Over the last 30-plus years, biopharmaceutical advances have transformed how we prevent, treat, and cure disease.
While this transformative progress has been embraced in certain parts of our healthcare system, many parts still operate on decades-old models and programs which undermine the significant progress for patients made through medical innovation. A prime example is the 340B Drug Discount Program.
While this transformative progress has been embraced in certain parts of our healthcare system, many parts still operate on decades-old models and programs which undermine the significant progress for patients made through medical innovation. A prime example is the 340B Drug Discount Program.
Our responsibility as a leader in the healthcare system is to bring forward actionable ideas, data and insights to help create a sustainable healthcare system.
This has been a paramount principle since our first Transparency Report was released in 2016. These data and insights are critical to help inform the ongoing debate surrounding rising out-of-pocket costs for patients.
This has been a paramount principle since our first Transparency Report was released in 2016. These data and insights are critical to help inform the ongoing debate surrounding rising out-of-pocket costs for patients.
2021 at a Glance
In 2021, our net prices declined for the fifth year in a row – declining by -2.8%, and nearly -17% when compounded over the last six years.1 Nearly 55% of the list price of our medicines went to commercial insurers and others in the healthcare system as rebates, discounts and fees.2
Even as the net prices paid by commercial insurers, pharmacy benefit managers (PBMs) and government programs, on average, have declined over the past five years,3 individuals and families face ever-increasing cost-sharing burdens, especially for prescription drugs, due to the design and growing use of high-deductible benefit plans.4
Even as the net prices paid by commercial insurers, pharmacy benefit managers (PBMs) and government programs, on average, have declined over the past five years,3 individuals and families face ever-increasing cost-sharing burdens, especially for prescription drugs, due to the design and growing use of high-deductible benefit plans.4
Janssen U.S. Pricing Overview8
In 2021, we provided $33.9 billion in rebates, discounts and fees to commercial insurers, government programs, providers, distributors and others.9
Here is the breakdown:
Here is the breakdown:
Ensuring We Protect Progress for Every Patient
The U.S. healthcare innovation ecosystem stands out across the world as a beacon of promise for patients. Yet, for many American families, employers and individuals, the transformational progress made to address existing and unmet medical needs is not easily or affordably accessible.
Rising costs for patients is the right issue to focus on because patients deserve affordable access to needed care and treatments. However, in specific instances, federal and state policy proposals do not address the growing “affordability gap” for patients.
These same policy proposals could have other unintended consequences, including:
Rising costs for patients is the right issue to focus on because patients deserve affordable access to needed care and treatments. However, in specific instances, federal and state policy proposals do not address the growing “affordability gap” for patients.
These same policy proposals could have other unintended consequences, including:
With this data and evidence, we are providing actionable information, insights and analysis critical to helping inform policies that address the growing affordability gap, foster a patient-centric healthcare system and enable our unique ecosystem of innovation.
At Janssen, our mission is to make disease a thing of the past, and we carry this mission forward by developing and providing medicines that are safe, effective, and accessible. It is our responsibility to do so, and our 50,000 U.S.-based Johnson & Johnson employees dedicate themselves to this mission each day.
At Janssen, our mission is to make disease a thing of the past, and we carry this mission forward by developing and providing medicines that are safe, effective, and accessible. It is our responsibility to do so, and our 50,000 U.S.-based Johnson & Johnson employees dedicate themselves to this mission each day.
Six Key Data Points
The medicines’ value to patients, the healthcare system and society:
We assess how our medicines and vaccines improve individual health and allow a person to live their life to the fullest, as well as the potential to lower healthcare costs throughout the system and advance existing standards of care.
The importance of supporting affordable access to our medicines and vaccines:
We negotiate with insurers, PBMs and governments, as well as hospitals, physicians, and other providers of care, so patients who are prescribed our medicines or need our vaccines can get access to them.
The importance of preserving our ability to develop future ground-breaking vaccines, treatments and cures:
Sales from our existing innovations provide us with the necessary resources to meet the growing costs of R&D to address unmet medical needs, better help underserved populations and remain prepared for emerging health threats.
In 2021, Rebates, Discounts, and Fees Increased by 15%12
Since 2016, the first year covered by the Transparency Report, the rebates, discounts and fees we have provided to commercial insurers and PBMs have increased almost fivefold.13
Note: Circles on the left refer to mutually exclusive total rebates, discounts and fees.
Note: Circles on the left refer to mutually exclusive total rebates, discounts and fees.
Insurers Determine Patient Out-of-Pocket Costs
The Congressional Budget Office (CBO) recently acknowledged that “it is unlikely that the average net price of a prescription has increased considerably in recent years…,” 17 yet patients face growing cost-sharing (or out-of-pocket costs) obligations because of insurance benefit design, and in some instances, are getting less access to needed medicines.
Commercial insurers and PBMs often, and more increasingly, base patient cost-sharing on list price and not the lower net price negotiated with drug companies. Commercial insurers and PBMs are also implementing more restrictive utilization management programs.18
Commercial insurers and PBMs often, and more increasingly, base patient cost-sharing on list price and not the lower net price negotiated with drug companies. Commercial insurers and PBMs are also implementing more restrictive utilization management programs.18
Commercial Insurers’ Utilization Management Impact
At the same time as the financial burden for patients is growing due to complex formularies, commercial insurers’ utilization management tactics are creating access hurdles for patients, which can impact patient outcomes:
Expanded Tiered Lists with Varying Cost-Sharing:
Commercial insurers continue to incorporate “more complex [insurance] benefit designs for prescriptions drugs… with multiple cost-sharing tiers as well as other management approaches.”19 This can be especially harmful for patients needing specialty drugs, (e.g., cancer treatment) as these drugs are often placed on higher cost-sharing tiers.
Co-Pay Adjustment Programs:
Commercial insurers are increasingly using accumulator and maximizer adjustment programs to prevent co-pay assistance provided to patients by manufacturers from applying toward patient out-of-pocket maximums or deductibles. They can lead to additional and unexpected costs for patients and consequently reduce medication adherence.
Non-Medical Switching:
This happens when commercial insurers and PBMs switch clinically stable patients on any product to other therapies for non-medical reasons. This creates significant barriers to decision-making for patients, with one study noting that 73% of patients surveyed felt commercial insurers’ non-medical switching disrupted the care decisions made between a patient and doctor.20
Step Therapy:
Commercial insurers can require patients to fail treatment on the insurer’s preferred medicine before trying another medicine. Beyond the burden this type of policy places on physicians, there is a growing concern that step therapy is preventing patients, especially those with very chronic conditions such as rheumatoid arthritis (RA), from taking their prescribed medicines.21 This also creates extra work for providers and doctors who must manage and maintain up-to-date lists of commercial insurers’ approved drug lists.
Prior Authorization:
This is a requirement that providers submit documentation to commercial insurers before the insurer approves coverage of a specific treatment and is a key driver of administrative cost growth in the U.S. It is estimated that physicians spend more than $26 billion per year managing commercial insurers’ prior authorization requirements for prescription drugs.22 One recent study noted that prior authorization could be the cause of prescription abandonment for more than 150 million patients.23
How Changes in Insurance Benefits Hurt Patients
Unfortunately, the growth of utilization management programs, administrative requirements and cost-sharing is causing financial distress and harming the health of the most vulnerable patients.
As a result, 39% of U.S. adults aged 19-64 who are on full insurance could not fill their prescription due to patient OOP costs (not including their cost for insurance premiums).24 Evidence shows that there is significant link between abandonment rates and higher out-of-pocket costs for patients.25
As a result, 39% of U.S. adults aged 19-64 who are on full insurance could not fill their prescription due to patient OOP costs (not including their cost for insurance premiums).24 Evidence shows that there is significant link between abandonment rates and higher out-of-pocket costs for patients.25
Higher Cost-Sharing Is a Growing Concern
Commercial insurers’ growing use of higher cost-sharing in the form of deductibles, co-payments and co-insurance is creating pressure on patients. This has become particularly acute for patients who are prescribed medications for multiple conditions or are taking specialty medicines for rare and difficult to treat diseases.
Our Role in the Innovation Ecosystem
We are proud of our historical investments that have supported the nation’s healthcare innovation ecosystem that is helping make disease a thing of the past.
Like any healthy ecosystem, it depends upon many elements supporting and sustaining each other. In this ecosystem, biopharmaceutical contributions to R&D spending accounts for the lion’s share of all investments in medical research.30
Our nation has seen significant progress and dramatic improvements in patients’ health with previously untreatable diseases because of this ecosystem. For example:
Like any healthy ecosystem, it depends upon many elements supporting and sustaining each other. In this ecosystem, biopharmaceutical contributions to R&D spending accounts for the lion’s share of all investments in medical research.30
Our nation has seen significant progress and dramatic improvements in patients’ health with previously untreatable diseases because of this ecosystem. For example:
- Over the past 20 years, the Food & Drug Administration has approved 115 oncology medicines, which is a significant contributor to why cancer death rates have fallen 32% since 1991.31
- The development of HIV treatments in the mid-1990s helped reduce the number of HIV-related deaths from more than 50,000 in 1995 to 5,000 in 2019.32
Ongoing Investments to Eliminate Health Inequities
Alliance for Inclusion in Medicine (AIM) Program:
In partnership with the National Medical Fellowships (NMF), we launched a new scholarship and mentorship program for 20 medical students of color in the U.S. who were matched and paired with a J&J mentor who serves as a resource, connecting them with hundreds of other experts within the enterprise from whom they can receive advice, guidance and insight as they progress through their research projects and pursue their goals. 36
NMF Diversity in Clinical Trials Research Program (NMF Dctr):
Janssen also partnered with NMF to launch a first of its kind program seeking to increase the number of underrepresented minority clinicians who serve as lead research managers or principal investigators to help strengthen diversity in clinical trials.37
Decoding Disparities QuickFire Challenge:
We continued our efforts to better detect, understand and reduce the root causes of health inequities through data-driven methodologies and technologies.38 Janssen awarded four innovative partners with funding to inform the crucial next steps we need to take towards achieving equity.39
Supporting Patient Access
Janssen CarePath Directly Supports Patients
We continue to support patients through Janssen CarePath, a service that provides information about support resources for patients taking Janssen medications. Once a healthcare professional has decided a Janssen medication is right for their patient, the program can help that patient find the tools they may need to get started on a medication and stay on track, including sharing options to help manage out-of-pocket costs.
Johnson & Johnson Patient Assistance Foundation, Inc.
We also support independent programs and foundations that help patients. In the U.S., Janssen and other Johnson & Johnson companies donate medicines and funding to the Johnson & Johnson Patient Assistance Foundation, Inc. (JJPAF), an independent, nonprofit organization. JJPAF gives eligible patients free prescription medicines donated by Johnson & Johnson companies. For more information, please visit JJPAF.org.
In continuing response to COVID-19, the JJPAF continued to provide support to those in need due to the COVID pandemic.
We continue to support patients through Janssen CarePath, a service that provides information about support resources for patients taking Janssen medications. Once a healthcare professional has decided a Janssen medication is right for their patient, the program can help that patient find the tools they may need to get started on a medication and stay on track, including sharing options to help manage out-of-pocket costs.
Johnson & Johnson Patient Assistance Foundation, Inc.
We also support independent programs and foundations that help patients. In the U.S., Janssen and other Johnson & Johnson companies donate medicines and funding to the Johnson & Johnson Patient Assistance Foundation, Inc. (JJPAF), an independent, nonprofit organization. JJPAF gives eligible patients free prescription medicines donated by Johnson & Johnson companies. For more information, please visit JJPAF.org.
In continuing response to COVID-19, the JJPAF continued to provide support to those in need due to the COVID pandemic.
Policies Must Protect Progress for Patients
We continue to advance solutions that promote innovation, reduce inequity and improve affordability, guided by four core principles:
Patients should have affordable and timely access to appropriate treatment options and sites of care
Treatment decisions belong in the hands of patients and their healthcare providers
Clinically stable patients should not be switched from their treatments for non-medical reasons (unless deemed substitutable by the FDA)
Appropriate clinical rigor and manufacturing quality standards should be applied in all instances to ensure patient safety
Our Solutions to Address the Nation’s
Healthcare Challenges
Healthcare Challenges
Citations
Notes on This Report
All information in this report refers to the U.S. operations of the Janssen Pharmaceutical Companies of Johnson & Johnson, unless noted otherwise. Financial and nonfinancial information covers the period between January 4, 2021 and January 2, 2022, except where noted. The methodologies used for analyses in this report may be different from those used by other organizations. This report is not audited and is not intended to address all our required disclosures.
2021 At A Glance
1. Figure according to Janssen internal financial accounting.
2. Ibid.
3. IQVIA Institute for Human Data Science. “The Use of Medicines in the U.S., Spending and Usage Trends and Outlook to 2025.” May 27, 2021. https://www.iqvia.com/insights/the-iqvia-institute/reports/the-use-of-medicines-in-the-us.
4. Kaiser Family Foundation, 2021 Employer Health Benefits Survey, Section 9: Prescription Drug Benefits. November 10, 2021. https://www.kff.org/report-section/ehbs-2021-section-9-prescription-drug-benefits.
5. Figure according to Janssen internal financial accounting.
6. Ibid.
7. Johnson & Johnson, FY21-Q4 Form 10-K for the period ending January 2, 2022 (filed. February 17, 2022).
8. All figures according to Janssen internal financial accounting.
9. Ibid.
10. Ibid.
11. Ibid.
2. Ibid.
3. IQVIA Institute for Human Data Science. “The Use of Medicines in the U.S., Spending and Usage Trends and Outlook to 2025.” May 27, 2021. https://www.iqvia.com/insights/the-iqvia-institute/reports/the-use-of-medicines-in-the-us.
4. Kaiser Family Foundation, 2021 Employer Health Benefits Survey, Section 9: Prescription Drug Benefits. November 10, 2021. https://www.kff.org/report-section/ehbs-2021-section-9-prescription-drug-benefits.
5. Figure according to Janssen internal financial accounting.
6. Ibid.
7. Johnson & Johnson, FY21-Q4 Form 10-K for the period ending January 2, 2022 (filed. February 17, 2022).
8. All figures according to Janssen internal financial accounting.
9. Ibid.
10. Ibid.
11. Ibid.
From Rebates To insurance Benefit Design
12. Figure according to Janssen internal financial accounting.
13. Ibid.
14. Ibid. Citation applies to all figures in the chart.
15. Xcenda. "Skyrocketing Growth in PBM Formulary Exclusions Raises Concerns About Patient Access." September 2020. https://www.xcenda.com/-/media/assets/xcenda/english/content-assets/white-papers-issue-briefs-studies-pdf/xcenda_pbm_exclusion_whitepaper_9-20.pdf?la=en&hash=B59B51A73075D62E561C94D85CC769FAD039D6BA.
16. Fein, A. "Five Takeaways from the Big Three PBMs’ 2022 Formulary Exclusions." Drug Channels Institute. January 19, 2022. https://www.drugchannels.net/2022/01/five-takeaways-from-big-three-pbms-2022.html.
17. The Congressional Budget Office, “Prescription Drugs: Spending, Use, and Prices.” January 2022. https://www.cbo.gov/publication/57772.
18. Howell, S., Yin, P. and Robinson, J. “Quantifying The Economic Burden Of Drug Utilization Management On Payers, Manufacturers, Physicians, And Patients.” Health Affairs. August 2021. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.00036.
19. Kaiser Family Foundation, 2021 Employer Health Benefits Survey, Section 9: Prescription Drug Benefits.https://www.kff.org/report-section/ehbs-2021-section-9-prescription-drug-benefits.
20. Alliance for Patient Access, A Study of the Qualitative Impact of Non-Medical Switching, February 2019. https://admin.allianceforpatientaccess.org/wp-content/uploads/2020/02/AfPA_Qualitative-Impact-of-Non-Medical-Switching_Report_Feb-2019.pdf.
21. American Journal of Managed Care, “How Prior Authorization, Step Therapy Result in Medication Discontinuation and Worse Outcomes.” https://www.ajmc.com/view/how-prior-authorization-step-therapy-result-in-medication-discontinuation-and-worse-outcomes-.
22. Howell, S., Yin, P. and Robinson, J. “Quantifying The Economic Burden Of Drug Utilization Management On Payers, Manufacturers, Physicians, And Patients.” Health Affairs. August 2021. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.00036.
23. McKesson Corporation. CoverMyMeds.com. “2020 Medication Access Report.” https://www.covermymeds.com/main/medication-access-report.
24. Collins, S., Gunja, M. and Aboulafia, G. The Commonwealth Fund. U.S. Health Insurance Coverage in 2020: A Looming Crisis in Affordability, August 19, 2020. https://www.commonwealthfund.org/publications/issue-briefs/2020/aug/looming-crisis-health-coverage-2020-biennial.
25. IQVIA, Medicine Spending and Affordability in the United States, August 2020. https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/medicine-spending-and-affordability-in-the-united-states.pdf?_=1596546900926.
26. Chandra, A., Flack, E. and Obermeyer, Z. “The Health Costs of Cost-Sharing.” National Bureau of Economic Research Working Paper. February 2021. https://www.nber.org/system/files/working_papers/w28439/w28439.pdf
27. Kaiser Family Foundation, 2021 Employer Health Benefits Survey, November 10, 2021. https://www.kff.org/report-section/ehbs-2021-summary-of-findings.
28. Ibid.
29. Ibid.
13. Ibid.
14. Ibid. Citation applies to all figures in the chart.
15. Xcenda. "Skyrocketing Growth in PBM Formulary Exclusions Raises Concerns About Patient Access." September 2020. https://www.xcenda.com/-/media/assets/xcenda/english/content-assets/white-papers-issue-briefs-studies-pdf/xcenda_pbm_exclusion_whitepaper_9-20.pdf?la=en&hash=B59B51A73075D62E561C94D85CC769FAD039D6BA.
16. Fein, A. "Five Takeaways from the Big Three PBMs’ 2022 Formulary Exclusions." Drug Channels Institute. January 19, 2022. https://www.drugchannels.net/2022/01/five-takeaways-from-big-three-pbms-2022.html.
17. The Congressional Budget Office, “Prescription Drugs: Spending, Use, and Prices.” January 2022. https://www.cbo.gov/publication/57772.
18. Howell, S., Yin, P. and Robinson, J. “Quantifying The Economic Burden Of Drug Utilization Management On Payers, Manufacturers, Physicians, And Patients.” Health Affairs. August 2021. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.00036.
19. Kaiser Family Foundation, 2021 Employer Health Benefits Survey, Section 9: Prescription Drug Benefits.https://www.kff.org/report-section/ehbs-2021-section-9-prescription-drug-benefits.
20. Alliance for Patient Access, A Study of the Qualitative Impact of Non-Medical Switching, February 2019. https://admin.allianceforpatientaccess.org/wp-content/uploads/2020/02/AfPA_Qualitative-Impact-of-Non-Medical-Switching_Report_Feb-2019.pdf.
21. American Journal of Managed Care, “How Prior Authorization, Step Therapy Result in Medication Discontinuation and Worse Outcomes.” https://www.ajmc.com/view/how-prior-authorization-step-therapy-result-in-medication-discontinuation-and-worse-outcomes-.
22. Howell, S., Yin, P. and Robinson, J. “Quantifying The Economic Burden Of Drug Utilization Management On Payers, Manufacturers, Physicians, And Patients.” Health Affairs. August 2021. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.00036.
23. McKesson Corporation. CoverMyMeds.com. “2020 Medication Access Report.” https://www.covermymeds.com/main/medication-access-report.
24. Collins, S., Gunja, M. and Aboulafia, G. The Commonwealth Fund. U.S. Health Insurance Coverage in 2020: A Looming Crisis in Affordability, August 19, 2020. https://www.commonwealthfund.org/publications/issue-briefs/2020/aug/looming-crisis-health-coverage-2020-biennial.
25. IQVIA, Medicine Spending and Affordability in the United States, August 2020. https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/medicine-spending-and-affordability-in-the-united-states.pdf?_=1596546900926.
26. Chandra, A., Flack, E. and Obermeyer, Z. “The Health Costs of Cost-Sharing.” National Bureau of Economic Research Working Paper. February 2021. https://www.nber.org/system/files/working_papers/w28439/w28439.pdf
27. Kaiser Family Foundation, 2021 Employer Health Benefits Survey, November 10, 2021. https://www.kff.org/report-section/ehbs-2021-summary-of-findings.
28. Ibid.
29. Ibid.
Supporting Our Nation’s Healthcare Innovation Ecosystem
30. Research America, “U.S. Investments in Medical and Health Research and Development 2016-2020.” January 2022. https://www.researchamerica.org/sites/default/files/PublicationsResearch%21AmericaInvestment%20Report.Final.January%202022.pdf.
31. Pharmaceutical Research and Manufacturers of America. The Value of Cancer Treatment Today. https://phrma.org/resource-center/Topics/Cancer/The-Value-of-Cancer-Treatment-Today#:~:text=Over%20the%20past%2020%20years,complex%20undertakings%20on%20the%20planet.
32. National Pharmaceutical Council, What If Groundbreaking Medicines Never Existed?, https://www.npcnow.org/resources/what-if-groundbreaking-medicines-never-existed.
33. Figure According to Janssen internal financial accounting.
34. Ibid.
35. Ibid.
36. JNJ.com. Empowering the Next Generation of Doctors to Support Health Equity. https://www.jnj.com/our-company/empowering-the-next-generation-of-doctors-to-support-health-equity.
37. JNJ.com. One Way We Are Combatting Underrepresentation as Part of Our Race to Health Equity. https://www.jnj.com/our-company/one-way-we-are-combatting-underrepresentation-as-part-of-our-race-to-health-equity.
38. Press Release. Johnson & Johnson Innovation Announces Awardees of the Decoding Disparities QuickFire Challenge, Nov. 15, 2021. https://www.prnewswire.com/news-releases/johnson--johnson-innovation-announces-awardees-of-the-decoding-disparities-quickfire-challenge-301424149.html.
39. JNJ.com. Decoding Disparities QuickFire Challenge. https://jlabs.jnjinnovation.com/quickfire-challenges/decoding-disparities-quickfire-challenge.
40. Data are an approximate number of patients supported by Janssen CarePath provided by the program administrator.
41. Figure according to Janssen internal financial accounting.
42. Data are an approximate number as reported by the Johnson & Johnson Patient Assistance Foundation, Inc.
31. Pharmaceutical Research and Manufacturers of America. The Value of Cancer Treatment Today. https://phrma.org/resource-center/Topics/Cancer/The-Value-of-Cancer-Treatment-Today#:~:text=Over%20the%20past%2020%20years,complex%20undertakings%20on%20the%20planet.
32. National Pharmaceutical Council, What If Groundbreaking Medicines Never Existed?, https://www.npcnow.org/resources/what-if-groundbreaking-medicines-never-existed.
33. Figure According to Janssen internal financial accounting.
34. Ibid.
35. Ibid.
36. JNJ.com. Empowering the Next Generation of Doctors to Support Health Equity. https://www.jnj.com/our-company/empowering-the-next-generation-of-doctors-to-support-health-equity.
37. JNJ.com. One Way We Are Combatting Underrepresentation as Part of Our Race to Health Equity. https://www.jnj.com/our-company/one-way-we-are-combatting-underrepresentation-as-part-of-our-race-to-health-equity.
38. Press Release. Johnson & Johnson Innovation Announces Awardees of the Decoding Disparities QuickFire Challenge, Nov. 15, 2021. https://www.prnewswire.com/news-releases/johnson--johnson-innovation-announces-awardees-of-the-decoding-disparities-quickfire-challenge-301424149.html.
39. JNJ.com. Decoding Disparities QuickFire Challenge. https://jlabs.jnjinnovation.com/quickfire-challenges/decoding-disparities-quickfire-challenge.
40. Data are an approximate number of patients supported by Janssen CarePath provided by the program administrator.
41. Figure according to Janssen internal financial accounting.
42. Data are an approximate number as reported by the Johnson & Johnson Patient Assistance Foundation, Inc.
Additional Resources
In this report, we refer to locations where you can find more information about specific Janssen U.S. and Johnson & Johnson programs, disclosures, and patient resources. Financial performance information for our parent company and its subsidiaries, as well as its “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors,” can be found in Johnson & Johnson Annual Reports atjnj.com/about-jnj/annual-reports. Information on corporate sustainability measures can be found at the Johnson & Johnson Health for Humanity Report at healthforhumanityreport.jnj.com.