Johnson & Johnson To Break Up Into Two Companies

Johnson & Johnson is separating into two different companies, keeping its medical tools and prescription medication disconnected from its company that will sell everyday items such as Band-Aids, baby powder, and items like Listerine. 

As reported by The Wall Street Journal: 

J&J will shed its consumer division in 18 to 24 months, Chief Executive Alex Gorsky said. J&J decided to make the change, he said, because the businesses, their customers and markets have diverged so much in recent years, including during the pandemic. Lawsuits that alleged use of Johnson’s Baby Powder caused cancer didn’t play a role, he said.

“The best path forward to ensure sustainable growth over the long term and better meet patient and consumer demands is to have our consumer business operate as a separate healthcare company,” Gorsky told The Journal.

The new company hasn’t been named yet, and details are still being worked out, but Gorsky “said J&J planned to structure the transaction to be tax-free,” per The Journal. 

“Following a comprehensive review, the board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world,” Gorsky also said in a statement.

If the company is given the green light by the board, it anticipates the separation to take place in the coming two years. 

Earlier this week, Johnson & Johnson was given a win by the courts when the Oklahoma Supreme Court reversed a previous ruling against the drug company. 

As reported by The Hill, “The 5-1 decision reversed a district court’s $465 million judgement against Johnson & Johnson for its role in the state’s opioid epidemic.” 

In 2019, the company was told to pay the large sum of money to essentially cover a year’s worth of initiatives and treatment.

“Cleveland County Judge Thad Balkman found Johnson & Johnson and its subsidiary Janssen Pharmaceuticals liable under Oklahoma’s public nuisance statute for conducting ‘false, misleading, and dangerous marketing campaigns’ about prescription opioids that helped lead to thousands of overdose deaths,” the outlet added. 

Thousands of lawsuits have been filed by other states, local jurisdictions, and Native American tribes arguing that the pharmaceutical business participated in fueling the opioid epidemic. 

The majority opinion by the Oklahoma Supreme Court this week stated, “The district court stepping into the shoes of the legislature by creating

*As an Amazon Associate I earn from qualifying purchases