Johnson & Johnson’s Over-the-Counter Growth through Innovation

In its fiscal first quarter, Johnson & Johnson (JNJ) registered sales of $1.1 billion for its OTC (over-the-counter) business. It contributed ~31.6% to the company’s consumer business sales of $3.4 billion. Its OTC business reported a YoY (year-over-year) sales growth of ~5.8% and an operational sales growth of ~0.9% in the quarter. For a detailed review of JNJ’s first-quarter earnings results, be sure to read Key Takeaways from Johnson & Johnson’s 1Q18 Earnings.

By the end of fiscal 2017, JNJ’s market position in the OTC business was fourth in the world. According to the company, the OTC market has an estimated CAGR (compound annual growth rate) of ~3% from 2017 to 2022. At that rate, by 2022, OTC market revenues could grow to ~$36 billion.

Johnson & Johnson believes it’s well positioned to gain a higher market share in this segment and expand its footprint through a strong market position, product pipeline, and innovative business model according to the needs of changing market dynamics. The company is focused on growing its OTC business through new claims and campaigns on pain, cough and cold, allergy, and smoking cessation.

JNJ is also working on developing next-generation treatments under its OTC business. It’s launching into the devices and medicated solutions space to remain competitive and sustain its market position. Some examples are Tylenol light and heat therapy in the United States and a Motrin baby patch in China.

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