Johnson & Johnson To Break Up Into Two Companies
Johnson & Johnson Products As Company's Covid Vaccine Found Effective By FDA A bottle of Johnson & Johnson's brand lotion for sale at a pharmacy in Salt Lake City, Utah, U.S., on Thursday, Feb. 25, 2021. Johnson & Johnsons Covid-19 vaccine is safe and effective, U.S. regulators said, a key milestone on the path toward giving Americans access to the first such shot to work in a single dose. Photographer: George Frey/Bloomberg via Getty Images Bloomberg / Contributor
George Frey/Bloomberg/Contributor via Getty Images

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

As reported by The Wall Street Journal: 

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

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

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

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

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

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

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

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

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

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

The majority opinion by the Oklahoma Supreme Court this week stated, “The district court stepping into the shoes of the legislature by creating and funding government programs designed to address social and health issues goes too far…This Court defers the policy-making to the legislative and executive branches and rejects the unprecedented expansion of public nuisance law.” 

“In reaching this decision, we do not minimize the severity of the harm that thousands of Oklahoma citizens have suffered because of opioids. However grave the problem of opioid addiction is in Oklahoma, public nuisance law does not provide a remedy for this harm,” Justice James Winchester reportedly wrote for the majority.

“A product manufacturer’s responsibility is to put a lawful, non-defective product into the market. There is no common law tort duty to monitor how a consumer uses or misuses a product after it is sold,” Winchester wrote.

This week, General Electric said it would separate into three separate public companies, as well. The three entities will center on health care, energy, and aviation with the aviation portion keeping the title “General Electric” in its name. 

“GE said it is spinning off GE Healthcare, which makes MRIs and other hospital equipment, in early 2023, with GE expecting to retain a stake of 19.9% that it plans to sell over time. In 2020, the unit had about $17 billion in revenue,” The Journal reported earlier this week. 

“GE plans to combine its power unit and renewable energy unit, which make turbines for power plants and wind farms, respectively, and spin off that operation in early 2024. The company’s remaining digital division will also be moved into the power business. Those units together had about $33 billion in revenue in 2020,” the outlet added.

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