Johnson & Johnson (NYSE:JNJ) is the world's second largest and most broadly based manufacturer of health care products, with 2010 annual sales of $61.6 billion, a decline of 0.5% from 2009. The company holds a significant share of the consumer and pharmaceutical markets, and is the world's largest developer and manufacturer of medical treatment and diagnostic devices.

The consumer health market size is increasing as consumers are taking greater responsibility and interest in their own health. Johnson & Johnson owns highly successful brands such as Tylenol, Band-Aid, and Neutrogena. The acquisition of Pfizer's Consumer Healthcare division in 2006 and addition of brands such as Listerine, Lubriderm, Visine, and Neosporin further solidified Johnson & Johnson dominance in consumer health care. Recently however the company has been plagued by a series of product-quality problems, mainly at its McNeil Consumer Healthcare unit, which makes over-the-counter medicines. The company has recalled Tylenol, Motrin, Benadryl and other products for problems ranging from musty odors that caused nausea in consumers, to excessive concentrations of active ingredients. ^[1] The problems with manufacturing have hurt the company's bottom line. In 2010, the company suffered significant losses in this segment with a decrease of 7.7% in revenue over the previous year. ^[2]

The company's pharmaceutical segment faces many of the challenges that face all pharmaceutical companies, including issues surrounding patent expiration and FDA approval. Johnson & Johnson's pharmaceutical segment maintained its revenue numbers as seen in 2009 with only a 0.6% decline in 2010.^[2]

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