Johnson and Johnson 2015 Annual Report Download - page 106

•Government laws and regulations, affecting U.S. and international operations, including those relating to taxes,
pricing and reimbursement, regulatory approval of new products, licensing and patent rights, environmental
protection, conflict minerals, possible drug reimportation legislation, trade, monetary and fiscal policies, and
securities laws compliance;
•Competition in research, both internally and externally sourced, involving the development and improvement of new
and existing products and processes, is particularly significant and results from time to time in product and process
obsolescence. The development of new and improved products is important to the Company’s success in all areas
of its business. Investments in, and development and commercialization collaborations for, externally sourced
innovation are inherently risky, with no guarantee of success;
•Challenges and difficulties inherent in product development, including the potential inability to successfully continue
technological innovation, complete clinical trials, obtain regulatory approvals in the U.S. and internationally, gain and
maintain market approval of products, the possibility of encountering infringement claims by competitors with respect
to patent or other intellectual property rights which can preclude or delay commercialization of a product, and
challenges involved in post-market surveillance activities and studies and data collection and analysis in the real
world context;
•Product efficacy or safety concerns, whether or not based on scientific evidence, resulting in product withdrawals,
recalls, regulatory action on the part of the FDA (or international counterparts) or declining sales;
•Significant litigation or government action adverse to the Company, including product liability claims, patent
infringement claims and antitrust claims. Due to the uncertain nature of litigation and government action, the outcome
in any one matter may result in charges in excess of any established accruals;
•Product liability insurance for products may be limited, cost prohibitive or unavailable;
•Increased scrutiny of the health care industry by government agencies and state attorneys general resulting in
investigations and prosecutions carry the risk of significant civil and criminal penalties, including, but not limited to,
debarment from government business. Failure to meet compliance obligations in the McNEIL-PPC, Inc. Consent
Decree or the Corporate Integrity Agreements of the Johnson & Johnson Pharmaceutical Affiliates or the DePuy
Synthes Companies, or any other compliance agreements with governments or government agencies could result in
significant sanctions;
•Difficulties and delays in manufacturing, internally or within the supply chain, that cause voluntary or involuntary
business interruptions or shutdowns, product shortages, substantial modifications to our business practices and
operations, withdrawals or suspensions of current products from the market, or possible civil penalties and criminal
prosecution;
•Interruptions and breaches of the Company’s computer and communications systems, and those of the Company’s
vendors, including computer viruses, “hacking” and “cyber-attacks,” that could impair the Company’s ability to
conduct business and communicate internally and with its customers, or result in the theft of trade secrets or other
misappropriation of assets, or otherwise compromise privacy of sensitive information belonging to the Company, its
customers or other business partners;
•The impact of business combinations, including acquisitions and divestitures, both by and for the Company, as well
as externally in the pharmaceutical, medical devices and consumer industries, and the potential that the expected
strategic benefits and opportunities from any acquisition or divestiture by the Company may not be realized or may
take longer to realize than expected;
•Market conditions and the possibility that the on-going share repurchase program may be suspended or
discontinued;
•Reliance on global supply chains and production and distribution processes that are complex, subject to increasing
regulatory requirements that may adversely affect sourcing, supply and pricing of materials used in our products, and
which may involve multiple third parties, require significant capital expenditures, and be subject to lengthy regulatory
approvals;
•Financial distress and bankruptcies experienced by significant customers and suppliers that could impair their ability,
as the case may be, to purchase the Company’s products, pay for products previously purchased or meet their
obligations to the Company under supply arrangements;
Johnson & Johnson 2015 Annual Report