Management’s discussion and analysis of results of operations and financial condition
Quantitative and qualitative disclosures about market risk
Financial statements and supplementary data
Changes in and disagreements with accountants on accounting and financial disclosure
Controls and procedures
Other information
Disclosure regarding foreign jurisdictions that prevent inspections
P art III
Directors, executive officers and corporate governance
Executive compensation
Security ownership of certain beneficial owners and management and related stockholder matters
Certain relationships and related transactions, and director independence
Principal accountant fees and services
P art IV
Exhibits and financial statement schedules
Form 10-K summary
Signatures
Exhibit index
Cautionary note regarding forward-looking statements
This Annual Report on Form 10-K and Johnson & Johnson’s other publicly available documents contain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Management and representatives of Johnson & Johnson and its subsidiaries (the Company) also may from time to time make forward-looking statements. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates” and other words of similar meaning in conjunction with, among other things: discussions of future operations; expected operating results and financial performance; impact of planned acquisitions and dispositions; impact and timing of restructuring initiatives, including associated cost savings and other benefits; the Company’s strategy for growth; product development activities; regulatory approvals; market position and expenditures.
Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to uncertainties, risks and changes that are difficult to predict and many of which are outside of the Company’s control. Investors should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, the Company’s actual results and financial condition could vary materially from expectations and projections expressed or implied in its forward-looking statements. Investors are therefore cautioned not to rely on these forward-looking statements. Risks and uncertainties include, but are not limited to:
Risks related to product development, market success and competition
• Challenges and uncertainties inherent in innovation and development of new and improved products and technologies on which the Company’s continued growth and success depend, including uncertainty of clinical outcomes, additional analysis of existing clinical data, obtaining regulatory approvals, health plan coverage and customer access, and initial and continued commercial success;
• Challenges to the Company’s ability to secure and maintain adequate patent and other intellectual property rights for new and existing products and technologies in the United States and other important markets;
• The impact of patent expirations, typically followed by the introduction of competing generic, biosimilar or other products and resulting revenue and market share losses;
• Increasingly aggressive and frequent challenges to the Company’s patents by competitors and others seeking to launch competing generic, biosimilar or other products and increased receptivity of courts, the United States Patent and Trademark Office and other decision makers to such challenges, potentially resulting in loss of market exclusivity and rapid decline in sales for the relevant product sooner than expected;
• Competition in research and development of new and improved products, processes and technologies, which can result in product and process obsolescence;
• Competition to reach agreement with third parties for collaboration, licensing, development and marketing agreements for products and technologies;
• Competition based on cost-effectiveness, product performance, technological advances and patents attained by competitors; and
• Allegations that the Company’s products infringe the patents and other intellectual property rights of third parties, which could adversely affect the Company’s ability to sell the products in question and require the payment of money damages and future royalties.
Risks related to product liability, litigation and regulatory activity
• Product efficacy or safety concerns, whether or not based on scientific evidence, potentially resulting in product withdrawals, recalls, regulatory action on the part of the United States Food and Drug Administration (U.S. FDA) (or international counterparts), declining sales, reputational damage, increased litigation expense and share price impact;
• The impact, including declining sales and reputational damage, of significant litigation or government action adverse to the Company, including product liability claims and allegations related to pharmaceutical marketing practices and contracting strategies;
• The impact of an adverse judgment or settlement and the adequacy of reserves related to legal proceedings, including patent litigation, product liability, personal injury claims, securities class actions, government investigations, employment and other legal proceedings;
• Increased scrutiny of the healthcare industry by government agencies and state attorneys general resulting in investigations and prosecutions, which carry the risk of significant civil and criminal penalties, including, but not limited to, debarment from government business;
• Failure to meet compliance obligations in compliance agreements with governments or government agencies, which could result in significant sanctions;
• Potential changes to applicable laws and regulations affecting United States and international operations, including relating to: approval of new products; licensing and patent rights; sales and promotion of healthcare products; access to, and reimbursement and pricing for, healthcare products and services; environmental protection; and sourcing of raw materials;
• Compliance with local regulations and laws that may restrict the Company’s ability to manufacture or sell its products in relevant markets, including requirements to comply with medical device reporting regulations and other requirements such as the European Union’s Medical Devices Regulation;
• Changes in domestic and international tax laws and regulations, increasing audit scrutiny by tax authorities around the world may cause exposures to additional tax liabilities potentially in excess of existing reserves; and
• The issuance of new or revised accounting standards by the Financial Accounting Standards Board and regulations by the Securities and Exchange Commission.
Risks related to the Company’s strategic initiatives, healthcare market trends and the planned separation of the Company's Orthopaedics Business
• Pricing pressures resulting from trends toward healthcare cost containment, including the continued consolidation among healthcare providers and other market participants, trends toward managed care, the shift toward governments increasingly becoming the primary payors of healthcare expenses, significant new entrants to the healthcare markets seeking to reduce costs and government pressure on companies to voluntarily reduce costs and price increases;
• Restricted spending patterns of individual, institutional and governmental purchasers of healthcare products and services due to economic hardship and budgetary constraints;
• Challenges to the Company’s ability to realize its strategy for growth including through externally sourced innovations, such as development collaborations, strategic acquisitions, licensing and marketing agreements, and the potential heightened costs of any such external arrangements due to competitive pressures;
• The potential that the expected strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected;
• The potential that the expected benefits and opportunities related to past and ongoing restructuring actions may not be realized or may take longer to realize than expected;
• The Company’s ability to satisfy the necessary conditions to consummate the planned separation of the Company’s Orthopaedics business on a timely basis or at all;
• The Company’s ability to successfully separate the Company’s Orthopaedics business and realize the anticipated benefits from the planned separation; and
• The structure of the separation transaction and the future operating and financial performance, market position and business strategy for each company.
Risks related to economic conditions, financial markets and operating internationally
• The risks associated with global operations on the Company and its customers and suppliers, including foreign governments in countries in which the Company operates;
• The impact of inflation and fluctuations in interest rates and currency exchange rates and the potential effect of such fluctuations on revenues, expenses and resulting margins;
• Potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs and potential drug reimportation legislation, and the impact of such changes on raw material prices, supply chains market volatility and the pace of product development;
• The impact on international operations from financial instability in international economies, sovereign risk, possible imposition of governmental controls and restrictive economic policies, and unstable international governments and legal systems;
• The impact of global public health crises and pandemics;
• Changes to global climate, extreme weather and natural disasters that could affect demand for the Company’s products and services, cause disruptions in manufacturing and distribution networks, alter the availability of goods and services within the supply chain, and affect the overall design and integrity of the Company’s products and operations;
• The impact of global or economic changes or events, including global tensions and war; and
• The impact of armed conflicts and terrorist attacks in the United States and other parts of the world, including social and economic disruptions and instability of financial and other markets.
Risks related to supply chain and operations
• Difficulties and delays in manufacturing, internally, through third-party providers or otherwise within the supply chain, that may lead to voluntary or involuntary business interruptions or shutdowns, product shortages, withdrawals or suspensions of products from the market, and potential regulatory action;
• Interruptions and breaches of the Company’s information technology systems or those of the Company’s vendors, which could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action;
• Reliance on global supply chains and production and distribution processes that are complex and subject to increasing regulatory requirements that may adversely affect supply, sourcing and pricing of materials used in the Company’s products; and
• The potential that the expected benefits and opportunities related to restructuring actions may not be realized or may take longer to realize than expected, including due to any required approvals from applicable regulatory authorities.
Investors also should carefully read the risk factors described in Item 1A of this Annual Report on Form 10-K for a description of certain risks that could, among other things, cause the Company’s actual results to differ materially from those expressed in its forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above and in Item 1A to be a complete statement of all potential risks and uncertainties. The Company does not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments.
Part I
Item 1. Business
General
Johnson & Johnson and its subsidiaries (the Company) have approximately 138,200 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. The Company’s primary focus is products related to human health and well-being. Johnson & Johnson was incorporated in the State of New Jersey in 1887.
The Chief Operating Decision Maker (CODM) is the Company's Chief Executive Officer (Principal Executive Officer). The Executive Committee is Johnson & Johnson’s senior leadership team responsible for setting the strategy and priorities of the Company and driving accountability at all levels. Within the strategic parameters provided by the Executive 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.
Segments of business
The Company is organized into two business segments: Innovative Medicine 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. Management’s discussion and analysis of results of operations and financial condition of this Report; and Note 17 Segments of business and geographic areas of the notes to consolidated financial statements included in Item 8 of this Report.
Innovative Medicine
The Innovative Medicine segment is focused on the following therapeutic areas: Oncology (e.g., prostate cancer, hematologic malignancies, lung cancer and bladder cancer), Immunology (e.g., rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease and psoriasis), Neuroscience (e.g., mood disorders, neurodegenerative disorders and schizophrenia), Pulmonary Hypertension (e.g., Pulmonary Arterial Hypertension), Infectious Diseases (e.g., HIV/AIDS) and Cardiovascular and Metabolism (e.g., thrombosis, diabetes and macular degeneration). Medicines in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. Key products in the Innovative Medicine segment include: CARVYKTI (ciltacabtagene autoleucel), a chimeric antigen receptor (CAR)-T-cell therapy for the treatment of patients with relapsed/refractory multiple myeloma; DARZALEX (daratumumab), a treatment for multiple myeloma; DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), a treatment for multiple myeloma and light chain (AL) Amyloidosis; 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; RYBREVANT (amivantamab), a fully-human bispecific antibody for adults with EGFR-mutated non-small cell lung cancer and LAZCLUZE (lazertinib), an oral, brain-penetrant EGFR tyrosine kinase inhibitor for non-small cell lung cancer; RYBREVANT FASPRO (amivantamab and hyaluronidase-lpuj), a subcutaneous therapy for patients with non-small cell lung cancer; TALVEY (talquetamab-tgvs) a bispecific antibody for adults with relapsed or refractory multiple myeloma who have received at least four prior lines of therapy; TECVAYLI (teclistamab-cqyv), a bispecific antibody for adults with relapsed or refractory multiple myeloma who have received at least four prior lines of therapy; ZYTIGA (abiraterone acetate), a treatment for patients with prostate cancer; REMICADE (infliximab), a treatment for a number of immune-mediated inflammatory diseases; SIMPONI (golimumab), a subcutaneous treatment for adults with moderate to rheumatoid arthritis, active psoriatic arthritis, active ankylosing spondylitis and moderately active to active ulcerative colitis; SIMPONI ARIA (golimumab), an intravenous treatment for adults with moderate to 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 plaque psoriasis, for adults with active psoriatic arthritis, for adults with moderately to active Crohn's disease and treatment of moderately to active
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ulcerative colitis; TREMFYA (guselkumab), a treatment for patients with moderate-to-severe plaque psoriasis, active psoriatic arthritis, moderate-to-severe Crohn’s disease and moderate-to-severe ulcerative colitis; CAPLYTA (lumateperone) is used in adults along with an antidepressant to treat major depressive disorder (MDD), depressive episodes associated with bipolar I or bipolar II disorder (bipolar depression) alone or with lithium or valproate; or to treat schizophrenia; 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; SPRAVATO (Esketamine), a nasal spray, used along with an oral antidepressant, to treat adults with treatment-resistant depression (TRD) and depressive symptoms in adults with major depressive disorder (MDD) with suicidal thoughts or actions; EDURANT (rilpivirine), PREZISTA (darunavir) and PREZCOBIX/REZOLSTA (darunavir/cobicistat), antiretroviral medicines for the treatment of human immunodeficiency virus (HIV) in combination with other antiretroviral products and SYMTUZA (darunavir/cobicistat/emtricitabine/tenofovir alafenamide), a once-daily single tablet regimen for the treatment of HIV; OPSUMIT (macitentan)/OPSYNVI (macitentan/tadalafil) 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; XARELTO (rivaroxaban), an oral anticoagulant for the 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 of thromboembolism in pediatric patients, and for thromboprophylaxis in pediatric patients following the Fontan procedure. Many of these medicines were developed in with strategic partners or are licensed from other companies and maintain active lifecycle development programs.
MedTech
The MedTech segment develops and manufactures a broad portfolio of products used in cardiovascular, orthopaedics, surgery, and vision supporting physicians, hospitals, eye care professionals and healthcare systems across a wide range of acute and elective procedures. These products are designed to address disease states where procedural intervention plays a central role in treatment and patient outcomes. The Cardiovascular portfolio includes electrophysiology products used to diagnose and treat heart rhythm disorders, mechanical circulatory support technologies (Abiomed) used in patients with cardiogenic shock or those undergoing a high-risk percutaneous coronary intervention (PCI), circulatory restoration products (Shockwave) for the treatment of calcified coronary artery disease (CAD) and peripheral artery disease (PAD), and neurovascular care that treats stroke and other conditions. These offerings are primarily delivered through minimally invasive, catheter based approaches and are used by interventional cardiologists, electrophysiologists and neurointerventional specialists. The Orthopaedics portfolio includes products and enabling technologies that support joint reconstruction, trauma, spine, sports-related injuries, and others. The Surgery portfolio includes a range of surgical products and enabling technologies for use across open, laparoscopic and robotic surgical procedures. This portfolio includes instrumentation, energy devices, stapling systems, wound closure, biosurgery products, and digital and robotic technologies designed to support procedural consistency and across multiple surgical specialties. The Surgery portfolio also includes solutions that focus on breast aesthetics and reconstruction (Mentor). These products are used in hospitals and surgical centers worldwide and are supported by ongoing development of surgical techniques and clinical evidence. The Vision portfolio includes contact lenses marketed under the ACUVUE brand, TECNIS premium intraocular lenses for cataract surgery, and other products used in cataract and refractive procedures. Vision products are used by eye care professionals and ophthalmic surgeons and span both corrective and surgical vision care. These MedTech products are distributed to wholesalers, hospitals, and retailers and are used predominantly in the professional fields by physicians, nurses, hospitals, eye care professionals, and clinics.
In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company intends to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
Geographic areas
The Company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being. The products made and sold in the international business include many of those described above under Segments of Business – Innovative Medicine and MedTech. However, the principal markets, products and methods of distribution in the international business vary with the country and the culture. The products sold in the international business include those developed in the U.S. and by subsidiaries abroad.
Investments and activities in some countries outside the U.S. are subject to higher risks than comparable U.S. activities because the investment and commercial climate may be influenced by financial instability in international economies, restrictive economic policies and political and legal system uncertainties.
Raw materials
Raw materials essential to the Company's business are generally readily available from multiple sources. Where there are exceptions, the temporary unavailability of those raw materials would not likely have a material adverse effect on the financial results of the Company.
Patents
The Company's subsidiaries have made a practice of obtaining patent protection on their products and processes where possible. They own, or are licensed under, a significant number of patents in the U.S. and other countries relating to their products, product uses, formulations and manufacturing processes. The Company’s subsidiaries face patent challenges from third parties, including challenges seeking to manufacture and market generic and biosimilar versions of the Company's key pharmaceutical products prior to expiration of the applicable patents covering those products. Significant legal proceedings and claims involving the Company's patent and other intellectual property are described in Note 19 Legal proceedings—Intellectual property of the Notes to Consolidated Financial Statements included in Item 8 of this Report.
Sales of the Company’s largest product, collectively DARZALEX (daratumumab) and DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), accounted for approximately 15.0% of the Company's total revenues for fiscal 2025. Genmab A/S owns two patent families related to DARZALEX, and Janssen Biotech, Inc. (a wholly-owned subsidiary of the Company) has an exclusive license to those patent families. Royalty rate ranges from 12% to 20% of total DARZALEX net sales. For the fiscal 2025 and 2024, royalty amounts to Genmab were approximately $2.4 billion and $2.0 billion, respectively. The two patent families both expire in the United States in 2029, and in Europe, compound/use patent protection in select countries extends to 2031/2032. Janssen Biotech, Inc. owns separate patent portfolios related to DARZALEX FASPRO and DARZALEX IV.
Sales of the Company’s second largest product, STELARA (ustekinumab) accounted for approximately 6.5% of the Company's total revenues for fiscal 2025. Third parties have filed biologics license applications with the U.S. FDA, the European Medicines Agency, and other government authorities seeking approval to market biosimilar versions of STELARA around the globe. The Company expects continued launches of biosimilar versions of STELARA globally which will continue to negatively impact the Company’s sales of STELARA.
Sales of the Company’s third largest product, TREMFYA (guselkumab), accounted for approximately 5.5% of the Company's total revenues for fiscal 2025. Janssen Biotech, Inc. owns multiple patent families related to TREMFYA, including a composition patent family projected to expire in the United States in 2031. In addition, Janssen Biotech, Inc. is a party to license agreements related to TREMFYA with an aggregate royalty rate of approximately 5.0% of total TREMFYA net sales payable to third parties.
Trademarks
The Company’s subsidiaries have made a practice of selling their products under trademarks and of obtaining protection for these trademarks by all available means. These trademarks are protected by registration in the U.S. and other countries where such products are marketed.
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.
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Competition
In all of their product lines, the Company's subsidiaries compete with companies both locally and globally. Competition exists in all product lines without regard to the number and size of the competing companies involved. Competition in research, both internally and externally sourced, involving the development and the improvement of new and existing products and processes, is particularly significant. The development of new and innovative products, as well as protecting the underlying intellectual property of the Company’s product portfolio, is important to the Company's success in all areas of its business. The competitive environment requires substantial investments in continuing research.
Environment
The Company is subject to a variety of environmental laws and regulations in the United States and other jurisdictions. The Company believes that its operations comply in all material respects with applicable environmental laws and regulations. The Company’s compliance with these requirements is not expected to have a material effect upon its capital expenditures, cash flows, earnings or competitive position.
Regulation
The Company’s businesses are subject to varying degrees of governmental regulation in the countries in which operations are conducted, and the general trend is toward increasingly stringent regulation and enforcement. The Company is subject to costly and complex U.S. and foreign laws and governmental regulations, and any adverse regulatory action may materially adversely affect the Company's financial condition and business operations. In the U.S., the pharmaceutical product and medical technology industries have long been subject to regulation by various federal and state agencies, primarily as to product safety, efficacy, manufacturing, advertising, labeling and safety reporting. The exercise of broad regulatory powers by the U.S. Food and Drug Administration (the U.S. FDA) continues to result in increases in the amounts of testing and documentation required for U.S. FDA approval of new drugs and devices and a corresponding increase in the expense of product introduction. Similar trends are also evident in major markets outside of the U.S.
The 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. Within the U.S., an increasing number of U.S. States have enacted comprehensive privacy laws, and federal regulators (e.g., the U.S. FDA, FTC and HHS) continue to stress the intersection of health and privacy as a compliance and enforcement priority. In the EU, multiple directives and laws (including NIS2, EHDS, the Data Act, the Cyber Resilience Act, and the AI Act) are rapidly changing privacy and cybersecurity compliance requirements while introducing new enforcement risks. In addition, China has introduced broad personal information protection and data security regulations, with more anticipated, thereby increasing China’s scrutiny of company compliance and data transfer practices. 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. These laws can also restrict transfers of data across borders, potentially impacting how data-driven health care solutions are developed and deployed globally in a compliant manner. Moreover, as a result of the broad scale release and availability of Artificial Intelligence (AI) technologies such as generative AI, a global trend towards more comprehensive and nuanced regulation to ensure the ethical use, privacy, and security of AI is underway that includes standards for , accountability, and fairness, which will require compliance developments or .
The regulatory agencies under whose purview the Company operates have administrative powers that may subject it to actions such as product withdrawals, recalls, seizure of products and other civil and criminal sanctions. In some cases, the Company’s subsidiaries may deem it advisable to initiate field actions, such as 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. FDA were to conclude that we are not in compliance with applicable laws or regulations, or that any of our pharmaceutical products or medical technologies are ineffective or pose an unreasonable safety risk, the U.S. FDA could ban such products, detain or seize adulterated or misbranded products, order a recall, repair, replacement, or refund of such products, withdraw approval/clearance/classification for such products, refuse to grant pending applications for marketing authorization or require certificates of foreign governments for exports, and/or require us to notify health professionals and others that the products present unreasonable risks of substantial harm to the public health. The U.S. FDA may also assess civil or criminal penalties us, our officers or employees and impose operating restrictions on a company-wide basis, or and/or restrain certain conduct resulting in of applicable law. The U.S. FDA may also recommend to the U.S.
Department of Justice. Any adverse regulatory action, depending on its magnitude, may restrict us from effectively marketing and selling our products and limit our ability to obtain future clearances, classifications or approvals, and could result in a substantial modification to our business practices and operations. Equivalent enforcement mechanisms exist in different countries in which we conduct business.
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. 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. Various state and federal transparency laws and regulations require disclosures of payments and other transfers of value made to certain healthcare practitioners, including physicians, teaching hospitals, and certain non-physician practitioners. Federal and foreign laws governing international business practices require strict compliance with anti-corruption standards and certain prohibitions with respect to payments to any foreign government official. Payors and Pharmacy Benefit Managers (PBMs) are a potent force in the marketplace, and increased attention is being paid to the impact of PBM practices on healthcare cost and access in the U.S.
Our business has been and continues to be affected by federal and state legislation that alters the pricing, coverage, and reimbursement landscape. The federal Inflation Reduction Act of 2022 (IRA) 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. In 2023, the Centers for Medicare & Medicaid Services (CMS) published the first “Selected Drug” list, which includes XARELTO and STELARA as well as IMBRUVICA, which is developed in collaboration and co-commercialized in the U.S. with Pharmacyclics LLC, an AbbVie company. The IRA specifies a ceiling price but not a minimum price for selected drugs and does not require CMS to use a specific framework for determining selected drug prices. The selected products are subject to a government-established price for the Medicare population beginning in 2026. CMS has indicated that, beginning in 2027, it will remove Xarelto and Stelara from the Selected Drug List, such that the products will no longer be subject to the IRA's minimum pricing provisions. In January 2026, CMS published the Selected Drug list for 2028, which includes ERLEADA.
The IRA also contains provisions that impose rebates if certain prices increase at a rate that outpaces the rate of inflation, beginning October 1, 2022, for Medicare Part D drugs and January 1, 2023, for Medicare Part B drugs. Separate IRA provisions redesign the Medicare Part D benefit in various ways, including by shifting a greater portion of costs to manufacturers within certain coverage phases and replacing the Part D coverage gap discount program with a new manufacturer discounting program. Failure to comply with IRA provisions may subject manufacturers to various penalties, including civil monetary penalties.
In July 2023, Janssen Pharmaceuticals, Inc. (Janssen) filed litigation against the U.S. Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services challenging the constitutionality of the IRA's Medicare Drug Price Negotiation Program. The litigation requests a declaration that the IRA violates Janssen’s rights under the First Amendment and the Fifth Amendment to the Constitution and therefore that Janssen is not subject to the IRA’s mandatory pricing scheme. While the impact of the IRA on our business and the broader pharmaceutical industry remains uncertain, as litigation filed by Janssen and other pharmaceutical companies remains ongoing, CMS has publicly announced the maximum fair price for each of the selected drugs and has recently begun implementing the program. In December 2025, Janssen sought review by the U.S. Supreme Court of the Third Circuit majority's affirmance of the district court's denial of its summary judgment motion.
In January 2026, the Company reached an agreement with the U.S. Administration to improve access to medicines and lower costs for U.S. patients. Additionally, we expect continued scrutiny on drug pricing and government price reporting from Congress, agencies, and other bodies at the federal and state levels, which may result in additional regulations, including models or other mechanisms to increase pricing controls and/or transparency.
There are a number of additional bills pending in Congress and healthcare reform proposals at the state level that would affect drug pricing, including in the Medicare and Medicaid programs. This changing legal landscape has both positive and negative impacts on the U.S. healthcare industry with much remaining uncertain as to how various provisions of federal and state law, and potential modification or repeal of these laws, will ultimately affect the industry. The IRA and any other federal or state legislative change could affect the pricing and market conditions for our products.
In addition, business practices in the healthcare industry have come under increased scrutiny, particularly in the U.S., by government agencies and state attorneys general, and resulting investigations and prosecutions carry the risk of significant civil and criminal penalties. Of note is the increased enforcement activity by data protection authorities in various jurisdictions,
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particularly in the European Union, where significant fines have been levied on companies for data breaches, violations of privacy requirements, and unlawful cross-border data transfers. In the U.S., the Federal Trade Commission has stepped up enforcement of data privacy with several significant settlements (including settlements concerning the downstream sharing of personal information and use and disclosure of personal health data) and there have been a material increase in class-action lawsuits linked to the collection and use of biometric data and use of tracking technologies.
Further, the Company relies on global supply chains, and production and distribution processes, that are complex, and subject to increasing regulatory requirements that may affect sourcing, supply and pricing of materials used in the Company's products. These processes also are subject to complex and lengthy regulatory approvals.
Employees and human capital management
As of December 28, 2025 and December 29, 2024 the number of employees was approximately:
Employees (1)
Full-time equivalent (FTE) positions (2)
(1) “Employee” is defined as an individual working full-time or part-time, excluding fixed term employees, interns and co-op employees. 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.
Employees by region (in percentages)
Strategy
The Company believes that its employees are critical to its continued success and are an essential element of its long-term strategy. Management is responsible for ensuring that its policies and processes reflect and reinforce the Company's desired corporate culture, including policies and processes related to strategy, risk management, and ethics and compliance. The Company’s human capital management strategy is built on three fundamental focus areas:
• Attracting and recruiting top talent
• Developing and retaining top talent
• Empowering and inspiring talent
Underpinning these focus areas are ongoing efforts to cultivate and foster a culture built on innovation, health, well-being and safety, inclusion and belonging where the Company's employees are encouraged to succeed both professionally and personally while helping the Company achieve its business goals.
Culture and employee engagement
At Johnson & Johnson, employees are guided by Our Credo, which sets forth the Company's responsibilities to patients, consumers, customers, healthcare professionals, employees, communities and shareholders. Employees worldwide must adhere to the Company’s Code of Business Conduct, which sets fundamental requirements and serves as a foundation for the Company policies, procedures and guidelines, all of which provide additional guidance on expected employee behaviors in every market where it operates. The Company 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 2025, 95% of global employees across 73 countries participated in Our Credo Survey which was offered in 36 languages.
Growth and development
To lead in the changing healthcare landscape, it is crucial that the Company continue to attract and retain top talent. In 2025, the Company's voluntary turnover rate was 5.8%. 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. 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. To prioritize learning, the Company has an annual Global Learning Day in which employees are encouraged to set aside a full day to explore skill-building courses on its state-of-the-art learning platform, J&J Learn.
Our workforce
As stated in Our Credo, we are responsible to our employees who work with us throughout the world. As a result, and as guided by applicable laws, external insights and employee feedback, we continually strive to meet the needs of our global workforce of individuals from many different backgrounds, abilities, cultures and perspectives. We are committed to cultivating an inclusive, Credo‑based work environment where employees are recognized and rewarded based on merit.
Compensation and benefits
As part of the Company's total rewards philosophy, the Company offers competitive compensation and benefits to attract and retain top talent. The Company is committed to fair treatment in its compensation and benefits for employees at all levels. The Company observes legal minimum wage provisions and exceeds them where possible. The Company's total rewards offerings include an array of programs to support its employees' 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.
Health, wellness and safety
The Company’s investment in employee health, well-being and safety is built on its conviction that advancing health for humanity starts with advancing the health of its employees. With the right awareness, focus, practices and tools, the Company works to ensure that all its employees around the world, as well as contingent workers, contractors and visitors to the Company's sites, can work safely. 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 provides—physical, mental, emotional and financial—help promote holistic employee health. 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 a balance of in-person and remote work, while preserving the Company's culture and need for face-to-face engagement and leadership.
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Available information
The Company’s main corporate website address is www.jnj.com . The Company makes its SEC filings available on the Company’s website at www.investor.jnj.com/financials/sec-filings , as soon as reasonably practicable after having been electronically filed or furnished to the SEC. The Company's SEC filings are also available at the SEC’s website at www.sec.gov .
Investors and the public should note that the Company also announces information through its press releases and media statements at www.jnj.com/media-center , investor.jnj.com and www.factsabouttalc.com . We use these websites to communicate with investors and the public about our products, litigation and other matters. It is possible that the information we post to these websites could be deemed to be material information. Therefore, we encourage investors and others interested in the Company to review the information posted to these websites in conjunction with www.jnj.com , the Company's SEC filings, press releases, public conference calls and webcasts.
In addition, the Restated Certificate of Incorporation, as amended, Amended and Restated By-Laws, the written charters of the Audit Committee, the Compensation & Benefits Committee, the Nominating & Corporate Governance Committee, the Regulatory Compliance & Sustainability Committee, and the Science & Technology 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 on the Company's website at www.investor.jnj.com/governance/corporate-governance-overview and will be provided without charge to any shareholder submitting a written request, as provided above. The information on www.jnj.com , investor.jnj.com and www.factsabouttalc.com is not, and will not be deemed, a part of this Report or incorporated into any other filings the Company makes with the SEC.
Item 1A. Risk factors
An investment in the Company’s common stock or debt securities involves risks and uncertainties. The Company seeks to identify, manage and mitigate risks to our business, but uncertainties and risks are difficult to predict and many are outside of the Company’s control and cannot therefore be eliminated. In addition to the other information in this report and the Company’s other filings with the SEC, investors should consider carefully the factors set forth below. Investors should be aware that it is not possible to predict or identify all such factors and that the following is not meant to be a complete discussion of all potential risks or uncertainties. If known or unknown risks or uncertainties materialize, the Company’s business, results of operations or financial condition could be adversely affected, potentially in a material way.
Risks related to our business, industry and operations
The Company’s businesses operate in highly competitive product markets and competitive pressures could adversely affect the Company’s earnings.
The Company faces substantial competition in its two operating segments and in all geographic markets. The Company’s businesses compete with companies of all sizes on the basis of cost-effectiveness, technological innovations, intellectual property rights, product performance, real or perceived product advantages, pricing and availability and rate of reimbursement. The Company also competes with other market participants in securing rights to acquisitions, collaborations and licensing agreements with third parties. Competition for rights to product candidates and technologies may result in significant investment and acquisition costs and onerous agreement terms for the Company. Competitors’ development of more effective or less costly products, and/or their ability to secure patent and other intellectual property rights and successfully market products ahead of the Company, could negatively impact sales of the Company’s existing products as well as its ability to bring new products to market despite significant prior investment in the related product development. The Company may also experience operational and financial risk in connection with acquisitions if we are to fully identify potential risks and liabilities associated with acquired businesses or products, integrate operations and employees, and identify and realize synergies with existing businesses while containing acquisition-related on our management, operations and financial resources.
For the Company’s Innovative Medicine businesses, loss of patent exclusivity for a product often is followed by a substantial reduction in sales as competitors gain regulatory approval for generic, biosimilar and other competing products and enter the market. 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 Company’s business and operations will be negatively impacted if we are unable to introduce new products or technological advances that are safe, more effective, more effectively marketed or otherwise those of our competitors.
Interruptions and delays in manufacturing operations could adversely affect the Company’s business, sales and reputation.
The Company’s manufacturing of products requires the timely delivery of sufficient amounts of complex, high-quality components and materials. The Company’s subsidiaries operate 63 manufacturing facilities as well as sourcing from thousands of suppliers around the world. The Company has in the past, and may in the future, face unanticipated interruptions and delays in manufacturing through its internal or external supply chain. Manufacturing disruptions can occur for many reasons including regulatory action, production quality deviations or safety issues, labor disputes, labor shortages, site-specific incidents (such as fires), natural disasters such as hurricanes and other severe weather events, raw material shortages, lack of available inspectors, political unrest, terrorist attacks and epidemics or pandemics. Such and in manufacturing can result in product , in sales and reputational impact as well as significant remediation and related costs associated with addressing the .
The Company relies on third parties to manufacture and supply certain of our products. Any failure by or loss of a third-party manufacturer or supplier could result in delays and increased costs, which may adversely affect our business.
The Company relies on third parties to manufacture and supply certain of our raw materials, component parts and products. We depend on these third-party manufacturers to allocate to us a portion of their manufacturing capacity sufficient to meet our needs, to produce products of acceptable quality and at acceptable manufacturing yields and to deliver those products to us on a timely basis and at acceptable prices. However, we cannot guarantee that these third-party manufacturers will be able to meet our near-term or long-term manufacturing requirements, which could result in lost sales and have an adverse effect on our business.
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Other risks associated with our reliance on third parties to manufacture these products include reliance on the third party for regulatory compliance and quality assurance, misappropriation of the Company’s intellectual property, limited ability to manage our inventory, possible breach of the manufacturing agreement by the third party and the possible termination or nonrenewal of the manufacturing agreement by the third party at a time that is costly or inconvenient for us. Moreover, if any of our third-party manufacturers suffers any damage to facilities, loses benefits under material agreements, experiences power outages, encounters financial difficulties, is unable to secure necessary raw materials from its suppliers or suffers any other reduction in efficiency, the Company may experience significant business . In the event of any such , the Company would need to seek and source other qualified third-party manufacturers, likely resulting in further and increased costs which could affect our business .
Counterfeit versions of our products could harm our patients and have a negative impact on our revenues, earnings, reputation and business.
Our industry continues to be challenged by the vulnerability of distribution channels to illegal counterfeiting and the presence of counterfeit products in a growing number of markets and over the Internet. Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet our rigorous manufacturing and testing standards. To distributors and patients, counterfeit products may be visually indistinguishable from the authentic version. Counterfeit medicines pose a risk to patient health and safety because of the conditions under which they are manufactured – often in unregulated, unlicensed, uninspected and unsanitary sites – as well as the lack of regulation of their contents.
The threat of counterfeit medicines could adversely impact our business and reputation by impacting patient confidence in our authentic products, potentially resulting in lost sales, product recalls, and an increased threat of litigation. 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.
We are subject to risks associated with global health crises, epidemics, pandemics and other outbreaks (such incident(s), a health crisis or health crises). The spread of health crises have caused and 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 under such circumstances. Impacts to the Company have included and may include adverse impacts to results of operations and financial condition, including lower sales and reduced customer demand and usage of certain of our products. While the Company has robust business continuity plans in place across our global supply chain network designed to help mitigate the impact of health crises, these efforts may not completely prevent our business from being adversely affected in the event of a health crisis. Health crises could 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 affect the Company’s business, financial results, and global economic conditions generally.
Risks related to government regulation and legal proceedings
Global sales in the Company’s Innovative Medicine and MedTech segments may be negatively impacted by healthcare reforms and increasing pricing pressures.
Sales of the Company’s Innovative Medicine and MedTech products are significantly affected by reimbursements by third-party payors such as government healthcare programs, private insurance plans and managed care organizations. As part of various efforts to contain healthcare costs, these payors 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. In addition, recent legislation and ongoing political scrutiny on pricing, coverage and reimbursement could result in additional pricing pressures. Specifically, the Inflation Reduction Act of 2022 (IRA) has changed Medicare Part D benefit design and has subjected certain of the Company's products to government-established pricing beginning in 2026 and may subject additional products in the future. Failure to adhere to the government's interpretations of the law pending ongoing litigation may expose the Company to penalties. In addition, change to Medicare Part D could have a impact on U.S. Medicine sales. Further, increased third-party utilization of the 340B Federal Drug Discount Program from expanded interpretations of the statute and program may have a impact on the Company's financial performance. Outside the U.S., numerous major markets, including the EU, United Kingdom, Japan and China, have government involvement in funding healthcare and, in that regard, directly or indirectly impose price controls, limit access to, or reimbursement for, the Company’s products, or reduce the value of its intellectual property protection.
The Company is subject to an increasing number of costly and complex governmental regulations in the countries in which operations are conducted which may have a material adverse affect on the Company’s financial condition and business operations.
As described in Item 1. Business, the Company is subject to an increasing number of extensive government laws and regulations, investigations and legal action by national, state and local government agencies in the U.S. and other countries in which it operates. For example, changes to the U.S. FDA’s timing or requirements for approval or clearance of our products may have a negative impact on our ability to bring new products to market. New and changing laws, regulations, executive orders and other directives may also impose deadlines on the Company, or its third-party suppliers, manufacturers or other partners and providers, for which there may be insufficient time to implement changes to comply with such new regulations and may result in manufacturing delays or other supply chain constraints. If the Company is unable to identify ways to mitigate these delays or constraints, there may be an adverse effect on sales and access to our products.
The Company is subject to significant legal proceedings that can result in significant expenses, fines and reputational damage.
In the ordinary course of business, Johnson & Johnson and its subsidiaries are subject to numerous claims and lawsuits involving various issues such as product liability, patent disputes and claims that their product sales, marketing and pricing practices violate various antitrust, unfair trade practices and/or consumer protection laws. The Company’s more significant legal proceedings are described in Note 19 Legal proceedings under Notes to the Consolidated Financial Statements included in Item 8 of this Report. Litigation, in general, and securities, derivative action, class action and multi-district litigation, in particular, can be expensive and disruptive. Some of these matters may include thousands of plaintiffs, may involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain for several years. For example, the Company is a in numerous lawsuits arising out of the use of body powders containing talc, primarily JOHNSON’S Baby Powder. While the Company believes it has substantial defenses in these matters, it is not feasible to predict the ultimate outcome of . The Company has been and could in the future be required to pay significant amounts as a result of settlements or judgments in these matters, potentially in excess of accruals, including matters where the Company could be held jointly and severally liable among other . The resolution of, or increase in accruals for, one or more of these matters in any reporting period could have a material effect on the Company’s results of operations and cash flows for that period. The Company does not purchase third-party product liability insurance; however, the Company utilizes a wholly owned captive insurance company subject to certain limits.
Product reliability, safety and effectiveness concerns can have significant negative impacts on sales and results of operations, lead to litigation and cause reputational damage.
Product concerns, whether raised internally or by litigants, regulators or consumer advocates, and whether or not based on scientific evidence, can result in safety alerts, field actions, such as product recalls, governmental investigations, regulatory action on the part of the U.S. FDA (or its counterpart in other countries), private claims and lawsuits, payment of fines and settlements, declining sales and reputational damage. These circumstances can also result in damage to brand image, brand equity and consumer trust in the Company’s products. Product recalls have in the past, and could in the future, prompt government investigations and inspections, the shutdown of manufacturing facilities, continued product shortages and related sales declines, significant remediation costs, reputational , possible civil and .
The Company faces significant regulatory scrutiny, which imposes significant compliance costs and exposes the Company to government investigations, legal actions and penalties.
The rapid increase in new government laws and regulations imposes significant compliance costs to the Company and a failure of the Company to timely implement changes to comply with these new laws may expose the Company to investigations, legal actions or penalties. Regulatory issues regarding compliance with current Good Manufacturing Practices (cGMP) (and comparable quality regulations in foreign countries) by manufacturers of drugs and devices can lead to fines and penalties, product recalls, product shortages, interruptions in production, delays in new product approvals and litigation. In addition, the marketing, pricing and sale of the Company’s products are subject to regulation, investigations and legal actions including under the Federal Food, Drug, and Cosmetic Act, the Medicaid Rebate Program, federal and state acts, state trade practices acts and consumer protection laws. of healthcare industry business practices by government agencies and state attorneys general in the U.S., and any resulting and , carry risk of significant civil and including, but not limited to, from participation in government healthcare programs. Any such could have a material effect on the Company’s business and results of operations. The most significant current and 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.
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Changes in tax laws or exposures to additional tax liabilities could negatively impact the Company’s operating results.
Changes in tax laws or regulations in the U.S. and around the world, including global minimum taxes could negatively impact the Company’s effective tax rate and results of operations. A change in statutory tax rate or certain international tax provisions in any country would result in the revaluation of the Company’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted. This change would result in an expense or benefit recorded in the Company’s Consolidated Statement of Earnings. The Company closely monitors these proposals as they arise in the countries where it operates. Changes to tax laws or regulations may occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in which the law change is enacted.
See Note 8 Income taxes under Notes to the Consolidated Financial Statements included in Item 8 of this Report for additional information.
The Company conducts business and files tax returns in numerous countries and is addressing tax audits and disputes with many tax authorities. In connection with various government initiatives, companies are required to disclose more information to tax authorities on operations around the world, which may lead to greater audit scrutiny of profits earned in other countries. The Company regularly assesses the likely outcomes of its tax audits and disputes to determine the appropriateness of its tax reserves. However, any tax authority could take a position on tax treatment that is contrary to the Company’s expectations, which could result in tax liabilities in excess of reserves.
Risks related to our intellectual property
The Company faces increased challenges to intellectual property rights central to its business.
The Company owns or licenses a significant number of patents and other proprietary rights relating to its products and manufacturing processes. These rights are essential to the Company’s businesses and the inability of the Company to secure and maintain these rights may have a detrimental impact on the Company’s financial results. Public policy, both within and outside the U.S., has become increasingly unfavorable toward intellectual property rights. The Company cannot be certain that it will secure and maintain adequate patent protection for new products and technologies in the United States and other important markets.
Competitors routinely challenge the validity or extent of the Company’s owned or licensed patents and proprietary rights through litigation, interferences, oppositions and other proceedings, such as inter partes review (IPR) proceedings before the United States Patent & Trademark Office (USPTO). These proceedings absorb resources and can be protracted as well as unpredictable. In addition, others may claim the Company has infringed their intellectual property rights, including copyrights, patents, or trademarks, and/or has misappropriated their trade secrets, any of which could result in an injunction and/or the need to pay past damages and future royalties and adversely affect the competitive position and sales of our products.
The Company has faced increasing patent challenges from third parties seeking to manufacture and market generic and biosimilar versions of the Company’s key pharmaceutical products prior to expiration of the applicable patents covering those products. In the event the Company is not successful in defending its patents against such challenges, or upon the “at-risk” launch by the generic or biosimilar firm of its product, the Company can lose a major portion of revenues for the referenced product in a very short period of time. Current legal proceedings involving the Company’s patents and other intellectual property rights are described in Note 19 Legal proceedings—Intellectual property under Notes to the Consolidated Financial Statements included in Item 8 of this Report.
Risks related to product development, regulatory approval and commercialization
Significant challenges or delays in the Company’s innovation, development and implementation of new products, technologies and indications could have an adverse impact on the Company’s long-term success.
The Company’s continued growth and success depends on its ability to innovate and develop new and differentiated products and services that address the evolving healthcare needs of patients, providers and consumers. 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 accounted for approximately 25% of 2025 sales. The Company cannot be certain when or whether it will be able to develop, license or otherwise acquire companies, products and technologies, whether particular product candidates will be granted regulatory approval, and, if approved, whether the products will be commercially successful.
The Company pursues product development through internal research and development as well as through collaborations, acquisitions, joint ventures and licensing or other arrangements with third parties. In all of these contexts, developing new products, particularly pharmaceutical and biotechnology products and medical devices, requires significant investment of resources over many years. Only a very few biopharmaceutical research and development programs result in commercially viable products. The process depends on many factors including the ability to: discern patients’ and healthcare providers’ future needs; develop promising new compounds, strategies and technologies; achieve successful clinical trial results; secure effective intellectual property protection; obtain regulatory approvals on a timely basis; and, if and when they reach the market, successfully differentiate the Company’s products from competing products and approaches to treatment. Moreover, the development and regulatory approval of new products may be delayed due to limits on federal agency budgets or personnel, including reductions to the U.S. FDA’s budget, employees, and operations, which may lead to slower response times and longer review periods. After approval, new products or to existing products may not be accepted quickly or significantly in the marketplace due to product and price competition, changes in customer preferences or healthcare purchasing patterns, resistance by healthcare providers or uncertainty over third-party reimbursement. Even following initial regulatory approval, the of a product can be impacted by safety and efficacy findings in larger real-world patient populations, as well as market entry of competitive products.
The Company leverages the use of data science, machine learning and other forms of AI and emerging technologies across varying parts of its business and operations, and the introduction and incorporation of AI may result in unintended consequences or other new or expanded risks and liabilities. AI technology is continuously evolving, and the AI technologies we develop and adopt may become obsolete earlier than planned. Our investments in these technologies may not result in the benefits we anticipate or enable us to obtain or maintain a competitive advantage. The application of AI in our business is emerging and evolving alongside new laws and regulations that may entail significant costs or ultimately limit our ability to continue the use of these technologies. These technologies also carry inherent risks related to data privacy and security further described below.
Risks related to financial and economic market conditions
The Company faces a variety of financial, economic, legal, social and political risks associated with conducting business internationally.
The Company’s extensive operations and business activity throughout the world are accompanied by certain financial, economic, legal, social and political risks, including those listed below.
Foreign currency exchange : In fiscal 2025, approximately 43% of the Company’s sales occurred outside of the U.S., with approximately 23% in Europe, 5% in the Western Hemisphere, excluding the U.S., and 15% 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 Company uses financial instruments to mitigate the impact of fluctuations in currency exchange rates on its cash flows, unhedged exposures continue to be subject to currency fluctuations. In addition, the weakening or strengthening of the U.S. dollar may result in significant favorable or unfavorable translation effects when the operating results of the Company’s non-U.S. business activity are translated into U.S. dollars.
Inflation and currency devaluation risks : The Company faces challenges in maintaining profitability of operations in economies experiencing high inflation rates. Specifically, the Company has accounted for operations in Argentina, Turkey, Venezuela and Egypt 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.
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In addition, the impact of currency devaluations in countries experiencing high inflation rates or significant currency exchange fluctuations could negatively impact the Company’s operating results.
Illegal importation of pharmaceutical products : The illegal importation of pharmaceutical products from countries where government price controls or other market dynamics result in lower prices may adversely affect the Company’s sales and profitability in the U.S. and other countries in which the Company operates. With the exception of limited quantities of prescription drugs for personal use, foreign imports of pharmaceutical products are illegal under current U.S. law. However, the volume of illegal imports continues to rise as the ability of patients and other customers to obtain the lower-priced imports has grown significantly.
Anti-corruption and other regulations : The Company is subject to various federal and foreign laws that govern its international business practices with respect to payments to government officials. Those laws include the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits U.S. publicly traded companies from promising, offering, or giving anything of value to foreign officials with the corrupt intent of influencing the foreign official for the purpose of helping the Company obtain or retain business or gain any improper advantage. 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. 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 and behavior. Enforcement activities under these laws could subject the Company to additional administrative and legal proceedings and actions, which could include for civil , sanctions, and administrative remedies, including exclusion from healthcare programs.
Other financial, economic, legal, social and political risks . Other risks inherent in conducting business globally include:
• local and regional economic environments and policies in the markets that we serve, including interest rates, monetary policy, inflation, economic growth, recession, commodity prices, and currency controls or other limitations on the ability to expatriate cash;
• protective economic policies taken by governments, such as trade protection measures, increased antitrust reporting requirements and enforcement activity, and import/export licensing requirements;
• compliance with local regulations and laws including, in some countries, regulatory requirements restricting the Company’s ability to manufacture or sell its products in the relevant market;
• diminished protection of intellectual property and contractual rights in certain jurisdictions;
• potential nationalization or expropriation of the Company’s foreign assets;
• political or social upheavals, economic instability, repression, or human rights issues; and
• geopolitical events, including natural disasters, disruptions to markets due to war, armed conflict, terrorism, epidemics or pandemics.
Due to the international nature of the Company's business, geopolitical or economic changes or events, including global tensions and war, could adversely affect our business, results of operations or financial condition.
As described above, the Company has extensive operations and business activity throughout the world. Global tensions, conflict and/or war among any of the countries in which we conduct business or distribute our products may result in foreign currency volatility, decreased demand for our products in affected countries, and challenges to our global supply chain related to increased costs of materials and other inputs for our products and suppliers. Most recently, we have experienced, and expect to continue to experience, impacts to the Company's business resulting from the Russia-Ukraine war, conflict in the Middle East as well as increasing tensions between the U.S. and China. In response to heightened conflict, such as the Russia- Ukraine war, governments may impose export controls and broad financial and economic sanctions. Our business and operations may be further impacted by the imposition of tariffs, trade protection measures or other policies - including data localization laws and restrictions on data transfers - adopted by any country that favor domestic companies and technologies over foreign competitors. Additional sanctions or other measures may be imposed by the global community, including but not limited to limitations on our ability to file, and maintain patents, trademarks and other intellectual property rights. Furthermore, in some countries, action may be taken that allows companies and individuals to owned by patent holders from the United States and many other countries without consent or compensation and we may not be to prevent third parties from practicing the Company's or from selling or importing products. In addition, the U.S. government has imposed and/or announced the potential imposition of tariffs on products manufactured in other jurisdictions.
While certain of the announced tariffs have been delayed, the U.S. government may in the future pause, reimpose or increase tariffs, and countries subject to such tariffs have and in the future may impose reciprocal tariffs or other restrictive trade measures in response. Any of these actions could increase uncertainties and associated risks relating to the Company’s global operations.
Weak financial performance, failure to maintain a satisfactory credit rating or disruptions in the financial markets could adversely affect our liquidity, capital position, borrowing costs and access to capital markets.
We currently maintain investment grade credit ratings with Moody’s Investors Service and Standard & Poor’s Ratings Services. Rating agencies routinely evaluate us, and their ratings of our long-term and short-term debt are based on a number of factors. Any downgrade of our credit ratings by a credit rating agency, whether as a result of our actions or factors which are beyond our control, can increase the cost of borrowing under any indebtedness we may incur, reduce market capacity for our commercial paper or require the posting of additional collateral under our derivative contracts. There can be no assurance that we will be able to maintain our credit ratings, and any additional actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, may have a negative impact on our liquidity, capital position and access to capital markets.
Risks related to the planned separation of our Orthopaedics business
The planned separation of the Company's Orthopaedics business may not be completed on the terms or timeline currently contemplated, if at all, and may not achieve the expected results
In October 2025, the Company announced its intention to separate the Company's Orthopaedics business. The Company is targeting completion of the planned separation in 18 to 24 months after initial announcement. 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 may be required, final approval of the Company's Board of Directors, and receipt of other regulatory approvals. There can be no assurance regarding the ultimate timing of the planned separation or that such separation will be completed. Unanticipated developments could delay, prevent or otherwise adversely affect the planned separation, including but not limited to disruptions in general or financial market conditions or potential problems or delays in obtaining various regulatory approvals or clearances.
The costs to complete the planned separation will be significant. In addition, the Company may be unable to achieve some of the strategic and financial benefits that it expects to achieve from the planned separation of the Company's Orthopaedics business
The Company will incur significant expenses in connection with 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.
Following the planned separation, the price of shares of the Company's common stock may fluctuate significantly
The Company cannot predict the effect of the planned separation on the trading price of shares of its common stock, and market value of shares of its common stock may be less than, equal to or greater than the market value of shares of its common stock prior to the planned separation. In addition, the price of the Company's common stock may be more volatile around the time of the planned separation.
Other risks
Our business depends on our ability to recruit and retain talented and highly skilled employees.
Our continued growth requires us to recruit and retain talented employees representing many different backgrounds, experiences, and skill sets. The market for highly skilled workers and leaders in our industry is extremely competitive and our ability to compete depends on our ability to hire, develop and motivate highly skilled personnel in all areas of our organization. Maintaining our brand and reputation, as well as a credo-based work environment enables us to attract top talent. If we are less successful in our recruiting efforts, or if we cannot retain highly skilled workers and key leaders, our ability to develop and deliver successful products and services may be adversely affected. 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.
2025 Annual Report
Climate change or legal, regulatory or market measures to address climate change may negatively affect our business and results of operations.
Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our operations, including an adverse impact on global temperatures, weather patterns and the frequency and severity of extreme weather and natural disasters. Natural disasters and extreme weather conditions, such as a hurricane, tornado, earthquake, wildfire or flooding, may pose physical risks to our facilities and disrupt the operation of our supply chain. The impacts of the changing climate on water resources may result in water scarcity, limiting our ability to access sufficient high-quality water in certain locations, which may increase operational costs.
Concern over climate change may also result in new or additional legal or regulatory requirements designed to reduce greenhouse gas emissions and/or mitigate the effects of climate change on the environment. If such laws or regulations are more stringent than current legal or regulatory obligations, we may experience disruption in, or an increase in the costs associated with sourcing, manufacturing and distribution of our products, which may adversely affect our business, results of operations or financial condition. Further, the impacts of climate change have an influence on customer preferences, and failure to provide climate-friendly products could potentially result in loss of market share.
An information security incident, including a cybersecurity breach, could have a negative impact on the Company’s business or reputation.
To meet business objectives, the Company relies on both internal information technology (IT) systems and networks, and those of third parties and their vendors, to process and store sensitive data (including confidential research, business plans, financial information, intellectual property, and personal data that may be subject to legal protection) to ensure the continuity of the Company’s supply chain and operations, and as part of many of the products we deliver to customers. The extensive range of information security and cybersecurity threats, which affect companies globally, pose a persistent risk to the security and availability of these systems and networks, including to customer products that are connected to or rely on such systems and networks, and the confidentiality, integrity, and availability of the Company’s sensitive data. The Company assesses these threats, responds to attacks and breaches that it has experienced, and makes investments to increase internal protection, detection, and response capabilities, as well as ensure the Company’s third-party providers have required capabilities and controls, to address this risk. Because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks and increasing use and reliance on third parties, there is the potential for the Company to be impacted. This impact could result in reputational, competitive, operational or other business as well as financial costs and regulatory action. The increasing use of AI and other emerging technology could also increase these risks. The Company maintains cybersecurity insurance in the event of an information security or cyber ; however, the coverage may not be sufficient to cover all financial, legal, business or reputational .
As a result of increased global tensions, the Company expects there will continue to be, an increased risk of information security or cybersecurity incidents, including cyberattacks perpetrated by adversaries of countries where the Company maintains operations. Given the potential sophistication of these attacks, the Company 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 customers that use our products, our business, results of operations or financial condition. Moreover, these threats could also impact our third-party partners resulting in compromise of the Company's IT systems, networks and data which could affect the Company.
A breach of privacy laws or unauthorized access, loss or misuse of personal data could have a negative impact on the Company’s business or reputation.
The Company is subject to privacy and data protection laws and regulations across the globe that impose broad compliance obligations on the collection, possession, use, storage, access, disclosure, transfer, deletion and protection of personal data. Breach of the requirements of these laws and regulations could result in substantial fines, penalties, governmental actions, private right of actions, including class actions, and damage to our reputation and business. New privacy laws are expected globally, together with greater privacy enforcement by governmental authorities globally, particularly on data localization requirements and data transfers including international data flows. The Company has established privacy compliance programs and controls with which our businesses worldwide are required to comply. However, with many technology and data-driven initiatives evolving across the Company, involving multiple vendors and third parties, there are threats that could impact our business operations and research activities, including potential risks of unauthorized access and loss of personal data as well as legislative actions imposing limitations and controls on the use and sharing of personal data as well as on cross border data flows.
Item 1B. Unresolved staff comments
Not applicable.
Item 1C. Cybersecurity
Risk management and strategy
The Company has documented cybersecurity policies and standards, assesses risks from cybersecurity threats, and monitors information systems for potential cybersecurity issues. To protect the Company’s information systems from cybersecurity threats, the Company uses various security tools supporting protection, detection, and response capabilities. The Company maintains a cybersecurity incident response plan to help ensure a timely, consistent response to actual or attempted cybersecurity incidents impacting the Company.
The Company also identifies and assesses third-party risks within the enterprise, and through the Company's use of third-party service providers, across a range of areas including data security and supply chain through a structured third-party risk management program.
The Company maintains a formal information security training program for all employees that includes training on matters such as phishing and email security best practices. Employees are also required to complete mandatory training on data privacy.
To evaluate and enhance its cybersecurity program, the Company periodically utilizes third-party experts to undertake maturity assessments of the Company’s information security program.
To date, the Company is not aware of any cybersecurity incident that has had or is reasonably likely to have a material impact on the Company’s business or operations; 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. This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action. Refer to the risk factor captioned An information security incident, including a cybersecurity breach, could have a negative impact to the Company’s business or reputation in Part I, Item 1A. Risk factors for additional description of cybersecurity risks and potential related impacts on the Company.
Governance - management’s responsibility
The Company takes a risk-based approach to cybersecurity and has implemented cybersecurity controls designed to address cybersecurity threats and risks. The Chief Information Officer (CIO), who is a member of the Company’s Executive Committee, and the Chief Information Security Officer (CISO) are responsible for assessing and managing cybersecurity risks, including security incident detection, response, and recovery.
The Company’s CISO, in coordination with the CIO, is responsible for leading the Company’s cybersecurity program and management of cybersecurity risk. The current CISO has over twenty-five years of experience in information security, and his background includes technical experience, strategy and architecture focused roles, cyber and threat experience, and various leadership roles.
Governance - board oversight
The Company’s Board of Directors oversees the overall risk management process, including cybersecurity risks, directly and through its committees. The Regulatory Compliance & Sustainability Committee (RCSC) of the board is primarily responsible for oversight of risk from cybersecurity threats and oversees compliance with applicable laws, regulations and Company policies related to, among others, privacy and cybersecurity.
RCSC meetings include discussions of specific risk areas throughout the year including, among others, those relating to cybersecurity. The CISO provides quarterly updates each year to RCSC on cybersecurity matters. These reports include an overview of the cybersecurity threat landscape, key cybersecurity initiatives to improve the Company’s risk posture, changes in the legal and regulatory landscape relative to cybersecurity, and overviews of certain cybersecurity incidents that have occurred within the Company and within the industry.
2025 Annual Report
Item 2. Properties
The Company's subsidiaries operate 63 manufacturing facilities occupying approximately 10.4 million square feet of floor space. The manufacturing facilities are used by the industry segments of the Company’s business approximately as follows:
Segment
Square Feet
(in thousands)
Innovative Medicine
MedTech
Worldwide Total
Within the U.S., three facilities are used by the Innovative Medicine segment and 19 by the MedTech segment. Outside of the U.S., 16 facilities are used by the Innovative Medicine 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
Europe
Western Hemisphere, excluding U.S.
Africa, Asia and Pacific
Worldwide Total
In addition to the manufacturing facilities discussed above, the Company maintains numerous office, research and development and warehouse facilities throughout the world.
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.
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.
Item 3. Legal proceedings
The information called for by this item is incorporated herein by reference to the information set forth in Note 19 Legal proceedings of the Notes to Consolidated Financial Statements included in Item 8 of this Report.
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. At the annual meeting of the Board of Directors, the executive officers are elected by the Board to hold office for one year and until their respective successors are elected and qualified, or until earlier resignation or removal.
Vanessa Broadhurst, 57
Member, Executive Committee; Executive Vice President, Global Corporate Affairs
Ms. V. Broadhurst was named Executive Vice President, Global Corporate Affairs and appointed to the Executive Committee in 2022. Ms. Broadhurst rejoined the Company in 2017 and was appointed Company Group Chairman, Global Commercial Strategy Organization in 2018. From 2013 to 2017, she held General Manager roles at Amgen in Inflammation & Cardiovascular, and Cardiovascular & Bone. Prior to her roles at Amgen, she served in various leadership roles at the Company from 2005-2013.
Joaquin Duato, 63
Chairman of the Board; Chief Executive Officer
Mr. J. Duato became Chairman of the Board of Directors in 2023 subsequent to his appointments as Chief Executive Officer and Director in 2022. Mr. Duato was appointed to the Executive Committee in 2016 when he was named Executive Vice President, Worldwide Chairman, Pharmaceuticals and subsequently served as Vice Chairman of the Executive Committee. Mr. Duato first 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.
Elizabeth Forminard, 55
Member, Executive Committee; Executive Vice President, Chief Legal Officer
Ms. E. Forminard was appointed Executive Vice President, Chief Legal Officer and a member of the Executive Committee in 2022. Ms. Forminard joined the Company in 2006, serving in roles of increasing responsibility including General Counsel Medical Devices & Diagnostics, General Counsel Consumer Group & Supply Chain, Worldwide Vice President Corporate Governance, and in her immediate past role as General Counsel Pharmaceuticals.
Kristen Mulholland, 59
Member, Executive Committee; Executive Vice President, Chief Human Resources Officer
Ms. K. Mulholland was appointed Executive Vice President, Chief Human Resources Officer and appointed to the Executive Committee in 2024. She joined the company in 2005 and has held HR leadership positions across the full breadth of the company including MedTech, Innovative Medicines, our Corporate Functions and Corporate HR Services including Performance and Development and most recently, Global Total Rewards.
John C. Reed, M.D., Ph.D., 67
Member, Executive Committee; Executive Vice President, Innovative Medicine, R&D
Dr. J. C. Reed joined the Company in 2023 as Executive Vice President, Innovative Medicine, R&D and a member of the Executive Committee. Prior to joining the Company, Dr. Reed held executive leadership positions at Sanofi (2018-2022) and Roche (2013-2018), serving on their respective executive committees. He also served as CEO of Sanford-Burnham Medical Research Institute (now Sanford Burnham Prebys) where he established multiple therapeutic area-aligned research centers and platform technology centers.
2025 Annual Report
Tim Schmid, 56
Member, Executive Committee; Executive Vice President, Worldwide Chairman, MedTech
Mr. T. Schmid was appointed Executive Vice President, Worldwide Chairman, MedTech and a member of the Executive Committee in 2023. He joined the Company in 1993 and has served in leadership positions throughout Johnson & Johnson MedTech, including Chief Strategic Customer Officer and President of Ethicon, and most recently served as Company Group Chairman MedTech Asia Pacific from 2018-2023.
James Swanson, 60
Member, Executive Committee; Executive Vice President, Chief Information Officer
Mr. J. Swanson was appointed Executive Vice President, Chief Information Officer and a member of the Executive Committee in 2022. He rejoined the Company in 2019 as Chief Information Officer of Johnson & Johnson from Bayer Crop Science, where he served as a member of the Executive Leadership Team and as Chief Information Officer and Head of Digital Transformation. From 1996 to 2005, Mr. Swanson held positions of increasing responsibility at the Company, including Project Manager, Director IT, Sr. Director IT and Vice President, Chief Information Officer.
Jennifer L. Taubert, 62
Member, Executive Committee; Executive Vice President, Worldwide Chairman, Innovative Medicine
Ms. J. L. Taubert was appointed Executive Vice President, Worldwide Chairman, Innovative Medicine and a member of the Executive Committee in 2018. She joined the Company in 2005 as Worldwide Vice President and held several executive positions of increasing responsibility in the Pharmaceuticals sector, including Company Group Chairman, North America, and Company Group Chairman, The Americas from 2012-2018.
Kathryn E. Wengel, 60
Member, Executive Committee; Executive Vice President, Chief Technical Operations & Risk Officer
Ms. K. E. Wengel was appointed Executive Vice President, Chief Technical Operations & Risk Officer in 2023, subsequent to her appointment to the Executive Committee in 2018 when she was named as Executive Vice President, Chief Global Supply Chain Officer. Ms. Wengel first 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.
Joseph J. Wolk, 59
Member, Executive Committee; Executive Vice President, Chief Financial Officer
Mr. J. J. Wolk was appointed Executive Vice President, Chief Financial Officer and a member of the Executive Committee in 2018. He first joined the Company in 1998 as Finance Manager, Business Development for Ortho-McNeil, a subsidiary of the Company. During his tenure at the Company, he has held a variety of senior leadership roles in several segments and functions across the Company's subsidiaries, including Vice President, Finance and Chief Financial Officer of the Janssen Pharmaceutical Companies, and Vice President, Investor Relations.
Part II
Item 5. Market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities
As of February 4, 2026, there were 108,358 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 2025. Common stock purchases on the open market are made as part of a systematic plan to meet the needs of the Company’s compensation programs. The repurchases below also include the stock-for-stock option exercises that settled in the fiscal fourth quarter.
Fiscal Period
Total Number
of Shares
Purchased (1)
Avg. Price
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
September 29, 2025 through October 26, 2025
October 27, 2025 through November 23, 2025
November 24, 2025 through December 28, 2025
Total
(1) During the fiscal fourth quarter of 2025, the Company repurchased an aggregate of 9,722,756 shares of Johnson & Johnson Common Stock in open-market transactions, all of which were purchased as part of a systematic plan to meet the needs of the Company’s compensation programs.
Item 6. Reserved
2025 Annual Report
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 138,200 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 is organized into two business segments: Innovative Medicine and MedTech. The Innovative Medicine segment is focused on the following therapeutic areas: Oncology, Immunology, Neuroscience, Pulmonary Hypertension, Infectious Diseases, and Cardiovascular and Metabolism. Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. The MedTech segment includes a broad portfolio of products used in the Surgery, Orthopaedic, Cardiovascular 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 October 2025, the Company announced its intention to separate its Orthopaedics business. The Company intends to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
The Chief Operating Decision Maker (CODM) is the Company's Chief Executive Officer (Principal Executive Officer). The Executive Committee is Johnson & Johnson’s senior leadership team responsible for setting the strategy and priorities of the Company and driving accountability at all levels. Within the strategic parameters provided by the Executive 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.
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. The development of new and innovative products, as well as protecting the underlying intellectual property of the Company's product portfolio, is important to the Company’s success in all areas of its business. The competitive environment requires substantial investments in continuing research.
Management’s objectives
With Our Credo as the foundation, the Company believes health is everything. The Company's strength in healthcare innovation empowers us to build a world where complex diseases are prevented, treated, and cured, where treatments are smarter and less invasive, and solutions are personal. Through the Company's expertise in Innovative Medicine and MedTech, the Company is uniquely positioned to innovate across the full spectrum of healthcare solutions today to deliver the breakthroughs of tomorrow, and profoundly impact health for humanity.
New products introduced within the past five years accounted for approximately 25% of 2025 sales. In 2025, $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 impact of health for humanity.
Our approximately 138,200 employees are critical drivers of the Company’s success. 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. 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.
Research &
development
Acquisitions*
(net of cash acquired)
Dividends paid
per share
* Includes business combinations and asset acquisitions
Results of operations
Analysis of consolidated sales
For discussion on results of operations and financial condition pertaining to the fiscal years 2024 and 2023 see the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2024, Item 7. Management's discussion and analysis of results of operations and financial condition.
In 2025, worldwide sales increased 6.0% to $94.2 billion as compared to an increase of 4.3% in 2024. These sales changes consisted of the following:
Sales increase/(decrease) due to:
Volume
Price
Currency
Total
The net impact of acquisitions and divestitures on the worldwide sales growth was a positive impact of 1.1% in 2025, primarily related to CAPLYTA and Shockwave and a positive impact of 0.5% in 2024 primarily related to Shockwave.
Sales by U.S. companies were $53.8 billion in 2025 and $50.3 billion in 2024. This represents increases of 6.9% in 2025 and 8.3% in 2024. In the fiscal year 2025, acquisitions and divestitures had a net positive impact of 2.0% on the U.S. sales growth primarily related to CAPLYTA and Shockwave. Sales by international companies were $40.4 billion in 2025 and $38.5 billion in 2024. This represents an increase of 5.0% in 2025, and a decrease of 0.5% in 2024. In fiscal 2025, acquisitions and divestitures had a net positive impact of 0.1% on the international operational* sales growth, primarily related to Shockwave. In the fiscal year 2025, the negative impact of the STELARA sales decline, due to biosimilar competition, was approximately 6.2%, 7.6% and 4.4% on worldwide, U.S. and international operational sales, respectively.
The five-year compound annual growth rates for worldwide, U.S. and international sales were 6.7%, 7.9% and 5.2%, respectively. The ten-year compound annual growth rates for worldwide, U.S. and international sales were 5.2%, 5.8% and 4.5%, respectively.
2025 Annual Report
In 2025, sales by companies in Europe achieved growth of 6.5% as compared to the prior year, which included operational growth of 2.4% and a positive currency impact of 4.1%. Sales by companies in the Western Hemisphere, excluding the U.S., achieved growth of 3.4% as compared to the prior year, which included operational growth of 8.4%, and a negative currency impact of 5.0%. Sales by companies in the Asia-Pacific, Africa region achieved growth of 3.2% as compared to the prior year, including operational growth of 3.1% and a positive currency impact of 0.1%.
In 2025, the Company utilized three wholesalers distributing products for both segments that represented approximately 21.8%, 15.5% and 11.1% of the total gross revenues. In 2024, the Company had three wholesalers distributing products for both segments that represented approximately 20.5%, 15.6% and 12.3% of the total gross revenues.
2025 Sales by geographic region (in billions)
2025 Sales by segment (in billions)
Note: values may have been rounded
*operational excludes the effect of translational currency
Analysis of sales by business segments
Innovative Medicine segment
Innovative Medicine segment sales in 2025 were $60.4 billion, an increase of 6.0% from 2024, which included operational growth of 5.3% and a positive currency impact of 0.7%. U.S. sales were $36.3 billion, an increase of 7.0%. International sales were $24.1 billion, an increase of 4.6%, which included operational growth of 2.9% and a positive currency impact of 1.7%. In 2025, the net impact of acquisitions and divestitures on the worldwide Innovative Medicine segment operational sales growth was a positive 1.2%, related to CAPLYTA. In 2025, the negative impact of the STELARA sales decline, primarily due to biosimilar competition, was an approximate 10.4%, 12.3% and 7.9% on worldwide, U.S. and international Innovative Medicine segment operational sales, respectively.
Major Innovative Medicine therapeutic area sales:
(Dollars in Millions)
Total
Change
Operations
Change
Currency
Change
Total Oncology
CARVYKTI
DARZALEX
ERLEADA
IMBRUVICA
RYBREVANT/ LAZCLUZE (1)
TALVEY (2)
TECVAYLI
ZYTIGA /abiraterone acetate
Other Oncology
Total Immunology
REMICADE
SIMPONI/SIMPONI ARIA
STELARA
TREMFYA
Other Immunology
Total Neuroscience
CAPLYTA (3)
CONCERTA/methylphenidate
INVEGA SUSTENNA/XEPLION/INVEGA TRINZA/TREVICTA
SPRAVATO
Other Neuroscience
Total Pulmonary Hypertension
OPSUMIT/OPSYNVI (4)
UPTRAVI
Other Pulmonary Hypertension
Total Infectious Diseases
EDURANT/rilpivirine
PREZISTA/PREZCOBIX/REZOLSTA/SYMTUZA
Other Infectious Diseases (5)
Total Cardiovascular / Metabolism / Other
XARELTO
Other
Total Innovative Medicine Sales
2025 Annual Report
(1) Previously in Other Oncology, Includes the sales of RYBREVANT and RYBREVANT + LAZCLUZE
(2) Previously in Other Oncology
(3) Acquired with Intra-Cellular Therapies on April 2, 2025
(4) OPSYNVI was previously in Other Pulmonary Hypertension
(5) Includes the Covid-19 Vaccine in 2024
* Percentage greater than 100% or not meaningful
Oncology products achieved sales of $25.4 billion in 2025, representing an increase of 22.1% as compared to the prior year. Strong sales of DARZALEX (daratumumab) were driven by continued share gains and market growth. Growth of ERLEADA (apalutamide) was primarily due to continued share gains and market growth partially offset by the impact of Medicare Part D redesign. Increased sales of CARVYKTI (ciltacabtagene autoleucel) were driven by continued share gains and capacity expansion. Additionally, sales from the ongoing launches and share gains of TECVAYLI (teclistamab-cqyv), TALVEY (talquetamab-tgvs) and RYBREVANT (amivantamab)/LAZCLUZE (lazertinib) contributed to the growth. Growth was partially offset by ZYTIGA (abiraterone acetate) due to loss of exclusivity and IMBRUVICA (ibrutinib) due to competitive pressures and the impact of Medicare Part D redesign.
Immunology products sales were $15.7 billion in 2025, a decline of 11.8% as compared to the prior year primarily due to the decline of STELARA (ustekinumab) sales driven by the impact of biosimilar competition and Medicare Part D redesign. The growth of TREMFYA (guselkumab) was due to share gains and market growth. The increase in SIMPONI/SIMPONI ARIA sales was primarily driven by the Merck, Sharp & Dohme return of rights in Europe in the fiscal fourth quarter of 2024. The increase in REMICADE (infliximab) sales was due to favorable patient mix, market growth and the Merck, Sharp & Dohme return of rights in Europe in the fiscal fourth quarter of 2024, partially offset by continued biosimilar competition.
Sales of STELARA in the United States were approximately $3.8 billion in fiscal 2025. Third parties have filed biologics license applications with the U.S. FDA, the European Medicines Agency, and other government authorities seeking approval to market biosimilar versions of STELARA around the globe. The Company expects continued launches of biosimilar versions of STELARA globally which will continue to negatively impact the Company’s sales of STELARA.
At least two biosimilars are pursuing regulatory approval for a SIMPONI biosimilar in the United States, which would likely result in a significant reduction in future sales.
Neuroscience products, which include sales of CAPLYTA (lumateperone) acquired with the Intra-Cellular Therapies (Intra- Cellular) acquisition on April 2, 2025, achieved sales of $7.8 billion in 2025, representing an increase of 10.1% as compared to the prior year. Growth of SPRAVATO (esketamine) was driven by continued increased physician and patient demand. Growth was partially offset by the sales decline of INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA primarily due to the impact of Medicare Part D redesign.
Pulmonary Hypertension products achieved sales of $4.4 billion, representing an increase of 3.6% as compared to the prior year. Sales growth of OPSUMIT (macitentan)/OPSYNVI (macitentan/tadalafil) was driven by share gains and market growth partially offset by the impact of Medicare Part D redesign and UPTRAVI (selexipag) was driven by market growth partially offset by the impact of Medicare Part D redesign. The Company expects generic competition for OPSUMIT in 2026, which would likely result in a significant reduction in future sales.
Infectious disease products sales were $3.2 billion in 2025, a decline of 4.6% as compared to the prior year primarily driven by declines across the portfolio including COVID-19 vaccine revenue in Other Infectious Diseases. The decline was partially offset by growth of EDURANT/rilpivirine.
Cardiovascular/Metabolism/Other products achieved sales were $3.8 billion, representing an increase of 6.1% as compared to the prior year. The growth of XARELTO (rivaroxaban) sales was primarily driven by the impact of Medicare Part D redesign and market growth partially offset by continued share loss.
The Company maintains a policy that no end customer will be permitted direct delivery of product to a location other than the billing location. This policy impacts contract pharmacy transactions involving non-grantee 340B covered entities for most of the Company’s drugs, subject to multiple exceptions. Both grantee and non-grantee covered entities can maintain certain contract pharmacy arrangements under policy exceptions. The Company has been and will continue to offer 340B discounts to covered entities on all of its covered outpatient drugs, and it believes its policy will improve its ability to identify inappropriate duplicate discounts and diversion prohibited by the 340B statute. The 340B Drug Pricing Program is a U.S. federal government program requiring drug manufacturers to provide significant discounts on covered outpatient drugs to covered entities.
During 2025, the Company advanced its pipeline with several regulatory submissions and approvals for new drugs and additional indications for existing drugs as follows:
Product Name
(Chemical Name)
Indication
Approval
Approval
Filing
Filing
AKEEGA (niraparib/abiraterone)
Treatment of patients with M1 Metastatic Castration-Sensitive Prostate Cancer (AMPLITUDE)
CAPLYTA (lumateperone)
Adjunctive treatment for Major Depressive Disorder
DARZALEX (daratumumab)
Treatment for frontline multiple myeloma transplant ineligible (CEPHEUS)
DARZALEX (daratumumab)
Treatment as subcutaneous monotherapy for high-risk smoldering multiple myeloma (AQUILA)
ICOTYDE (icotrokinra)
Treatment for Psoriasis (ICONIC)
INLEXZO (gemcitabine intravesical system)
Treatment for non muscle invasive bladder cancer (SunRISe-1)
IMAAVY (nipocalimab)
Treatment for Generalized Myasthenia Gravis (Vivacity MG3)
IMAAVY (nipocalimab)
Treatment for Generalized Myasthenia Gravis Pediatrics (VIBRANCE MG)
IMBRUVICA (ibrutinib)
Treatment for frontline MCL (Triangle)
RYBREVANT (amivantamab)
Treatment for subcutaneous (PALOMA-3)
SIMPONI (golimumab)
Treatment of Patients with Pediatric Ulcerative Colitis (PURSUIT 2)
SPRAVATO (esketamine)
Treatment of Patients with Treatment Resistant Depression monotherapy (TRD4005)
STELARA (ustekinumab)
Treatment of Patients with Pediatric Crohn's Disease
STELARA (ustekinumab)
Treatment of Patients with Pediatric Ulcerative Colitis (UNIFI JR)
TECVAYLI (teclistamab)
Multiple Myeloma 1-3PLs (MajesTEC-3)
TREMFYA (guselkumab)
Treatment of Patients with Ulcerative Colitis (QUASAR)
TREMFYA (guselkumab)
Subcutaneous Induction for treatment of patients with Ulcerative Colitis (ASTRO)
TREMFYA (guselkumab)
Subcutaneous Induction for treatment of patients with Crohn's Disease (GRAVITI)
TREMFYA (guselkumab)
Treatment of Patients with Crohn's Disease (GALAXI)
TREMFYA (guselkumab)
Treatment of Patients with Pediatric Psoriasis (PROTOSTAR)
TREMFYA (guselkumab)
Treatment of patients with Psoriatic Arthritis Structural Damage (APEX)
TREMFYA (guselkumab)
Treatment of Patients with Pediatric Juvenile Psoriatic Arthritis
2025 Annual Report
MedTech segment
The MedTech segment sales in 2025 were $33.8 billion, an increase of 6.1% from 2024, which included operational growth of 5.4% and a positive currency impact of 0.7%. U.S. sales were $17.4 billion, an increase of 6.6% as compared to the prior year. International sales were $16.4 billion, an increase of 5.5% as compared to the prior year, which included operational growth of 4.1% and a positive currency impact of 1.4%. In 2025, the net impact of acquisitions and divestitures on the MedTech segment worldwide operational sales growth was a positive 1.1% primarily related to the Shockwave acquisition.
Major MedTech franchise sales:
(Dollars in Millions)
Total
Change
Operations
Change
Currency
Change
Surgery
Advanced
General
Orthopaedics
Hips
Knees
Trauma
Spine, Sports & Other
Cardiovascular
Electrophysiology
Abiomed
Shockwave (1)
Other Cardiovascular
Vision
Contact Lenses/Other
Surgical
Total MedTech Sales
(1) Acquired on May 31, 2024
* Percentage greater than 100% or not meaningful
The Surgery franchise achieved sales of $10.1 billion in 2025, representing an increase of 3.0% from 2024. Growth in Advanced Surgery was primarily due to the strength of the portfolio and commercial execution in Biosurgery as well as new products in Endocutters. This was partially offset by China volume-based procurement across all platforms and competitive pressures in Energy and Endocutters. Growth in General Surgery was primarily driven by technology penetration and upgrades within the differentiated Wound Closure portfolio. This growth was partially offset by the impact from divestitures.
The Orthopaedics franchise achieved sales of $9.3 billion in 2025, representing an increase of 1.1% from 2024. All platforms were negatively impacted by revenue disruption from the previously announced Orthopaedics restructuring, which is now substantially complete, the negative impact of volume-based procurement in China and selling days. The growth in Hips was primarily due to new product launches. The growth in Knees was primarily driven by the ATTUNE portfolio, pull through related to the VELYS Robotic assisted solution. Growth in Trauma was driven by the adoption of recently launched products and commercial execution. The decline in Spine, Sports & Other was primarily driven by competitive pressures and price pressures in the U.S. Early Interventional segment partially offset by new product launches.
In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company intends to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
The Cardiovascular franchise achieved sales of $8.9 billion in 2025, representing an increase of 15.8% from 2024. Electrophysiology growth was driven by procedure growth, new product performance and commercial execution. This was partially offset by competitive pressures in Pulsed Field Ablation catheters. Abiomed sales reflect the continued strong adoption of Impella 5.5 and Impella CP. Shockwave sales growth was driven by Coronary and Peripheral portfolios and new product launches.
The Vision franchise achieved sales of $5.5 billion in 2025, representing an increase of 6.3% from 2024. Contact Lenses/Other growth was primarily driven by market growth, continued strong performance in the ACUVUE OASYS 1-Day family of products (including recent launches) and strategic price actions. Surgical growth was primarily driven by the continued strength of recent product innovations, robust demand and commercial execution.
Analysis of consolidated earnings before provision for taxes on income
Consolidated earnings before provision for taxes on income was $32.6 billion and $16.7 billion for the years 2025 and 2024, respectively. As a percent to sales, consolidated earnings before provision for taxes on income was 34.6% and 18.8%, in 2025 and 2024, respectively.
Earnings before provision for taxes
(Dollars in billions. Percentages in chart are as a percent to total sales)
Cost of products sold and selling, marketing and administrative expenses:
Cost of products sold
Selling, marketing & administrative
(Dollars in billions. Percentages in chart are as a percent to total sales)
2025 Annual Report
Cost of products sold:
Cost of products sold increased as a percent to sales driven by:
• Unfavorable product mix driven by the decline of STELARA sales and unfavorable transactional currency in the Innovative Medicine business
• Tariffs, unfavorable transactional currency and macroeconomic factors in the MedTech business
partially offset by
• Non-recurring, acquisition related fair value Inventory step-up of $0.1 billion in 2025 versus $0.4 billion in 2024 related to the business combination accounting associated with the Shockwave acquisition in the MedTech business
The intangible asset amortization expense included in cost of products sold was $4.6 billion in fiscal 2025 and $4.5 billion in fiscal 2024.
Selling, Marketing and Administrative expense:
Selling, Marketing and Administrative Expenses decreased as a percent to sales driven by:
• Corporate administrative expense rationalization
• Planned leverage in the Innovative Medicine business
partially offset by
• Increased investment related to the acquisition of Intra-Cellular (CAPLYTA)
Research and Development expense:
Research and development expense by segment of business was as follows:
(Dollars in Millions)
Amount
% of Sales*
Amount
% of Sales*
Innovative Medicine
MedTech
Total research and development expense
Percent increase/(decrease) over the prior year
*As a percent to segment sales
Research and development activities represent a significant part of the Company's business. These expenditures relate to the processes of discovering, testing and developing new products, upfront payments and developmental milestones, improving existing products, as well as ensuring product efficacy and regulatory compliance prior to launch. The Company remains committed to investing in research and development with the aim of delivering high quality and innovative products.
Research and Development decreased as a percent to sales primarily driven by:
• Acquired in-process research & development expense of $1.25 billion to secure the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition) in the Innovative Medicine business in 2024
• Acquired in-process research & development expense of $0.5 billion from the V-Wave acquisition and a Laminar milestone of $0.3 billion in the MedTech business in 2024
• Leverage resulting from investment prioritization in the Innovative Medicine business
In-Process Research and Development Impairments (IPR&D): In the fiscal year 2025, the Company recorded a charge of approximately $0.1 billion primarily related to a non-strategic asset acquired with Abiomed in 2022. In the fiscal year 2024, the Company recorded a charge of approximately $0.2 billion primarily associated with the M710 (biosimilar) asset acquired as part of the acquisition of Momenta Pharmaceuticals in 2020. There was also a partial impairment of this asset for $0.2 billion in the fiscal 2023. This asset is fully impaired.
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. (JJDC), changes in the fair value of securities, investment (income)/loss related to employee benefit programs, gains and losses on divestitures, certain transactional currency gains and losses, acquisition and divestiture related costs, litigation accruals and settlements, as well as royalty income.
Other (income) expense, net for the fiscal year 2025 reflected an increase in income of $11.9 billion as compared to the prior year primarily due to the following:
(Dollars in Billions)(Income)/Expense
Change
Litigation related (1)
Employee benefit plan related
Changes in the fair value of securities (2)
Acquisition, Integration and Divestiture related (3)
Monetization of royalty rights
Other
Total Other (Income) Expense, Net
(1) The fiscal year 2025 includes the reversal of approximately $7.0 billion, a significant portion of the previously accrued talc reserve and an expense of $0.8 billion for the Auris shareholder litigation. The fiscal year 2024 includes charges of approximately $5.1 billion for talc matters (See Note 19 to the Consolidated Financial Statements for additional details).
(2) The fiscal year 2024 includes the loss of $0.4 billion on the completion of the debt for equity exchange of the retained stake in Kenvue.
(3) The fiscal year 2025 is primarily related to the acquisitions of Intra-Cellular (CAPLYTA) and Halda Therapeutics partially offset by the reduction of the Abiomed contingent value right (CVR) liability. The fiscal year 2024 is primarily related to the acquisition of Shockwave.
Interest (Income) Expense: Interest income in the fiscal year 2025 was $1.1 billion as compared to $1.3 billion in 2024. Interest income decreased as compared to the prior year driven by lower interest rates earned on cash balances. Interest expense in the fiscal year 2025 was $1.0 billion as compared to $0.8 billion in 2024. Interest expense was higher as compared to the prior year due to a higher average debt balance. Cash, cash equivalents and marketable securities totaled $20.1 billion at the end of 2025, and averaged $22.3 billion as compared to the cash, cash equivalents and marketable securities total of $24.5 billion and $23.7 billion average balance in 2024. The total debt balance at the end of 2025 was $47.9 billion with an average debt balance of $42.3 billion as compared to $36.6 billion at the end of 2024 and an average debt balance of $33.0 billion. The higher debt balance was due to the senior unsecured notes issued by the Company in the fiscal first quarter of 2025. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition which closed on April 2, 2025 and for general corporate purposes.
Income before tax by segment
Income before tax by segment of business was as follows:
Income Before Tax
Segment Sales
Percent of Segment
Sales
(Dollars in Millions)
Innovative Medicine
MedTech
Segment earnings before tax (1)
(Income) Expenses not allocated to segments (2)
Worldwide income before tax
(1) See Note 17 to the Consolidated Financial Statements for more details.
(2) Amounts not allocated to segments include interest (income) expense and general corporate (income) expense. The fiscal year 2025 includes the reversal of approximately $7.0 billion, a significant portion of the previously accrued talc reserve. The fiscal year 2024 includes charges for talc matters of approximately $5.1 billion and a loss of approximately $0.4 billion related to the debt to equity exchange of the Company's remaining shares of Kenvue Common Stock.
2025 Annual Report
Innovative Medicine segment:
In 2025, the Innovative Medicine segment income before tax as a percent to sales was 36.9% versus 33.2% in 2024. The increase in the income before tax as a percent of sales was primarily driven by the following:
• Acquired in-process research and development expense of $1.25 billion to secure the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition) in 2024
• Litigation income of $0.1 billion in 2025 versus expense of $0.4 billion in 2024, primarily related to Risperdal Gynecomastia
• Research & development leverage resulting from investment prioritization
partially offset by
• Acquisition, integration and divestiture related net expense of $0.4 billion in 2025 primarily related to Intra-Cellular and Halda Therapeutics and $0.1 billion in 2024
• Monetization of royalty rights of $0.3 billion in 2024
• Unfavorable Product mix, the impact of Medicare Part D redesign and unfavorable transactional currency
• Increased investment related to the acquisition of Intra-Cellular (CAPLYTA)
MedTech segment:
In 2025, the MedTech segment income before tax as a percent to sales was 12.2% versus 11.7% in 2024. The increase in the income before tax as a percent to sales was primarily driven by the following:
• Acquisition, integration and divestiture related net income of $0.2 billion in 2025 primarily driven by a contingent value right liability reduction associated with Abiomed versus net costs of $1.0 billion in 2024 primarily related to the Shockwave acquisition
• Acquired in-process research and development expense of $0.5 billion from the V-Wave acquisition and $0.3 billion for a Laminar milestone in 2024
• Gain on the sale of securities of $0.2 billion in 2025
partially offset by
• Litigation expense of $0.9 billion in 2025, primarily related to Auris shareholder litigation
• Higher restructuring related costs of $0.5 billion in 2025 versus $0.2 billion in 2024
• Tariffs, unfavorable transactional currency and macroeconomic factors in Cost of products sold
Restructuring: In fiscal 2025, the company initiated a restructuring program of its Surgery franchise within the MedTech segment to simplify and focus operations by exiting certain non-strategic product lines and optimize select sites across the network. The pre-tax restructuring expense was $205 million in the fiscal year 2025, of which $76 million was recorded in Restructuring, $122 million in Other income and expense and $7 million in Cost of products sold on the Consolidated Statement of Earnings. The pre-tax restructuring expense in the fiscal year 2025 primarily included costs related to asset impairments as well as product exits. The estimated costs of the total program are between $0.9 billion - $1.0 billion and is expected to be substantially completed by the end of fiscal year 2026.
In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pretax restructuring expense was $307 million in the fiscal year 2025, of which $152 million was recorded in Restructuring, $84 million in Cost of products sold and $71 million in Other (Income)/Expense on the Consolidated Statement of Earnings primarily for costs related to asset impairments as well as market and product exits. The pre-tax restructuring expense was $167 million in the fiscal year 2024, of which $132 million was recorded in Restructuring and $35 million was recorded in Cost of products sold on the Consolidated Statement of Earnings, primarily included costs related to market and product exits. The pre-tax restructuring expense was $319 million in the fiscal year 2023, of which $40 million was recorded in Restructuring and $279 million was recorded in Cost of products sold on the Consolidated Statement of Earnings, primarily included inventory and instrument charges related to market and product exits. Total project costs of approximately $0.8 billion have been recorded since the was announced and the program has been substantially completed in the fiscal year 2025.
In fiscal 2023, the Company completed a prioritization of its research and development (R&D) investment within the Innovative Medicine segment to focus on the most promising medicines with the greatest benefit to patients. This resulted in the exit of certain programs within therapeutic areas. The pre-tax restructuring charge of $102 million in the fiscal year 2024 was recorded in Restructuring on the Consolidated Statement of Earnings, and included the termination of partnered and non-partnered development program costs, asset impairments and asset divestments. The pre-tax restructuring expense was $479 million in the fiscal year 2023, of which $449 million was recorded in Restructuring and $30 million was recorded in Cost of products sold on the Consolidated Statement of Earnings included the termination of partnered and non-partnered program costs and asset impairments. Total project costs of approximately $0.6 billion have been recorded since the was announced and the program was completed in the fiscal fourth quarter of 2024.
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 from continuing operations was 17.7% in 2025 and 15.7% in 2024. For discussion related to the fiscal year 2025 provision for taxes refer to Note 8 to the Consolidated Financial Statements.
On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework that was supported by over 130 countries worldwide. Several EU and non-EU countries have enacted Pillar Two legislation with an initial effective date of January 1, 2024, with other aspects of the law effective in 2025 or later. While countries continue to enact new provisions or issue new regulations this could have an impact to the Company’s effective tax rate. The Company will continue to monitor further developments to determine any potential impact in the countries in which we operate, such as the recently issued administrative guidance on the side-by-side system that will fully exclude U.S. parented groups from certain provisions of the Pillar Two Framework.
Liquidity and capital resources
Liquidity & cash flows
Cash and cash equivalents were $19.7 billion at the end of 2025 as compared to $24.1 billion at the end of 2024.
The primary sources and uses of cash that contributed to the $4.4 billion decrease were:
(Dollars in billions)
Q4 2024 Cash and cash equivalents balance
cash generated from operating activities
net cash used for investing activities
net cash used for financing activities
effect of exchange rate and rounding
Q4 2025 Cash and cash equivalents balance
In addition, the Company had $0.4 billion in marketable securities at the end of fiscal year 2025 and $0.4 billion at the end of fiscal year 2024. See Note 1 to the Consolidated Financial Statements for additional details on cash, cash equivalents and marketable securities.
2025 Annual Report
Cash flow from operations of $24.5 billion was the result of:
(Dollars In billions)
Net Earnings
non-cash expenses and other adjustments primarily for depreciation and amortization, stock-based compensation, asset write-downs, charges for acquired in-process research and development and deferred tax provision partially offset by net gain on sale of assets/businesses
an increase in other current and non-current assets
a decrease in other current and non-current liabilities
an increase in accounts payable and accrued liabilities
an increase in accounts receivable and inventories
Cash flow from operations
Cash flow used for investing activities of $23.6 billion was primarily due to:
(Dollars in billions)
additions to property, plant and equipment
acquisitions, net of cash acquired
proceeds from the disposal of assets/businesses, net
acquired in-process research and development /related milestones
net sales of investments
credit support agreements activity, net
other (including capitalized licenses and milestones)
Net cash used for investing activities
Cash flow used for financing activities of $5.5 billion was primarily due to:
(Dollars in billions)
dividends to shareholders
repurchase of common stock
net proceeds from short and long-term debt
proceeds from stock options exercised/employee withholding tax on stock awards, net
credit support agreements activity, net
other and rounding
Net cash used for financing activities
As of December 28, 2025, the Company's notes payable and long-term debt was in excess of cash, cash equivalents and marketable securities. As of December 28, 2025, the net debt position was $27.8 billion as compared to the prior year of $12.1 billion. The debt balance at the end of 2025 was $47.9 billion as compared to $36.6 billion in 2024. In the fiscal first quarter of 2025, the Company issued senior unsecured notes for a total of $9.2 billion. For additional details on borrowings, see Note 7 to the Consolidated Financial Statements. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition for approximately $14.5 billion which closed on April 2, 2025, and for general corporate purposes. Considering recent market conditions, the Company has re-evaluated its operating cash flows and liquidity profile and does not foresee any significant incremental risk. 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 reserve balance of approximately $3.4 billion related to talc matters, $2.0 billion related to the current portion of Corporate bonds due and the remaining
approximately $1.1 billion to settle opioid litigation (See Note 19 to the Consolidated Financial Statements for additional details). In addition, the Company monitors the global capital markets on an ongoing basis and from time to time may raise capital when market conditions are favorable.
The following table summarizes the Company’s material contractual obligations and their aggregate maturities as of December 28, 2025: To satisfy these obligations, the Company intends to use cash from operations.
(Dollars in Millions)
Debt Obligations
Interest on
Debt Obligations
Total
After 2030
Total
For tax matters, see Note 8 to the Consolidated Financial Statements. For talc matters, see Note 19 to the Consolidated Financial Statements.
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. 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 December 28, 2025 market rates would increase the unrealized value of the Company’s forward contracts by approximately $0.2 billion. Conversely, a 10% depreciation of the U.S. Dollar from the December 28, 2025 market rates would decrease the unrealized value of the Company’s forward contracts by approximately $0.3 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.
The Company hedges the exposure to fluctuations in currency exchange rates, and the effect on certain assets and liabilities in foreign currency, by entering into currency swap contracts. 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 $1.5 billion. In either scenario, at maturity, the gain or loss on the swap contract would be offset by the gain or loss on the underlying transaction, and therefore, would have no impact on future anticipated cash flows.
The Company does not enter into financial instruments for trading or speculative purposes. Further, the Company has a policy of only entering into contracts with parties that have at least an investment grade credit rating. The counterparties to these contracts are major financial institutions and there is no significant concentration of exposure with any one counterparty. Management believes the risk of loss is remote. The Company entered into credit support agreements (CSA) with certain derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. See Note 6 to the Consolidated Financial Statements for additional details on credit support agreements.
The Company invests in both fixed rate and floating rate interest earning securities which carry a degree of interest rate risk. The fair market value of fixed rate securities may be adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. 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 $5.0 million.
The Company has access to substantial sources of funds at numerous banks worldwide. In June 2025, the Company secured a new 364-day Credit Facility of $10 billion, which expires on June 24, 2026. 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.
2025 Annual Report
Total borrowings at the end of 2025 and 2024 were $47.9 billion and $36.6 billion, respectively. The increase in the borrowings was primarily due to the issuance of new debt in the fiscal first quarter of 2025. The Company issued senior unsecured notes for approximately $9.2 billion. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition for approximately $14.5 billion which closed on April 2, 2025, and for general corporate purposes. In 2025, net debt (cash and current marketable securities, net of debt) was $27.8 billion compared to net debt of $12.1 billion in 2024. Total debt represented 37.0% of total capital (shareholders’ equity and total debt) in 2025 and 34.0% of total capital in 2024. Shareholders’ equity per share at the end of 2025 was $33.86 compared to $29.70 at year-end 2024.
A summary of borrowings can be found in Note 7 to the Consolidated Financial Statements.
Dividends
The Company increased its dividend in 2025 for the 63 rd consecutive year. Cash dividends paid were $5.14 per share in 2025 and $4.91 per share in 2024.
On January 2, 2026, the Board of Directors declared a regular cash dividend of $1.30 per share, payable on March 10, 2026 to shareholders of record as of February 24, 2026.
Other information
Critical accounting policies and estimates
Management’s discussion and analysis of results of operations and financial condition are based on the Company’s consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). The preparation of these financial statements requires that management make estimates and assumptions that affect the amounts reported for revenues, expenses, assets, liabilities and other related disclosures. Actual results may or may not differ from these estimates. The Company believes that the understanding of certain key accounting policies and estimates are essential in achieving more insight into the Company’s operating results and financial condition. These key accounting policies include revenue recognition, income taxes, legal and self-insurance contingencies, valuation of long-lived assets, assumptions used to determine the amounts recorded for pensions and other employee benefit plans and accounting for stock based awards.
Revenue Recognition: The Company recognizes revenue from product sales when obligations under the terms of a contract with the customer are satisfied; generally, this occurs with the transfer of control of the goods to customers. The Company's global payment terms are typically between 30 to 90 days. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns, discounts to customers and governmental clawback provisions are accounted for as variable consideration and recorded as a reduction in sales.
Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including consideration of competitor pricing. Rebates and discounts are estimated based on contractual terms, historical experience, patient outcomes, trend analysis and projected market conditions in the various markets served. The Company evaluates market conditions for products or groups of products primarily through the analysis of wholesaler and other third-party sell-through and market research data, as well as internally generated information.
Sales returns are estimated and recorded based on historical sales and returns information. Products that have lost patent exclusivity, or that otherwise exhibit unusual sales or return patterns due to dating, competition or other marketing matters are specifically investigated and analyzed as part of the accounting for sales return accruals.
Sales returns allowances represent a reserve for products that may be returned due to expiration, destruction in the field, or in specific areas, product recall. In accordance with the Company’s accounting policies, the Company generally issues credit to customers for returned goods. The Company’s sales returns reserves are accounted for in accordance with the U.S. GAAP guidance for revenue recognition when right of return exists. Sales returns reserves are recorded at full sales value. Sales returns in the Innovative Medicine segment 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 sales returns reserve for the total Company has been approximately 1.0% of annual net trade sales during the fiscal years 2025, 2024 and 2023.
Promotional programs are recorded in the same period as related sales and include volume-based sales incentive programs. Volume-based incentive programs are based on the estimated sales volumes for the incentive period and are recorded as products are sold. These arrangements are evaluated to determine the appropriate amounts to be deferred or recorded as a reduction of revenue. 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 the fiscal year 2025, 2024 and 2023.
In addition, the Company enters into collaboration arrangements that contain multiple performance obligations. Amounts due from collaborative partners for these arrangements are recognized as each performance obligation is satisfied, based on the relative selling price. Upfront fees received as part of these arrangements are generally deferred and recognized over the performance period. 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. 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.
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 December 28, 2025 and December 29, 2024.
Innovative Medicine segment
(Dollars in Millions)
Balance at
Beginning
of Period
Accruals
Payments/
Credits (2)
Balance at
End of
Period
Accrued rebates (1)
Accrued returns
Accrued promotions
Subtotal
Reserve for doubtful accounts
Reserve for cash discounts
Total
Accrued rebates (1)
Accrued returns
Accrued promotions
Subtotal
Reserve for doubtful accounts
Reserve for cash discounts
Total
(1) Includes reserve for customer rebates of $262 million at December 28, 2025 and $187 million at December 29, 2024, recorded as a contra asset.
(2) Includes adjustments to revenue recognized as a result of changes in estimates for prior year transactions
2025 Annual Report
MedTech segment
(Dollars in Millions)
Balance at
Beginning of
Period
Accruals
Payments/
Credits
Balance at
End of
Period
Accrued rebates (1)
Accrued returns
Accrued promotions
Subtotal
Reserve for doubtful accounts
Reserve for cash discounts
Total
Accrued rebates (1)
Accrued returns
Accrued promotions
Subtotal
Reserve for doubtful accounts
Reserve for cash discounts
Total
(1) Includes reserve for customer rebates of $767 million at December 28, 2025 and $704 million at December 29, 2024, recorded as a contra asset.
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. GAAP accounting and tax reporting, recorded as deferred tax assets or liabilities. The Company estimates deferred tax assets and liabilities based on enacted tax law and rates. Future changes in tax laws and rates may affect recorded deferred tax assets and liabilities in the future.
The Company records 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. Management believes that changes in these estimates would not have a material effect on the Company's results of operations, cash flows or financial position.
The Company has not provided deferred taxes on the undistributed earnings on 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. If the Company decides at a later date to repatriate these earnings to the U.S., the Company would be required to record the net tax effects on these amounts. The Company estimates that the tax effect of this repatriation would be approximately $0.6 billion under currently enacted tax laws and regulations and at current currency exchange rates. This amount does not include the possible benefit of U.S. foreign tax credits, which may substantially offset this cost.
See Note 1 and Note 8 to the Consolidated Financial Statements for further information regarding income taxes.
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. 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.
See Notes 1 and 19 to the Consolidated Financial Statements for further information regarding product liability and legal proceedings.
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. As these assumptions and estimates may change over time, it may or may not be necessary for the Company to record impairment charges.
Employee Benefit Plans: The Company sponsors various retirement and pension plans, including defined benefit, defined contribution and termination indemnity plans, which cover most employees worldwide. These plans are based on assumptions for the discount rate, expected return on plan assets, mortality rates, expected salary increases, healthcare cost trend rates and attrition rates. See Note 10 to the Consolidated Financial Statements for further details on these rates.
Stock Based Compensation: The Company recognizes compensation expense associated with the issuance of equity instruments to employees for their services. Based on the type of equity instrument, the fair value is estimated on the date of grant using either the Black-Scholes option valuation model or a combination of both the Black-Scholes option valuation model and Monte Carlo valuation model, and is expensed in the financial statements over the service period. 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. The fair values for the earnings per share goal of each performance share unit was estimated on the date of grant using the fair market value of the shares at the time of the award, discounted for dividends, which are not paid on the performance share units during the vesting period. The fair value for the relative total shareholder return goal of each performance share unit was estimated on the date of grant using the Monte Carlo valuation model. See Note 16 to the Consolidated Financial Statements for additional information.
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 December 28, 2025.
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. In response to these concerns, the Company has a long-standing policy of pricing products responsibly. For the period 2015 - 2025, 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. The Company continues to monitor these situations and take appropriate actions. Inflation rates continue to have an effect on worldwide economies and, consequently, on the way companies operate. The Company has accounted for operations in Argentina, Venezuela, Turkey and Egypt (beginning in the fiscal fourth quarter of 2024) as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%. 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.
In July 2023, Janssen Pharmaceuticals, Inc. (Janssen) filed litigation against the U.S. Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services challenging the constitutionality of the IRA's Medicare Drug Price Negotiation Program. The litigation requests a declaration that the IRA violates Janssen’s rights under the First Amendment and the Fifth Amendment to the Constitution and therefore that Janssen is not subject to the IRA’s mandatory pricing scheme. While the impact of the IRA on our business and the broader pharmaceutical industry remains uncertain, as litigation filed by Janssen and other pharmaceutical companies remains ongoing, CMS has publicly announced the maximum fair price for each of the selected drugs and has recently begun implementing the program. In December 2025, Janssen sought review by the U.S. Supreme Court of the Third Circuit's majority affirmance of the district court’s ruling in favor of the government.
The long-term implications of regional conflicts on the Company are difficult to predict. The financial impact of known existing conflicts in the fiscal 2025 was not material.
2025 Annual Report
The Company is exposed to fluctuations in currency exchange rates. A 1% change in the value of the U.S. Dollar as compared to all foreign currencies in which the Company had sales, income or expense in 2025 would have increased or decreased the translation of foreign sales by approximately $0.4 billion and net income by approximately $0.2 billion.
Governments around the world consider various proposals to make changes to tax laws, which may include increasing or decreasing existing statutory tax rates. In connection with various government initiatives, companies are required to disclose more information to tax authorities on operations around the world, which may lead to greater audit scrutiny of profits earned in other countries. A change in statutory tax rate in any country would result in the revaluation of the Company’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted. This change would result in an expense or benefit recorded to the Company’s Consolidated Statement of Earnings. The Company closely monitors these proposals as they arise in the countries where it operates. Changes to the statutory tax rate may occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in which the law change is enacted.
The Company may be further impacted by the imposition of tariffs, trade protection measures or other policies adopted by any jurisdiction that favor domestic companies and technologies over foreign competitors.
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, pricing and reimbursement of healthcare products.
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 may continue to impact the Company’s businesses.
The Company also operates in an environment increasingly hostile to intellectual property rights. Firms have filed Abbreviated New Drug Applications or Biosimilar Biological Product Applications with the U.S. FDA or otherwise challenged the coverage and/or validity of the Company's patents, seeking to market generic or biosimilar forms of many of the Company’s key pharmaceutical products prior to expiration of the applicable patents covering those products. In the event the Company is not successful in defending the patent claims challenged in the resulting lawsuits, generic or biosimilar versions of the products at issue will be introduced to the market, resulting in the potential for substantial market share and revenue losses for those products, and which may result in a non-cash impairment charge in any associated intangible asset. There is also a risk that one or more competitors could launch a generic or biosimilar version of the product at issue following regulatory approval even though one or more valid patents are in place.
Legal proceedings
Johnson & Johnson and certain of its subsidiaries are involved in various lawsuits and claims regarding product liability, intellectual property, commercial, employment, indemnification and other matters; governmental investigations; and other legal proceedings that arise from time to time in the ordinary course of business.
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 December 28, 2025, the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated. 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, Contingencies. For these and other litigation and regulatory matters discussed below for which a loss is probable or reasonably possible, the Company is unable to estimate the possible loss or range of loss beyond the amounts accrued. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors including, among other things, whether sought in the proceedings are or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in ; procedural or jurisdictional issues; the uncertainty and of the number of potential ; ability to comprehensive multi-party settlements; complexity of related cross- and ; and/or there are numerous parties involved. To the extent awards, judgments or have been rendered the Company, the Company does not record an accrual until a is determined to be probable and can be reasonably estimated.
In the Company's opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company's balance sheet, is not expected to have a material adverse effect on the Company's financial position. However, the resolution of, or increase in accruals for, one or more of these matters in any reporting period may have a material adverse effect on the Company's results of operations and cash flows for that period.
See Note 19 to the Consolidated Financial Statements included in Item 8 of this report for further information regarding legal proceedings.
Common stock
The Company’s Common Stock is listed on the New York Stock Exchange under the symbol JNJ. As of February 4, 2026, there were 108,358 record holders of Common Stock of the Company.
