Growth was led by worldwide pharmaceutical sales, which rose 21.1% on a reported basis to $8.5 billion in the second quarter of 2014, compared with about $7 billion in the second quarter of 2013. Domestic drug sales, which generated nearly a quarter of Johnson & Johnson's total sales, surged by 36.6% to $4.6 billion in the second quarter.
The company attributed the sector's success to sales of new drugs such as Olysio, a combination therapy used to treat chronic hepatitis C that received approval from the Food and Drug Administration in November, and several other drugs, including cancer therapies Zytiga and Imbruvica.
Remicade, which can be used to treat such conditions as rheumatoid arthritis, psoriatic arthritis, ulcerative colitis or Crohn's disease, remains the company's top-selling drug, with worldwide sales in the second quarter of $1.8 billion.
The positive growth in drug sales was offset by weak sales in the company's devices and diagnostics business. U.S. sales of these products declined 1.4% to roughly $3.2 billion in the second quarter of 2014, while worldwide sales edged up 0.7% to $7.2 billion in the second quarter.
U.S. sales of diabetes care products fell 14.3% to $222 million in the second quarter, due in part to cuts up to 72% in Medicare reimbursement for diabetes test supplies that went into effect a year ago, company executives said. Surgical-care product sales also fell in the U.S. market, by 4.5% to $551 million. Cardiovascular-care devices were the top performing unit in the second quarter, with domestic sales increasing by 4.9% to $214 million.
Two factors were cited as causes of the company's performance in the devices and diagnostics unit: Ongoing pricing pressure from hospitals and healthcare providers as well as lower utilization of laboratory service, surgeries and visits to primary-care doctors.
“They remain somewhat subdued,” Gorsky said during a call with investors.
But the company's CEO remains bullish that patient utilization will increase and Johnson & Johnson's breadth has positioned it as a better partner to hospitals and managed-care systems in the U.S. and with governments in Europe and elsewhere.
“We do believe that scale and size and depth and breadth is going to be important,” Gorsky said.
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