Johnson and Johnson at Jefferies Conference Notes

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Alex Gorsky

Healthcare makes up 20% of the US economy

“healthcare now makes up almost 20% of the economy in the U.S.; about 10% in a lot of the other major economies around the; world given demographics, 65 plus population, I think latest figures in the U.S.; we got about 40 million people who are at the age of 65 that number is going to go to 80 million over the next 20 or 30 years; and if you look at every age category, from 70 to 80, 80 to 90, you see very similar statistics, I think the number from 90 plus is going from like 2 million to 10 million. And of course, the corresponding increase in medical and healthcare consumption with that aging, it’s pretty remarkable. And by the way, it’s not only in the United States, it’s in Japan right now 25% of the population of 55 plus that number is going to 40%.”

When people move up the economic ladder they want healthcare

“And as I travel around whether it’s a Mumbai, whether it’s a Memphis or Moscow, this tissue of aging demographics and increasing middle class and I think it’s pretty — it’s been shown that once people have food, once people have shelter the next thing they consume more of is they move up the economic ladders, healthcare that it puts a lot of pressures on governments and systems. ”

Incredible explosion of innovation thanks to technology

“The flip side of that is the incredible explosion of innovation that we’re seeing right now. And I think a lot of that is enabled frankly by technology, it’s enabled by Big Data, it’s enabled by new innovation approaches in some cases that we couldn’t even have imagined 10 years, 15 years ago or if we did it was side by. And I think that makes it quite exciting. I think if you look — just look back in my carrier, we’ve seen HIV go from a death sentence where if you were diagnosed in the early 80s with HIV you perhaps had about two years of life left. Today, I believe the numbers with support of the Epidemiologist poor thing it take two years of the average life span. And if you think of going forward areas like oncology and the potential that we’re seeing vis-à-vis a better understanding of genomics and applying those insights into new therapeutic options is very exciting.”

*Consumers have been switching back to brands from private label

“I think there was a lot of skepticism not only can you fix the quality issue but number two is once you do reintroduce once patients made the switch to private label, particularly at the depth of the recession, will you ever get them switch back to brands like Tylenol. Today, if you look at our core share with Neutrogena, with Tylenol, with other brands, they are definitely on the upswing, not quite back yet to where they were, but well underway.”