VOL. XCIV, NO. 247
★ MOAT STOCKS & COMPETITIVE ADVANTAGES ★
PRICE: 5 CENTS
Tuesday, December 23, 2025
Johnson & Johnson
JNJ · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Johnson & Johnson operates two segments: Innovative Medicine and MedTech. Innovative Medicine's moat is primarily legal - patents and other exclusivities that support pricing and share until loss of exclusivity, with pipeline execution as the reinvestment engine to offset patent cliffs. MedTech's moat is more demand- and relationship-driven - clinician training/workflow switching costs, reputation-based preference, and field sales/service support across procedure-centric categories. Both segments face meaningful erosion vectors from competition and payer/government cost containment, keeping overall moat durability closer to medium than permanent.
Primary segment
Innovative Medicine
Market structure
Competitive
Market share
—
HHI: —
Coverage
2 segments · 6 tags
Updated 2025-12-21
Segments
Innovative Medicine
Branded prescription pharmaceuticals (biopharma)
Revenue
64.1%
Structure
Competitive
Pricing
moderate
Share
—
Peers
MedTech
Medical devices and procedure-based consumables (cardiovascular, orthopaedics, surgery, vision)
Revenue
35.9%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Moat Claims
Innovative Medicine
Branded prescription pharmaceuticals (biopharma)
Revenue/profit shares are derived from J&J FY2024 segment reporting: Innovative Medicine segment sales $56.964B and segment income before tax $18.919B (10-K filed 2025-02-13). Operating_profit_share uses J&J's reported segment income before tax as the closest disclosed segment profit measure.
IP Choke Point
Legal
IP Choke Point
Strength: 4/5 · Durability: medium · Confidence: 5/5 · 3 evidence
Patent and related exclusivities support pricing and share for key medicines; however, loss of exclusivity and patent challenges can rapidly erode sales via generics/biosimilars.
Erosion risks
- Patent cliffs / loss of exclusivity on top products
- At-risk generic or biosimilar launches after adverse IP outcomes
- Government price-setting/controls and reimbursement pressure
Leading indicators
- Upcoming loss-of-exclusivity dates for top products
- Biosimilar approvals/launches vs key biologics
- Net price trends (gross-to-net) and payer formulary positioning
Counterarguments
- Payers can accelerate switching to lower-cost alternatives once biosimilars/generics are available
- Patent challenges can shorten expected exclusivity windows
Regulated Standards Pipe
Legal
Regulated Standards Pipe
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 2 evidence
Scale clinical/regulatory execution and pipeline replenishment create a continuing barrier; success depends on sustained R&D productivity and timely approvals.
Erosion risks
- Clinical failures or delays in late-stage programs
- Regulatory tightening or slower agency review timelines
- R&D productivity deterioration or weaker external innovation sourcing
Leading indicators
- Phase 3 readouts and major regulatory submissions/approvals
- R&D spend trajectory and mix (internal vs business development)
- New product launch cadence and early uptake
Counterarguments
- Large pharma peers and well-funded biotechs have similar regulatory capabilities
- Breakthrough innovation can come from smaller entrants and shift standards of care
MedTech
Medical devices and procedure-based consumables (cardiovascular, orthopaedics, surgery, vision)
Revenue/profit shares are derived from J&J FY2024 segment reporting: MedTech segment sales $31.857B and segment income before tax $3.740B (10-K filed 2025-02-13). Operating_profit_share uses J&J's reported segment income before tax as the closest disclosed segment profit measure.
Training Org Change Costs
Demand
Training Org Change Costs
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
In procedure-driven device categories (notably orthopaedics/trauma), surgeon training, familiarity, and associated hospital workflows/instrumentation create meaningful switching costs and loyalty effects.
Erosion risks
- Hospital procurement standardization can force brand switches
- New enabling technologies can reset clinician preferences
- Cost-containment and tendering can shift purchasing toward lowest price
Leading indicators
- Hospital win/loss rates in tenders and IDN/GPO contracts
- Clinician adoption and utilization metrics in key franchises
- Instrument/platform placements and associated procedure volumes
Counterarguments
- Hospitals can mandate switching when total cost savings are large
- Clinical evidence and innovation can move preferences quickly
Brand Trust
Demand
Brand Trust
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 2 evidence
Device markets often compete on perceived quality and reputation; J&J highlights reputation and customer service as key competitive factors and owns established brands (e.g., ACUVUE, TECNIS).
Erosion risks
- Product recalls or safety concerns damaging brand equity
- Clinical data favoring competitor devices
- Increasing price transparency reducing brand premium
Leading indicators
- Recall frequency and regulatory warning letters
- Clinician satisfaction/NPS (if disclosed) and repurchase rates
- Average selling price trends and mix shifts
Counterarguments
- In commoditized categories, purchasing can be primarily price-driven
- Reputation can be quickly impaired by quality issues
Service Field Network
Supply
Service Field Network
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 2 evidence
Field sales/service and in-hospital education support adoption and retention in complex device categories; training and demonstrations by sales reps are highlighted as part of market access dynamics in orthopaedic devices.
Erosion risks
- Provider consolidation reducing influence of field reps
- Remote/digital support commoditizing training services
- Cost cuts that weaken service responsiveness
Leading indicators
- Salesforce effectiveness and coverage in priority accounts
- Service response times and customer satisfaction metrics
- Share stability in franchises where in-procedure support is critical
Counterarguments
- Procurement bodies may prioritize total cost over service
- Competitors can replicate service models by hiring experienced reps
Evidence
Loss of patent exclusivity for a product often is followed by a substantial reduction in sales...
Directly supports the dependence on IP/exclusivity and the sharp revenue step-down after generic/biosimilar entry.
These rights are essential to the Company's businesses...
Positions patents/proprietary rights as essential to the business model.
the Company can lose a major portion of revenues... in a very short period of time.
Supports the cliff dynamics that both define and limit durability of the IP moat.
The process depends on many factors... achieve successful clinical trial results... obtain regulatory approvals...
Shows the centrality of large-scale clinical and regulatory execution for competitive success.
New products introduced within the past five years accounted for approximately 25% of 2024 sales.
Indicates meaningful contribution from newer products, consistent with ongoing pipeline commercialization.
Showing 5 of 11 sources.
Risks & Indicators
Erosion risks
- Patent cliffs / loss of exclusivity on top products
- At-risk generic or biosimilar launches after adverse IP outcomes
- Government price-setting/controls and reimbursement pressure
- Clinical failures or delays in late-stage programs
- Regulatory tightening or slower agency review timelines
- R&D productivity deterioration or weaker external innovation sourcing
Leading indicators
- Upcoming loss-of-exclusivity dates for top products
- Biosimilar approvals/launches vs key biologics
- Net price trends (gross-to-net) and payer formulary positioning
- Share of sales from products launched in past 5 years
- Phase 3 readouts and major regulatory submissions/approvals
- R&D spend trajectory and mix (internal vs business development)
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.