The MoatWide moat

Johnson & Johnson (JNJ) — moat facet

J&J's moat is not a product but the machinery that replaces its products, and 2025 proved it by absorbing a 41% collapse in its second-largest drug.

Johnson & Johnson's moat is not a drug or a device. Every product it sells will lose its patent, meet a copy or be displaced by something better; the company's own risk factors list patent expirations, typically followed by the introduction of competing generic, biosimilar or other products1. What endures is the machinery that replaces them: a research budget, a habit of buying what the research does not produce, a sales organisation in virtually every country, and a balance sheet that absorbs the accidents along the way.

Sales change, 2023 to 2025 ($M)Darzalex+4,607Tremfya+2,008Carvykti+1,387Erleada+1,187Spravato+1,007Stelara-4,780J&J Form 10-K FY2025
Five growing products more than covered the largest loss.

2025 was the stress test. Stelara, 11.7% of J&J's revenue in 20242, lost 41.3% of its sales to biosimilars3. The company still grew sales 6.0% to $94.2 billion4, with volume adding 8.4 points and price subtracting 3.15. A business without a moat does not lose six points of growth to one product and grow anyway.

The economics sit mostly in medicines. Innovative Medicine earned $22,266 million before tax on $60,401 million of sales in 2025, a 36.9% margin, and MedTech $4,113 million on $33,792 million, 12.2%6. The medicines business produced about 84% of segment income on 64% of sales7. Gross margin for the whole company was about 67.9%89.

The return on the capital is good rather than extraordinary. Johnson & Johnson's return on invested capital, computed from its EDGAR filings, was 14.3% in 2024 and between 12.1% and 17.0% in every computable year from 201610, against an assumed cost of capital of 7%. The 2025 figure of 23.9% is flattered by the reversal of approximately $7.0 billion of talc reserves11. A business earning roughly twice its cost of capital for a decade, through patent cliffs and litigation, has a real moat; one that has had to buy much of its growth does not earn the returns of a business whose franchise defends itself.

The limits are visible in who sets the price. Medicines revenue is struck after very large rebates to payers: Innovative Medicine accrued $56,819 million of rebates in 202512. Governments now set some prices directly, through the Medicare selected-drug list and the company's January 2026 agreement with the administration1314. And three wholesalers handled about 48% of gross revenues1516.

The research budget is the part of the machine that is easiest to overlook, because it rarely produces a headline. J&J spent $14,665 million on research and development in 2025, 15.6% of sales, down 14.9% from $17,232 million in 202417, when acquired research charges were unusually large. Innovative Medicine accounted for $11,827 million of it and MedTech for $2,838 million18. The output in a single year is long: the 2025 regulatory table lists filings or approvals for Darzalex in two new myeloma settings, Tremfya in seven indications, Caplyta, Spravato, Imaavy and Inlexzo among others19, and in the first quarter of 2026 the FDA approved Icotyde, which J&J calls the first-and-only targeted oral peptide for plaque psoriasis20.

The sales organisation is the other quiet part. J&J's operating companies conduct business in virtually all countries of the world21, with about 138,200 employees22, and international markets bought $40,441 million of its products in 20252324. A small biotechnology company that discovers a good medicine has no such reach, which is why so many of them end up selling to J&J or licensing to it.

The moat is wide, but its width is measured in replacements rather than in any single product's defences. The number that would falsify it is Innovative Medicine operational growth through the next patent losses; the segment grew 6.8% operationally in the second quarter of 2026 despite about 760 basis points of Stelara drag25. A full year of decline as Simponi, Opsumit and eventually Darzalex face copies would say the machinery has slowed.

Moat trajectory: Holding steady

The replacement machine absorbed Stelara; pricing is increasingly set by payers and governments.

The number that tests this moat
Moat Explorer calc
ROIC vs 7% hurdle (EDGAR calc)
23.9% in 2025 (flattered by the ~$7.0bn talc reversal); 14.3% in 2024

A decade between about 12% and 17% before 2025; falling back toward 12% after the acquisitions would mean they bought sales, not returns.

How it's calculated: NOPAT divided by average operating invested capital from SEC EDGAR XBRL (tools_roic_edgar.py). 2025 operating income includes the reversal of approximately $7.0 billion of the talc reserve, so the 2025 figure overstates the underlying return; 2020 is not computable.
Source: Moat Explorer ROIC calculation from EDGAR ↗
Aspects of the moat
DIG DEEPER 01
The Replacement Machine
Johnson & Johnson lost 41% of its second-largest drug in 2025 and its medicines business still grew 6%.
DIG DEEPER 02
Buying What the Laboratory Cannot Supply
J&J spent about $33 billion on acquisitions in two years because its laboratories alone cannot replace what expires.
DIG DEEPER 03
MedTech: Scale in the Operating Room
MedTech is a third of J&J's sales and about a sixth of its segment profit, and it uses more assets than the medicines business.
DIG DEEPER 04
A Balance Sheet Built to Absorb Accidents
J&J absorbed about $12 billion of talc charges in two years and still raised its dividend each year.
References
  1. ReportedEvery product it sells will lose its patent, meet a copy or be displaced by something better; the company's own risk factors list patent expirations, typically followed by the introduction of competing generic, biosimilar or other products.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1A risk factors, Note 19 legal proceedings (talc, Innovative Health, Auris, Tracleer) and the Inflation Reduction Act. — FY2025 · publ. 11 February 2026 · source ↗
  2. ReportedStelara, 11.7% of J&J's revenue in 2024, lost 41.3% of its sales to biosimilars.
    Johnson & Johnson Form 10-K for fiscal 2024 - segment sales, the three wholesalers in 2023 and 2024, rebate accruals for 2023 and segment income for 2022. — FY2024 · publ. February 2025 · source ↗
  3. ReportedStelara, 11.7% of J&J's revenue in 2024, lost 41.3% of its sales to biosimilars.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: Innovative Medicine segment, therapeutic-area and product sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
  4. ReportedThe company still grew sales 6.0% to $94.2 billion, with volume adding 8.4 points and price subtracting 3.1.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  5. ReportedThe company still grew sales 6.0% to $94.2 billion, with volume adding 8.4 points and price subtracting 3.1.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  6. ReportedInnovative Medicine earned $22,266 million before tax on $60,401 million of sales in 2025, a 36.9% margin, and MedTech $4,113 million on $33,792 million, 12.2%.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - financial statements and notes: income statement, balance sheet, cash flows, equity, segment income, acquisitions and geographic assets. — FY2025 · publ. 11 February 2026 · source ↗
  7. Moat Explorer calcThe medicines business produced about 84% of segment income on 64% of sales.
    Moat Explorer calculation from Johnson & Johnson's reported figures ($ millions unless stated). Darzalex royalty: 2,400 / 14,351 = 16.7%. Stelara 2023-2025: 10,858 - 6,078 = 4,780 lost; Tremfya 5,155 - 3,147 = 2,008 gained, 2,008 / 4,780 = 42%. Growth 2023-2025: Darzalex 14,351 - 9,744 = 4,607; Carvykti 1,887 - 500 = 1,387; Erleada 3,574 - 2,387 = 1,187; Spravato 1,696 - 689 = 1,007; five products 4,607 + 2,008 + 1,387 + 1,187 + 1,007 = 10,196. Myeloma medicines Q2 2026: 4,207 + 657 + 260 + 174 = 5,298; 5,298 / 25,310 = 20.9%. Simponi and Opsumit 2025: 2,668 + 2,325 = 4,993. Abiomed: 3,700 / 1,751 = 2.1 times; 1,751 x 1.171^5 = 3,850 by 2030. Shockwave: 12,600 / 1,146 = 11.0 times. Caplyta: 361 x 4 = 1,444 a year; 14,500 / 1,444 = 10.0 times. Acquisitions: 15,146 + 17,541 = 32,687. Goodwill and intangibles: 48,772 + 50,403 = 99,175; 99,175 / 199,210 = 49.8%. Free cash flow 2025: 24,530 - 4,832 = 19,698. Cash uses 2025: 12,381 + 5,953 + 17,541 = 35,875. Capex 4,832 / 94,193 = 5.1%. Surgery: 10,137 / 10,037 - 1 = 1.0%. Electrophysiology: 5,634 / 33,792 = 16.7%. MedTech share of sales: 33,792 / 94,193 = 35.9%; Innovative Medicine 60,401 / 94,193 = 64.1%. Segment income 2025: 22,266 + 4,113 = 26,379; Innovative Medicine 22,266 / 26,379 = 84.4%; MedTech 4,113 / 26,379 = 15.6%. Gross margin 63,937 / 94,193 = 67.9%. MedTech rebates: 6,446 / 33,792 = 19.1%; 5,955 / 31,857 = 18.7%. Return on identifiable assets: Innovative Medicine 22,266 / 78,057 = 28.5%; MedTech 4,113 / 86,482 = 4.8%. Cost of products sold / segment sales 2025: Innovative Medicine 15,646 / 60,401 = 25.9%; MedTech 14,549 / 33,792 = 43.1%. Q2 2026 segment margins: Innovative Medicine 6,249 / 16,384 = 38.1%; MedTech 1,177 / 8,926 = 13.2%. Growth 2023-2025: sales 94,193 / 85,159 - 1 = 10.6%; operating cash flow 24,530 / 22,791 - 1 = 7.6%; dividends 12,381 / 11,770 - 1 = 5.2%. Dividends per share 5.14 / 2.95 - 1 = 74%. Payout 2025: 12,381 / 26,804 = 46%; 12,381 / 26,215 = 47%; 12,381 / 19,698 = 63%. Diluted shares 2,429.4 / 2,812.9 - 1 = -13.6%; Kenvue exchange 190.96 / 2,674.0 = 7.1%. Firefly and Sail initial payments: 1,000 + 785 = 1,785. Consumer sales 2015-2022: (14,953 / 13,507)^(1/7) - 1 = 1.5% a year. Wholesalers: 21.8 + 15.5 + 11.1 = 48.4 (2025); 20.5 + 15.6 + 12.3 = 48.4 (2024); 18.2 + 15.1 + 14.2 = 47.5 (2023); largest 21.8 - 18.2 = 3.6 points. Innovative Medicine rebates: 56,819 / 60,401 = 94.1% (2025); 47,523 / 54,759 = 86.8% (2023); 56,819 / 47,523 - 1 = 19.6%; net sales 60,401 / 54,759 - 1 = 10.3%. Top three products: 15.0 + 6.5 + 5.5 = 27.0% of revenue. United States share: 53,752 / 94,193 = 57.1% (2025); 14,533 / 25,310 = 57.4% (Q2 2026). MedTech excluding orthopaedics: (33,792 - 9,258) / (31,857 - 9,158) - 1 = 8.1%. Talc: 5,500 / 76,000 claims = about $72,000 per claim; 5.5 - 3.7 = 1.8 billion. Valuation: 348.19 / 24.242 = 14.4 times (end-2024 market value over 2024 adjusted net earnings); 652.05 / 348.19 - 1 = 87%; 270.57 / 11.04 = 24.5 times; 11.04 / 10.79 - 1 = 2.3%; 277.91 / 270.57 - 1 = 2.7%. Innovative Medicine history: (60,401 / 31,430)^(1/10) - 1 = 6.8% a year; Pharmaceutical pre-tax margins 11,734 / 31,430 = 37.3% (2015), 12,827 / 33,464 = 38.3% (2016), 8,816 / 42,198 = 20.9% (2019); restated growth 52,563 / 51,680 - 1 = 1.7% (2022), 54,759 / 52,563 - 1 = 4.2% (2023), 56,964 / 54,759 - 1 = 4.0% (2024). Additional: 2015 mix 31,430 / 70,074 = 45%; dividend 5.36 / 11.04 = 49%; buybacks 4,253 / 5,953 = 71%; vision 5,468 / 33,792 = 16%; Innovative Medicine international 60,401 - 36,344 = 24,057 against 54,759 - 31,169 = 23,590 (2.0%); United States 36,344 / 31,169 - 1 = 16.6%; myeloma four-product growth 2023-2025 4,607 + 1,387 + (670 - 395) + (463 - 63) = 6,669 of oncology growth 25,380 - 17,661 = 7,719, 86%; Darzalex international 1,772 / 4,207 = 42%; equity gap 99,175 - 81,544 = 17,631; Abiomed 440 x 4 = 1,760; amortisation MedTech 0.5 / 1.3 = 38%; MedTech H1 2026 segment income 2,416 / 2,625 - 1 = -8.0%, SM&A 5,975 / 5,518 - 1 = 8.3%, R&D 1,492 / 1,324 - 1 = 12.7%, cost of products sold 7,438 / 6,964 - 1 = 6.8%, margins 2,416 / 17,562 = 13.8% and 2,625 / 16,561 = 15.9%; Innovative Medicine H1 2026 11,566 / 10,762 - 1 = 7.5%, 11,566 / 31,810 = 36.4%; dividends / operating cash flow 12,381 / 24,530 = 50%; receivables 17,178 - 14,842 = 2,336, inventories 14,191 - 12,444 = 1,747; Q2 2026 dividend 3,227 x 4 = 12,908, one cent x 4 x 2,408M shares = $96M; diluted shares 2,663.9 / 2,812.9 - 1 = -5.3%; MedTech United States 17,408 / 33,792 = 52%; international sales 94,193 - 53,752 = 40,441; oncology share of Innovative Medicine 25,380 / 60,401 = 42.0%; Darzalex sales increase 14,351 - 11,670 = 2,681, royalty increase 2,400 - 2,000 = 400, 400 / 2,681 = 15%; newer myeloma medicines Q2 2026 657 + 260 + 174 = 1,091, 1,091 / 4,207 = 26%; Shockwave international 67 / 335 = 20%; amortisation 2,492 x 2 = 4,984 a year, 4,984 / 26,215 = 19%; US long-lived assets 89,392 - 70,670 = 18,722; surgery international Q2 2026 1,559 / 2,653 = 59%; net interest 1,056 - 971 = 85; dividends per share 5.14 / 4.70 - 1 = 9.4%; MedTech rebates 6,446 / 5,955 - 1 = 8.2%; trailing sales 94,193 - 45,636 + 49,372 = 97,929; net earnings 26,804 - 16,536 + 10,769 = 21,037. MedTech history: (33,792 / 25,137)^(1/10) - 1 = 3.0% a year; Medical Devices 6,826 / 25,137 = 27.2% (2015), 5,392 / 26,592 = 20.3% (2017); restated 4,208 / 27,060 = 15.6% (2021), 4,447 / 27,427 = 16.2% (2022); growth 27,427 / 27,060 - 1 = 1.4% (2022), 30,400 / 27,427 - 1 = 10.8% (2023), 31,857 / 30,400 - 1 = 4.8% (2024) - segment margins, rebates, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in J&J's Forms 10-K, 10-Q, results releases and market data; operands shown in the source line.
  8. ReportedGross margin for the whole company was about 67.9%.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  9. Moat Explorer calcGross margin for the whole company was about 67.9%.
    Moat Explorer calculation from Johnson & Johnson's reported figures ($ millions unless stated). Darzalex royalty: 2,400 / 14,351 = 16.7%. Stelara 2023-2025: 10,858 - 6,078 = 4,780 lost; Tremfya 5,155 - 3,147 = 2,008 gained, 2,008 / 4,780 = 42%. Growth 2023-2025: Darzalex 14,351 - 9,744 = 4,607; Carvykti 1,887 - 500 = 1,387; Erleada 3,574 - 2,387 = 1,187; Spravato 1,696 - 689 = 1,007; five products 4,607 + 2,008 + 1,387 + 1,187 + 1,007 = 10,196. Myeloma medicines Q2 2026: 4,207 + 657 + 260 + 174 = 5,298; 5,298 / 25,310 = 20.9%. Simponi and Opsumit 2025: 2,668 + 2,325 = 4,993. Abiomed: 3,700 / 1,751 = 2.1 times; 1,751 x 1.171^5 = 3,850 by 2030. Shockwave: 12,600 / 1,146 = 11.0 times. Caplyta: 361 x 4 = 1,444 a year; 14,500 / 1,444 = 10.0 times. Acquisitions: 15,146 + 17,541 = 32,687. Goodwill and intangibles: 48,772 + 50,403 = 99,175; 99,175 / 199,210 = 49.8%. Free cash flow 2025: 24,530 - 4,832 = 19,698. Cash uses 2025: 12,381 + 5,953 + 17,541 = 35,875. Capex 4,832 / 94,193 = 5.1%. Surgery: 10,137 / 10,037 - 1 = 1.0%. Electrophysiology: 5,634 / 33,792 = 16.7%. MedTech share of sales: 33,792 / 94,193 = 35.9%; Innovative Medicine 60,401 / 94,193 = 64.1%. Segment income 2025: 22,266 + 4,113 = 26,379; Innovative Medicine 22,266 / 26,379 = 84.4%; MedTech 4,113 / 26,379 = 15.6%. Gross margin 63,937 / 94,193 = 67.9%. MedTech rebates: 6,446 / 33,792 = 19.1%; 5,955 / 31,857 = 18.7%. Return on identifiable assets: Innovative Medicine 22,266 / 78,057 = 28.5%; MedTech 4,113 / 86,482 = 4.8%. Cost of products sold / segment sales 2025: Innovative Medicine 15,646 / 60,401 = 25.9%; MedTech 14,549 / 33,792 = 43.1%. Q2 2026 segment margins: Innovative Medicine 6,249 / 16,384 = 38.1%; MedTech 1,177 / 8,926 = 13.2%. Growth 2023-2025: sales 94,193 / 85,159 - 1 = 10.6%; operating cash flow 24,530 / 22,791 - 1 = 7.6%; dividends 12,381 / 11,770 - 1 = 5.2%. Dividends per share 5.14 / 2.95 - 1 = 74%. Payout 2025: 12,381 / 26,804 = 46%; 12,381 / 26,215 = 47%; 12,381 / 19,698 = 63%. Diluted shares 2,429.4 / 2,812.9 - 1 = -13.6%; Kenvue exchange 190.96 / 2,674.0 = 7.1%. Firefly and Sail initial payments: 1,000 + 785 = 1,785. Consumer sales 2015-2022: (14,953 / 13,507)^(1/7) - 1 = 1.5% a year. Wholesalers: 21.8 + 15.5 + 11.1 = 48.4 (2025); 20.5 + 15.6 + 12.3 = 48.4 (2024); 18.2 + 15.1 + 14.2 = 47.5 (2023); largest 21.8 - 18.2 = 3.6 points. Innovative Medicine rebates: 56,819 / 60,401 = 94.1% (2025); 47,523 / 54,759 = 86.8% (2023); 56,819 / 47,523 - 1 = 19.6%; net sales 60,401 / 54,759 - 1 = 10.3%. Top three products: 15.0 + 6.5 + 5.5 = 27.0% of revenue. United States share: 53,752 / 94,193 = 57.1% (2025); 14,533 / 25,310 = 57.4% (Q2 2026). MedTech excluding orthopaedics: (33,792 - 9,258) / (31,857 - 9,158) - 1 = 8.1%. Talc: 5,500 / 76,000 claims = about $72,000 per claim; 5.5 - 3.7 = 1.8 billion. Valuation: 348.19 / 24.242 = 14.4 times (end-2024 market value over 2024 adjusted net earnings); 652.05 / 348.19 - 1 = 87%; 270.57 / 11.04 = 24.5 times; 11.04 / 10.79 - 1 = 2.3%; 277.91 / 270.57 - 1 = 2.7%. Innovative Medicine history: (60,401 / 31,430)^(1/10) - 1 = 6.8% a year; Pharmaceutical pre-tax margins 11,734 / 31,430 = 37.3% (2015), 12,827 / 33,464 = 38.3% (2016), 8,816 / 42,198 = 20.9% (2019); restated growth 52,563 / 51,680 - 1 = 1.7% (2022), 54,759 / 52,563 - 1 = 4.2% (2023), 56,964 / 54,759 - 1 = 4.0% (2024). Additional: 2015 mix 31,430 / 70,074 = 45%; dividend 5.36 / 11.04 = 49%; buybacks 4,253 / 5,953 = 71%; vision 5,468 / 33,792 = 16%; Innovative Medicine international 60,401 - 36,344 = 24,057 against 54,759 - 31,169 = 23,590 (2.0%); United States 36,344 / 31,169 - 1 = 16.6%; myeloma four-product growth 2023-2025 4,607 + 1,387 + (670 - 395) + (463 - 63) = 6,669 of oncology growth 25,380 - 17,661 = 7,719, 86%; Darzalex international 1,772 / 4,207 = 42%; equity gap 99,175 - 81,544 = 17,631; Abiomed 440 x 4 = 1,760; amortisation MedTech 0.5 / 1.3 = 38%; MedTech H1 2026 segment income 2,416 / 2,625 - 1 = -8.0%, SM&A 5,975 / 5,518 - 1 = 8.3%, R&D 1,492 / 1,324 - 1 = 12.7%, cost of products sold 7,438 / 6,964 - 1 = 6.8%, margins 2,416 / 17,562 = 13.8% and 2,625 / 16,561 = 15.9%; Innovative Medicine H1 2026 11,566 / 10,762 - 1 = 7.5%, 11,566 / 31,810 = 36.4%; dividends / operating cash flow 12,381 / 24,530 = 50%; receivables 17,178 - 14,842 = 2,336, inventories 14,191 - 12,444 = 1,747; Q2 2026 dividend 3,227 x 4 = 12,908, one cent x 4 x 2,408M shares = $96M; diluted shares 2,663.9 / 2,812.9 - 1 = -5.3%; MedTech United States 17,408 / 33,792 = 52%; international sales 94,193 - 53,752 = 40,441; oncology share of Innovative Medicine 25,380 / 60,401 = 42.0%; Darzalex sales increase 14,351 - 11,670 = 2,681, royalty increase 2,400 - 2,000 = 400, 400 / 2,681 = 15%; newer myeloma medicines Q2 2026 657 + 260 + 174 = 1,091, 1,091 / 4,207 = 26%; Shockwave international 67 / 335 = 20%; amortisation 2,492 x 2 = 4,984 a year, 4,984 / 26,215 = 19%; US long-lived assets 89,392 - 70,670 = 18,722; surgery international Q2 2026 1,559 / 2,653 = 59%; net interest 1,056 - 971 = 85; dividends per share 5.14 / 4.70 - 1 = 9.4%; MedTech rebates 6,446 / 5,955 - 1 = 8.2%; trailing sales 94,193 - 45,636 + 49,372 = 97,929; net earnings 26,804 - 16,536 + 10,769 = 21,037. MedTech history: (33,792 / 25,137)^(1/10) - 1 = 3.0% a year; Medical Devices 6,826 / 25,137 = 27.2% (2015), 5,392 / 26,592 = 20.3% (2017); restated 4,208 / 27,060 = 15.6% (2021), 4,447 / 27,427 = 16.2% (2022); growth 27,427 / 27,060 - 1 = 1.4% (2022), 30,400 / 27,427 - 1 = 10.8% (2023), 31,857 / 30,400 - 1 = 4.8% (2024) - segment margins, rebates, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in J&J's Forms 10-K, 10-Q, results releases and market data; operands shown in the source line.
  10. Moat Explorer calcJohnson & Johnson's return on invested capital, computed from its EDGAR filings, was 14.3% in 2024 and between 12.1% and 17.0% in every computable year from 2016, against an assumed cost of capital of 7%.
    Moat Explorer calculation, tools_roic_edgar.py on SEC EDGAR XBRL for CIK 200406: return on invested capital 17.0% (2016), 12.1% (2017), 15.3% (2018), 14.8% (2019), not computable (2020), 12.9% (2021), 14.9% (2022), 12.2% (2023), 14.3% (2024), 23.9% (2025). 2025 operating income includes the reversal of approximately $7.0 billion of the talc reserve. — 2016-2025 · publ. September 2026 · source ↗
    Method: NOPAT (operating income x (1 - effective tax rate)) divided by average operating invested capital (total assets less current liabilities less cash), from SEC EDGAR XBRL via tools_roic_edgar.py. The 2025 figure is flattered by the ~$7.0bn talc reserve reversal booked in other income.
  11. Moat Explorer calcThe 2025 figure of 23.9% is flattered by the reversal of approximately $7.0 billion of talc reserves.
    Moat Explorer calculation, tools_roic_edgar.py on SEC EDGAR XBRL for CIK 200406: return on invested capital 17.0% (2016), 12.1% (2017), 15.3% (2018), 14.8% (2019), not computable (2020), 12.9% (2021), 14.9% (2022), 12.2% (2023), 14.3% (2024), 23.9% (2025). 2025 operating income includes the reversal of approximately $7.0 billion of the talc reserve. — 2016-2025 · publ. September 2026 · source ↗
    Method: NOPAT (operating income x (1 - effective tax rate)) divided by average operating invested capital (total assets less current liabilities less cash), from SEC EDGAR XBRL via tools_roic_edgar.py. The 2025 figure is flattered by the ~$7.0bn talc reserve reversal booked in other income.
  12. ReportedMedicines revenue is struck after very large rebates to payers: Innovative Medicine accrued $56,819 million of rebates in 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: rebate accrual tables, research and development, cost of products sold, debt and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  13. ReportedGovernments now set some prices directly, through the Medicare selected-drug list and the company's January 2026 agreement with the administration.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1A risk factors, Note 19 legal proceedings (talc, Innovative Health, Auris, Tracleer) and the Inflation Reduction Act. — FY2025 · publ. 11 February 2026 · source ↗
  14. ReportedGovernments now set some prices directly, through the Medicare selected-drug list and the company's January 2026 agreement with the administration.
    Johnson & Johnson press release: agreement with the United States government on drug prices, Medicaid access, TrumpRx and a tariff exemption. — January 2026 · publ. 8 January 2026 · source ↗
  15. ReportedAnd three wholesalers handled about 48% of gross revenues.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  16. Moat Explorer calcAnd three wholesalers handled about 48% of gross revenues.
    Moat Explorer calculation from Johnson & Johnson's reported figures ($ millions unless stated). Darzalex royalty: 2,400 / 14,351 = 16.7%. Stelara 2023-2025: 10,858 - 6,078 = 4,780 lost; Tremfya 5,155 - 3,147 = 2,008 gained, 2,008 / 4,780 = 42%. Growth 2023-2025: Darzalex 14,351 - 9,744 = 4,607; Carvykti 1,887 - 500 = 1,387; Erleada 3,574 - 2,387 = 1,187; Spravato 1,696 - 689 = 1,007; five products 4,607 + 2,008 + 1,387 + 1,187 + 1,007 = 10,196. Myeloma medicines Q2 2026: 4,207 + 657 + 260 + 174 = 5,298; 5,298 / 25,310 = 20.9%. Simponi and Opsumit 2025: 2,668 + 2,325 = 4,993. Abiomed: 3,700 / 1,751 = 2.1 times; 1,751 x 1.171^5 = 3,850 by 2030. Shockwave: 12,600 / 1,146 = 11.0 times. Caplyta: 361 x 4 = 1,444 a year; 14,500 / 1,444 = 10.0 times. Acquisitions: 15,146 + 17,541 = 32,687. Goodwill and intangibles: 48,772 + 50,403 = 99,175; 99,175 / 199,210 = 49.8%. Free cash flow 2025: 24,530 - 4,832 = 19,698. Cash uses 2025: 12,381 + 5,953 + 17,541 = 35,875. Capex 4,832 / 94,193 = 5.1%. Surgery: 10,137 / 10,037 - 1 = 1.0%. Electrophysiology: 5,634 / 33,792 = 16.7%. MedTech share of sales: 33,792 / 94,193 = 35.9%; Innovative Medicine 60,401 / 94,193 = 64.1%. Segment income 2025: 22,266 + 4,113 = 26,379; Innovative Medicine 22,266 / 26,379 = 84.4%; MedTech 4,113 / 26,379 = 15.6%. Gross margin 63,937 / 94,193 = 67.9%. MedTech rebates: 6,446 / 33,792 = 19.1%; 5,955 / 31,857 = 18.7%. Return on identifiable assets: Innovative Medicine 22,266 / 78,057 = 28.5%; MedTech 4,113 / 86,482 = 4.8%. Cost of products sold / segment sales 2025: Innovative Medicine 15,646 / 60,401 = 25.9%; MedTech 14,549 / 33,792 = 43.1%. Q2 2026 segment margins: Innovative Medicine 6,249 / 16,384 = 38.1%; MedTech 1,177 / 8,926 = 13.2%. Growth 2023-2025: sales 94,193 / 85,159 - 1 = 10.6%; operating cash flow 24,530 / 22,791 - 1 = 7.6%; dividends 12,381 / 11,770 - 1 = 5.2%. Dividends per share 5.14 / 2.95 - 1 = 74%. Payout 2025: 12,381 / 26,804 = 46%; 12,381 / 26,215 = 47%; 12,381 / 19,698 = 63%. Diluted shares 2,429.4 / 2,812.9 - 1 = -13.6%; Kenvue exchange 190.96 / 2,674.0 = 7.1%. Firefly and Sail initial payments: 1,000 + 785 = 1,785. Consumer sales 2015-2022: (14,953 / 13,507)^(1/7) - 1 = 1.5% a year. Wholesalers: 21.8 + 15.5 + 11.1 = 48.4 (2025); 20.5 + 15.6 + 12.3 = 48.4 (2024); 18.2 + 15.1 + 14.2 = 47.5 (2023); largest 21.8 - 18.2 = 3.6 points. Innovative Medicine rebates: 56,819 / 60,401 = 94.1% (2025); 47,523 / 54,759 = 86.8% (2023); 56,819 / 47,523 - 1 = 19.6%; net sales 60,401 / 54,759 - 1 = 10.3%. Top three products: 15.0 + 6.5 + 5.5 = 27.0% of revenue. United States share: 53,752 / 94,193 = 57.1% (2025); 14,533 / 25,310 = 57.4% (Q2 2026). MedTech excluding orthopaedics: (33,792 - 9,258) / (31,857 - 9,158) - 1 = 8.1%. Talc: 5,500 / 76,000 claims = about $72,000 per claim; 5.5 - 3.7 = 1.8 billion. Valuation: 348.19 / 24.242 = 14.4 times (end-2024 market value over 2024 adjusted net earnings); 652.05 / 348.19 - 1 = 87%; 270.57 / 11.04 = 24.5 times; 11.04 / 10.79 - 1 = 2.3%; 277.91 / 270.57 - 1 = 2.7%. Innovative Medicine history: (60,401 / 31,430)^(1/10) - 1 = 6.8% a year; Pharmaceutical pre-tax margins 11,734 / 31,430 = 37.3% (2015), 12,827 / 33,464 = 38.3% (2016), 8,816 / 42,198 = 20.9% (2019); restated growth 52,563 / 51,680 - 1 = 1.7% (2022), 54,759 / 52,563 - 1 = 4.2% (2023), 56,964 / 54,759 - 1 = 4.0% (2024). Additional: 2015 mix 31,430 / 70,074 = 45%; dividend 5.36 / 11.04 = 49%; buybacks 4,253 / 5,953 = 71%; vision 5,468 / 33,792 = 16%; Innovative Medicine international 60,401 - 36,344 = 24,057 against 54,759 - 31,169 = 23,590 (2.0%); United States 36,344 / 31,169 - 1 = 16.6%; myeloma four-product growth 2023-2025 4,607 + 1,387 + (670 - 395) + (463 - 63) = 6,669 of oncology growth 25,380 - 17,661 = 7,719, 86%; Darzalex international 1,772 / 4,207 = 42%; equity gap 99,175 - 81,544 = 17,631; Abiomed 440 x 4 = 1,760; amortisation MedTech 0.5 / 1.3 = 38%; MedTech H1 2026 segment income 2,416 / 2,625 - 1 = -8.0%, SM&A 5,975 / 5,518 - 1 = 8.3%, R&D 1,492 / 1,324 - 1 = 12.7%, cost of products sold 7,438 / 6,964 - 1 = 6.8%, margins 2,416 / 17,562 = 13.8% and 2,625 / 16,561 = 15.9%; Innovative Medicine H1 2026 11,566 / 10,762 - 1 = 7.5%, 11,566 / 31,810 = 36.4%; dividends / operating cash flow 12,381 / 24,530 = 50%; receivables 17,178 - 14,842 = 2,336, inventories 14,191 - 12,444 = 1,747; Q2 2026 dividend 3,227 x 4 = 12,908, one cent x 4 x 2,408M shares = $96M; diluted shares 2,663.9 / 2,812.9 - 1 = -5.3%; MedTech United States 17,408 / 33,792 = 52%; international sales 94,193 - 53,752 = 40,441; oncology share of Innovative Medicine 25,380 / 60,401 = 42.0%; Darzalex sales increase 14,351 - 11,670 = 2,681, royalty increase 2,400 - 2,000 = 400, 400 / 2,681 = 15%; newer myeloma medicines Q2 2026 657 + 260 + 174 = 1,091, 1,091 / 4,207 = 26%; Shockwave international 67 / 335 = 20%; amortisation 2,492 x 2 = 4,984 a year, 4,984 / 26,215 = 19%; US long-lived assets 89,392 - 70,670 = 18,722; surgery international Q2 2026 1,559 / 2,653 = 59%; net interest 1,056 - 971 = 85; dividends per share 5.14 / 4.70 - 1 = 9.4%; MedTech rebates 6,446 / 5,955 - 1 = 8.2%; trailing sales 94,193 - 45,636 + 49,372 = 97,929; net earnings 26,804 - 16,536 + 10,769 = 21,037. MedTech history: (33,792 / 25,137)^(1/10) - 1 = 3.0% a year; Medical Devices 6,826 / 25,137 = 27.2% (2015), 5,392 / 26,592 = 20.3% (2017); restated 4,208 / 27,060 = 15.6% (2021), 4,447 / 27,427 = 16.2% (2022); growth 27,427 / 27,060 - 1 = 1.4% (2022), 30,400 / 27,427 - 1 = 10.8% (2023), 31,857 / 30,400 - 1 = 4.8% (2024) - segment margins, rebates, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in J&J's Forms 10-K, 10-Q, results releases and market data; operands shown in the source line.
  17. ReportedJ&J spent $14,665 million on research and development in 2025, 15.6% of sales, down 14.9% from $17,232 million in 2024, when acquired research charges were unusually large.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: rebate accrual tables, research and development, cost of products sold, debt and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  18. ReportedInnovative Medicine accounted for $11,827 million of it and MedTech for $2,838 million.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: MedTech segment and franchise sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
  19. ReportedThe output in a single year is long: the 2025 regulatory table lists filings or approvals for Darzalex in two new myeloma settings, Tremfya in seven indications, Caplyta, Spravato, Imaavy and Inlexzo among others, and in the first quarter of 2026 the FDA approved Icotyde, which J&J calls the first-and-only targeted oral peptide for plaque psoriasis.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  20. ReportedThe output in a single year is long: the 2025 regulatory table lists filings or approvals for Darzalex in two new myeloma settings, Tremfya in seven indications, Caplyta, Spravato, Imaavy and Inlexzo among others, and in the first quarter of 2026 the FDA approved Icotyde, which J&J calls the first-and-only targeted oral peptide for plaque psoriasis.
    Johnson & Johnson first-quarter 2026 results release, Form 8-K exhibit 99.1. — Q1 2026 · publ. 14 April 2026 · source ↗
  21. ReportedJ&J's operating companies conduct business in virtually all countries of the world, with about 138,200 employees, and international markets bought $40,441 million of its products in 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  22. ReportedJ&J's operating companies conduct business in virtually all countries of the world, with about 138,200 employees, and international markets bought $40,441 million of its products in 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  23. ReportedJ&J's operating companies conduct business in virtually all countries of the world, with about 138,200 employees, and international markets bought $40,441 million of its products in 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  24. Moat Explorer calcJ&J's operating companies conduct business in virtually all countries of the world, with about 138,200 employees, and international markets bought $40,441 million of its products in 2025.
    Moat Explorer calculation from Johnson & Johnson's reported figures ($ millions unless stated). Darzalex royalty: 2,400 / 14,351 = 16.7%. Stelara 2023-2025: 10,858 - 6,078 = 4,780 lost; Tremfya 5,155 - 3,147 = 2,008 gained, 2,008 / 4,780 = 42%. Growth 2023-2025: Darzalex 14,351 - 9,744 = 4,607; Carvykti 1,887 - 500 = 1,387; Erleada 3,574 - 2,387 = 1,187; Spravato 1,696 - 689 = 1,007; five products 4,607 + 2,008 + 1,387 + 1,187 + 1,007 = 10,196. Myeloma medicines Q2 2026: 4,207 + 657 + 260 + 174 = 5,298; 5,298 / 25,310 = 20.9%. Simponi and Opsumit 2025: 2,668 + 2,325 = 4,993. Abiomed: 3,700 / 1,751 = 2.1 times; 1,751 x 1.171^5 = 3,850 by 2030. Shockwave: 12,600 / 1,146 = 11.0 times. Caplyta: 361 x 4 = 1,444 a year; 14,500 / 1,444 = 10.0 times. Acquisitions: 15,146 + 17,541 = 32,687. Goodwill and intangibles: 48,772 + 50,403 = 99,175; 99,175 / 199,210 = 49.8%. Free cash flow 2025: 24,530 - 4,832 = 19,698. Cash uses 2025: 12,381 + 5,953 + 17,541 = 35,875. Capex 4,832 / 94,193 = 5.1%. Surgery: 10,137 / 10,037 - 1 = 1.0%. Electrophysiology: 5,634 / 33,792 = 16.7%. MedTech share of sales: 33,792 / 94,193 = 35.9%; Innovative Medicine 60,401 / 94,193 = 64.1%. Segment income 2025: 22,266 + 4,113 = 26,379; Innovative Medicine 22,266 / 26,379 = 84.4%; MedTech 4,113 / 26,379 = 15.6%. Gross margin 63,937 / 94,193 = 67.9%. MedTech rebates: 6,446 / 33,792 = 19.1%; 5,955 / 31,857 = 18.7%. Return on identifiable assets: Innovative Medicine 22,266 / 78,057 = 28.5%; MedTech 4,113 / 86,482 = 4.8%. Cost of products sold / segment sales 2025: Innovative Medicine 15,646 / 60,401 = 25.9%; MedTech 14,549 / 33,792 = 43.1%. Q2 2026 segment margins: Innovative Medicine 6,249 / 16,384 = 38.1%; MedTech 1,177 / 8,926 = 13.2%. Growth 2023-2025: sales 94,193 / 85,159 - 1 = 10.6%; operating cash flow 24,530 / 22,791 - 1 = 7.6%; dividends 12,381 / 11,770 - 1 = 5.2%. Dividends per share 5.14 / 2.95 - 1 = 74%. Payout 2025: 12,381 / 26,804 = 46%; 12,381 / 26,215 = 47%; 12,381 / 19,698 = 63%. Diluted shares 2,429.4 / 2,812.9 - 1 = -13.6%; Kenvue exchange 190.96 / 2,674.0 = 7.1%. Firefly and Sail initial payments: 1,000 + 785 = 1,785. Consumer sales 2015-2022: (14,953 / 13,507)^(1/7) - 1 = 1.5% a year. Wholesalers: 21.8 + 15.5 + 11.1 = 48.4 (2025); 20.5 + 15.6 + 12.3 = 48.4 (2024); 18.2 + 15.1 + 14.2 = 47.5 (2023); largest 21.8 - 18.2 = 3.6 points. Innovative Medicine rebates: 56,819 / 60,401 = 94.1% (2025); 47,523 / 54,759 = 86.8% (2023); 56,819 / 47,523 - 1 = 19.6%; net sales 60,401 / 54,759 - 1 = 10.3%. Top three products: 15.0 + 6.5 + 5.5 = 27.0% of revenue. United States share: 53,752 / 94,193 = 57.1% (2025); 14,533 / 25,310 = 57.4% (Q2 2026). MedTech excluding orthopaedics: (33,792 - 9,258) / (31,857 - 9,158) - 1 = 8.1%. Talc: 5,500 / 76,000 claims = about $72,000 per claim; 5.5 - 3.7 = 1.8 billion. Valuation: 348.19 / 24.242 = 14.4 times (end-2024 market value over 2024 adjusted net earnings); 652.05 / 348.19 - 1 = 87%; 270.57 / 11.04 = 24.5 times; 11.04 / 10.79 - 1 = 2.3%; 277.91 / 270.57 - 1 = 2.7%. Innovative Medicine history: (60,401 / 31,430)^(1/10) - 1 = 6.8% a year; Pharmaceutical pre-tax margins 11,734 / 31,430 = 37.3% (2015), 12,827 / 33,464 = 38.3% (2016), 8,816 / 42,198 = 20.9% (2019); restated growth 52,563 / 51,680 - 1 = 1.7% (2022), 54,759 / 52,563 - 1 = 4.2% (2023), 56,964 / 54,759 - 1 = 4.0% (2024). Additional: 2015 mix 31,430 / 70,074 = 45%; dividend 5.36 / 11.04 = 49%; buybacks 4,253 / 5,953 = 71%; vision 5,468 / 33,792 = 16%; Innovative Medicine international 60,401 - 36,344 = 24,057 against 54,759 - 31,169 = 23,590 (2.0%); United States 36,344 / 31,169 - 1 = 16.6%; myeloma four-product growth 2023-2025 4,607 + 1,387 + (670 - 395) + (463 - 63) = 6,669 of oncology growth 25,380 - 17,661 = 7,719, 86%; Darzalex international 1,772 / 4,207 = 42%; equity gap 99,175 - 81,544 = 17,631; Abiomed 440 x 4 = 1,760; amortisation MedTech 0.5 / 1.3 = 38%; MedTech H1 2026 segment income 2,416 / 2,625 - 1 = -8.0%, SM&A 5,975 / 5,518 - 1 = 8.3%, R&D 1,492 / 1,324 - 1 = 12.7%, cost of products sold 7,438 / 6,964 - 1 = 6.8%, margins 2,416 / 17,562 = 13.8% and 2,625 / 16,561 = 15.9%; Innovative Medicine H1 2026 11,566 / 10,762 - 1 = 7.5%, 11,566 / 31,810 = 36.4%; dividends / operating cash flow 12,381 / 24,530 = 50%; receivables 17,178 - 14,842 = 2,336, inventories 14,191 - 12,444 = 1,747; Q2 2026 dividend 3,227 x 4 = 12,908, one cent x 4 x 2,408M shares = $96M; diluted shares 2,663.9 / 2,812.9 - 1 = -5.3%; MedTech United States 17,408 / 33,792 = 52%; international sales 94,193 - 53,752 = 40,441; oncology share of Innovative Medicine 25,380 / 60,401 = 42.0%; Darzalex sales increase 14,351 - 11,670 = 2,681, royalty increase 2,400 - 2,000 = 400, 400 / 2,681 = 15%; newer myeloma medicines Q2 2026 657 + 260 + 174 = 1,091, 1,091 / 4,207 = 26%; Shockwave international 67 / 335 = 20%; amortisation 2,492 x 2 = 4,984 a year, 4,984 / 26,215 = 19%; US long-lived assets 89,392 - 70,670 = 18,722; surgery international Q2 2026 1,559 / 2,653 = 59%; net interest 1,056 - 971 = 85; dividends per share 5.14 / 4.70 - 1 = 9.4%; MedTech rebates 6,446 / 5,955 - 1 = 8.2%; trailing sales 94,193 - 45,636 + 49,372 = 97,929; net earnings 26,804 - 16,536 + 10,769 = 21,037. MedTech history: (33,792 / 25,137)^(1/10) - 1 = 3.0% a year; Medical Devices 6,826 / 25,137 = 27.2% (2015), 5,392 / 26,592 = 20.3% (2017); restated 4,208 / 27,060 = 15.6% (2021), 4,447 / 27,427 = 16.2% (2022); growth 27,427 / 27,060 - 1 = 1.4% (2022), 30,400 / 27,427 - 1 = 10.8% (2023), 31,857 / 30,400 - 1 = 4.8% (2024) - segment margins, rebates, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in J&J's Forms 10-K, 10-Q, results releases and market data; operands shown in the source line.
  25. ReportedThe number that would falsify it is Innovative Medicine operational growth through the next patent losses; the segment grew 6.8% operationally in the second quarter of 2026 despite about 760 basis points of Stelara drag.
    Johnson & Johnson second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 15 July 2026 · source ↗
Sources
Generated September 24, 2026