CEOInterviews.AIJoaquin Duato, Chairman and Chief Executive Officer of Johnson & Johnson

I

Interviewer0:13

When I was preparing for this, I did some research and I was disappointed to learn that the Band-Aids I've been using all these years are no longer owned by Johnson & Johnson.

J

Joaquin Duato0:23

Yeah.

I

Interviewer0:23

What happened to the Band-Aids? I mean, I thought Band-Aids were Johnson & Johnson. And how come you became CEO and you got rid of the Band-Aids?

J

Joaquin Duato0:31

So, it's not only you. I think many retirees of the company are sending me mail regarding that same feeling. Many of them worked in our consumer sector. And even today when I tell people I'm the CEO of Johnson & Johnson, they tell me the baby shampoo company all the time.

I

Interviewer0:51

So, you became the CEO and then within a year or two of that, you spun out your entire consumer division, all the kind of products that I buy at the drugstore. And you got rid of all those things. Why did you do that?

J

Joaquin Duato1:04

We wanted to be more focused on medical innovation. The consumer business had departed from medical innovation. We were more connected with cosmetics, over-the-counter medication, and it didn't fit in the overall umbrella of trying to bring medical innovation to treat tough, difficult conditions like oncology, cardiovascular, or dementia. So, we wanted to be a more focused company dedicated to medical innovation and we were deliberate about separating the consumer company. It's good for companies like Johnson & Johnson to reinvent ourselves.

I

Interviewer1:41

All right. Since you did that, has your stock gone up or down?

J

Joaquin Duato1:45

It's going up. As a matter of fact, last year in 2025 was one of the best years for Johnson & Johnson history in terms of total shareholder return. We had 47% return in 2025.

I

Interviewer1:59

Pretty good.

Now, I can tell from your accent that you're not from Mississippi.

J

Joaquin Duato2:05

No, I am not from Mississippi.

I

Interviewer2:07

Or Florida? Where?

J

Joaquin Duato2:08

Nearby.

I

Interviewer2:10

Missouri.

Now, you are a native of Spain. So, how did a native of Spain rise up to be the CEO of an American company that is the largest healthcare company by revenue in the entire world? Let's talk about your story. You're born in Spain. What city?

J

Joaquin Duato2:29

I was born in Spain in Valencia. I'm the son of an engineer and a nurse. So, I had the medical side in my family and also the entrepreneurial side. I grew up in a large family. My dad had nine brothers and sisters, so I have like 40 cousins. I was in the middle. So, I realized at the beginning that I needed to have a strong voice in order to be heard. Otherwise, nobody was paying attention to me in my family.

I

Interviewer2:57

Your parents are both alive, right?

J

Joaquin Duato2:58

Yeah, my parents are both alive.

I

Interviewer2:59

Do they ask you about the Band-Aids, too?

J

Joaquin Duato3:01

Yeah. No, but you know, they ask me questions about Johnson & Johnson and how I'm doing and things like that.

I

Interviewer3:09

All right. So, now, as I understand it, you went to college in Spain initially, right?

J

Joaquin Duato3:13

Yeah.

I

Interviewer3:14

And then, after you graduated from college, you applied for a job at Johnson & Johnson and got turned down.

J

Joaquin Duato3:20

Yeah. I got an interview and I didn't make it to the second interview.

I

Interviewer3:26

So, what happened to the person who turned you down? Is he still there?

J

Joaquin Duato3:28

He worked in the consumer business and look what happened with consumer.

I

Interviewer3:35

And he said, "Okay." All right. So, now, you worked your way up. Over how many years have you been at Johnson?

J

Joaquin Duato3:42

I've been at Johnson & Johnson and it goes fast. 37 years this.

I

Interviewer3:46

37 years.

J

Joaquin Duato3:47

37 years, yeah.

I

Interviewer3:48

Wow, you like a long-term relationship. How long have you been married?

J

Joaquin Duato3:51

I've been married 35, so I've been at Johnson & Johnson longer than I've been married.

I

Interviewer3:55

You stay with whoever you go with initially, right?

J

Joaquin Duato3:58

I'm a loyal person.

I

Interviewer4:01

I can see. Okay.

J

Joaquin Duato4:01

In every aspect, I'm a loyal person.

I

Interviewer4:03

So, to be very serious, how did somebody from Spain, nothing wrong with Spain, it's a great country, they financed Christopher Columbus to come here, right? Great country, but how did somebody from Spain rise up to be the CEO of the typical American healthcare company? Not that it's impossible as I said earlier, but what was your skill set? Were you a salesman? Were you a product person? What did you have as your skill set?

J

Joaquin Duato4:30

My skill set at Johnson & Johnson is that I never said no. So, all the opportunities that the company put in front of me, I took them. They moved me to different countries. I came to the US. I worked in the medical device division, in the consumer division, in the pharmaceutical division. I worked in supply chain. I was the chief information officer for a while. So, I did many jobs at Johnson & Johnson and I think that those opportunities that the company gave me gave me the opportunity to be who I am now. Johnson & Johnson is a big company. We build talent from the inside. The average seniority of a Johnson & Johnson employee in the US is more than 10 years.

I

Interviewer5:09

All right. Who were Johnson & Johnson? Were they brothers or mother and father and son? Who were Johnson & Johnson?

J

Joaquin Duato5:16

Two brothers. They were two brothers from Pennsylvania that went into the Philadelphia Fair in 1884, I think it was, and they saw a presentation from a British surgeon called Joseph Lister that was talking about the germ theory in infections during surgery. And they decided that that was the way to go and they created a company that did surgical dressings, aseptic surgical dressings. And from there we went to the Band-Aids.

I

Interviewer5:46

No, as I understand there were actually three brothers.

J

Joaquin Duato5:50

They were three brothers.

I

Interviewer5:51

Was it Johnson & Johnson & Johnson? Why is it just Johnson & Johnson?

J

Joaquin Duato5:54

I think another one created a separate company, so he was not part of the Johnson & Johnson.

I

Interviewer5:59

I see. Okay. So, what did Johnson & Johnson do, to be very serious, to enable it to grow to be the largest revenue company in the world in terms of healthcare companies? What did they actually do? They make better products? Are they harder working? What do they actually do?

J

Joaquin Duato6:13

They are a great American story of ingenuity and creativity. So, they started as a surgical dressing company and from there they went into the consumer side with the Band-Aids. In the '50s we went into pharmaceuticals for the first time. And they had a philosophy that was based on integrity. Our Credo of Johnson & Johnson was written by one of the family members more than 80 years ago in 1943. And it was based also on decentralization. They wanted their managers to run their businesses as if they were their own companies. So, they were very successful on that and they created the largest, most diversified healthcare company in the world. Still to this day, we're the largest healthcare company in revenue.

I

Interviewer6:59

Now, the owner of the New York Jets is Woody Johnson. He's a member of the Johnson family.

J

Joaquin Duato7:05

Correct.

I

Interviewer7:05

Are there any other members of the Johnson family still involved in the company?

J

Joaquin Duato7:10

There's no member of the Johnson family involved in the company. The last member of the Johnson family working in the company as a CEO finished his job in the '60s. So, today we don't have any member of the Johnson family working in the company. We honor the Johnson family and once a year with the annual meeting we meet with many members and we tell them how the company is doing, but at this point no member of the Johnson family is in the company.

I

Interviewer7:34

The company was started in what city?

J

Joaquin Duato7:36

The company is in New Brunswick. We started in New Jersey 140 years ago in 1886 and we are in the same place. When I go to drive every day, I go to the same place in which Johnson & Johnson started.

I

Interviewer7:49

New Brunswick.

J

Joaquin Duato7:50

New Brunswick, New Jersey. Great town.

I

Interviewer7:52

How many employees does Johnson & Johnson have?

J

Joaquin Duato7:55

We have 140,000 employees globally.

I

Interviewer7:57

How many in the United States?

J

Joaquin Duato7:58

We have about 60,000 in the US, 80,000 globally.

I

Interviewer8:02

And what are the revenues of Johnson & Johnson now?

J

Joaquin Duato8:05

Our guidance this year is going to be somewhere north of a hundred billion dollars.

I

Interviewer8:11

A hundred billion dollars.

J

Joaquin Duato8:12

Yeah.

I

Interviewer8:12

And what's the market capitalization of the company?

J

Joaquin Duato8:16

The market cap varies every day as you know very well, but it's about 570 billion dollars.

I

Interviewer8:23

570 billion.

J

Joaquin Duato8:24

Billion, yeah.

I

Interviewer8:25

That's a lot. So, now, in the United States there are only two companies that have a triple A credit rating. Does anybody else know what Johnson & Johnson is? That is the only other company in the United States, publicly traded company, that has a triple A credit rating. Anybody? Microsoft is the company.

J

Joaquin Duato8:47

Microsoft, yeah. Microsoft and Johnson & Johnson. So we're proud to have a triple A credit rating. I think it's a better credit rating than the US government. It's a sign of our financial discipline and our trajectory over a long period of time. Many investors ask me why having a triple A credit rating, you could be more leveraged. I say, "Look, it's a sign of our financial discipline. We are not married to the triple A credit rating. If a good opportunity would come along, we would be happy not to have a triple A credit rating, but it's a sign of our financial discipline and our investors like it."

I

Interviewer9:24

For 15 years in a row you've had an annual dividend that has increased. Is that right?

J

Joaquin Duato9:31

More than 50 years.

I

Interviewer9:32

More than 50 years.

J

Joaquin Duato9:33

Years we've increased our dividend, yeah.

I

Interviewer9:35

So, that's pretty good. Do you try very hard to make sure you do that every year?

J

Joaquin Duato9:38

That's sacrosanct. When investors ask me, "What about the dividend?" I say, "That's always going to be there. You can bet that you will have a dividend growth if you are investing in Johnson & Johnson."

I

Interviewer9:49

All right. So, if you've got a market capitalization of over $500 billion, of course, if you had Band-Aid, you'd have even more, but you don't have the Band-Aids anymore. So, what are the products? You're in two businesses. You're in pharmaceuticals and you're in medical devices. Let's talk about pharmaceuticals. What is your biggest pharmaceutical product?

J

Joaquin Duato10:07

Our biggest pharmaceutical product is a drug for multiple myeloma called Darzalex. Multiple myeloma is a blood cancer that has improved significantly in the last decade. The life expectancy of a multiple myeloma patient was about single years. Now, a multiple myeloma patient can expect to live more than 10 years. In some ways, we're turning multiple myeloma into a chronic disease. So, Darzalex is our largest product.

I

Interviewer10:34

In the United States, if you develop a pharmaceutical product like the one you just talked about for multiple myeloma, you have roughly 17 years before it goes off patent.

J

Joaquin Duato10:47

Yeah.

I

Interviewer10:48

And so, you have a 17-year period of time before it becomes a so-called generic. Is that a risky kind of adventure for you where you got to develop these products, and then if you develop them, 17 years later, they're gone.

J

Joaquin Duato11:03

I think it's a good system. On one hand, it rewards the investment that you do in innovation by giving you a period of exclusivity. And on the other hand, after a number of years, those medicines are very cheap and available. Keep in mind that 90% of the medicines prescribed in the US are generics. So, the majority of the medications that you get in your pharmacy most likely are generic medications. So, it helps in the affordability aspect.

I

Interviewer11:29

And you have the highest revenue of any healthcare company in the world. But, there's one healthcare company that has a higher market capitalization than you, which is Eli Lilly, and that's about roughly a trillion dollars because they have a GLP-1 drug. How come you don't have a GLP-1 drug?

J

Joaquin Duato11:46

That's a good question. We were focused on a different area. We were not focused on obesity or diabetes like Eli Lilly was. Great for them that they were able to identify this transformational medicine GLP-1. There's going to be more GLP-1s coming through the pipe. Multiple companies have GLP-1s. So, it's good that they were able to identify that advance. We have other things to pay attention to like trying to cure cancer or address dementia, which are real social problems and real issues that we want to pursue. But, no, we are not going to be in the GLP-1 area.

I

Interviewer12:21

So, the things that you're focused on, most people like in my age, I'm focused on drugs that are Alzheimer's related. Is that something you're focused on?

J

Joaquin Duato12:32

Yeah.

I

Interviewer12:32

Because that's going to be a big thing, right?

J

Joaquin Duato12:35

I think the biggest challenge for the healthcare industry and for the pharmaceutical and medical device industry is to address the issue of neurodegeneration and dementia. It's a real social problem. Your chances of having some type of cognitive impairment increase as you age. As we are increasing our age, the likelihood of having more people with dementia is higher. So, I think this is the most important problem in my view that the industry can address. We are working on that at Johnson & Johnson. We're trying, we fail, and we come back again.

I

Interviewer13:09

The greatest cause of death in the United States, I assume, is cardiovascular.

J

Joaquin Duato13:14

Correct.

I

Interviewer13:15

So, are you doing anything on cardiovascular?

J

Joaquin Duato13:17

Yeah, we work in cardiovascular disease in the area of heart failure, also in the area of atrial fibrillation, which is a common problem of cardiac rhythm, and also in an area we call circulatory restoration. So, we work in cardiovascular disease in areas that are quite specialized, specifically in our medical device sector.

I

Interviewer13:38

What about cancer?

J

Joaquin Duato13:40

Cancer, we aim to be the number one company in cancer. Our goal is to be number one by 2030. Perhaps it's the best sign of where the company is heading. What is the new Johnson & Johnson about? It's trying to eliminate cancer. The basic areas that we're working: I mentioned multiple myeloma. We're also working in lung cancer, bladder cancer, prostate cancer, colorectal cancer, head and neck cancer. So, we have multiple medicines to address a number of cancers that have common oncogenic drivers. Cancer is an area in which progress is occurring at an accelerated pace. On one hand, we understand better the biology of the disease, and on the other hand, we have better technologies to kill cancer cells.

I

Interviewer14:24

You doing anything for people with teeth that don't work as well as they used to?

J

Joaquin Duato14:27

That's something...

I

Interviewer14:29

Thought about that one.

J

Joaquin Duato14:30

No, we have not gotten there, but there are companies in medical devices that work in that area in dental, yeah.

I

Interviewer14:36

Let me know when you get something there. Now, you have medical devices is another thing. Your pharmaceutical is one thing. Medical devices, what is your most important medical device that you have?

J

Joaquin Duato14:46

Let me tell you why we have medical devices and pharmaceuticals. It's because I think it gives us a long-term competitive advantage because we can span an entire patient journey. Let's say cancer. Take lung cancer. We have systems to do bronchoscopy and diagnosis, robotic assisted bronchoscopy. We have medicines to treat lung cancer. We also have the instruments that are used for the surgery in lung cancer. And we are working on a radiotherapy enhancer, and radiotherapy is an important therapeutic modality for local control of lung cancer. So, we can span the entire patient journey. What I'm more excited about in medical devices right now is that we can use technology to make our medical devices smarter. The most important product that we are about to get approval from the FDA is a robotic surgical system. Most surgery is going to have a robotic component that's going to help improve the level of surgery and have better outcomes. I'm sure in this audience everybody has had surgery sometime. It's very important to have good outcomes in surgery because still we have some complications.

I

Interviewer15:51

Now, some people say that the United States is very good at healthcare when you have a problem. We have all kinds of drugs for things when you have a problem. But what about prevention? We're not thought to be as good in preventing healthcare problems as solving them once you have them. What do you think about that argument or criticism?

J

Joaquin Duato16:08

I think that we could do better as a country in prevention. Everything we can do to improve our diet, our exercise, our lifestyle is going to be good. Everything we can do to improve the primary care side of healthcare in the US will help in the prevention side. Primary care is the first defense in healthcare. Improving primary care is an important element. Now, when it comes to specialized care, clearly the US is the lead in the world. Everywhere I go, when somebody has a disease, they think about coming to the US because we have the best medicine in the world.

I

Interviewer16:42

Okay. Now, a number of years ago the Affordable Care Act was passed by Congress and was heavily criticized by some but supported by others. Do you think the Affordable Care Act has been helpful to our US healthcare system? How does it help you? And how would you change it if you could change it?

J

Joaquin Duato16:58

My principle, our principle as a company, is the more people that have health coverage the better for this country. So, anything that improves health coverage and more people covered the better for this country. It's important for a country as rich as the US that we have healthcare extended to as many people as possible. In that regard, I think that's good. That's going to help in the areas of prevention that you were mentioning. That's going to help in life expectancy. That's good for the country. All investments in healthcare are investments in productivity. A country with good health is a more productive country.

I

Interviewer17:33

Now, it may not be a surprise to you, but a lot of people in this country don't think that pharmaceutical companies are very good. They charge high prices and things like that. Are you aware of this concern?

J

Joaquin Duato17:43

I'm aware.

I

Interviewer17:44

So, what are you trying to do in the pharmaceutical industry to make people like you more?

J

Joaquin Duato17:49

Look, I can tell you something. I am on the road a lot. Every time I talk to a patient that is using one of our medicines and has a serious condition, they like Johnson & Johnson and they like the pharmaceutical industry and they are grateful. We do that a lot. We bring a lot of patients to our offices. We bring patients to our manufacturing sites. So, our people working in the company can connect what they do every day with the impact those medicines have on patients or those medical devices. So, yes, we have a reputation depending, but where we have a good reputation is in the patients that use our medicines and medical technologies.

I

Interviewer18:26

How many different products do you have in the pharmaceutical and how many do you have in the devices? How many different?

J

Joaquin Duato18:31

We have dozens of products on both sides.

I

Interviewer18:33

How much?

J

Joaquin Duato18:34

Dozens of products.

I

Interviewer18:35

Okay. So, how do you keep up with all of them? And when somebody comes along and says we have a new product, you actually test the product yourself or how do you decide whether you're going to go ahead and use this product or not?

J

Joaquin Duato18:44

We have a large $15 billion research and development budget and thousands of scientists working at Johnson & Johnson. I don't make those decisions. I trust the scientists working at Johnson & Johnson to help me in identifying and making the decision of what's going to have a bigger impact on patients. Our standard is what is going to have a bigger impact on patients. What is going to clearly improve the standard of care of that particular disease. That's what we try to do every day.

I

Interviewer19:11

Now, some people say that in China they take American healthcare products that are patented and then they kind of copy them, counterfeit them, and sell them. Is there any evidence of that?

J

Joaquin Duato19:23

China is making a lot of strides in healthcare and everything is incremental. At the beginning they used to start copying but gradually you start improving and you start discovering new things yourself, too. So, I think clearly we have competition from China when it comes to innovation. I don't think China is at the level of breakthrough innovation that the US is. China didn't discover the GLP-1s or didn't discover the CAR-T cell therapy or the immunotherapy in cancer, but they are good at being fast followers. That only has to stimulate the US, which has the best ecosystem, to be able to invest more in healthcare. We have to invest more in research, we have to continue to protect intellectual property, we have to attract the best talent, we have to have a good market. If we do that, we're going to continue being the number one country in life science innovation, which is good economically and also good for the patients here.

I

Interviewer20:14

Okay, so when you want to get a new product, let's say in Alzheimer's or cancer, you can develop it yourself in your own lab and that might take 15 years or so, or you can go buy it from somebody else. What percentage of your products that you now sell in pharmaceutical and in medical devices did you actually develop yourself and what percentage did you actually buy from somebody else?

J

Joaquin Duato20:39

We always aim to have a happy mix of 50/50, internal and external. It's not realistic for a company to think that all the best things are going to occur in your labs. You have to be aware that some of the best science is not going to be occurring within the walls of Johnson & Johnson. So, we have a very sophisticated system of scientific scouts identifying external innovation. Most of the times we identify things that are quite early on that will still take many years to get into the market. For example, we just bought a company that has a system to kill cancer cells. I think the first medicine coming from that company may come mid-30s. So, is that internal or external? Because for us to get that medicine into the market, we have to do some adjustments in the chemical structure. We have to be able to develop and do all the clinical development and develop all the manufacturing process and bring it to market. So, we have a happy 50/50 external and internal innovation. For a company that is focused on medical breakthroughs, having a good system of external innovation is fundamental.

I

Interviewer21:45

How much of your time do you spend on the road?

J

Joaquin Duato21:48

I would say 75%.

I

Interviewer21:49

75%? So, who's watching the store back in New Brunswick?

J

Joaquin Duato21:53

Look, I have a lot of people back in the store, so that is watching for me. It's important for me to be connected. I have to be connected to the physicians that use our medicines and medical technologies. I have to be connected with our employees here in the US and elsewhere. I have to have a pulse of the company. I cannot have a pulse of the company if I am at New Brunswick.

I

Interviewer22:16

And when you're in Washington, D.C., I assume you meet with regulators and members of Congress. Is that an enjoyable experience for you?

J

Joaquin Duato22:23

Look, I always like people. So, regulators or members of Congress is always a good experience for me. I always learn from that and it's always my job to try to educate people about what we do as a company and try to help in having the right policies for innovation.

I

Interviewer22:42

But you must do consumer surveys. What is the most popular thing that people tell you about what they like about your company, what they don't like?

J

Joaquin Duato22:49

What they like about our company is normally the trust that our medicines and medical technologies have on them. So, when they think Johnson & Johnson, they think it's a trust mark. What they don't like about our company are the prices, as usual.

I

Interviewer23:02

Okay. What are you going to do about the prices?

J

Joaquin Duato23:05

Look, there's always going to be a tension between innovation and affordability because innovation is expensive, is high risk, and we want to make that innovation gets to everybody in this country. So, we are always trying to price our medicines in a way that is consistent with the benefit they bring. In this country, we can work in different areas in order to improve affordability. One area is trying to take some of the percentage that the middleman gets in pharmaceuticals and try to get that back to the patient. We can also have other developed countries paying their fair share for research and development. All these things will help in making medicines for Americans more affordable.

I

Interviewer23:49

Maybe an urban legend, but people say that sometimes the drugs in Canada or England are cheaper than they are in the United States for the same drug. Have you heard of that?

J

Joaquin Duato23:57

It's true. It's not an urban legend.

I

Interviewer23:58

What are you going to do about that?

J

Joaquin Duato23:59

We are working in order to have the right recognition there, but keep in mind that we are working with countries that have a national healthcare system that has a monopoly on that. We have to obey some of these regulations unless we don't want these patients to have that medicine.

I

Interviewer24:17

Now, a lot of people coming out of colleges today are looking for jobs. It's harder, some people say, to get them. Why should somebody want to work in a healthcare company like Johnson & Johnson? What's the argument you would tell a young college person why they should come work for you?

J

Joaquin Duato24:31

The first one is because we have a mission that is worth it. We have a mission to address serious diseases like oncology, cardiovascular, dementia, and people are attracted to be able to contribute to that. The second thing is because we are a great company that builds careers, not only jobs. I am a good role model of that, and many people in the company are like that. The third one is because our workforce is highly engaged. When we do surveys of engagement at our company, we are north of 90% of the company telling us that they are going to remain at Johnson & Johnson and that they would recommend Johnson & Johnson to a friend. So, it's a company in which people can develop a full career and can have a real opportunity to develop their skills.

I

Interviewer25:14

The most commonly asked question of CEOs today is how is your company being affected by AI and what are you doing to take advantage of AI? So, how are you being affected by AI and how are you taking advantage of AI?

J

Joaquin Duato25:25

On the positive, AI for us is a force multiplier because AI is going to help life science companies like Johnson & Johnson to be able to develop better medicines and medical technology. So, we have to embrace AI. AI is going to accelerate discovery of new medicines. AI is going to make medical devices smarter, able to navigate the body better. So, I think AI is something that a company like Johnson & Johnson has to embrace. Now, we have to help all our employees to amplify what they do with AI. We are training all our employees in AI because we want to bring everybody on the journey. AI is not going to take your job, but somebody with AI skills may take your job.

I

Interviewer26:04

Are you spending a lot of money now on AI?

J

Joaquin Duato26:07

We are investing in AI too, in programs that are going to improve the operations of the company in areas like drug discovery where I think AI is going to have a big impact, in areas like making our medical devices smarter, our robotic systems. So, we are investing in AI.

I

Interviewer26:24

Has anybody ever told you if you could increase the market value of your company by calling it Johnson & Johnson AI?

J

Joaquin Duato26:31

I think they will see me coming, so I'm not even trying, no. But the value of AI would be realized by companies like us deploying the AI technology into what we do every day.

I

Interviewer26:42

Now, when you had a litigation issue years ago where I think some kind of baby talk was said to be carcinogenic, maybe it was, I don't know. But when you spun off your consumer division, you still kept the talc litigation. What's the status of that litigation?

J

Joaquin Duato27:00

Yes, so let me say first, studies and regulatory agencies have never found a causal relationship between talc and cancer. So we stand behind that and that's why we defend our position there and we litigate every single case that comes with talc. Taking a step back, this is a system here for civil litigation for tort that needs to be reformed. There's a combination of third party litigation funders that invest in litigation like if you were working in infrastructure or if you were investing in technology, and they fund these litigations building pseudo-scientific arguments and try to prey on companies like us. That's the business model that exists here. So we are litigating every single case. We are winning and at the same time we are also trying to introduce modifications in civil justice in order to make the system more fair.

I

Interviewer27:58

Sometimes I see a cardiologist and he might be overweight. And it always gets me nervous if the cardiologist is overweight. Now, if you're the healthcare CEO of the biggest healthcare company in the world, you should be really fit. And you seem like you're fit, but what do you do? Do you exercise every day? Do you have an instructor to teach you how to make sure you look fit and are fit?

J

Joaquin Duato28:20

I exercise a couple of days a week and then I play tennis over the weekend. They say tennis is the best sport in order to be fit because you have to exercise your mind and your body. There are many studies that show that tennis is the one that creates more longevity. So that's why I'm playing.

I

Interviewer28:35

So do you play with Rafael Nadal or?

J

Joaquin Duato28:37

I wish. I play with a coach and I plan that I play twice a week and I really love it.

I

Interviewer28:44

So when you walk in the streets and when you go to a restaurant in Spain, people recognize you, I assume.

J

Joaquin Duato28:50

No, nobody recognizes me. I'm totally anonymous there. I left Spain more than 30 years ago and people do not recognize me.

I

Interviewer28:59

What about in New Brunswick? When you go to a restaurant in New Brunswick?

J

Joaquin Duato29:02

In New Brunswick, there's a higher chance that I would be recognized, much higher chance. Or in Bucks County where I live, a high chance that I would be recognized.

I

Interviewer29:12

What is the hardest part about being CEO of Johnson & Johnson? What's the biggest challenge you face?

J

Joaquin Duato29:18

The biggest challenge is to be able to continue to improve this company every day. Companies as big as Johnson & Johnson, we need to have a tension to improvement, to reinvent ourselves. The biggest challenge for a CEO is to break the inertia and to make the company every day more competitive. That's what I'm trying every day.

I

Interviewer29:39

Now, I noticed that your person in Washington, Jane, where's Jane? She's done a very good job and her first initial is J. Your first initial is J. So, to get to Johnson & Johnson, do you have to have a J in your name or something?

J

Joaquin Duato29:57

It helps a lot. And if your last name also starts with J, you have double points there.

I

Interviewer30:02

Okay. So, today, if the president of the United States called you up or any president, not this one, but any future president, and said, "You did a great job running Johnson & Johnson and your country needs you to come in and serve in the federal government in some important job." Would you ever consider going into federal service?

J

Joaquin Duato30:20

Nobody has called me yet, but if they do call me once I retire from Johnson & Johnson, I would pay attention to that. Why not?

I

Interviewer30:26

All right. Now, do you have children who want to be in the healthcare world?

J

Joaquin Duato30:30

I have a daughter who is in medical school. And I have a son who is a mechanical engineer. But yeah, I have a tradition in my family. As I told you, my mom was a nurse, my grandmother was a pharmacist, my grandfather a pediatrician. I spent a lot of my childhood in Valencia, my hometown, in my grandmother's pharmacy. She had a retail pharmacy, and when my mom was doing errands in town, she would let me wait in the pharmacy with my grandmother. She was talking to patients coming to refill prescriptions all the time, and I would always complain, "Grandma, why do you talk to people so much? Why do you spend so much time with the people?" And she told me, I remember, that the important thing is not the medicine, it's the person. I always retain that. It's not the medicine, it's the person.

I

Interviewer31:17

So, now, you're I assume a Spain World Cup fan.

J

Joaquin Duato31:24

I am.

I

Interviewer31:24

Not an American fan.

J

Joaquin Duato31:25

Spain World Cup fan.

I

Interviewer31:27

But what happened to the Spain team the other day?

J

Joaquin Duato31:30

Maybe complacency. They got a beating, and they need to pick up and come back. It's been traditional that the team that wins the World Cup loses the first match. Argentina lost in Qatar, they lost to Saudi Arabia, and Spain when we won in 2010, we lost the first match, too. So, it may be a good omen. You never know. I'm an optimist guy, very optimistic.

I

Interviewer31:52

Now, when you joined Johnson & Johnson after having been rejected initially, you got a job later. Did you ever think you could rise up to be the CEO?

J

Joaquin Duato32:04

Never. I never thought I was going to be the CEO. I'll tell you how I realized I could be the CEO. I was getting different jobs, and every time I got a job, I thought, "You know what? I can do the next one." And then next job, I could do the next one. I could do the next one until I became my share, and I said, "I think I can be CEO."

I

Interviewer32:21

And when did they tell you, like 3 years in advance, 4 years in advance? Do they tell you, "Hey, don't do anything bad while I'm CEO"?

J

Joaquin Duato32:28

No, they told me maybe a year and a half in advance. They told me, "You are going to be a candidate to be CEO," and I had to go through a process in order to become the CEO.

I

Interviewer32:37

And did you tell them what was wrong with all the other candidates or you didn't tell them that?

J

Joaquin Duato32:41

They didn't tell me anything. They just told me, "You are going to be the next one."

I

Interviewer32:44

Okay. So, today, if I wanted to buy a stock in a healthcare company, would Johnson & Johnson be a good stock to buy?

J

Joaquin Duato32:51

David, you are a smart man. It would be the best stock to buy, Johnson & Johnson. No question about it. I'm going to give you some reasons why.

I

Interviewer32:59

Well, your stock has gone up since you've been the CEO. Stock is up by...

J

Joaquin Duato33:02

We are just at the beginning. This is just the initial innings of a cycle of growth for Johnson & Johnson. We have line of sight to double-digit growth by the end of the decade. That's remarkable for a company which is more than a hundred billion dollars. And you know why? We are not a one-trick pony company. We have a whole stable of medicines and medical devices. We have 28 platforms of more than a billion dollars. So, we don't depend on a single platform. That creates much more optionality to be able to bring breakthroughs and at the same time to create more revenue.

I

Interviewer33:35

And if I'd bought your stock the day you became the CEO and then you spun off the Band-Aids, I would have been upset.

J

Joaquin Duato33:41

Yeah.

I

Interviewer33:41

So, are you going to spin off anything else or you're going to keep what you have?

J

Joaquin Duato33:45

I think we are in the right areas right now. We are in three areas in pharmaceuticals: oncology, immunology, and neuroscience. And three areas in medical devices: vision, surgery, and cardiovascular. We are actually spinning out one of our medical device businesses, which is the orthopedics business, the largest orthopedics business in the world. It's called DePuy Synthes. We're in the process of spinning out that part of the business.

I

Interviewer34:09

So, since you've been in the healthcare world, what do you think is the single greatest healthcare invention or creation? Is it the discovery of certain kinds of drugs? What do you think has changed the world of healthcare more than anything else in the years that you've been in the healthcare world?

J

Joaquin Duato34:23

I have seen a lot of progress. I've seen how life expectancy increased in the 20th century more than 30 years. I have seen how HIV became a curable disease. I have seen how we developed vaccines that have been extremely positive preventive tools. I have seen how we have improved cardiovascular mortality and morbidity through multiple prevention in hypertension and statins. So, I have seen many positive things. Perhaps the most positive thing that I'm seeing now is how we are improving our treatment of cancer. The cancer death rates are coming down. We are much better as a country than any other country in the world and we have the ambition to eliminate cancer.

I

Interviewer35:05

Now, I've observed that people my age are increasingly worried about longevity. As you get older, you want to live longer. Is longevity something you're focused on and how to get people to live longer? Is that part of your product base?

J

Joaquin Duato35:19

Everything that we do tries to get people to live longer. The important thing is to live longer but with high quality of life. That's what we aim for. Life expectancy is increasing but we need high quality of life. That's where the fight against neurodegeneration and dementia comes into play. That's why this is one of the biggest challenges and opportunities for life science companies like Johnson & Johnson.

I

Interviewer35:42

So what do you do on the outside? Do you have philanthropic interests or other things you do? You've been married a long time. Your wife and you have things you do together, hobbies? What do you do on the outside when you're not worried about healthcare?

J

Joaquin Duato35:57

I am a reader. I like to read. I like movies. I like traveling. I have been associated with multiple non-profits, Save the Children and UNICEF. So I like to dedicate my time to other causes. And then I support my kids. That is also a full-time job as you know, and I do that very often.

I

Interviewer36:18

So your stock is up a fair bit since you took over and I guess if somebody were to buy your stock now, you'd say it probably would still go up, right?

J

Joaquin Duato36:25

Absolutely. As I said, we are at the early innings of a new cycle of growth. In reality, we were just catching up. I think you're going to see the stock of Johnson & Johnson continue to go up based on the revenue that we provide and the number of opportunities that we have to improve the standard of care.

I

Interviewer36:42

And you wouldn't call it Johnson & Johnson X?

J

Joaquin Duato36:44

No. Not so far. No. I know if we can have an IPO of $1.7 billion, I will think about that.

I

Interviewer36:52

Look, you've done a great job in a relatively short period of time. It's really amazing that you came from a different country and not that other people don't rise up, but it's a big company, so much competition. To become the CEO and do the job you've done is very impressive. So, thank you for coming here today. This final question for you is: what do you think people should know about healthcare that they don't know as much as they should? In other words, if you were to educate somebody in this audience and you say, "Here's something you should know about healthcare that you really don't know or you should know more about." What would that be?

J

Joaquin Duato37:28

I would say first, in becoming CEO of Johnson & Johnson, I think this is a sign of the opportunities that exist in this country. The US is a great country. It's a land of opportunity. I was born in Spain, but I am more an American from a professional perspective. I love the sense of opportunity of this country. I love the opportunity to progress and make your dreams come true like me becoming CEO of Johnson & Johnson. As a US citizen that was not born in the US, I have to say this is a wonderful country and sometimes you have to be from outside to appreciate what a great country this is. I'm very grateful for this country and the opportunities they gave me. As far as what I would say in healthcare, I would say trust your doctor. Doctors and nurses and healthcare workers are really the front line of our health. Trusting your doctor, your nurse is a very important thing. That's why as Johnson & Johnson, our focus in terms of our philanthropic activities is on frontline healthcare workers, on nurses. We think that's the frontlines of healthcare, and my advice is trust them.

I

Interviewer38:31

Very impressive career. Thank you very much for being here.

J

Joaquin Duato38:34

Thank you.

I

Interviewer38:35

I have a gift for you. Hold on.

Joaquin Duato, Chairman and Chief Executive Officer of Johnson & Johnson

About Joaquin Duato