are examples of such increased regulation. 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.
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 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.
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. 6 Available Information The Company’s main corporate website address is www.jnj.com .
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 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.
The Surgery portfolios include advanced and general surgery offerings (Ethicon), solutions that focus on Breast Aesthetics (Mentor), and Ear, Nose and Throat (Acclarent) procedures. Johnson & Johnson Vision products include ACUVUE Brand contact lenses and ophthalmic technologies related to cataract and laser refractive surgery.
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.
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.
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.
These products are marketed to the general public and sold online (eCommerce) and to retail outlets and distributors throughout the world.
Diversity, Equity, and Inclusion (DEI) 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. The Company’s DEI vision is: Be yourself, change the world .
Diversity, Equity, and Inclusion (DEI) The Company is committed to workplace diversity and to cultivating, fostering, and advancing a culture of equity and inclusion.
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 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.
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.
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.
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. Geographic Areas Johnson & Johnson and its subsidiaries (the Company) have approximately 152,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field.
There is increased focus on interactions and financial relationships between healthcare companies and healthcare providers. Various transparency laws and regulations require disclosures of payments and other transfers of value made to physicians and teaching hospitals and, beginning with disclosures in 2022, to certain non-physician practitioners.
Laws and regulations have been enacted to require adherence to strict compliance standards and prevent fraud and abuse in the healthcare industry. There is increased focus on interactions and financial relationships between healthcare companies and healthcare providers.
Removed
The Company is targeting completion of the planned separation in 18 to 24 months after initial announcement.
Added
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.
Removed
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. Laws and regulations have been enacted to require adherence to strict compliance standards and prevent fraud and abuse in the healthcare industry.
Added
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.
Removed
U.S. government actors continue efforts to repeal, modify, or invalidate provisions of the Patient Protection and Affordable Care Act (the ACA) which passed in 2010.
Added
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. Five U.S. 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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
Pending resolution of the litigation, all of the ACA but the individual mandate to buy health insurance remains in effect. The U.S. 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.
Added
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.
Removed
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. The U.S. FDA and other health authorities have shifted resources and priorities to meet the many challenges presented by the pandemic.
Added
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.
Removed
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.
Added
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.
Removed
Accordingly, professional development programs and educational resources 5 5 are available to all employees. The Company's objective is to foster a learning culture that helps shape each person’s unique career path while creating a robust pipeline of talent to deliver on the Company’s long-term strategies.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
These processes also are subject to complex and lengthy regulatory approvals.
Removed
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.
Added
In 2022, 92% of global employees across 77 countries participated in Our Credo Survey which was offered in 36 languages . 5 Growth and Development To continue to lead in the changing healthcare landscape, it is crucial that the Company continue to attract and retain top talent.
Removed
In the U.S. and Puerto Rico, this requirement took effect on October 4, 2021, with processes established for granting accommodations to those with medical or religious needs.
Added
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.
Removed
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. 6 Available Information The Company’s main corporate website address is www.jnj.com .
Added
The Company’s DEI Mission is: Make diversity, equity and inclusion how we work everyday .
Added
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

30 edited+19 added−3 removed90 unchanged
Biggest changeSales of the Company’s Pharmaceutical and Medical Devices products are significantly affected by reimbursements by third-party payers such as government healthcare programs, private insurance plans and managed care organizations. As part of various efforts to contain healthcare costs, these payers are putting downward pressure on prices at which products will be reimbursed.
Biggest changeRisks Related to Government Regulation and Legal Proceedings Global sales in the Company’s Pharmaceutical and MedTech segments may be negatively impacted by healthcare reforms and increasing pricing pressures. 9 Sales of the Company’s Pharmaceutical and MedTech products are significantly affected by reimbursements by third-party payers such as government healthcare programs, private insurance plans and managed care organizations.
The Company has established privacy compliance programs and controls that our businesses worldwide are required to comply with, but with many technology and data-driven initiatives being prioritized across the Company and involving multiple vendors and third parties, there are potential risks of controls imposed on cross border data flows, unauthorized access, and loss of personal data through internal and external threats that could impact our business operations and research activities.
The Company has established privacy compliance programs and controls that our businesses worldwide are required to comply with, but with many technology and data-driven initiatives being prioritized across the Company and involving multiple vendors and third parties, there are potential risks of controls imposed on cross border data flows, unauthorized access, and loss of personal data through internal and external threats that could impact our business operations and research activities. 15
The most significant current investigations and litigation brought by government agencies are described in Note 19, “Legal Proceedings—Government Proceedings” under Notes to the Consolidated Financial Statements included in Item 8 of this Report. 10 Changes in tax laws or exposures to additional tax liabilities could negatively impact the Company’s operating results.
The most significant current investigations and litigation brought by government agencies are described in Note 19, “Legal Proceedings—Government Proceedings” under Notes to the Consolidated Financial Statements included in Item 8 of this Report. Changes in tax laws or exposures to additional tax liabilities could negatively impact the Company’s operating results.
The Company’s business is heavily regulated and therefore involves significant interaction with foreign officials. Also, in many countries outside the U.S., the healthcare providers who prescribe human pharmaceuticals are employed by the government and the purchasers of human pharmaceuticals are government entities; 12 therefore, the Company’s interactions with these prescribers and purchasers are subject to regulation under the FCPA.
The Company’s business is heavily regulated and therefore involves significant interaction with foreign officials. Also, in many countries outside the U.S., the healthcare providers who prescribe human pharmaceuticals are employed by the government and the purchasers of human pharmaceuticals are government entities; therefore, the Company’s interactions with these prescribers and purchasers are subject to regulation under the FCPA.
To date, the Company has not experienced any material impact to the business or operations resulting from information or cybersecurity attacks; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there is the potential for the Company to be adversely 14 impacted.
To date, the Company has not experienced any material impact to the business or operations resulting from information or cybersecurity attacks; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there is the potential for the Company to be adversely impacted.
In addition, effective succession planning is important to our long-term success. Any unsuccessful implementation of our succession plans or failure to ensure effective transfer of knowledge and smooth transitions involving key employees could adversely affect our business, financial condition, or results of operations.
In addition, effective succession planning is important to our long-term success. Any unsuccessful implementation of our succession plans or failure to ensure effective transfer of 14 knowledge and smooth transitions involving key employees could adversely affect our business, financial condition, or results of operations.
In addition to the U.S. application and enforcement of the FCPA, various jurisdictions in which the Company operates have laws and regulations, including the U.K. Bribery Act 2010, aimed at preventing and penalizing corrupt and anticompetitive behavior.
In addition to the U.S. application and enforcement of the FCPA, various jurisdictions in which the Company operates have laws 12 and regulations, including the U.K. Bribery Act 2010, aimed at preventing and penalizing corrupt and anticompetitive behavior.
The Company has accounted for operations in Argentina and Venezuela as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%. While the Company strives to maintain profit margins in these areas through cost reduction programs, productivity improvements and periodic price increases, it might experience operating losses as a result of continued inflation.
Specifically, the Company has accounted for operations in Argentina, Turkey and Venezuela as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%. While the Company strives to maintain profit margins in these areas through cost reduction programs, productivity improvements and periodic price increases, it might experience operating losses as a result of continued inflation.
Development of successful 11 products and technologies is also necessary to offset revenue losses when the Company’s existing products lose market share due to various factors such as competition and loss of patent exclusivity. New products introduced within the past five years accounted for approximately 25% of 2021 sales.
Development of successful products and technologies is also necessary to offset revenue losses when the Company’s existing products lose market share due to various factors such as competition and loss of patent exclusivity. New products introduced within the past five years 11 accounted for approximately 25% of 2022 sales.
The Company’s manufacture of products requires the timely delivery of sufficient amounts of complex, high-quality components and materials. The Company’s subsidiaries operate 85 manufacturing facilities as well as sourcing from thousands of suppliers around the world.
The Company’s manufacture of products requires the timely delivery of sufficient amounts of complex, high-quality components and materials. The Company’s subsidiaries operate 89 manufacturing facilities as well as sourcing from thousands of suppliers around the world.
For the Company’s Medical Devices businesses, technological innovation, product quality, reputation and customer service are especially important to competitiveness. Development by other companies of new or improved products, processes and technologies could threaten to make the Company’s products or technologies less desirable, less economical or obsolete.
For the Company’s MedTech businesses, technological innovation, product quality, reputation and customer service are especially important to competitiveness. Development by other companies of new or improved products, processes and technologies could threaten to make the Company’s products or technologies less desirable, less economical or obsolete.
The COVID-19 pandemic has adversely impacted, and is expected to continue to adversely impact, certain aspects of the Company’s business, results of operations and financial condition, including lower sales and reduced customer demand and usage of certain of our products.
The COVID-19 pandemic has adversely impacted, and may continue to adversely impact, certain aspects of the Company’s business, results of operations and financial condition, including lower sales and reduced customer demand and usage of certain of our products.
We also face uncertainties related to our COVID-19 vaccine, including uncertainties related to the risk that our continued development programs may not be successful, commercially viable or receive approval from regulatory authorities; risks associated with clinical trial and real-world data, including further analyses of its efficacy, safety and durability; the risk that data are subject to differing interpretations and assessments, including during the peer review/publication process, in the scientific community generally, and by national immunization technical advisory groups (NITAGs) and regulatory authorities; disruptions in the relationships between us, our third-party suppliers and external manufacturers; the risk that other companies may produce superior or competitive products; the risk that demand for any products we may develop may no longer exist; risks related to the availability of raw materials to manufacture any such products; the risk that we may not be able to recoup costs associated with our R&D and manufacturing efforts and risks associated with any changes in the way we approach or provide additional research funding for potential drug development related to COVID-19; the risk that we may not be able to create or scale up manufacturing capacity on a timely basis, that we may continue to experience manufacturing delays once a manufacturing site is activated, or have access to logistics or supply channels commensurate with global demand for any potential approved vaccine or product candidate, which would negatively impact our ability to supply the estimated numbers of doses of our vaccine within the projected time periods indicated, and other challenges and risks associated with the pace of our vaccine development program; and pricing and access challenges for such products, including in the U.S.
We also face uncertainties related to our vaccine development programs, including uncertainties related to the risk that our continued development programs may not be successful, commercially viable or receive approval from regulatory authorities; risks associated with clinical trial and real-world data, including further analyses of its efficacy, safety and durability; the risk that continued evolution and mutation of disease and the duration of a particular outbreak may impede our ability to conduct trials within a specified time frame; the risk that data are subject to differing interpretations and assessments, including during the peer review/publication process, in the scientific community generally, and by national immunization technical advisory groups (NITAGs) and regulatory authorities; disruptions in the relationships between us, our third-party suppliers, external manufacturers, and other third parties with whom we engage; the risk that other companies may produce superior or competitive products; the risk that demand for any products we may develop may no longer exist; risks related to the availability of raw materials to manufacture any such products; the risk that we may not be able to recoup costs associated with our R&D and manufacturing efforts and risks associated with any changes in the way we approach or provide additional research funding for potential drug development; the risk that we may not be able to create or scale up manufacturing capacity on a timely basis, that we may continue to experience manufacturing delays once a manufacturing site is activated, or have access to logistics or supply channels commensurate with global demand for any potential approved vaccine or product candidate, which would negatively impact our ability to supply the estimated numbers of doses of our vaccine within the projected time periods indicated, and other challenges and risks associated with the pace of our vaccine development program; and pricing and access challenges for such products, including in the U.S.
The costs to complete the planned separation will be significant. In addition, the Company may be unable to achieve some or all of the strategic and financial benefits that it expects to achieve from the planned separation of the Company’s Consumer Health business. The Company will incur significant expenses in connection with the planned separation.
The costs to complete the planned separation will be significant. In addition, the Company may be unable to achieve some or all of the strategic and financial benefits that it expects to achieve from the planned separation of the Company’s Consumer Health business. The Company has incurred, and is expected to incur, significant expenses in connection with the planned separation.
Foreign Currency Exchange : In fiscal 2021, approximately 50% of the Company’s sales occurred outside of the U.S., with approximately 25% in Europe, 6% in the Western Hemisphere, excluding the U.S., and 19% in the Asia-Pacific and Africa region. Changes in non-U.S. currencies relative to the U.S. dollar impact the Company’s revenues and expenses.
Foreign Currency Exchange : In fiscal 2022, approximately 49% of the Company’s sales occurred outside of the U.S., with approximately 25% in Europe, 6% in the Western Hemisphere, excluding the U.S., and 18% in the Asia-Pacific and Africa region. Changes in non-U.S. currencies relative to the U.S. dollar impact the Company’s revenues and expenses.
While the U.S. and other countries have begun or will begin to reopen their economies, the extent to which COVID-19 will impact the Company’s future operations will depend on many factors which cannot be predicted with confidence, including the duration of the outbreak and impact of variants.
While the U.S. and other countries have substantially reopened their economies, the extent to which COVID-19, or other health crises, could impact the Company’s future operations will depend on many factors which cannot be predicted with confidence, including the duration of an outbreak and impact of variants.
The Company continues to monitor the situation and while we have robust business continuity plans in place across our global supply chain network to help mitigate the impact of COVID-19, these efforts may not completely prevent our business from being adversely affected and future impacts remain uncertain.
While the Company has robust business continuity plans in place across our global supply chain network to help mitigate the impact of health crises, these efforts may not completely prevent our business from being adversely affected and future impacts remain uncertain.
Completion of the planned separation will be subject to the satisfaction of certain conditions, including, among others, consultations with works councils and other employee representative bodies, as required, final approval of the Company’s Board of Directors, receipt of a favorable opinion and Internal Revenue Service (“IRS”) ruling with respect to the tax-free nature of the transaction, and the receipt of other regulatory approvals.
Completion of the planned separation will be subject to the satisfaction of certain conditions, including, among others, consultations with works councils and other employee representative bodies, as required, final approval by the Company’s Board of Directors, the continuing effectiveness and validity of the Company's private letter ruling from the Internal Revenue Service (“IRS”) and receipt of favorable opinions of the Company's U.S. tax advisors with respect to the tax-free nature of the transaction, and the receipt of other regulatory approvals.
We are subject to risks associated with global health crises, epidemics and pandemics, including the global outbreak of coronavirus and its variants (COVID-19).
We are subject to risks associated with global health crises, epidemics, pandemics and other outbreaks (such incident(s), a health crisis or health crises), including the global outbreak of coronavirus and its variants (COVID-19).
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 planned separation is intended to qualify as a tax-free transaction for U.S. federal income tax purposes. 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, with the intention to create a standalone publicly traded company, which was subsequently named Kenvue, Inc. ("Kenvue"). The planned separation is intended to qualify as a tax-free transaction for U.S. federal income tax purposes. The Company is targeting completion of the planned separation in 2023.
The spread of COVID-19 has caused the Company to modify its business practices (including instituting remote work for many of the Company’s employees), and the Company may take further actions as may be required by government authorities or as the Company determines are in the best interests of our patients, customers, employees and business partners.
The continued spread of COVID-19 or other health crises may cause the Company to modify its business practices, and take further actions as may be required by government authorities or as the Company determines are in the best interests of our patients, customers, employees and business partners.
Changes in tax laws or regulations around the world, including in the U.S. and as led by the Organization for Economic Cooperation and Development, could negatively impact the Company’s effective tax rate and results of operations.
Changes in tax laws or regulations around the world, including in the U.S. and as led by the Organization for Economic Cooperation and Development, such as the recent adoption by the EU, enactment by South Korea and the anticipated enactment 10 by additional countries of a global minimum tax, could negatively impact the Company’s effective tax rate and results of operations.
In addition, diversion of our products from their authorized market into other channels may result in reduced revenues and negatively affect our profitability. The COVID-19 pandemic has adversely impacted certain aspects of the Company’s business and could cause disruptions or future impact to the Company’s business, results of operations and financial condition.
In addition, diversion of our products from their authorized market into other channels may result in reduced revenues and negatively affect our profitability. Global health crises, pandemics, epidemics, or other outbreaks could adversely disrupt or impact certain aspects of the Company’s business, results of operations and financial condition.
In addition, the price of the Company’s common stock may be more volatile around the time of the planned separation. The planned separation could result in substantial tax liability. The Company intends to obtain an opinion from its U.S. tax advisors and a ruling from the IRS as to the tax-free nature of the planned separation under the U.S.
In addition, the price of the Company’s common stock may be more volatile around the time of the planned separation. The planned separation could result in substantial tax liability. The Company has received a private letter ruling from the IRS as to the tax-free nature of the planned separation under the U.S. Internal Revenue Code of 1986, as amended.
In addition, the Company may not be able to achieve the full strategic and financial benefits that are expected to result from the planned separation.
In addition, the Company may not be able to achieve the full strategic and financial benefits that are expected to result from the planned separation. The anticipated benefits of the planned separation are based on a number of assumptions, some of which may prove incorrect.
In the U.S., increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, in part due to continued consolidation among healthcare providers, could result in further pricing pressures. In addition, increased political scrutiny could result in additional pricing pressures.
As part of various efforts to contain healthcare costs, these payers are putting downward pressure on prices at which products will be reimbursed. In the U.S., increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, in part due to continued consolidation among healthcare providers, could result in further pricing pressures.
Internal Revenue Code of 1986, as amended. The opinion and ruling will be based on, among other things, various factual assumptions and representations that the Company and the New Consumer Health Company will make regarding the past and future conduct of the companies’ respective businesses and other matters.
The private letter ruling and opinions will be based on, among other things, various facts, assumptions, representations and undertakings from the Company and Kenvue regarding the past and future conduct of the companies’ respective businesses and other matters.
If any of these assumptions or representations are, or become, inaccurate or incomplete, reliance on the opinion and ruling may be jeopardized. If subsequent to the planned separation it is determined that the transaction does not qualify for tax-free treatment for U.S. federal income tax purposes, the resulting tax liability to the Company and its shareholders could be substantial.
Notwithstanding the private letter ruling and opinions of tax advisors, if subsequent to the planned separation the IRS determines that certain steps of the transaction do not qualify for tax-free treatment for U.S. federal income tax purposes, the resulting tax liability to the Company and its shareholders could be substantial.
Any resurgence in COVID-19 could result in the imposition of new mandates and prolonged restrictive measures implemented in order to control the spread of the disease. The continued global spread of COVID-19 could adversely impact the Company’s operations, including, among other things, our manufacturing operations, supply chain, including third-party suppliers, sales and marketing and clinical trial operations.
The global spread of COVID-19 or other health crises could adversely impact the Company’s operations, including, among other things, our manufacturing operations, supply chain, third-party suppliers, sales and marketing, and clinical trial operations. Any of these factors could adversely affect the Company’s business, financial results, and global economic conditions generally.
The anticipated benefits of the planned separation are based on a number of assumptions, some of which may prove incorrect. 13 Following the planned separation, the price of shares of the Company’s common stock may fluctuate significantly.
Following the planned separation, the price of shares of the Company’s common stock may fluctuate significantly.
Removed
Any of these factors could adversely affect the Company’s business, financial results, and global economic conditions generally.
Added
A surge in COVID-19 or other health crises could result in the imposition of new mandates and prolonged restrictive measures implemented in order to control the spread of disease.
Removed
In addition, to the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section and those incorporated by reference herein, i ncluding risks relating to the Company’s effective tax rate as a result of changes in consumption as well as changes in laws relating to supply of the Company’s products .
Added
In addition, recent legislation and ongoing political scrutiny or pricing, coverage and reimbursement could result in additional pricing pressures. Specifically, the Inflation Reduction Act of 2022 (IRA) may subject certain products to government-established pricing, potentially impose rebates, and subject manufacturers who fail to adhere to the government's interpretations of the law to penalties.
Removed
Given that developments concerning the COVID-19 pandemic have been constantly evolving, additional impacts and risks may arise, including litigation, that are not presently known to the Company. 9 Risks Related to Government Regulation and Legal Proceedings Global sales in the Company’s Pharmaceutical and Medical Devices segments may be negatively impacted by healthcare reforms and increasing pricing pressures.
Added
The Russia-Ukraine War, and actions taken in response to the Russia-Ukraine War, could adversely affect our business, results of operations or financial condition. In February 2022, Russia launched a military invasion of Ukraine.
Added
The ongoing Russia-Ukraine War has provoked strong reactions from the United States, the United Kingdom, the European Union and various other countries and economic and political organizations around the world.
Added
We have been monitoring the geopolitical situation in Russia since the start of the Russia-Ukraine War and have suspended additional investment, enrollment of clinical trials, and supply of our personal care products in Russia.
Added
We continue to monitor the need for humanitarian relief in the region and continue to supply our medicines, medical devices and equipment in the region in compliance with the applicable sanctions. We will continue to monitor the geopolitical situation in Russia and to evaluate our activities and future operations in Russia.
Added
Actions taken in response to the Russia-Ukraine War include the imposition of export controls and broad financial and economic sanctions against Russia, Belarus and specific areas of Ukraine.
Added
Additional sanctions or other measures may be imposed by the global community, including but not limited to limitations on our ability to file, prosecute and maintain patents, trademarks and other intellectual property rights.
Added
Furthermore, the Russian government has already taken action allowing Russian companies and individuals to exploit inventions owned by patent holders from the United States and many other countries without consent or compensation and we may not be able to prevent third parties from practicing our inventions in Russia or from selling or importing products in and into Russia.
Added
We have experienced, and expect to continue to experience, other risks related to the broad economic consequences of the Russia-Ukraine War, including foreign currency volatility, decreased demand for our products in countries affected by the Russia-Ukraine War and challenges to our global supply chain related to increased costs of materials and other inputs for our products and suppliers operating in Russia and Ukraine.
Added
We also continue to monitor the various sanctions and export controls imposed in response to the Russia-Ukraine War. The full impact of the Russia-Ukraine War, and actions taken in response to the ongoing conflict, on the global economy and geopolitical relations, in general, and on our business in particular, remain uncertain.
Added
Any or all of the foregoing risks could 13 have an adverse effect on our business, results of operations or financial condition, particularly as the conflict continues for an indefinite period of time. Given that developments concerning the Russia-Ukraine War are ongoing and have been constantly evolving, additional impacts and risks may arise that are not presently known to us.
Added
The Russia-Ukraine War may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
Added
The planned separation is conditioned on, among other things, the continuing effectiveness and validity of the Company's private letter ruling from the IRS and receipt of favorable opinions of the Company's U.S. tax advisors.
Added
If any of these facts, assumptions, representations or undertakings are incorrect or not otherwise satisfied, the Company and its shareholders may not be able to rely on the ruling or the opinions of tax advisors.
Added
As a result of the Russia-Ukraine War, there has been, and we expect there will continue to be, an increased risk of information security or cybersecurity incidents, including cyberattacks perpetrated by Russia or others at its direction.
Added
Although we have taken steps to enhance our protections against these attacks, we may not be able to address the threat of information security or cybersecurity incidents proactively or implement adequate preventative measures and we may not be able to detect and address any such disruption or security breach promptly, or at all, which could adversely affect our business, results of operations or financial condition.
Added
Moreover, we are aware of incidents in which our third-party partners have been the target of information security or cybersecurity incidents as a result of the Russia-Ukraine War.
Added
Although, to date, our IT Systems have not been compromised by these incidents, it is possible that future information security or cybersecurity incidents involving our customers, manufacturers, suppliers or other third-party partners could successfully compromise our IT Systems, which could adversely affect our business, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

6 edited+0 added−3 removed0 unchanged
Biggest changeFDA inspections of the facilities which have been delayed due to COVID-19 were completed and the Consent Decree was vacated in July of 2021. Segment information on additions to property, plant and equipment is contained in Note 17 “Segments of Business and Geographic Areas” of the Notes to Consolidated Financial Statements included in Item 8 of this Report. 16
Biggest changeSegment information on additions to property, plant and equipment is contained in Note 17 “Segments of Business and Geographic Areas” of the Notes to Consolidated Financial Statements included in Item 8 of this Report.
The Company's subsidiaries generally seek to own, rather than lease, their manufacturing facilities, although some, principally in non-U.S. locations, are leased. Office and warehouse facilities are often leased. The Company also engages contract manufacturers. The Company is committed to maintaining all of its properties in good operating condition. McNEIL-PPC, Inc.
The Company's subsidiaries generally seek to own, rather than lease, their manufacturing facilities, although some, principally in non-U.S. locations, are leased. Office and warehouse facilities are often leased. The Company also engages contract manufacturers. The Company is committed to maintaining all of its properties in good operating condition.
Outside of the U.S., 23 facilities are used by the Consumer Health segment, 13 by the Pharmaceutical segment and 23 by the Medical Devices segment.
Outside of the U.S., 23 facilities are used by the Consumer Health segment, 13 by the Pharmaceutical segment and 25 by the MedTech segment.
The locations of the manufacturing facilities by major geographic areas of the world are as follows: Geographic Area Number of Facilities Square Feet (in thousands) United States 26 4,233 Europe 25 5,991 Western Hemisphere, excluding U.S. 9 1,733 Africa, Asia and Pacific 25 3,030 Worldwide Total 85 14,987 In addition to the manufacturing facilities discussed above, the Company maintains numerous office and warehouse facilities throughout the world.
The locations of the manufacturing facilities by major geographic areas of the world are as follows: Geographic Area Number of Facilities Square Feet (in thousands) United States 28 4,169 Europe 27 6,016 Western Hemisphere, excluding U.S. 9 1,733 Africa, Asia and Pacific 25 3,030 Worldwide Total 89 14,948 In addition to the manufacturing facilities discussed above, the Company maintains numerous office and warehouse facilities throughout the world.
The manufacturing facilities are used by the industry segments of the Company’s business approximately as follows: Segment Square Feet (in thousands) Consumer Health 4,562 Pharmaceutical 5,517 Medical Devices 4,908 Worldwide Total 14,987 Within the U.S., four facilities are used by the Consumer Health segment, five by the Pharmaceutical segment and 17 by the Medical Devices segment.
The manufacturing facilities are used by the industry segments of the Company’s business approximately as follows: Segment Square Feet (in thousands) Consumer Health 4,562 Pharmaceutical 5,456 MedTech 4,930 Worldwide Total 14,948 Within the U.S., four facilities are used by the Consumer Health segment, five by the Pharmaceutical segment and 19 by the MedTech segment.
Item 2. PROPERTIES The Company's subsidiaries operate 85 manufacturing facilities occupying approximately 15.0 million square feet of floor space.
Item 2. PROPERTIES The Company's subsidiaries operate 89 manufacturing facilities occupying approximately 14.9 million square feet of floor space.
Removed
(now Johnson & Johnson Consumer Inc.) (McNEIL-PPC) operated under a consent decree, signed in 2011 with the U.S. FDA, which governed certain McNeil Consumer Healthcare manufacturing operations, and required McNEIL-PPC to remediate the facilities it operates in Lancaster, Pennsylvania, Fort Washington, Pennsylvania, and Las Piedras, Puerto Rico (the “Consent Decree”). Following U.S.
Removed
FDA inspections McNEIL-PPC received notifications from the U.S FDA that all three manufacturing facilities were in conformity with applicable laws and regulations, and commercial production restarted in 2015. Under the Consent Decree, after receiving notice from the U.S.
Removed
FDA of being in compliance with applicable laws and regulations, each of the three facilities was subject to a five-year audit period by a third-party cGMP expert. A third-party expert continued to reassess the sites at various times through 2020. U.S.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

16 edited+5 added−8 removed15 unchanged
Biggest changeIn 2014, she was promoted to Vice President, Johnson & Johnson Supply Chain. In July 2018, she was promoted to Executive Vice President, Chief Global Supply Chain Officer, and became a member of the Executive Committee. Ms. Wengel has enterprise-wide responsibilities for Supply Chain, Quality & Compliance, Procurement, Engineering & Property Services, Environmental Health & Safety and Sustainability. (l) Mr.
Biggest changeIn 2018, she was named Executive Vice President, Chief Global Supply 18 Chain Officer, and became a member of the Executive Committee. In January 2023, she was appointed Executive Vice President, Chief Technical Operations & Risk Officer. Ms.
McEvoy joined the Company in 1996 as Assistant Brand Manager of McNeil Consumer Health, a subsidiary of the Company, advancing through positions of increasing responsibilities until she was appointed Company Group Chairman, Vision Care in 2012, followed by Company Group Chairman, Consumer Medical Devices in 2014. In July 2018, Ms.
A. McEvoy joined the Company in 1996 as Assistant Brand Manager of McNeil Consumer Health, a subsidiary of the Company, advancing through positions of increasing responsibilities until she was appointed Company Group Chairman, Vision Care in 2012, followed by Company Group Chairman, Consumer Medical Devices in 2014. In July 2018, Ms.
J. J. Wolk joined the Company in 1998 as Finance Manager, Business Development for Ortho-McNeil, a subsidiary of the Company, and through the years held a variety of senior leadership roles in several segments and functions across the Company's subsidiaries, in Pharmaceuticals, Medical Devices and Supply Chain.
Wolk joined the Company in 1998 as Finance Manager, Business Development for Ortho-McNeil, a subsidiary of the Company, and through the years held a variety of senior leadership roles in several segments and functions across the Company's subsidiaries, in Pharmaceuticals, Medical Devices and Supply Chain.
Item 4. MINE SAFETY DISCLOSURES Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT Listed below are the executive officers of the Company. There are no family relationships between any of the executive officers, and there is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected.
Item 4. MINE SAFETY DISCLOSURES Not applicable. 16 EXECUTIVE OFFICERS OF THE REGISTRANT Listed below are the executive officers of the Company. There are no family relationships between any of the executive officers, and there is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected.
Director IT and Vice President, Chief Information Officer. Mr. Swanson is 18 responsible for enhancing Johnson & Johnson’s business impact and shaping its direction through the strategic use of technology. Mr. Swanson, Executive Vice President, Chief Information Officer, joined the Executive Committee effective January 3, 2022. (i) Ms. J. L.
Director IT and Vice President, Chief Information Officer. Mr. Swanson is responsible for enhancing Johnson & Johnson’s business impact and shaping its direction through the strategic use of technology. Mr. Swanson, Executive Vice President, Enterprise Chief Information Officer, joined the Executive Committee effective January 3, 2022. (i) Ms. J. L.
Fasolo has responsibility for global talent, recruiting, diversity, compensation benefits, employee relations and all aspects of the human resources agenda for the Company. He also serves on the Boards of the Human Resources Policy Association, Tufts University and Save the Children and was named a Fellow of the National Academy of Human Resources in 2017. (d) Dr. W.
Fasolo has responsibility for global talent, recruiting, diversity, compensation, benefits, employee relations and all aspects of the human resources agenda for the Company. He also serves on the Boards of the Human Resources Policy Association, Tufts University and Save the Children and was named a Fellow of the National Academy of Human Resources in 2017. (d) Ms.
As a dual citizen of Spain and the United States, Mr. Duato's international perspective and global lens gives him a deep appreciation of diverse thoughts and opinions. (c) Dr. P. M. Fasolo joined the Company in 2004 as Worldwide Vice President, Human Resources in the Medical Devices segment, and subsequently served as the Company’s Chief Talent Officer.
As a dual citizen of Spain and the United States, Mr. Duato's international perspective and global lens gives him a deep appreciation of diverse thoughts and opinions. 17 (c) Dr. P. M. Fasolo joined the Company in 2004 as Worldwide Vice President, Human Resources in the MedTech segment, and subsequently served as the Company’s Chief Talent Officer.
McEvoy was promoted to Executive Vice President, Worldwide Chairman, Medical Devices, and became a member of the Executive Committee. Ms. McEvoy has responsibility for the surgery, orthopaedics, interventional solutions and eye health businesses across Ethicon, DePuy Synthes, Biosense Webster and Johnson & Johnson Vision. (g) Mr. T.
McEvoy was promoted to Executive Vice President, Worldwide Chairman, MedTech, and became a member of the Executive Committee. Ms. McEvoy has responsibility for the surgery, orthopaedics, interventional solutions and eye health businesses across Ethicon, DePuy Synthes, Biosense Webster, Abiomed, and Johnson & Johnson Vision. (g) Mr. T.
Taubert is responsible for the Pharmaceutical sector globally, including shaping the company’s strategy of transformational medical innovation and for successfully bringing to market critical new medicines that significantly improve the lives of patients living with cancer, immune-related diseases, cardiovascular disease, infectious diseases, pulmonary hypertension and serious mental illness. (j) Mr. M. H.
Taubert is responsible for the Pharmaceutical sector globally, including shaping the company’s strategy of transformational medical innovation and for successfully bringing to market critical new medicines that significantly improve the lives of patients living with cancer, immune-related diseases, cardiovascular disease, infectious diseases, pulmonary hypertension and serious mental illness. (j) Ms. K. E.
(Spain), a subsidiary of the Company, and held executive positions of increasing responsibility in all business sectors and across multiple geographies and functions. In 2009, he was named Company Group Chairman, Pharmaceuticals, and in 2011, he was named Worldwide Chairman, Pharmaceuticals. In 2016, Mr.
He joined the Company in 1989 with Janssen-Farmaceutica S.A. (Spain), a subsidiary of the Company, and held executive positions of increasing responsibility in all business sectors and across multiple geographies and functions. In 2009, he was named Company Group Chairman, Pharmaceuticals, and in 2011, he was named Worldwide Chairman, Pharmaceuticals. In 2016, Mr.
Election of Directors” in the Proxy Statement. Name Age Position Vanessa Broadhurst 53 Member, Executive Committee; Executive Vice President, Global Corporate Affairs (a) Joaquin Duato 59 Chief Executive Officer; Chairman, Executive Committee (b) Peter M. Fasolo, Ph.D. 59 Member, Executive Committee; Executive Vice President, Chief Human Resources Officer (c) William N. Hait, M.D., Ph.
Election of Directors” in the Proxy Statement. Name Age Position Vanessa Broadhurst 54 Member, Executive Committee; Executive Vice President, Global Corporate Affairs (a) Joaquin Duato 60 Chairman of the Board; Chief Executive Officer (b) Peter M.
Broadhurst was named Executive Vice President, Global Corporate Affairs and a 17 member of the Executive Committee, leading the Company's global marketing, communication, design and philanthropy functions. (b) Mr. J. Duato became Chief Executive Officer and Chairman of the Executive Committee and joined the Board of Directors in January 2022. He joined the Company in 1989 with Janssen-Farmaceutica S.A.
Broadhurst was named Executive Vice President, Global Corporate Affairs and a member of the Executive Committee, leading the Company's global marketing, communication, Global Public Health and philanthropy functions. (b) Mr. J. Duato became Chairman of the Board of Directors in January 2023 subsequent to his appointment as Chief Executive Officer and a Director in January 2022.
D. 54 Member, Executive Committee; Executive Vice President, Pharmaceuticals, R&D (e) Ashley McEvoy 51 Member, Executive Committee; Executive Vice President, Worldwide Chairman, Medical Devices (f) Thibaut Mongon 52 Member, Executive Committee, Executive Vice President, Worldwide Chairman, Consumer Health (g) James Swanson 56 Member, Executive Committee; Executive Vice President, Chief Information Officer (h) Jennifer L.
D. 73 Member, Executive Committee; Executive Vice President, Chief External Innovation and Medical Safety Officer; Interim Head Janssen R&D (e) Ashley McEvoy 52 Member, Executive Committee; Executive Vice President, Worldwide Chairman, MedTech (f) Thibaut Mongon 53 Member, Executive Committee, Executive Vice President, Worldwide Chairman, Consumer Health (g) James Swanson 57 Member, Executive Committee; Executive Vice President, Chief Information Officer (h) Jennifer L.
During her tenure with the Company, she has held a variety of strategic leadership and executive positions across the global enterprise, in roles within operations, quality, engineering, new products, information technology, and other technical and business functions. In 2010, Ms. Wengel became the first Chief Quality Officer of the Company.
Wengel joined the Company in 1988 as Project Engineer and Engineering Supervisor at Janssen, a subsidiary of the Company. During her tenure with the Company, she has held a variety of strategic leadership and executive positions, including in roles within operations, quality, engineering, new products, information technology, and other technical and business functions.
Taubert 58 Member, Executive Committee; Executive Vice President, Worldwide Chairman, Pharmaceuticals (i) Michael H. Ullmann 63 Member, Executive Committee; Executive Vice President, General Counsel (j) Kathryn E. Wengel 56 Member, Executive Committee; Executive Vice President, Chief Global Supply Chain Officer (k) Joseph J. Wolk 55 Member, Executive Committee; Executive Vice President, Chief Financial Officer (l) (a) Ms. V.
Taubert 59 Member, Executive Committee; Executive Vice President, Worldwide Chairman, Pharmaceuticals (i) Kathryn E. Wengel 57 Member, Executive Committee; Executive Vice President, Chief Technical Operations & Risk Officer (j) Joseph J. Wolk 56 Member, Executive Committee; Executive Vice President, Chief Financial Officer (k) (a) Ms. V.
He also has oversight over Global Public Health and the Office of the Chief Medical Officer. (e) Dr. M. Mammen joined the Company in 2017 as Global Head of R&D at the Janssen Pharmaceutical Companies of Johnson & Johnson. Prior to joining Janssen in June 2017, Dr.
He also has oversight over Global Public Health and the Office of the Chief Medical Officer. As Interim Head of Janssen R&D, Dr. Hait's mission is to focus the best research and development teams in the world at the intersection of unmet medical need and breakthroughs in science and technology to make medicines with benefit for patients worldwide. (f) Ms.
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D. 72 Member, Executive Committee; Executive Vice President, Chief External Innovation, Medical Safety and Global Public Health Officer (d) Mathai Mammen, Ph.
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Fasolo, Ph.D. 60 Member, Executive Committee; Executive Vice President, Chief Human Resources Officer (c) Elizabeth Forminard 52 Member, Executive Committee; Executive Vice President, General Counsel (d) William N. Hait, M.D., Ph.
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Mammen was Senior Vice President at Merck Research Laboratories, responsible for research in the areas of Cardiovascular, Metabolic and Renal Diseases, Oncology/lmmuno-Oncology and Immunology. Prior to Merck, he led R&D at Theravance, a company he co-founded in the San Francisco Bay Area in 1997 based on his work at Harvard University.
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Elizabeth Forminard joined the Company in 2006 as Vice President, Law, Consumer Healthcare Global Business Unit and continued to serve in roles of increasing responsibility. In 2012, she was promoted to General Counsel, Medical Devices & Diagnostics and became General Counsel, Consumer Group & Supply Chain in 2013. She was appointed Worldwide Vice President, Corporate Governance in 2016.
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In 2022, he was named as Executive Vice President, Pharmaceuticals R&D, and a member of the Executive Committee.
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From 2019 to 2022, she served as General Counsel, Pharmaceuticals. In October 2022, she was named Executive Vice President, General Counsel and became a member of the Executive Committee. Ms. Forminard has worldwide responsibility for the legal and privacy functions, and leads the development and execution of the Company's environment, social and governance strategy. (e) Dr. W.
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He is responsible for a team whose mission is to make transformational medicines with unequivocal benefit for patients worldwide, working across a wide range of therapeutic areas and biological pathways in the areas of: Oncology, Cardiovascular and Metabolic Disease, Retinal Disease, Pulmonary Hypertension, Immunology, Neuroscience and Infectious Disease and Vaccines.
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Wengel has enterprise-wide responsibilities for key technical operations functions, including Procurement, Engineering & Property Services, Sustainability and cross-sector Supply Chain teams focused on standards, services, strategic programs and data science, and serves as Chair of the Company’s Supply Chain Management Committee.
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These Therapeutic Areas are fueled by world-class Global Functions in Discovery Sciences and Manufacturing, Regulatory Affairs, Development Operations and Data Science. (f) Ms. A.
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She also oversees critical risk functions, including Quality & Compliance, Health Care Compliance, Environmental Health & Safety, Global Security and Global Brand Protection. (k) Mr. J. J.
Removed
Ullmann joined the Company in 1989 as a corporate attorney in the Law Department. He was appointed Corporate Secretary in 1998 and served in that role until 2006. During that time, he also held various management positions in the Law Department.
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In 2006, he was named General Counsel, Medical Devices and Diagnostics and was appointed Vice President, General Counsel and became a member of the Executive Committee in 2012. In April 2016, Mr. Ullmann was named Executive Vice President, General Counsel. Mr.
Removed
Ullmann has worldwide responsibility for legal, government affairs & policy, global security, aviation, healthcare compliance, global brand protection and privacy. (k) Ms. K. E. Wengel joined the Company in 1988 as Project Engineer and Engineering Supervisor at Janssen, a subsidiary of the Company.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePrice Paid Per Share Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 4, 2021 through October 31, 2021 549,068 $ 163.78 - - November 1, 2021 through November 28, 2021 100,000 163.23 - - November 29, 2021 through January 2, 2022 5,391,956 165.09 - - Total 6,041,024 (1) During the fiscal fourth quarter of 2021, the Company repurchased an aggregate of 6,041,024 shares of Johnson & Johnson Common Stock in open-market transactions, all of which were purchased in open-market transactions as part of a systematic plan to meet the needs of the Company’s compensation programs.
Biggest changePrice Paid Per Share Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (3) October 3, 2022 through October 30, 2022 3,921,949 $ 165.29 3,179,491 - October 31, 2022 through November 27, 2022 1,444,006 173.26 - - November 28, 2022 through January 1, 2023 2,379,100 178.18 - - Total 7,745,055 3,179,491 13,876,567 (1) During the fiscal fourth quarter of 2022, the Company repurchased an aggregate of 7,745,055 shares of Johnson & Johnson Common Stock in open-market transactions, of which 3,179,491 shares were purchased pursuant to the repurchase program that was publicly announced on September 14, 2022, and of which 4,565,564 shares were purchased as part of a systematic plan to meet the needs of the Company’s compensation programs.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of February 10, 2022, there were 127,899 record holders of common stock of the Company.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of February 10, 2023, there were 124,211 record holders of common stock of the Company.
Additional information called for by this item is incorporated herein by reference to the following sections of this Report: Note 16 “Common Stock, Stock Option Plans and Stock Compensation Agreements” of the Notes to Consolidated Financial Statements included in Item 8; and Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Equity Compensation Plan Information.” Issuer Purchases of Equity Securities The following table provides information with respect to common stock purchases by the Company during the fiscal fourth quarter of 2021.
Additional information called for by this item is incorporated herein by reference to the following sections of this Report: Note 16 “Common Stock, Stock Option Plans and Stock Compensation Agreements” of the Notes to Consolidated Financial Statements included in Item 8; and Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Equity Compensation Plan Information.” Issuer Purchases of Equity Securities On September 14, 2022, the Company announced that its Board of Directors approved a share repurchase program, authorizing the Company to purchase up to $5.0 billion of the Company's Common Stock.
Added
Share repurchases may be made at management’s discretion from time to time on the open market or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. The following table provides information with respect to common stock purchases by the Company during the fiscal fourth quarter of 2022.
Added
(2) As of January 1, 2023, an aggregate of 15,411,776 shares were purchased for a total of $2.5 billion since the inception of the repurchase program announced on September 14, 2022.
Added
(3) As of January 1, 2023, the maximum number of shares that may yet be purchased under the plan is 13,876,567 based on the closing price of Johnson & Johnson Common Stock on the New York Stock Exchange on December 30, 2022 of $176.65 per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeMajor Pharmaceutical Therapeutic Area Sales*: % Change (Dollars in Millions) 2021 2020 ’21 vs. ’20 Total Immunology $ 16,750 15,055 11.3 % REMICADE ® 3,190 3,747 (14.9) SIMPONI ® /SIMPONI ARIA ® 2,276 2,243 1.4 STELARA ® 9,134 7,707 18.5 TREMFYA ® 2,127 1,347 57.9 Other Immunology 24 11 ** Total Infectious Diseases 5,861 3,574 64.0 COVID-19 VACCINE 2,385 — ** EDURANT ® /rilpivirine 994 964 3.1 PREZISTA ® / PREZCOBIX ® /REZOLSTA ® /SYMTUZA ® 2,083 2,184 (4.6) Other Infectious Diseases 399 427 (6.5) Total Neuroscience 7,011 6,548 7.1 CONCERTA ® /methylphenidate 667 622 7.3 INVEGA SUSTENNA ® /XEPLION ® /INVEGA TRINZA ® /TREVICTA ® 4,022 3,653 10.1 RISPERDAL CONSTA ® 592 642 (7.7) Other Neuroscience 1,729 1,632 6.0 Total Oncology 14,548 12,367 17.6 DARZALEX ® 6,023 4,190 43.8 ERLEADA ® 1,291 760 70.0 IMBRUVICA ® 4,369 4,128 5.8 ZYTIGA ® /abiraterone acetate 2,297 2,470 (7.0) Other Oncology (1) 568 821 (30.8) Total Pulmonary Hypertension 3,450 3,148 9.6 OPSUMIT ® 1,819 1,639 11.0 UPTRAVI ® 1,237 1,093 13.1 Other Pulmonary Hypertension 395 416 (5.0) Total Cardiovascular / Metabolism / Other 4,460 4,878 (8.6) XARELTO ® 2,438 2,345 4.0 INVOKANA ® / INVOKAMET ® 563 795 (29.3) PROCRIT ® /EPREX ® 479 552 (13.3) Other 981 1,186 (17.3) Total Pharmaceutical Sales $ 52,080 45,572 14.3 % *Certain prior year amounts have been reclassified to conform to current year presentation ** Percentage greater than 100% or not meaningful (1) Inclusive of VELCADE ® which was previously disclosed separately 24 Immunology products achieved sales of $16.8 billion in 2021, representing an increase of 11.3% as compared to the prior year driven by strong uptake of STELARA ® (ustekinumab) in Crohn's disease and Ulcerative Colitis and strength in TREMFYA ® (guselkumab) in Psoriasis and uptake in Psoriatic Arthritis.
Biggest changeMajor Pharmaceutical Therapeutic Area Sales*: Total Operations Currency (Dollars in Millions) 2022 2021 Change Change Change Total Immunology $ 16,935 16,750 1.1 % 4.8 % (3.7) % REMICADE 2,343 3,190 (26.6) (25.3) (1.3) SIMPONI/SIMPONI ARIA 2,184 2,276 (4.0) 1.0 (5.0) STELARA 9,723 9,134 6.5 10.4 (3.9) TREMFYA 2,668 2,127 25.4 30.1 (4.7) Other Immunology 17 24 (28.2) (28.2) 0.0 Total Infectious Diseases 5,449 5,825 (6.5) 0.8 (7.3) COVID-19 VACCINE 2,179 2,385 (8.6) 2.0 (10.6) EDURANT/rilpivirine 1,008 994 1.5 11.8 (10.3) PREZISTA/ PREZCOBIX/REZOLSTA/ SYMTUZA 1,943 2,083 (6.7) (4.4) (2.3) Other Infectious Diseases (2) 318 363 (12.3) (7.2) (5.1) Total Neuroscience 6,893 6,988 (1.4) 3.4 (4.8) CONCERTA/methylphenidate 644 667 (3.5) 4.1 (7.6) INVEGA SUSTENNA/XEPLION/ INVEGA TRINZA/TREVICTA 4,140 4,022 3.0 6.9 (3.9) RISPERDAL CONSTA 485 592 (18.1) (13.0) (5.1) Other Neuroscience (2) 1,623 1,706 (4.9) 0.4 (5.3) Total Oncology 15,983 14,548 9.9 16.9 (7.0) DARZALEX 7,977 6,023 32.4 39.5 (7.1) ERLEADA 1,881 1,291 45.7 53.0 (7.3) IMBRUVICA 3,784 4,369 (13.4) (7.6) (5.8) ZYTIGA /abiraterone acetate 1,770 2,297 (22.9) (13.6) (9.3) Other Oncology 571 568 0.6 6.0 (5.4) Total Pulmonary Hypertension 3,417 3,450 (1.0) 3.0 (4.0) OPSUMIT 1,783 1,819 (2.0) 2.6 (4.6) UPTRAVI 1,322 1,237 6.9 8.6 (1.7) Other Pulmonary Hypertension 313 395 (20.8) (13.1) (7.7) Total Cardiovascular / Metabolism / Other 3,887 4,119 (5.6) (4.0) (1.6) XARELTO 2,473 2,438 1.4 1.4 — INVOKANA/ INVOKAMET 448 563 (20.4) (17.2) (3.2) Other (1,2) 966 1,119 (13.6) (9.3) (4.3) Total Pharmaceutical Sales $ 52,563 51,680 1.7 % 6.7 % (5.0) % *Certain prior year amounts have been reclassified to conform to current year presentation (1) Inclusive of PROCRIT / EPREX which was previously disclosed separately (2) Fiscal 2021 reflects approximately $0.4 billion of certain international OTC products, primarily in China, which were reclassified from the Pharmaceutical segment to the Consumer Health segment based on operational changes 24 Immunology products achieved sales of $16.9 billion in 2022, representing an increase of 1.1% as compared to the prior year.
Employees are empowered and inspired to lead with the Company’s Our Credo and purpose as guides. This allows every employee to use the Company’s reach and size to advance the Company's purpose, and to also lead with agility and urgency. Leveraging the extensive resources across the enterprise enables the Company to innovate and execute with excellence.
Employees are empowered and inspired to lead with Our Credo and purpose as guides. This allows every employee to use the Company’s reach and size to advance the Company’s purpose, and to also lead with agility and urgency. Leveraging the extensive resources across the enterprise enables the Company to innovate and execute with excellence.
The sales returns reserve for the total Company has been approximately 1.0% of annual net trade sales during the fiscal years 2021 and 2020. Promotional programs, such as product listing allowances and cooperative advertising arrangements, are recorded in the same period as related sales. Continuing promotional programs include coupons and volume-based sales incentive programs.
The sales returns reserve for the total Company has been approximately 1.0% of annual net trade sales during the fiscal years 2022, 2021 and 2020. Promotional programs, such as product listing allowances and cooperative advertising arrangements, are recorded in the same period as related sales. Continuing promotional programs include coupons and volume-based sales incentive programs.
The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25.
The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based 38 on new information and further developments in accordance with ASC 450-20-25.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Organization and Business Segments Description of the Company and Business Segments Johnson & Johnson and its subsidiaries (the Company) have approximately 141,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Organization and Business Segments Description of the Company and Business Segments Johnson & Johnson and its subsidiaries (the Company) have approximately 152,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field.
The Pharmaceutical segment is focused on six therapeutic areas, including Immunology, Infectious diseases, Neuroscience, Oncology, Pulmonary Hypertension, and Cardiovascular and Metabolic diseases. Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use.
The Pharmaceutical segment is focused on the following therapeutic areas, including Immunology, Infectious diseases, Neuroscience, Oncology, Pulmonary Hypertension, and Cardiovascular and Metabolic diseases. Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use.
The Company is broadly based in human healthcare, and is committed to creating value by developing accessible, high quality, innovative products and services. New products introduced within the past five years accounted for approximately 25% of 2021 sales.
The Company is broadly based in human healthcare, and is committed to creating value by developing accessible, high quality, innovative products and services. New products introduced within the past five years accounted for approximately 25% of 2022 sales.
A 1% change in the spread between U.S. and foreign interest rates on the Company’s interest rate sensitive financial instruments would either increase or decrease the unrealized value of the Company’s swap contracts by approximately $2.2 billion.
A 1% change in the spread between U.S. and foreign interest rates on the Company’s interest rate sensitive financial instruments would either increase or decrease the unrealized value of the Company’s swap contracts by approximately $1.7 billion.
This ensures the Company can remain focused on addressing the unmet needs of society every day and invest for an enduring impact, ultimately delivering value to its patients, consumers and healthcare professionals, employees, communities and shareholders. 21 Results of Operations Analysis of Consolidated Sales For discussion on results of operations and financial condition pertaining to the fiscal years 2020 and 2019 see the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2021, Item 7.
This ensures the Company can remain focused on addressing the unmet needs of society every day and invest for an enduring impact, ultimately delivering value to its patients, consumers and healthcare professionals, employees, communities and shareholders. 21 Results of Operations Analysis of Consolidated Sales For discussion on results of operations and financial condition pertaining to the fiscal years 2021 and 2020 see the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2022, Item 7.
Tax Cuts and Job Act of 2017 currently requires the Company to deduct U.S. and international research and development expenditures for tax purposes over 5 to 15 years, instead of in the current fiscal year.
Tax Cuts and Job Act of 2017 (TCJA) requires the Company to deduct U.S. and international research and development expenditures for tax purposes over 5 to 15 years, instead of in the current fiscal year.
In 2021, the Company recorded a pre-tax charge of $0.5 billion, which is included on the following lines of the Consolidated Statement of Earnings, $0.3 billion in restructuring, $0.1 billion in other (income) expense and $0.1 billion in cost of products sold. Total project costs of approximately $1.8 billion have been recorded since the restructuring was announced.
In 2022, the Company recorded a pre-tax charge of $0.5 billion, which is included on the following lines of the Consolidated Statement of Earnings, $0.3 billion in restructuring, $0.1 billion in other (income) expense and $0.1 billion in cost of products sold. Total project costs of approximately $2.2 billion have been recorded since the restructuring was announced.
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 Company is organized into three business segments: Consumer Health, Pharmaceutical and Medical Devices.
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 Company is organized into three business segments: Consumer Health, Pharmaceutical and MedTech.
Sales returns in the Consumer Health and Pharmaceutical segments are almost exclusively not resalable. Sales returns for certain franchises in the Medical Devices segment are typically resalable but are not material. The Company infrequently exchanges products from inventory for returned products.
Sales returns in the Consumer Health and Pharmaceutical segments are almost exclusively not resalable. Sales returns for certain franchises in the MedTech segment are typically resalable but are not material. The Company infrequently exchanges products from inventory for returned products.
The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. As of January 2, 2022, the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated.
The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. As of January 1, 2023, the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated.
See Note 1 to the Consolidated Financial Statements for additional details on cash, cash equivalents and marketable securities. 31 Cash flow from operations of $23.4 billion was the result of: (Dollars In Billions) $ 20.9 Net Earnings 6.8 non-cash expenses and other adjustments primarily for depreciation and amortization, stock-based compensation and asset write-downs partially offset by the deferred tax provision, net gain on sale of assets/businesses and credit losses and accounts receivable allowances (1.1) a decrease in current and non-current liabilities 2.4 an increase in accounts payable and accrued liabilities (5.6) an increase in accounts receivable, inventories and other current and non-current assets $ 23.4 Cash Flow from operations Investing activities use of $8.7 billion of cash was primarily used for: (Dollars In Billions) $ (3.7) additions to property, plant and equipment (5.4) net purchases of investments 0.7 proceeds from the disposal of assets/businesses, net 0.2 Credit support agreements activity, net (0.1) acquisitions (0.4) other (primarily licenses and milestones) and rounding $ (8.7) Net cash used for investing activities Financing activities use of $14.0 billion of cash was primarily used for: (Dollars In Billions) $ (11.0) dividends to shareholders (3.5) repurchase of common stock for employee share programs (1.0) net repayment from short and long term debt 1.0 proceeds from stock options exercised/employee withholding tax on stock awards, net 0.3 Credit support agreements activity, net 0.2 other and rounding $ (14.0) Net cash used for financing activities As of January 2, 2022, the Company's notes payable and long-term debt was in excess of cash, cash equivalents and marketable securities.
See Note 1 to the Consolidated Financial Statements for additional details on cash, cash equivalents and marketable securities. 31 Cash flow from operations of $21.2 billion was the result of: (Dollars In Billions) $ 17.9 Net Earnings 7.3 non-cash expenses and other adjustments primarily for depreciation and amortization, stock-based compensation and asset write-downs partially offset by the deferred tax provision, net gain on sale of assets/businesses and credit losses and accounts receivable allowances (2.0) a decrease in current and non-current liabilities 0.7 a decrease in other current and non-current assets 1.1 an increase in accounts payable and accrued liabilities (3.8) an increase in accounts receivable and inventories $ 21.2 Cash Flow from operations Investing activities use of $12.4 billion of cash was primarily used for: (Dollars In Billions) $ (4.0) additions to property, plant and equipment (17.7) acquisitions 0.5 proceeds from the disposal of assets/businesses, net 9.2 net sales of investments (0.2) Credit support agreements activity, net (0.2) other (primarily licenses and milestones) and rounding $ (12.4) Net cash used for investing activities Financing activities use of $8.9 billion of cash was primarily used for: (Dollars In Billions) $ (11.7) dividends to shareholders (6.0) repurchase of common stock 7.5 net proceeds from short and long term debt 1.3 proceeds from stock options exercised/employee withholding tax on stock awards, net $ (8.9) Net cash used for financing activities As of January 1, 2023, the Company's notes payable and long-term debt was in excess of cash, cash equivalents and marketable securities.
These sales changes consisted of the following: Sales increase/(decrease) due to: 2021 2020 Volume 12.9 % 3.5 % Price (0.7) (2.3) Currency 1.4 (0.6) Total 13.6 % 0.6 % The net impact of acquisitions and divestitures on the worldwide sales growth was a negative impact of 0.6% in 2021 and a negative impact of 0.3% in 2020.
These sales changes consisted of the following: Sales increase/(decrease) due to: 2022 2021 Volume 6.9 % 12.9 % Price (0.8) (0.7) Currency (4.8) 1.4 Total 1.3 % 13.6 % The net impact of acquisitions and divestitures on the worldwide sales growth was a negative impact of 0.1% in 2022 and a negative impact of 0.6% in 2021.
The five-year compound annual growth rates for worldwide, U.S. and international sales were 5.5%, 4.5% and 6.5%, respectively. The ten-year compound annual growth rates for worldwide, U.S. and international sales were 3.7%, 5.0% and 2.6%, respectively.
The five-year compound annual growth rates for worldwide, U.S. and international sales were 4.4%, 4.0% and 4.9%, respectively. The ten-year compound annual growth rates for worldwide, U.S. and international sales were 3.5%, 5.0% and 2.2%, respectively.
Dollar as compared to all foreign currencies in which the Company had sales, income or expense in 2021 would have increased or decreased the translation of foreign sales by approximately $0.5 billion and net income by approximately $0.2 billion.
Dollar as compared to all foreign currencies in which the Company had sales, income or expense in 2022 would have increased or decreased the translation of foreign sales by approximately $0.5 billion and net income by approximately $0.1 billion.
The Medical Devices segment includes a broad range of products used in the Orthopaedic, Surgery, Interventional Solutions (cardiovascular and neurovascular) and Vision fields. These products are distributed to wholesalers, hospitals and retailers, and used principally in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics.
The MedTech segment includes a broad portfolio of products used in the Orthopaedic, Surgery, Interventional Solutions (cardiovascular and neurovascular) and Vision fields. These products are distributed to wholesalers, hospitals and retailers, and used principally in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics.
In 2021, $14.7 billion was invested in research and development reflecting management’s commitment to create life-enhancing innovations and to create value through partnerships that will profoundly change the trajectory of health for humanity. A critical driver of the Company’s success is the diversity of its 141,700 employees worldwide.
In 2022, $14.6 billion was invested in research and development reflecting management’s commitment to create life-enhancing innovations and to create value through partnerships that will profoundly change the trajectory of health for humanity. A critical driver of the Company’s success is the diversity of its 152,700 employees worldwide.
In 2021, the Company utilized three wholesalers distributing products for all three segments that represented approximately 14.0%, 11.0% and 11.0% of the total consolidated revenues. In 2020, the Company had three wholesalers distributing products for all three segments that represented approximately 16.0%, 12.0% and 12.0% of the total consolidated revenues.
In 2021, the Company had three wholesalers distributing products for all three segments that represented approximately 14.0%, 11.0% and 11.0% of the total consolidated revenues.
As a percent to sales, consolidated earnings before provision for taxes on income was 24.3% and 20.0%, in 2021 and 2020, respectively. (Dollars in billions. Percentages in chart are as a percent to total sales) Cost of Products Sold and Selling, Marketing and Administrative Expenses: (Dollars in billions.
As a percent to sales, consolidated earnings before provision for taxes on income was 22.9% and 24.3%, in 2022 and 2021, respectively. (Dollars in billions. Percentages in chart are as a percent to total sales) Cost of Products Sold and Selling, Marketing and Administrative Expenses: (Dollars in billions.
The primary sources and uses of cash that contributed to the $0.5 billion increase were: (Dollars In Billions) $ 14.0 Q4 2020 Cash and cash equivalents balance 23.4 cash generated from operating activities (8.7) net cash used by investing activities (14.0) net cash used by financing activities (0.2) effect of exchange rate and rounding $ 14.5 Q4 2021 Cash and cash equivalents balance In addition, the Company had $17.1 billion in marketable securities at the end of fiscal year 2021 and $11.2 billion at the end of fiscal year 2020.
The primary sources and uses of cash that contributed to the $0.4 billion decrease were: (Dollars In Billions) $ 14.5 Q4 2021 Cash and cash equivalents balance 21.2 cash generated from operating activities (12.4) net cash used by investing activities (8.9) net cash used by financing activities $ (0.3) effect of exchange rate and rounding $ 14.1 Q4 2022 Cash and cash equivalents balance In addition, the Company had $9.4 billion in marketable securities at the end of fiscal year 2022 and $17.1 billion at the end of fiscal year 2021.
Adjustments to previous sales reserve estimates were approximately $0.7 billion and $0.6 billion in fiscal years 2021 and 2020, respectively.
Adjustments to previous sales reserve estimates were approximately $0.1 billion and $0.7 billion in fiscal years 2022 and 2021, respectively.
Sales by companies in the Western Hemisphere (excluding the U.S.) achieved growth of 7.8% as compared to the prior year, which included operational growth of 7.3% and a positive currency impact of 0.5%.
Sales by companies in the Western Hemisphere, excluding the U.S., achieved growth of 6.5% as compared to the prior year, which included operational growth of 10.2%, and a negative currency impact of 3.7%.
A 1% (100 basis points) change in spread on the Company’s interest rate sensitive investments would either increase or decrease the unrealized value of cash equivalents and current marketable securities by approximately $0.1 billion. The Company has access to substantial sources of funds at numerous banks worldwide. In September 2021, the Company secured a new 364-day Credit Facility.
A 1% (100 basis points) change in spread on the Company’s interest rate sensitive investments would either increase or decrease the unrealized value of cash equivalents and current marketable securities by less than $0.1 billion. The Company has access to substantial sources of funds at numerous banks worldwide.
Note: values may have been rounded 22 Analysis of Sales by Business Segments Consumer Health Segment Consumer Health segment sales in 2021 were $14.6 billion, an increase of 4.1% from 2020, which included 2.8% operational growth and a positive currency impact of 1.3%. U.S. Consumer Health segment sales were $6.5 billion, an increase of 2.4%.
Note: values may have been rounded 22 Analysis of Sales by Business Segments Consumer Health Segment Consumer Health segment sales in 2022 were $15.0 billion, a decrease of 0.5% from 2021, which included 3.6% operational growth and a negative currency impact of 4.1%. U.S. Consumer Health segment sales were $6.6 billion, an increase of 1.3%.
The input assumptions used in determining fair value are the expected life, expected volatility, risk-free rate and expected dividend yield. Prior to fiscal 2020, for performance share units, the fair market value was calculated for each of the three component goals at the date of grant: operational sales, adjusted operational earnings per share and relative total shareholder return.
The input assumptions used in determining fair value are the expected life, expected volatility, risk-free rate and expected dividend yield. For performance share units, the fair market value is calculated for the two component goals at the date of grant: adjusted operational earnings per share and relative total shareholder return.
Common Stock The Company’s Common Stock is listed on the New York Stock Exchange under the symbol JNJ. As of February 10, 2022, there were 127,899 record holders of Common Stock of the Company.
Common Stock The Company’s Common Stock is listed on the New York Stock Exchange under the symbol JNJ. As of February 10, 2023, there were 124,211 record holders of Common Stock of the Company.
The Company acquired all rights to bermekimab from XBiotech, Inc. in fiscal year 2020. Other (Income) Expense, Net: Other (income) expense, net is the account where the Company records gains and losses related to the sale and write-down of certain investments in equity securities held by Johnson & Johnson Innovation - JJDC, Inc.
Other (Income) Expense, Net: Other (income) expense, net is the account where the Company records gains and losses related to the sale and write-down of certain investments in equity securities held by Johnson & Johnson Innovation - JJDC, Inc.
International sales were $8.1 billion, an increase of 5.6%, which included 3.1% operational growth and a positive currency impact of 2.5%. In 2021, acquisitions and divestitures had a net negative impact of 1.0% on the operational sales growth of the worldwide Consumer Health segment.
International sales were $8.4 billion, a decrease of 1.9%, which included 5.3% operational growth and a negative currency impact of 7.2%. In 2022, acquisitions and divestitures had a net negative impact of 0.3% on the operational sales growth of the worldwide Consumer Health segment.
Cash, cash equivalents and marketable securities totaled $31.6 billion at the end of 2021, and averaged $28.4 billion as compared to the cash, cash equivalents and marketable securities total of $25.2 billion and $22.2 billion average cash balance in 2020.
Cash, cash equivalents and marketable securities totaled $23.5 billion at the end of 2022, and averaged $27.6 billion as compared to the cash, cash equivalents and marketable securities total of $31.6 billion and $28.4 billion average cash balance in 2021.
This did not have a material impact to the Company's results in the period. In the face of increasing costs, the Company strives to maintain its profit margins through cost reduction programs, productivity improvements and periodic price increases. The Company is exposed to fluctuations in currency exchange rates. A 1% change in the value of the U.S.
This did not have a material impact to the Company's results in the period. In the face of increasing costs, the Company strives to maintain its profit margins through cost reduction programs, productivity improvements and periodic price increases.
Sales by U.S. companies were $47.2 billion in 2021 and $43.1 billion in 2020. This represents increases of 9.3% in 2021 and 2.5% in 2020. Sales by international companies were $46.6 billion in 2021 and $39.5 billion in 2020. This represents an increase of 18.2% in 2021 and a decrease of 1.3% in 2020.
Sales by U.S. companies were $48.6 billion in 2022 and $47.2 billion in 2021. This represents increases of 3.0% in 2022 and 9.3% in 2021. Sales by international companies were $46.4 billion in 2022 and $46.6 billion in 2021. This represents a decrease of 0.6% in 2022 and an increase of 18.2% in 2021.
In all of its product lines, the Company competes with other companies both locally and globally, throughout the world. Competition exists in all product lines without regard to the number and size of the competing companies involved. Competition in research, involving the development and the improvement of new and existing products and processes, is particularly significant.
Competition exists in all product lines without regard to the number and size of the competing companies involved. Competition in research, involving the development and the improvement of new and existing products and processes, is particularly significant.
The program is set to be completed at the end of 2022. See Note 20 to the Consolidated Financial Statements for additional details related to the restructuring programs. Provision for Taxes on Income: The worldwide effective income tax rate was 8.3% in 2021 and 10.8% in 2020.
The program was completed in the fiscal fourth quarter of 2022. See Note 20 to the Consolidated Financial Statements for additional details related to the restructuring programs. Provision for Taxes on Income: The worldwide effective income tax rate was 17.4% in 2022 and 8.3% in 2021.
The total debt balance at the end of 2021 was $33.8 billion with an average debt balance of $34.5 billion as compared to $35.3 billion at the end of 2020 and an average debt balance of $31.5 billion.
The total debt balance at the end of 2022 was $39.7 billion with an average debt balance of $36.7 billion as compared to $33.8 billion at the end of 2021 and an average debt balance of $34.5 billion.
U.S. sales were $12.7 billion, an increase of 14.9% as compared to the prior year. International sales were $14.4 billion, an increase of 20.6% as compared to the prior year, which included operational growth of 17.3% and a positive currency impact of 3.3%.
U.S. sales were $13.4 billion, an increase of 5.4% as compared to the prior year. International sales were $14.1 billion, a decrease of 2.3% as compared to the prior year, which included operational growth of 6.9% and a negative currency impact of 9.2%.
Management's Discussion and Analysis of Results of Operations and Financial Condition. In 2021, worldwide sales increased 13.6% to $93.8 billion as compared to an increase of 0.6% in 2020.
Management's Discussion and Analysis of Results of Operations and Financial Condition. In 2022, worldwide sales increased 1.3% to $94.9 billion as compared to an increase of 13.6% in 2021.
The increase in the income before tax as a percent of sales was primarily driven by the following: • 2021 litigation expense includes $1.6 billion of talc expenses; 2020 includes $3.9 billion of talc expenses • Supply chain efficiencies partially offset by: • Increased brand marketing expenses and commodity inflation Pharmaceutical Segment: In 2021, the Pharmaceutical segment income before tax as a percent to sales was 34.9% versus 33.9% in 2020.
The increase in the income before tax as a percent of sales was primarily driven by the following: • Lower litigation expense of $0.2 billion in 2022 versus $1.6 billion (primarily talc related) in 2021 • Reduction in brand marketing expenses in 2022 versus 2021 • Supply chain benefits in 2022 partially offset by: • Commodity inflation in 2022 Pharmaceutical Segment: In 2022, the Pharmaceutical segment income before tax as a percent to sales was 30.3% versus 34.8% in 2021.
The Company anticipates that operating cash flows, the ability to raise funds from external sources, borrowing capacity from existing committed credit facilities and access to the commercial paper markets will continue to provide sufficient resources to fund operating needs, including the Company's approximate $1.1 billion in contractual supply commitments associated with its development of the COVID-19 vaccine, the opioid litigation settlement for $5.0 billion and the establishment of the $2.0 billion trust for talc related liabilities (See Note 19 to the Consolidated Financial Statements for additional details).
The Company anticipates that operating cash flows, the ability to raise funds from external sources, borrowing capacity from existing committed credit facilities and access to the commercial paper markets will continue to provide sufficient resources to fund operating needs, including the Company's remaining balance to be paid on the agreement to settle opioid litigation for approximately $2.7 billion and the establishment of the $2.0 billion trust for talc related liabilities (See Note 19 to the Consolidated Financial Statements for additional details).
The Company faces various worldwide healthcare changes that may continue to result in pricing pressures that include healthcare cost containment and government legislation relating to sales, promotions and reimbursement of healthcare products. 38 Changes in the behavior and spending patterns of purchasers of healthcare products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and foregoing healthcare insurance coverage, as a result of the current global economic downturn, may continue to impact the Company’s businesses.
Changes in the behavior and spending patterns of purchasers of healthcare products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and foregoing healthcare insurance coverage, as a result of the current global economic downturn, may continue to impact the Company’s businesses.
The increase in the income before tax as a percent to sales was primarily driven by the following: • Recovery of prior year COVID-19 production related slow downs and related inventory impacts • Overall expense leveraging resulting from the Medical Devices sales recovery • Litigation expense of $0.1 billion in 2021 vs. $0.3 billion in 2020 partially offset by: • A contingent consideration reversal of approximately $1.1 billion in the fiscal 2020 related to the timing of certain developmental milestones associated with the Auris Health acquisition • A higher IPR&D charge of $0.7 billion ($0.9 billion in 2021 related to the general surgery offering in digital robotics (Ottava) acquired with the Auris Health acquisition in 2019) Restructuring: In the fiscal second quarter of 2018, the Company announced plans to implement actions across its Global Supply Chain that are intended to enable the Company to focus resources and increase investments in critical capabilities, technologies and solutions necessary to manufacture and supply its product portfolio of the future, enhance agility and drive growth.
The increase in the income before tax as a percent to sales was primarily driven by the following: • An IPR&D charge of $0.9 billion in 2021 related to the general surgery offering in digital robotics (Ottava) acquired with the Auris Health acquisition in 2019 partially offset by: • Higher litigation related expense of $0.6 billion in 2022, primarily related to pelvic mesh costs versus $0.1 billion in 2021 • Acquisition related costs of $0.3 billion in 2022 related to the Abiomed acquisition versus $0.1 billion in 2021 Restructuring: In the fiscal second quarter of 2018, the Company announced plans to implement actions across its Global Supply Chain that are intended to enable the Company to focus resources and increase investments in critical capabilities, technologies and solutions necessary to manufacture and supply its product portfolio of the future, enhance agility and drive growth.
International sales were $24.1 billion, an increase of 21.6%, which included 18.8% operational growth and a positive currency impact of 2.8%. In 2021, acquisitions and divestitures had a net negative impact of 0.5% on the operational sales growth of the worldwide Pharmaceutical segment.
U.S. sales were $28.6 billion, an increase of 2.3%. International sales were $24.0 billion, an increase of 1.0%, which included 11.9% operational growth and a negative currency impact of 10.9%. In 2022, acquisitions and divestitures had a net negative impact of 0.1% on the operational sales growth of the worldwide Pharmaceutical segment.
Contributors to the growth were strong sales of DARZALEX ® (daratumumab) driven by continued strong market growth, share gains in all regions and solid uptake of the subcutaneous formulation launched in 2020; the continued global launch uptake of ERLEADA ® (apalutamide) and IMBRUVICA ® (ibrutinib) growth primarily driven by market and continued share leadership.
Contributions to operational growth were strong sales of DARZALEX (daratumumab) driven by share gains in all regions, continued strong market growth, and uptake of the subcutaneous formulation as well as the continued global launch uptake of ERLEADA (apalutamide).
Total credit available to the Company approximates $10 billion, which expires on September 8, 2022. Interest charged on borrowings under the credit line agreement is based on either Secured Overnight Financing Rate (SOFR) Reference Rate or other applicable market rate as allowed plus applicable margins. Commitment fees under the agreement are not material.
Interest charged on borrowings under the credit line agreement is based on either Secured Overnight Financing Rate (SOFR) Reference Rate or other applicable market rate as allowed plus applicable margins. Commitment fees under the agreement are not material. Total borrowings at the end of 2022 and 2021 were $39.7 billion and $33.8 billion, respectively.
These arrangements provide the Company with future supplemental commercial capacity for vaccine production and potentially transferable rights to such production if capacity is not required.
These arrangements provided the Company with supplemental commercial capacity for vaccine production and potentially transferable rights to such production if capacity is not required. The Company continues to evaluate and monitor both its internal and external supply arrangements.
This was partially offset by lower sales of REMICADE ® (infliximab) due to biosimilar competition. Biosimilar versions of REMICADE ® have been introduced in the United States and certain markets outside the United States and additional competitors continue to enter the market. Continued infliximab biosimilar competition will result in a further reduction in sales of REMICADE ® .
Biosimilar versions of REMICADE have been introduced in the United States and certain markets outside the United States and additional competitors continue to enter the market. Continued infliximab biosimilar competition will result in a further reduction in sales of REMICADE. The latest expiring United States patent for STELARA (ustekinumab) will expire in September 2023.
Long-Lived and Intangible Assets: The Company assesses changes, both qualitatively and quantitatively, in economic conditions and makes assumptions regarding estimated future cash flows in evaluating the value of the Company’s property, plant and equipment, goodwill and intangible assets.
See Notes 1 and 19 to the Consolidated Financial Statements for further information regarding product liability and legal proceedings. 36 Long-Lived and Intangible Assets: The Company assesses changes, both qualitatively and quantitatively, in economic conditions and makes assumptions regarding estimated future cash flows in evaluating the value of the Company’s property, plant and equipment, goodwill and intangible assets.
This was partially offset by lower sales of PREZISTA ® and PREZCOBIX ® /REZOLSTA ® (darunavir/cobicistat) due to increased competition and loss of exclusivity of PREZISTA ® in certain countries outside the U.S. Neuroscience products achieved sales of $7.0 billion, representing an increase of 7.1% as compared to the prior year.
Operational growth was driven by the COVID-19 vaccine outside the U.S partially offset by lower sales of PREZISTA and PREZCOBIX/REZOLSTA (darunavir/cobicistat) due to increased competition and loss of exclusivity of PREZISTA in certain countries outside the U.S. Neuroscience products sales were $6.9 billion, in 2022, representing a decline of 1.4% as compared to the prior year.
Sales growth of OPSUMIT ® (macitentan) and UPTRAVI ® (selexipag) were due to continued share gains and market growth. Cardiovascular/Metabolism/Other products sales were $4.5 billion, a decline of 8.6% as compared to the prior year.
The operational sales growth of OPSUMIT (macitentan) and UPTRAVI (selexipag) due to continued share gains and market growth was offset by COVID-19 related impacts and continued declines in Other Pulmonary Hypertension. Cardiovascular/Metabolism/Other products sales were $3.9 billion, a decline of 5.6% as compared to the prior year.
In either scenario, the gain or loss on the forward contract would be offset by the gain or loss on the underlying transaction, and therefore, would have no impact on future anticipated earnings and cash flows.
Dollar from the January 1, 2023 market rates would decrease the unrealized value of the Company’s forward contracts by $0.1 billion. In either scenario, the gain or loss on the forward contract would be offset by the gain or loss on the underlying transaction, and therefore, would have no impact on future anticipated earnings and cash flows.
Dollar from the January 2, 2022 market rates would increase the unrealized value of the Company’s forward contracts by $0.1 billion. Conversely, a 10% depreciation of the U.S. Dollar from the January 2, 2022 market rates would decrease the unrealized value of the Company’s forward contracts by $0.1 billion.
Gains or losses on these contracts are offset by the gains or losses on the underlying transactions. A 10% appreciation of the U.S. Dollar from the January 1, 2023 market rates would increase the unrealized value of the Company’s forward contracts by $0.1 billion. Conversely, a 10% depreciation of the U.S.
Research and Development increased as a percent to sales primarily driven by: • General portfolio progression in the Pharmaceutical business • COVID-19 vaccine expenses, net of governmental reimbursements In-Process Research and Development (IPR&D): In fiscal year 2021, the Company recorded a partial IPR&D charge of $0.9 billion primarily related to expected development delays in the general surgery digital robotics platform (Ottava) acquired with the Auris Health acquisition in 2019.
In fiscal year 2021, the Company recorded a partial IPR&D charge of $0.9 billion primarily related to expected development delays in the general surgery digital robotics platform (Ottava) acquired with the Auris Health acquisition in 2019.
Paliperidone long-acting injectables growth was driven by sales of INVEGA SUSTENNA ® /XEPLION ® (paliperidone palmitate) and INVEGA TRINZA ® /TREVICTA ® from new patient starts and persistence as well as the launch of INVEGA HAFYERA™. Oncology products achieved sales of $14.5 billion in 2021, representing an increase of 17.6% as compared to the prior year.
The operational sales growth of INVEGA SUSTENNA/XEPLION (paliperidone palmitate) and INVEGA TRINZA/TREVICTA from new patient starts and persistence as well as the launch of INVEGA HAFYERA was offset by negative currency impacts and lower sales of RISPERDAL CONSTA. Oncology products achieved sales of $16.0 billion in 2022, representing an increase of 9.9% as compared to the prior year.
In 2021, sales by companies in Europe achieved growth of 24.3% as compared to the prior year, which included operational growth of 20.7% and a positive currency impact of 3.6%.
In 2022, sales by companies in Europe experienced a decline of 0.6% as compared to the prior year, which included operational growth of 11.0% and a negative currency impact of 11.6%.
The following table summarizes the Company’s material contractual obligations and their aggregate maturities as of January 2, 2022: To satisfy these obligations, the Company intends to use cash from operations.
The Company intends to finance the share repurchase program through available cash. Through January 1, 2023, approximately $2.5 billion has been repurchased under the program. The following table summarizes the Company’s material contractual obligations and their aggregate maturities as of January 1, 2023: To satisfy these obligations, the Company intends to use cash from operations.
The Company has recorded deferred tax liabilities on all undistributed earnings prior to December 31, 2017 from its international subsidiaries. The Company has not provided deferred taxes on the undistributed earnings subsequent to January 1, 2018 from certain international subsidiaries where the earnings are considered to be indefinitely reinvested.
The Company has not provided deferred taxes on the undistributed earnings subsequent to January 1, 2018 from certain international subsidiaries where the earnings are considered to be indefinitely reinvested. The Company intends to continue to reinvest these earnings in those international operations.
The Executive Committee of Johnson & Johnson is the principal management group responsible for the strategic operations and allocation of the resources of the Company. This Committee oversees and coordinates the activities of the Consumer Health, Pharmaceutical and Medical Devices business segments.
The Executive Committee of Johnson & Johnson is the principal management group responsible for the strategic operations and allocation of the resources of the Company. This Committee oversees and coordinates the activities of the Consumer Health, Pharmaceutical and MedTech business segments. In all of its product lines, the Company competes with other companies both locally and globally, throughout the world.
Amounts due from collaborative partners for these arrangements are recognized as each activity is performed or delivered, based on the relative selling price. Upfront fees received as part of these arrangements are deferred and recognized over the performance period. See Note 1 to the Consolidated Financial Statements for additional disclosures on collaborations.
In addition, the Company enters into collaboration arrangements that contain multiple revenue generating activities. Amounts due from collaborative partners for these arrangements are recognized as each activity is performed or delivered, based on the relative selling price. Upfront fees received as part of these arrangements are deferred and recognized over the performance period.
The Company also earns profit-share payments through collaborative arrangements of certain products, which are included in 34 sales to customers. For all years presented, profit-share payments were less than 3.0% of the total revenues and are included in sales to customers. In addition, the Company enters into collaboration arrangements that contain multiple revenue generating activities.
The Company also earns profit-share payments through collaborative arrangements of certain products, which are included in sales to customers. Profit-share payments were less than 2.0% of the total revenues in fiscal year 2022 and less than 3.0% of the total revenues in fiscal years 2021 and 2020 and are included in sales to customers.
On January 4, 2022, the Board of Directors declared a regular cash dividend of $1.06 per share, payable on March 8, 2022 to shareholders of record as of February 22, 2022.
Cash dividends paid were $4.45 per share in 2022 and $4.19 per share in 2021. On January 3, 2023, the Board of Directors declared a regular cash dividend of $1.13 per share, payable on March 7, 2023 to shareholders of record as of February 21, 2023.
For the period 2011 - 2021, in the U.S., the weighted average compound annual growth rate of the Company’s net price increases for healthcare products (prescription and over-the-counter drugs, hospital and professional products) was below the U.S. Consumer Price Index (CPI). The Company operates in certain countries where the economic conditions continue to present significant challenges.
In response to these concerns, the Company has a long-standing policy of pricing products responsibly. For the period 2012 - 2022, in the U.S., the weighted average compound annual growth rate of the Company’s net price increases for healthcare products (prescription and over-the-counter drugs, hospital and professional products) was below the U.S. Consumer Price Index (CPI).
Percentages in chart are as a percent to total sales) Cost of products sold decreased as a percent to sales driven by: • Non-recurring prior year COVID-19 production related slow-downs and related inventory impacts • Fixed cost deleveraging in the Medical Devices business in the fiscal 2020 • Favorable mix within the Pharmaceutical business as well as at the enterprise level with a higher percentage of sales coming from the Pharmaceutical business • Supply chain efficiencies in the Consumer Health segment The intangible asset amortization expense included in cost of products sold was $4.7 billion for both fiscal years 2021 and 2020. 28 Selling, Marketing and Administrative Expenses decreased as a percent to sales driven by: • Leveraging in the Medical Devices business resulting from the recovery of sales from the prior years impact of COVID-19 Partially offset by: • Increased brand marketing expenses in the Consumer Health business Research and Development Expense: Research and development expense by segment of business was as follows: 2021 2020 (Dollars in Millions) Amount % of Sales* Amount % of Sales* Consumer Health $ 455 3.1 % $ 422 3.0 % Pharmaceutical 11,882 22.8 9,563 21.0 Medical Devices 2,377 8.8 2,174 9.5 Total research and development expense $ 14,714 15.7 % $ 12,159 14.7 % Percent increase/(decrease) over the prior year 21.0 % 7.1 % *As a percent to segment sales Research and development activities represent a significant part of the Company's business.
Percentages in chart are as a percent to total sales) Cost of products sold increased as a percent to sales driven by: • One-time COVID-19 vaccine manufacturing exit related costs • Currency impacts in the Pharmaceutical segment • Commodity inflation in the MedTech and Consumer Health segments partially offset by • Supply chain benefits in the Consumer Health segment The intangible asset amortization expense included in cost of products sold was $4.3 billion and $4.7 billion for the fiscal years 2022 and 2021, respectively. 28 Selling, Marketing and Administrative Expenses decreased as a percent to sales driven by: • Reduction of brand marketing expenses in the Pharmaceutical and Consumer Health businesses Research and Development Expense: Research and development expense by segment of business was as follows: 2022 2021 (Dollars in Millions) Amount % of Sales* Amount % of Sales* Consumer Health $ 493 3.3 % $ 459 3.1 % Pharmaceutical 11,622 22.1 11,878 23.0 MedTech 2,488 9.1 2,377 8.8 Total research and development expense $ 14,603 15.4 % $ 14,714 15.7 % Percent increase/(decrease) over the prior year (0.8) % 21.0 % *As a percent to segment sales Research and development activities represent a significant part of the Company's business.
The growth in Spine, Sports & Other was primarily driven by procedure recovery and new product introductions. The Vision franchise achieved sales of $4.7 billion in 2021, representing an increase of 19.6% from 2020. The Contact Lenses/Other operational growth was due to market recovery and market share gains from new products.
The Vision franchise achieved sales of $4.8 billion in 2022, representing an increase of 3.4% from 2021. The Contact Lenses/Other operational growth was due to market recovery, price actions, commercial execution and benefits from new products.
A summary of borrowings can be found in Note 7 to the Consolidated Financial Statements. 33 Dividends The Company increased its dividend in 2021 for the 59th consecutive year. Cash dividends paid were $4.19 per share in 2021 and $3.98 per share in 2020.
Shareholders’ equity per share at the end of 2022 was $29.39 compared to $28.16 at year-end 2021. A summary of borrowings can be found in Note 7 to the Consolidated Financial Statements. 33 Dividends The Company increased its dividend in 2022 for the 60th consecutive year.
For discussion related to the fiscal 2021 provision for taxes refer to Note 8 to the Consolidated Financial Statements. Liquidity and Capital Resources Liquidity & Cash Flows Cash and cash equivalents were $14.5 billion at the end of 2021 as compared to $14.0 billion at the end of 2020.
Liquidity and Capital Resources Liquidity & Cash Flows Cash and cash equivalents were $14.1 billion at the end of 2022 as compared to $14.5 billion at the end of 2021.
Below are tables that show the progression of accrued rebates, returns, promotions, reserve for doubtful accounts and reserve for cash discounts by segment of business for the fiscal years ended January 2, 2022 and January 3, 2021.
The Company currently discloses the impact of changes to assumptions in the quarterly or annual filing in which there is a material financial statement impact. 34 Below are tables that show the progression of accrued rebates, returns, promotions, reserve for doubtful accounts and reserve for cash discounts by segment of business for the fiscal years ended January 1, 2023 and January 2, 2022.
Reasonably likely changes to assumptions used to calculate the accruals for rebates, returns and promotions are not anticipated to have a material effect on the financial statements. The Company currently discloses the impact of changes to assumptions in the quarterly or annual filing in which there is a material financial statement impact.
See Note 1 to the Consolidated Financial Statements for additional disclosures on collaborations. Reasonably likely changes to assumptions used to calculate the accruals for rebates, returns and promotions are not anticipated to have a material effect on the financial statements.
Surgical Vision operational growth was primarily due to market recovery and uptake of recently launched products. The Interventional Solutions franchise achieved sales of $4.0 billion in 2021, an increase of 30.4% from 2020. Growth in the electrophysiology and stroke businesses were driven by market recovery and success of new products and commercial strategies.
Surgical Vision operational growth was primarily due to market recovery and the success of new products and was partially offset by a higher prior year U.S. Refractory market. The Interventional Solutions franchise achieved sales of $4.3 billion in 2022, representing an increase of 8.3% from 2021.
The growth in Advanced Surgery was primarily driven by Endocutter, Biosurgery and Energy products attributable to market recovery, market expansion and the success of new products offsetting competitive pressures in the U.S.
The operational growth in Advanced Surgery was primarily driven by the following: Endocutter market recovery and new products partially offset by competitive pressures in the U.S.; Biosurgery market recovery and the success of new products partially offset by strong U.S. market demand in the prior year for infection prevention products; and Energy products driven by market recovery and new product penetration coupled with competitive supply challenges.
(2) Includes prior period adjustments Medical Devices Segment (Dollars in Millions) Balance at Beginning of Period Accruals Payments/Credits Balance at End of Period 2021 Accrued rebates ( 1) $ 1,174 5,942 (5,670) 1,446 Accrued returns 138 559 (563) 134 Accrued promotions 52 140 (138) 54 Subtotal 1,364 6,641 (6,371) 1,634 Reserve for doubtful accounts 202 12 (66) 148 Reserve for cash discounts 9 96 (95) 10 Total 1,575 6,749 (6,532) 1,792 2020 Accrued rebates (1) $ 1,013 5,144 (4,983) 1,174 Accrued returns 118 578 (558) 138 Accrued promotions 46 118 (112) 52 Subtotal $ 1,177 5,840 (5,653) 1,364 Reserve for doubtful accounts 155 95 (48) 202 Reserve for cash discounts 10 88 (89) 9 Total $ 1,342 6,023 (5,790) 1,575 (1) Includes reserve for customer rebates of $845 million at January 2, 2022 and $707 million at January 3, 2021, recorded as a contra asset. 36 Income Taxes: Income taxes are recorded based on amounts refundable or payable for the current year and include the results of any difference between U.S.
(2) Includes prior period adjustments 35 MedTech Segment (Dollars in Millions) Balance at Beginning of Period Accruals Payments/Credits Balance at End of Period 2022 Accrued rebates ( 1) $ 1,446 6,131 (6,107) 1,470 Accrued returns 134 531 (531) 134 Accrued promotions 54 102 (113) 43 Subtotal $ 1,634 6,764 (6,751) 1,647 Reserve for doubtful accounts 148 6 (29) 125 Reserve for cash discounts 10 99 (100) 9 Total $ 1,792 6,869 (6,880) 1,781 2021 Accrued rebates (1) $ 1,174 5,942 (5,670) 1,446 Accrued returns 138 559 (563) 134 Accrued promotions 52 140 (138) 54 Subtotal $ 1,364 6,641 (6,371) 1,634 Reserve for doubtful accounts 202 12 (66) 148 Reserve for cash discounts 9 96 (95) 10 Total $ 1,575 6,749 (6,532) 1,792 (1) Includes reserve for customer rebates of $802 million at January 1, 2023 and $845 million at January 2, 2022, recorded as a contra asset.
GAAP accounting and tax reporting, recorded as deferred tax assets or liabilities. The Company estimates deferred tax assets and liabilities based on enacted tax regulations and rates. Future changes in tax laws and rates may affect recorded deferred tax assets and liabilities. The Company has unrecognized tax benefits for uncertain tax positions. The Company follows U.S.
Future changes in tax laws and rates may affect recorded deferred tax assets and liabilities. The Company has unrecognized tax benefits for uncertain tax positions. The Company follows U.S. GAAP, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
The accruals are based on management’s judgment as to the probability of losses and, where applicable, actuarially determined estimates. The Company has self insurance through a wholly-owned captive insurance company. In addition to accruals in the self insurance program, claims that exceed the insurance coverage are accrued when losses are probable and amounts can be reasonably estimated.
Legal and Self Insurance Contingencies: The Company records accruals for various contingencies, including legal proceedings and product liability claims as these arise in the normal course of business. The accruals are based on management’s judgment as to the probability of losses and, where applicable, actuarially determined estimates. The Company has self insurance through a wholly-owned captive insurance company.
The Company is aware that its products are used in an environment where, for more than a decade, policymakers, consumers and businesses have expressed concerns about the rising cost of healthcare. In response to these concerns, the Company has a long-standing policy of pricing products responsibly.
New Accounting Pronouncements Refer to Note 1 to the Consolidated Financial Statements for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of January 1, 2023. 37 Economic and Market Factors The Company is aware that its products are used in an environment where, for more than a decade, policymakers, consumers and businesses have expressed concerns about the rising cost of healthcare.
Accordingly, the Company enters into forward foreign exchange contracts to protect the value of certain foreign currency assets and liabilities and to hedge future foreign currency transactions primarily related to product costs. Gains or losses on these contracts are offset by the gains or losses on the underlying transactions. A 10% appreciation of the U.S.
Financing and Market Risk The Company uses financial instruments to manage the impact of foreign exchange rate changes on cash flows. Accordingly, the Company enters into forward foreign exchange contracts to protect the value of certain foreign currency assets and liabilities and to hedge future foreign currency transactions primarily related to product costs.
Income Before Tax by Segment Income (loss) before tax by segment of business were as follows: Income Before Tax Segment Sales Percent of Segment Sales (Dollars in Millions) 2021 2020 2021 2020 2021 2020 Consumer Health $ 1,294 (1,064) 14,635 14,053 8.8 % (7.6) Pharmaceutical 18,181 15,462 52,080 45,572 34.9 33.9 Medical Devices 4,373 3,044 27,060 22,959 16.2 13.3 Total (1) 23,848 17,442 93,775 82,584 25.4 21.1 Less: Net expense not allocated to segments (2) 1,072 945 Earnings before provision for taxes on income $ 22,776 16,497 93,775 82,584 24.3 % 20.0 (1) See Note 17 to the Consolidated Financial Statements for more details.
Income Before Tax by Segment Income (loss) before tax by segment of business were as follows: Income Before Tax Segment Sales Percent of Segment Sales (Dollars in Millions) 2022 2021 2022 2021 2022 2021 Consumer Health (3) $ 2,930 1,573 14,953 15,035 19.6 % 10.5 Pharmaceutical (3) 15,901 17,969 52,563 51,680 30.3 34.8 MedTech 4,607 4,373 27,427 27,060 16.8 16.2 Segment earnings before tax (1) 23,438 23,915 94,943 93,775 24.7 25.5 Less: Expenses not allocated to segments (2) 624 1,072 Less: Consumer Health separation costs 1,089 67 Worldwide income before tax $ 21,725 22,776 94,943 93,775 22.9 % 24.3 (1) See Note 17 to the Consolidated Financial Statements for more details.
In 2021, the net impact of acquisitions and divestitures on the Medical Devices segment worldwide operational sales growth was a negative 0.6% primarily due to the divestiture of Advanced Sterilization Products (ASP).
In 2022, the net impact of acquisitions and divestitures on the MedTech segment worldwide operational sales growth was a positive 0.1%.
The growth in hips reflects the market recovery combined with continued strength of the portfolio including the ACTIS ® stem and enabling technologies – KINCISE™ and VELYS™ Hip Navigation. The growth in knees was primarily driven by procedure recovery and new product introductions. The growth in Trauma was driven by global market recovery and uptake of new products.
The operational growth in hips reflects the market recovery combined with continued strength of the portfolio including the ACTIS stem and enabling technologies – KINCISE and VELYS Hip Navigation. This growth was partially offset by impacts of volume-based procurement in China and the timing of tenders outside the U.S.
On January 28, 2022, subsequent to the fiscal year 2021, additional information regarding efficacy became available which led the Company to the decision to terminate the development of bermekimab for Atopic Dermatitis (AD).
Additional information regarding efficacy of the AD indication and HS indication became available which led the Company to the decision to terminate the development of bermekimab for both AD and HS. The Company acquired all rights to bermekimab from XBiotech, Inc. in the fiscal year 2020.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeManagement’s Discussion and Analysis of Results of Operations and Financial Condition - Liquidity and Capital Resources - Financing and Market Risk” of this Report; and Note 1 “Summary of Significant Accounting Policies - Financial Instruments” of the Notes to Consolidated Financial Statements included in Item 8 of this Report. 39
Biggest changeManagement’s Discussion and Analysis of Results of Operations and Financial Condition - Liquidity and Capital Resources - Financing and Market Risk” of this Report; and Note 1 “Summary of Significant Accounting Policies - Financial Instruments” of the Notes to Consolidated Financial Statements included in Item 8 of this Report.

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