Johnson & Johnson to Spin Off Consumer Health Unit, Focus on Pharmaceuticals and MedTech

Reuters, November 12th: Johnson & Johnson plans to spin off its consumer health division, which sells Listerine and baby powder, to focus on pharmaceuticals and medical devices. This is the largest adjustment in the company's 135-year history.

Johnson & Johnson stated that the company aims to complete the split within 18 to 24 months, at a cost of $500 million to $1 billion. The Johnson & Johnson name will be retained by the pharmaceuticals and medical devices divisions.

Reports indicate that Toshiba, General Electric, and other companies have previously announced plans to split their operations. This highlights the pressure on large, diversified corporations to simplify their structures in order to enhance focus—particularly in the healthcare industry. The slow and steady business of selling products like shampoo and moisturizers has increasingly diverged from the high-risk, high-reward work of developing and marketing pharmaceuticals. Johnson & Johnson CEO Alex Gorsky stated: "We believe these businesses have evolved into fundamentally different operations."