To Our Shareholders
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In my time at the helm of Johnson & Johnson, it has been my privilege to write ten letters such as this one to you—our valued partners. As I reflect on my last year serving as the CEO of this great company, the world faces uncertainty in so many aspects of our society and global economy—but there is still a great deal of hope for the future. This hope is rooted in the collective purpose and lived experiences of recent years that have created an unprecedented momentum behind four ideas that I believe will—and indeed, must—propel us onward in creating a better tomorrow.
At the most fundamental level, these ideas could be characterized as lessons imparted by living and leading through a global pandemic. But it’s no coincidence that each one closely reflects the Credo values that have set Johnson & Johnson apart from our earliest days—and I feel great certainty that they are the lodestars for charting both the best course for our company, and the healthiest possible future for humanity.
First, Science Has Unlimited Potential to Change Lives—But We Must Continue to Prioritize Innovation
I consider myself incredibly fortunate to have led Johnson & Johnson during a decade-long period that encompassed astonishing advancements in human health. The unlocking of the human genetic code and development of cell therapy, continued advances in digitization across the spectrum of healthcare, and rapid progress in data science have opened up a new world of therapies for even the most rare and hard-to-treat diseases.
None of us would ever have guessed that a humble but ruthlessly infectious respiratory virus would be the reason our society would finally come to understand the full potential for science and innovation to transform lives. But after two-plus years of fighting COVID-19…here we are. For scientists at Johnson & Johnson and across our industry, the pandemic was a once-in-a-generation convergence of opportunities and challenges—and they delivered.
Working in double shifts seven days a week for more than a year, our colleagues at Janssen developed a safe, effective vaccine that we chose to provide to the world on a not-for-profit basis for emergency pandemic use. In addition to offering strong and lasting protection against COVID-19, our vaccine is easy to use, distribute, and administer—characteristics that allow our regimen to play a uniquely critical role in the overall global response to the pandemic. Thanks to this unprecedented collective effort spanning healthcare systems, industries, and governments all around the world, more than 4 billion people are now fully vaccinated against COVID-19—and the tide has finally turned against this virus that upended life as we knew it.
In our industry, impact can and must always be quantified in numbers—and there are plenty of them to be found in this Annual Report. However, the one that stands out most to me in 2021 is not a sales figure or market share. It’s our record investment of $14.7 billion in Research and Development—a 21% increase over our previous all-time-high investment in 2020.
R&D isn’t just the foundation of growth for our company—it’s the engine driving scientific progress in creating a healthier world. Johnson & Johnson has made an investment in innovation every year since 1886. And in doing so, every year we have taken on the responsibility of defining what we think healthcare can accomplish next.
Forward-looking investments made years or even decades ago were the seeds for successful innovations that flowered across all our segments in 2021.
- Our world-class Pharmaceutical scientists advanced exciting new medicines for some of the hardest-to-treat diseases, receiving FDA approval for two new products: RYBREVANT™ (amivantamab-vmjw), the first targeted treatment for patients with non-small cell lung cancer with EGFR exon 20 insertion mutations, and PONVORY™ (ponesimod) to treat adults with relapsing forms of multiple sclerosis. We reached more patients who can benefit from our marketed medicines through approvals for additional indications, new formulations, and combination therapies. And we continued to advance key pipeline programs such as our BCMA-directed CAR-T cell therapy program and our entry into gene therapy with a focus on retinal diseases.
- In our Medical Devices business, our push into the digital space gained traction in exciting ways. At the beginning of the year, we received 510(k) FDA clearance for the VELYS™ Robotic-Assisted Solution for use with the ATTUNE® Total Knee System—creating an opportunity for surgeons to simplify their existing workflows on a common orthopedic surgery. The MONARCH® platform, our first-of-its-kind robotic bronchoscopy technology, also saw more than 10,000 procedures performed in 2021.
- Just as impressive as the launch of more than 400 new Consumer Health products last year was the way the segment’s employees prioritized the health of our planet through innovation. Brands leading the way in these efforts included NEUTROGENA®, which launched the first makeup wipes to be made of 100 percent plant-based, home-compostable fibers, and LISTERINE®, which introduced new bottles containing up to 50% recycled plastic in key markets.
The resources we are allocating to R&D now are what will help us move even more quickly in creating increasingly personalized medicines, advancing robotic surgery, deploying artificial intelligence, and leveraging data in ways that will benefit the patients, consumers, and families we serve for many years to come.
To truly impact health outcomes, innovation investments must also be made outside of just R&D. Investment in data science and digital business enablement is propelling us into a future of remote clinical trials, automated patient recruitment, and innovative digitized models for end-to-end supply chain planning. Enabling new digital care models to meet people where they are and provide tech-forward resources to support disease management or personal health will make the future brighter and more interconnected—and we must stay ahead of the curve.
Second, Public Health is Everyone’s Business
One of the biggest revelations of the past few years has become a bit of a cliché—but no less of a fundamental truth: None of us are safe unless all of us are safe. Times of crisis have highlighted the interconnectedness of health systems around the world and the urgent necessity of investing in public health infrastructure to put quality care within the reach of everyone.
I’m incredibly proud of all the work Johnson & Johnson does across our extensive Global Public Health portfolio. When it comes to our Janssen COVID-19 vaccine, approximately 70% of our global vaccine supply was made available to low- and middle-income countries in 2021—and our company will continue to focus on vaccine access in those countries where people are in the greatest need going forward.
This work also includes numerous initiatives that don’t necessarily make front page headlines, but unquestionably make a huge impact in advancing our long-standing mission to create a healthier and more equitable world.
Throughout 2021, Johnson & Johnson made it a priority to maintain hard-won gains against intractable public health challenges by ensuring continuity of access to critical medicines and supporting community-based care. One example I think demonstrates the depth of both our commitment and our ambitions in this area: Not only did we deliver nearly 140,000 courses of our multidrug-resistant tuberculosis medicine (MDR-TB) to patients in need around the world, we forged ahead with launching five initiatives aimed at helping to find the “missing” patients who go undiagnosed every year.
It’s also important to note that an important component of our work to advance better health for all is taking place in our own backyard. In 2020, Johnson & Johnson launched Our Race to Health Equity—a $100 million pledge to address systemic inequalities in care that plague communities of color in the United States. In 2021, Johnson & Johnson began using this funding as a catalyst to drive change, collaboration, and innovation in embedding health equity into healthcare.
Initiatives included scholarships and mentoring programs with partners including the National Medical Foundation, National Association of Community Health Workers, and universities across the United States; investment support of early-stage innovators working to advance solutions for a range of health disparities through Johnson & Johnson Innovation and JLabs; and a J&J Impact Ventures partnership with Village Capital to launch a new accelerator focused specifically on culturally competent care.
It is now beyond question that we all suffer when public health suffers—and that we all stand to benefit from greater attention to and investment in global health programs and systems. As the world’s largest healthcare company, Johnson & Johnson will continue to lead the way—and invite other companies, industries, governments, and international institutions to join us on that path.
Third, We Must Embrace a New Era of Collaboration and Partnership
While I continue to believe that competitive markets bring out the best in both companies and individuals, collaboration can provide an exponential multiplier for good when we face the most difficult common challenges.
During the past few years, governments and regulators, private companies, and esteemed academics have all partnered together in unprecedented ways to deliver results at a speed and scale never before seen in our history—and this openness to new thinking is the critical element that must be carried into the future.
We will all need to continue evolving our shared definition of partnership if we hope to lead through the complexity of the coming decades and the increasingly interconnected nature of the issues we face.
Take, for example, what we (and so many others) have learned over the past few years about the importance of having a global supply chain that maximizes more than just efficiency. Resilience and flexibility have turned out to be just as crucial when it comes to developing the best possible network of suppliers, manufacturers, and other partners capable of meeting unexpected challenges and ensuring that patients in every corner of the world have uninterrupted access to our lifesaving medicines and essential products.
Just as this physical supply chain must evolve, it’s also imperative that we create a robust and resilient global supply chain of knowledge. The more data and insights we share within our own business and across our industry, the better we will be able to both respond to future challenges and catalyze groundbreaking innovation.
In healthcare, we often talk about interoperability—the ability of different devices in a healthcare system to share data and optimize patient outcomes. We need to lift that concept up to the highest level, enabling our partners with knowledge that they can leverage—and in turn share their findings back with us.
The tremendous potential in these relationships is clear to me because they have been a part of our business culture at Johnson & Johnson for many years. I consider it a key accomplishment of my tenure as CEO that Johnson & Johnson has become increasingly agnostic about the provenance of the best ideas. Whether from internal or external sources, through partnership or acquisition—we want to drive those ideas forward for the same reason we do everything: to create healthier, happier, longer lives for people everywhere.
The radical openness to collaboration that was so instrumental in recent years must not be allowed to recede when times of crisis are behind us. It must spread across our own and other industries, so we can continue to rapidly learn from and with each other. To me, this will be an important step in achieving true stakeholder capitalism.
Fourth, Never Underestimate the Combined Power of Purpose and Resilience
The trials all of us have faced over the last two years have motivated individuals, families, communities, and companies alike to reconsider their values and goals. We know that a new generation of employees want to clearly understand the meaning of their work and the importance of their own contribution to it.
In these letters over the last decade, I’ve probably used up every possible superlative in describing the talent and dedication of our 140,000-plus colleagues around the world and what an honor it is to lead them. Healthcare attracts a special kind of person who wants to make a difference in their career by providing meaningful service to others and I believe Johnson & Johnson continues to get the very best of the best.
They come from virtually every country in the world, bringing a vast range of skills in every discipline, as well as the richness of their own unique lived experiences. The two main things members of this diverse group seem to have in common: a passion for finding new ways to do what’s right, and an unwavering dedication to our shared mission.
Over the course of my career, I have seen the corrosive effect of uncertainty on organizations and individuals alike. But it cannot overcome the moral power of purpose—that innate and clearly understood sense of direction for our work and our lives that creates resilience in response to the greatest challenges.
Even in the most discouraging moments of the last year, the resilience of my colleagues has been a constant source of inspiration to me—from the medical professionals in our ranks who took advantage of our paid leave program to serve on the front lines of care during times of strain on their local hospitals, to the scientists who took turns working day and night shifts to advance our vaccine development while balancing their roles as mothers and fathers, to our own front line of supply chain employees who never stopped coming to work so we could deliver our most important medicines and products.
In challenging times, they have been living proof of the great power of purpose—demonstrating through their actions how a spirit of “we can do this” evolves into “we can do anything.”
Throughout my tenure as CEO of Johnson & Johnson, I have often expressed that healthcare is one of society’s most pressing needs. This urgency is why our 140,000 associates have always come to work each day guided by their collective purpose. And it’s this purpose that will both continue to guide Johnson & Johnson into the next decade and drive me to continue doing whatever I can to make a difference when it comes to addressing the most pressing needs of our world—in healthcare and beyond.
In 2021, it became clear that skillful, adrenaline-fueled crisis management wasn’t what enabled us to continue serving the patients and consumers who have depended on us throughout the pandemic. On the contrary, all our accomplishments in this unique moment have been deeply rooted in the commitment to Our Credo that has set Johnson & Johnson apart for well over a century.
It feels only fitting that when I showed up to interview for an entry-level job as a sales rep at Janssen back in 1988, the first question I was asked was about Our Credo—that living document that would go on to guide me through times of both triumph and doubt for more than three decades.
General Robert Wood Johnson’s vision from 1943 of how corporations could be a force for good in the world has never been more relevant—or necessary—than it is today. I like to think he would be pleased by how our 140,000-plus associates around the globe have honored our commitments to the people and communities we serve throughout the pandemic and beyond. I know I couldn’t be more proud of all the ways they are showing the world what it looks like to change the trajectory of health for humanity in real time.
Serving as CEO of this incredible company for the past ten years has been the great honor of my life. I couldn’t have asked for a better opportunity to make an impact on the world than through the work we do at Johnson & Johnson. And I can’t wait to see what our company accomplishes by continuing to push the boundaries of these ideas in new ways that propel us further along the journey to a healthier future for all.
Johnson & Johnson
Note Regarding Forward-Looking Statements
This letter contains forward-looking statements relating to, among other things, future operating and financial performance, product development, market position and business strategy. The reader is cautioned not to rely on these statements, which are based on current expectations of future events. For important information about these statements, including the risks, uncertainties and other factors that could cause actual results to vary materially from the assumptions, expectations and projections expressed in any forward-looking statements, the reader should review the Annual Report on Form 10-K for the fiscal year ended January 2, 2022, including in the sections captioned “Cautionary Note Regarding Forward Looking Statements” and “Item 1A. Risk Factors.” Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.