How much are lawsuits hurting Johnson & Johnson’s brand? The New Jersey drugmaker has lost half a billion dollars in brand value over the past year, according to Interbrand’s Best Global Brands for 2019 ranking, out Thursday. The company dropped in the brand consultancy’s tally to No. 86 with $5.72 billion in brand value, down 8% from last year’s finish at No. 77 with $6.23 billion.
It’s the first time J&J has shed value in the survey since 2011, when it dipped by 2% after a brutal 18 months of product recalls that included the biggest children’s drug recall up until then for Tylenol, Motrin, Benadryl and Zyrtec. Reports at the time pointed to the dozens of recalls as the reason then-CEO Bill Weldon stepped down in early 2012; current CEO Alex Gorsky took his place.
While the latest Interbrand report doesn’t expound on the reasons for J&J’s drop, an ongoing spate of lawsuits against the company—which has been accused of fueling the nationwide opioid crisis and selling cancer-causing talc powder, and was recently hit with an $8 billion verdict over antipsychotic Risperdal—likely played a role.
In J&J’s Q3 financial earnings call on Tuesday, CFO Joseph Welk talked at length about the various U.S. litigations, though he asserted that J&J’s bottom line remains strong.
“We continue to be focused as an organization of 135,000 associates, trying to bring better solutions, better innovation to healthcare. That will eventually win out. We’re very strong in our conviction around that … We know how to navigate these matters, and we’re going to stay focused at the task at hand,” he said, according to a Seeking Alpha transcript.
While that may be true—J&J’s pharma unit revenue increased by 6.4% to $10.9 billion in sales for the quarter, and its consumer business grew 3.3% to $3.5 billion in sales—the Interbrand measurement indicates something is amiss.
A reputation study last week found that the J&J brand is holding, but warned that if bad news continues to flow, that could change. In Alva’s annual reputation ranking, J&J went from inside the top 10 pharma companies in 2014 to second-to-last this year.
J&J is the only pharma company on the Interbrand brand value list. Its 2019 valuation puts it between Land Rover at $5.86 billion in brand value and list newcomer Uber at $5.71 billion. At the top of the chart are Apple ($214.5 billion), Google ($155.5 billion), and Amazon ($100.8 billion) in a repeat of 2018’s first three spots.