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      Creating the next era of healthcare advancements for patients
      Innovating healthcare through research and policy
      Read the report
      • At Johnson & Johnson, our vision is to develop science-based innovations to change and save lives. Every day our team of scientists, researchers and clinicians work to discover breakthroughs to help patients today and tomorrow.
      • J&J Innovative Medicine’s continuous R&D investments, totaling over $90 billion since 2016, are helping save lives today and bringing hope to patients tomorrow.1  Yet, patients’ affordable access to lifesaving medicines is becoming harder each year because of increasing out-of-pocket costs, inadequate insurance benefit design and regulatory hurdles.2
          • Our average net prices have declined a compounded 18.2% since 20161
            The changes in our net prices are below overall inflation growth, and are significantly below the change in our list prices.
          • updatedgraph.svg
          • Rebates, discounts and fees totaled $47.8B in 20241
            Nearly half of this total goes to the 340B Program, private health insurers and pharmacy benefit managers (PBMs), whose rebates and discounts have risen significantly since 2016.1
          • new pie chart.svg
          Pricing transparency and patient costs
          While commercial insurers and PBMs continue to benefit from lower net drug prices, patients continue to face high out-of-pocket costs due to distorted incentives and inadequate benefits.3
          July 16, 2025
          • Why it matters
            As rebates and discounts increase, patients are not benefiting.4 Patients, especially the most vulnerable, are burdened by rising healthcare out-of-pocket costs, which can lead to medication abandonment and worsened health outcomes.5
            • The disconnect between declining net prices and patient costs underscores the need to ensure patients benefit more directly from lower prices.
            • Commercial insurers pay lower net prices thanks to our rebates and discounts, but patients still pay higher out-of-pocket costs at the pharmacy.6
            • -18.2%
              Compound rate of decline in J&J’s net prices since 2016.1
            • $47.8B
              In 2024, J&J provided $47.8B
in rebates, discounts and fees.1
            • 58%
              In 2024, J&J provided 58% of
total gross sales to the healthcare system through rebates, discounts and fees.1
              • The bottom line
                Policymakers must ensure rebates and discounts directly benefit patients.
                • Reforms should focus on reducing out-of-pocket expenses, holding PBMs accountable and reforming the 340B Program to ensure discounts are shared with patients.
                • Requiring insurers and PBMs to pass rebates and discounts directly to patients at the pharmacy counter would help lower out-of-pocket costs.
                Barriers to accessing innovative medicines
                The U.S. leads in creating the broadest, earliest access to innovative medicines, but Americans’ access to medicines is becoming too hard and too expensive as out-of-pocket costs are growing significantly.7 Benefit design creates barriers that drive costs up, lead to medication denials and cause care delays for patients.
                July 16, 2025
                • Why it matters
                  Access to medications is crucial to improving health outcomes and enabling all to benefit from high-value treatments.
                  • Patient access barriers like strict prior authorization and step therapy delay or prevent patient access to necessary treatments.8
                  • High out-of-pocket costs deter patients from obtaining prescribed medications, exacerbating health challenges.9
                  • As out-of-pocket costs rise, patient assistance programs are crucial, yet intermediaries and PBMs divert these funds, undermining more affordable access.
                  • Additional barriers include alternative funding programs (AFPs), which can cause patients to be denied or receive delayed coverage of a needed treatment or medicine.10
                • 51%
                  of insured Americans managing a chronic condition commonly face challenges when seeking reliable access to care.11
                • 1 in 3
                  Insured Americans say their out-of-pocket costs for healthcare services have increased over the past year.12
                  1. 41%
                    of insured Americans taking a prescription medicine report insurer- and PBM-imposed barriers to care in the past year, such as prior authorization or step therapy.8
                  • The bottom line
                    Addressing these barriers requires reforms that prioritize patient-centered solutions and protect access to healthcare.
                    • Policymakers need to focus on reducing out-of-pocket costs and increasing transparency
in insurance coverage.
                    • Strengthened protections for doctor-patient relationships and decision-making are crucial to ensure access to necessary treatments.
                    J&J IM’s policy solutions
                    Enact legislation to protect patients from patient assistance diversion programs that limit access.
                    • Federal legislation can prohibit copay accumulator or maximizer programs unless a medically appropriate generic equivalent is available.13
                    • At the state level, lawmakers should pass legislation that ensures cost-sharing assistance is counted toward patient out-of-pocket contributions, prohibits third parties from altering or conditioning the terms of health plan coverage or benefit design based on the availability of financial or product assistance for a prescription drug, and requires disclosure about diversion programs to patients.14
                    • State and federal policymakers can prohibit or disincentivize practices that block patients’ access to medicine, such as prior authorization and step therapy.
                    Stop alternative funding programs (AFPs) to protect patients.
                    • The Federal Trade Commission and state regulators should review AFP industry practices.
                    • The Departments of Labor, Health and Human Services and Treasury should extend the Affordable Care Act’s Essential Health Benefit drug coverage standards for individual and small group plans to large group and self-insured plans so patient assistance counts toward a patient’s cost-sharing requirements.15
                    • The Department of Labor should help ensure that plan designs prioritize affordability and access to essential medicines rather than maximizing rebates or cost-shifting onto patients by increasing oversight of AFP practices in employer-sponsored plans.
                    • Congress and states should pursue legislation that prohibits the use of AFPs by group health plans, health insurance issuers and other entities.
                    Reform PBMs to prevent patient access hurdles and lower patient costs.
                    • Policymakers can advance legislation that would lower out-of-pocket costs, remove deductibles on certain medicines and allow patients to pay a flat-dollar copay rather than a percentage-based coinsurance.2
                    • State and federal lawmakers can ensure that any co-pay assistance that patients receive counts toward their deductible and maximum out-of-pocket limits.16
                    • Reforms can also ensure that patients more directly benefit from the savings provided by rebates and discounts.
                    • Federal and state legislatures can pursue policies that delink PBM fees from list prices.
                    Reform the 340B Program to support its original intent by increasing transparency and accountability.
                    • Reforms should require that 340B discounts be shared directly with vulnerable patients at the outpatient clinic or at the pharmacy counter.
                    • Policymakers should take steps to eliminate duplicate discounts and diversion. The lack of transparency in the program limits stakeholders’ ability to monitor for these issues.
                    Enact legislation to streamline prior authorization requirements.
                    • Policymakers should advance legislation to improve process transparency, reduce administrative burdens for clinicians and prevent unnecessary delays for patients.
                    • At the federal level, J&J has supported the Improving Seniors’ Timely Access to Care Act (S.1816). It has been reintroduced in the Senate in 2025 with strong bipartisan support.17
                    • Streamlining prior authorization is essential to putting patients over paperwork—a goal echoed by the Centers for Medicare & Medicaid Services (CMS) “Patients over Paperwork” initiative that aimed to reduce regulatory burden on providers.18
                    Citations
                    All citations
                    1. Figure according to Johnson & Johnson internal financial accounting. Values may have been rounded.
                    2. PAN Foundation. “Insured adults want policy action in 2025 on healthcare coverage and costs amid rising financial stress, new polling finds.” January 3, 2025. https://www.panfoundation.org/insured-adults-want-policy-action-in-2025-on-healthcare-coverage-and-costs-amid-rising-financial-stress-new-polling-finds/. Accessed June 2025.
                    3. Avani Kalra and David Giangiulio. “Pharmacy benefit managers claim to lower drug costs. Congress isn’t convinced.” Harvard Public Health. April 25, 2023. https://harvardpublichealth.org/policy-practice/pbms-face-scrutiny-from-congress-over-drug-prices/. Accessed June 2025
                    4. House Committee on Oversight and Government Reform. “Hearing Wrap Up: Oversight Committee Exposes How PBMs Undermine Patient Health and Increase Drug Costs.” July 23, 2024. https://oversight.house.gov/release/hearing-wrap-up-oversight-committee-exposes-how-pbms-undermine-patient-health-and-increase-drug-costs. Accessed June 2025.
                    5. Karthik Rohatgi, Sarah Humble, and Amy McQueen. “Medication Adherence and Characteristics of Patients Who Spend Less on Basic Needs to Afford Medications.” Journal of the American Board of Family Medicine. 2021; 34(3): 561-570. DOI: 10.3122/jabfm.2021.03.200361. Accessed May 2025.
                    6. Adam Fein. “Gross-to-Net Bubble Update: 2022 Pricing Realities at 10 Top Drugmakers.” Drug Channels. June 2023. https://www.drugchannels.net/2023/06/gross-to-net-bubble-update-2022-pricing.html. Accessed June 2025.
                    7. Andrew Mulcahy. “Comparing New Prescription Drug Availability and Launch Timing in the United States and Other OECD Countries.” RAND. February 1, 2024. https://www.rand.org/pubs/research_reports/RRA788-4.html. Accessed May 2025.
                    8. Christopher Moessner, Jennifer Berg, and Ryan Tully. “Many insured Americans experience delays and denial of care because of health insurance.” Ipsos. October 28, 2024. https://www.ipsos.com/en-us/many-insured-americans-experience-delays-and-denial-care-because-health-insurance. Accessed May 2025.
                    9. Sara R. Collins and Avni Gupta. “The State of Health Insurance Coverage in the U.S.” Commonwealth Fund Biennial Health Insurance Survey, 
The Commonwealth Fund. November 21, 2024. 
https://www.commonwealthfund.org/publications/surveys/2024/nov/state-health-insurance-coverage-us-2024-biennial-survey. Accessed June 2025.
                    10. Adam Fein. “Employers Expand Use of Alternative Funding Programs – But Sustainability in Doubt as Loopholes Close.” May 17, 2023. https://www.drugchannels.net/2023/05/employers-expand-use-of-alternative.html. Accessed June 2025.
                    11. Reuters. “Americans face abusive insurer and PBM practices that limit access to medicines.” November 13, 2024. https://www.reuters.com/plus/americans-face-abusive-insurer-and-pbm-practices-that-limit-access-to-medicines. Accessed June 2025.
                    12. Cynthia Hicks. “Americans speak out on health insurance barriers and need for policy change, according to the latest Patient Experience Survey.” PhRMA. October 28, 2024. https://phrma.org/blog/patient-experience-survey-americans-speak-out-on-health-insurance-barriers-and-need-for-policy-change. Accessed June 2025.
                    13. Congress.gov S.864 – 119th Congress (2025-2026): HELP Copays Act. March 5, 2025. https://www.congress.gov/bill/119th-congress/senate-bill/864. Accessed June 2025.
                    14. The AIDS Institute. “Copay Accumulator Adjustment Policies in 2025.” February 2025. https://www.theaidsinstitute.org/copays/TAI-copay-report-2025. Accessed June 2025.
                    15. Centers for Medicare & Medicaid Services. “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2025.” Federal Register. April 15, 2024. https://www.federalregister.gov/documents/2024/04/15/2024-07274/patient-protec. Accessed June 2025.
                    16. The AIDS Institute. “Copay Accumulator Adjustment Policies in 2025.” February 2025. https://www.theaidsinstitute.org/copays/TAI-copay-report-2025. Accessed June 2025.
                    17. Congress.gov S.1816 – 119th Congress (2025-2026): Improving Seniors’ Timely Access to Care Act of 2025. May 20, 2025. https://www.congress.gov/bill/119th-congress/senate-bill/1816/text. Accessed June 2025.
                    18. Centers for Medicare & Medicaid Services. “Patients Over Paperwork Fact Sheet.” December 2019. https://www.cms.gov/sites/default/files/2019-12/Patients-Over-Paperwork-fact-sheet-508.pdf. Accessed May 2025.

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