Writers Muse
Johnson & Johnson: Part I
Description: Brief essay that analyzes the company Johnson & Johnson. Discusses the company’s history, growing competition and the changes they face with global government regulations. Paper written for the college course of Microeconomics.
The company I selected is popular and widely known Johnson and Johnson Corporation. Johnson and Johnson is known as an American pharmaceutical company that provides medical items and consumer boxed goods on a global scale. The company has been around since the year 1886 and is headquartered in New Jersey. The corporation “…includes some 230 subsidiary companies with operations in over 57 countries” (“Johnson & Johnson”). Currently the company is selling their products in about 175 countries.
Johnson and Johnson is without a doubt one of America’s most admitted companies. Furthermore J&J is also “…one of the largest health care firms in the world and one of the most diversified” (“Johnson & Johnson History”). Operations currently conducted are divided into three different business segments known as pharmaceutical, professional, consumer. The roots of the great J&J can be traced back to the late 1800s with Robert Wood Johnson. Theories made English surgeon Sir Joseph Lister on “…airborne germs as a source of infection in the operating room” triggered the idea for surgical dressings products (“Our Company”). After joining his two brothers James Wood and Edward Mead Johnson, operations began and in 1887 Johnson and Johnson was officially formed.
Even though J&J is a trusted and known company it still faces many competitors. In the upcoming years the launch of new drugs on the market are giving J&J a run for their money. For example, one of J&J’s top selling drugs Procrit, treated for anemia, is now competing against a new anemia-fighting drug made by Amgen. Conducted research has proven that many more doctors are not only using Amgen’s product in hospitals but also prescribing them as well. But Procrit isn’t the only drug that is facing a competitor. The anti-psychotic drugged named Risperdal “…will face competition from Bristol-Myers’ new schizophrenia medicine Abilify, which boasts fewer side effects than Risperdal and its kin” (Herper). If physicians are draw into this new drug than it is unavoidable that Risperdal will see a large sales decrease. Furthermore generic drug firms are as of recent years becoming more and more of a threat seeing as they are “…seeking to market generic forms of most of the Company’s key pharmaceutical products, prior to expiration of the applicable patents covering those products” (“Form 10-Q”).
There have also been rising economic and market issues with Johnson and Johnson. The company is fully aware that they are conducting business in an area where there is rising concern about the cost for health care. Johnson and Johnson have always made it an objective and strong hold policy in their company that the pricing for their products be reasonable and affordable. However because inflation rates have continued to strongly affect the worldwide economy, J&J has been implementing various cost reduction programs. Despite their best efforts, Johnson and Johnson still have to face “…worldwide health care changes that may result in pricing pressures that include health care cost containment and government legislation relating to sales, promotions and reimbursement” (“Form 10-Q”).
Increased global government regulations over the years have also proven to give Johnson and Johnson some challenges. In Western Indian government officials are convinced that J&J’s baby shampoos may be harmful to infants. As such they have ordered the company to remove the baby label from various products in order to be sold there. Other problems with government regulations occurred in India, as well as China, with misbranded products and wanted FDA proof of these products being classified correctly. Here in the U.S. problems also occurred when Johnson and Johnson was being sought after by officials for prosecution of health care fraud with the use of the product called Natrecor. The problem persisted of the company being:
“…criticized by some prominent cardiologists, who say that the company has encouraged widespread and frequent use of intravenous Natrecor therapy in outpatient clinics, one or more times a week for some patients, even though the Food and Drug Administration has approved the drug only for acutely ill hospitalized patients. While doctors are free to administer drugs as they see fit, it is illegal for companies to promote so-called off-label, or nonapproved, uses of a pharmaceutical product” (Saul).
Despite governmental problems, Johnson and Johnson do still face many opportunities for growth across the globe. It is after all a company that has been around for many years and as managed to single handedly change the performance medical procedures.
Works Citied
- “Form 10-Q for Johnson & Johnson.” Yahoo Finance. 10 May 2007. 27 Jan. 2008 <http://biz.yahoo.com/e/070510/jnj10-q.html>.
- Herper, Matthew. “J&J Earnings Soar, But Competition Looms.” Forbes. 21 Jan. 2003. 20 Jan. 2008 <http://www.forbes.com/2003/01/21/cx_mh_0121jnj.html>.
- “Johnson & Johnson.” Wikipedia, The Free Encyclopedia. 25 Jan 2008, 02:11 UTC. Wikimedia Foundation, Inc. 27 Jan 2008 <http://en.wikipedia.org/w/index.php?title=Johnson_%26_Johnson&oldid=186728355>.
- “Johnson & Johnson History.” Funding Universe. 27 Jan. 2008 <http://www.fundinguniverse.com/company-histories/Johnson-amp;-Johnson-Company-History.html>.
- “Our Company.” Johnson and Johnson. 8 June 2007. 25 Jan. 2008 <http://www.jnj.com/our_company/history/history_section_1.htm>.
- Saul, Stephanie. “Johnson & Johnson Faces U.S. Inquiry on Marketing of Heart Drug.” Editorial. International Herald Tribune 22 July 2005, Business ed.