Medical devices weigh on J&J; focuses on innovation, hospital bundling to improve


Johnson & Johnson ($JNJ) is working to make its medical device business grow as fast as the pharmaceutical side–but for now devices sales are slowing, while pharma is picking up fast. The healthcare conglomerate is looking to innovation, including from its 30 pending device regulatory filings, as well as to use its scale to negotiate effectively with hospitals seeking less fragmented pricing. But it remains unclear precisely how J&J will resuscitate this business, which accounted for 37% of its $74.3 billion in 2014 worldwide sales.

Worldwide medical device sales for J&J were $27.5 billion in 2014, a decrease of 3.4% from the prior year. Excluding the net impact of M&A activity, including the June divestiture of Ortho Clinical Diagnostics, J&J’s medical device business had underlying operational growth of 1.5%. By contrast, its pharma sales were up an impressive 14.9% to $32.3 billion in 2014.

The company said its best device performers were its orthopedic, electrophysiology and biosurgicals products.

Johnson & Johnson CEO Alex Gorsky

“Growth was driven by orthopedics and cardiovascular care products, partially offset by lower sales in vision care. Competitive pricing dynamics negatively impacted growth for vision care in the US. This was partially offset by growth outside the US with strong results in emerging markets. Orthopedic sales growth was driven by sports medicine, hips, spine, and knees,” J&J chairman and CEO Alex Gorsky detailed about the device business on a conference call.


Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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