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Johnson & Johnson sells medicines, medical devices, and everyday health products like Band-Aids and Tylenol.
Johnson & Johnson is really two big businesses under one roof. One half invents and sells prescription medicines — things like cancer drugs, immune treatments, and a blockbuster for psoriasis and Crohn's disease. The other half makes medical devices, the hardware surgeons use every day: tools for joint replacements, surgical staplers, and heart devices. For most of its history there was a third leg too, selling Band-Aids, Tylenol, and shampoo straight to shoppers, but the company spun that consumer business off into a separate public company called Kenvue in 2023.
The money mostly comes from drugs, and the reason is simple: a single successful medicine can earn billions a year once regulators approve it and insurers agree to pay for it. Drugmakers charge high prices because inventing a new medicine is brutally expensive and most attempts fail. J&J's edge is patience and scale — it can fund years of failed experiments with profits from the few winners that make it through, and it has been doing this for over a century. The device side is steadier and less glamorous. Hospitals buy surgical tools because they need them to operate, but they push hard on price, and competitors like Medtronic, Abbott Laboratories, and Stryker are always nipping at the same customers. There is a darker side that matters. J&J has faced tens of thousands of lawsuits over talc-based baby powder, with plaintiffs claiming it caused cancer; the company denies the link and has fought the claims in court, and the litigation has dragged on for years. It has also used a controversial legal maneuver — putting a subsidiary into bankruptcy to try to settle the talc cases — and courts have repeatedly pushed back. More broadly, its drug patents eventually expire, cheap generics rush in, and revenue from those medicines evaporates. That is why the company spends roughly $15 billion a year on research and development: it is constantly racing to replace the drugs it is about to lose.
In 1876, Robert Wood Johnson went to the Centennial Exposition in Philadelphia and heard a doctor named Joseph Lister describe a strange new idea: antiseptic surgery, killing germs so wounds don't rot. Most of the doctors in the room thought it was nonsense. Johnson thought it was the future.
A decade later, Johnson split with his business partner Seabury and started a company with his two younger brothers, Edward and James. Their big idea: make sterile surgical supplies in bulk, something no one had done before, from a rented factory in New Brunswick, New Jersey. It began with just 14 employees, eight women and six men, and a bet that clean would beat dirty.
After 58 years of running privately, Johnson & Johnson sold shares to the public for the first time. It was already a big business by then, with well over a thousand products and sales in the many tens of millions, and the money raised would fuel its next stretch of growth.
The company bought McNeil Laboratories and got a young aspirin-free pain reliever called Tylenol along with it. Soon after, regulators let J&J sell the drug over the counter, and sales took off. It looked like a quiet little deal, but it would come to define the company's reputation, both for good and for bad.
J&J bought Janssen Pharmaceuticals, a move that gave it a real drug-making arm, which still sits inside the company today. That part of the business would eventually produce medicines for ADHD and even a COVID-19 vaccine, pushing J&J deeper into the science of making drugs, not just supplies.
Then came the nightmare. Seven people in the Chicago area died after taking Tylenol capsules that someone had laced with poison on store shelves. J&J, led by James Burke, pulled every bottle off shelves, stopped advertising, and worked closely with police and regulators. It then brought Tylenol back in packaging you can't secretly open, and that playbook became the most-studied crisis response in business history. The brand survived, and so did the company's reputation for doing the right thing.
J&J bought DePuy, a company founded back in 1895 as the world's first orthopaedics business, which had invented the first hip and knee replacement implants. It became the core of a global orthopaedics arm, later joined by Synthes, as J&J kept spreading into the hardware that goes inside people's bodies.
After 135 years as a consumer conglomerate, J&J announced it would spin off its consumer health business, the part that sells Listerine and Baby Powder. The goal was focus: keep the high-intensity work of pharmaceuticals and medical technology, and let the everyday consumer brands stand on their own. One company became two.
Joaquin Duato, a company veteran of more than 30 years, became CEO and turned out to be the decisive builder of the new, leaner J&J. His style was operational discipline and a push for digital tools, steering money toward fast-growing medical technology and cancer drugs.
The Baby Powder story finally caught up with the company. After more than 67,000 lawsuits piled up over talc and cancer claims, and after three failed attempts to use bankruptcy to contain them, J&J agreed to a multi-billion-dollar settlement. It had already stopped making talc-based powder. The deal cleared a legal cloud that had weighed on the stock for years.
J&J generates a lot of spare cash, and it sends much of it back to shareholders. It pays a dividend that it has raised every single year for more than six decades, a streak almost unmatched among big companies, and it also buys back its own shares. It uses the rest to buy smaller companies — in 2024 it agreed to pay about $13 billion for Shockwave Medical, a maker of devices that blast hardened calcium out of arteries — and to keep funding its pipeline. In 2024 the company brought in roughly $88 billion in revenue. The core question for any investor is whether its labs keep producing new blockbusters fast enough to outrun the patents expiring on the old ones.
Saved answer · last researched 23 Oct 2026