http://www.investor.jnj.com/governance/policies.cfm

http://www.investor.jnj.com/governance/board.cfm

http://www.investor.jnj.com/governance/committee.cfm

http://www.investor.jnj.com/governance/committee.cfm

http://www.investor.jnj.com/governance/committee.cfm

Johnson & Johnson - Index

Johnson & Johnson - report - Index

that a counterfeit product has been identified.
Through this plan, the Company’s
Worldwide Security department facilitates
a number of actions, including a
thorough investigation to identify the
distributor(s) and manufacturing site.
GOVERNANCE
There are twelve members of the
Johnson & Johnson Board of Directors.
Ten of these directors are independent
directors under the standards of the
New York Stock Exchange. The other two
directors are members of management.
CEO William C. Weldon is also the
Chairman of the Board of Directors.
Our Principles of Corporate Governance,
available on our website, establish
Director qualifications. Directors meet
independently several times a year, and
have full and open access to all officers
and employees of the company. The
Board of Directors has a standing Audit
Committee, Compensation & Benefits
Committee and Nominating & Corporate
Governance Committee. Other committees
include the Finance Committee,
Public Policy Committee and the Science
and Technology Committee. For more
information on these committees and
our Board of Directors, see our website.
INTELLECTUAL PROPERTY
The operating companies of
Johnson & Johnson rely heavily
on the intellectual property protections
offered by the U.S. patent system and its
counterpart systems around the world.
Patents are critical to maintaining innovation
in the pharmaceutical and biotechnology
industries. It routinely takes 10
years or more, and hundreds of millions
of dollars, to develop, test and obtain
approvals for a single product. Patent
protection weighs heavily on business
planners when deciding whether to go
forward with the investment needed to
develop a potentially promising new
drug. We routinely review hundreds of
patents during product development,
make appropriate design changes to
avoid the patents of others and/or
obtain appropriate licenses or legal
opinions prior to launching our products.
Nonetheless, Johnson & Johnson
companies do from time to time
MORE ABOUT OUR BUSINESS PRACTICES
become involved in patent litigation,
finding themselves defendants about as
often as plaintiffs.
Johnson & Johnson supports a
patent system that fairly rewards those
who contribute to society through the
invention and development of new and
useful products and processes. A fair
and reliable patent system stimulates the
investment in innovation that is necessary
in today’s technologically complex world,
enabling the creation of new products
and processes that benefit society.
KNOWLEDGE MANAGEMENT
Sustainable growth for our business
depends on Johnson & Johnson employees
collaborating to find innovations. In
2006, we launched a search engine that
locates internal expertise by brokering
a request for assistance to potentially
perfect responders. LINK (Leveraging
Internal Knowledge) works by indexing
terms from participant’s outgoing emails.
We set an aggressive target to enroll our
entire R&D community in 2007 and we
met that goal.The LINK network is now
over 14,000 employees and more than
500 new questions were posted during
2007. Successful connections are producing
powerful results, such as accelerating
our problem solving capability.
PRICING
The prices we set for our products help
us to cover our research, manufacturing,
education and marketing costs. And,
they allow us to provide a return to
our investors so future investments will
enable us to conduct more research and
bring new medical advances to people.
In the United States, we work to
keep our net price increases for health
care products within the Consumer Price
Index (CPI). A government measurement,
the CPI is calculated by gauging price
changes across a wide array of products
and weighing these changes against the
percentage of income that typical consumers
spend to purchase these products.
The result is the “weighted average
compound growth rate.” From 1996 to
2006, the weighted average compound
annual growth rate of Johnson & Johnson
net price increases for prescription and
over-the-counter medicines and hospital
and professional products was below the
U.S. CPI.
As the cost of raw materials and
other expenses continue to rise, we work
to keep our price increases modest and
still maintain competitive profit margins
by producing our products more efficiently,
by reducing operating costs, and by
improving our productivity. We also look
for new ways to design and package
products such as baby shampoo and
blood glucose monitoring systems so
they meet different needs and enable
more people around the world to afford
our products. We are committed to
affordable healthcare, and will continue
our efforts to balance the need for affordable
medicines with the costs incurred in
bringing new products to market, while
remaining a viable economic enterprise.
PUBLIC POLICY
The mandate of the Public Policy
Advisory Committee includes oversight
and review of:
• the Company’s policies, programs
and practices on public health issues
regarding the environment and the
health and safety of its employees, and,
• the Company’s governmental affairs
and policies, both in the United States
and internationally, with an emphasis
on national health care policies impacting
access, pricing, regulation and use of
medicines and medical devices.
In addition, the Committee reviews
public policy topics as determined by the
Committee members, such as our initiatives
in the HIV/AIDS area. As part of its
oversight role in governmental affairs
and policies, the Committee also annually
reviews the Company’s political contribution
policies and practices.
We also have a comprehensive task
force comprised of business and technical
leaders which identifies and evaluates
emerging issues that require greater
study and understanding. For each key
issue, a subcommittee investigates the
nature of the issue, various points of
view and potential business impacts.
Among the topics considered to date
are pharmaceuticals in the environment,
endocrine disrupters, genetically
modified organisms and nanotechnology.
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