Johnson & Johnson Tackles Huge Missed Revenue Opportunity

Johnson & Johnson looks to fill in the revenue gap created by unfilled prescriptions.

Jan 30, 2014 at 11:14AM

It may surprise you to hear that about one in every three prescriptions are never filled or used. It's a huge missed revenue opportunity, and health giant Johnson & Johnson (NYSE:JNJ) is tackling the "therapeutic compliance" issue in an effort to benefit both patients and its bottom line.

At the recent mHealth Summit near Washington, D.C., Fool analysts Rex Moore and Max Macaluso chatted with Robert McCray of the Wireless-Life Sciences Alliance. In this video, Rob explains Johnson & Johnson's efforts.

A full transcript follows the video.

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Max Macaluso: Let's start off with Johnson & Johnson, which is one of the best-known and probably biggest health care companies out there. It has a pretty robust pharmaceutical division, a medical device division, and also consumer health -- Band-Aids and Tylenol.

What are they doing with wireless technology?

Robert McCray: I can't speak to it completely, because as you know, J&J is over 250 separate companies; each one with their general manager and their business requirements.

What they have done and announced as a lead project is in therapeutic compliance. This is a B2B2C model, designed to use health care applications -- digital health -- to increase the compliance of patients with their therapeutic regimens, because that's a big problem in health care, and it's a big business opportunity for pharmaceutical companies.

It's the fact that about a third of our pharmaceuticals that are prescribed are never used. They're never purchased, they're never used -- so there's a missing revenue opportunity, and people don't get better if they don't take these therapeutics.

Max Macaluso, Ph.D., has no position in any stocks mentioned. Rex Moore owns shares of Johnson & Johnson. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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