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Photo: Mark Ralston/AFP via Getty Images

Johnson & Johnson announced Friday it will split off its $15-billion-a-year consumer health division to form two independent companies in 2022.

Why it matters: The move will create a slower-growing health care vendor that sells consumer brands like Band-Aid bandages, Tylenol medicines and Johnson’s Baby Powder and a high-margin but riskier advanced research pharmaceutical and medical device company.

What they're saying: “For the new Johnson & Johnson, this planned separation underscores our focus on delivering industry-leading biopharmaceutical and medical device innovation and technology with the goal of bringing new solutions to market for patients and healthcare systems, while creating sustainable value for shareholders," J&J CEO Alex Gorsky said in a statement.

  • "We believe that the New Consumer Health Company would be a global leader across attractive and growing consumer health categories, and a streamlined and targeted corporate structure would provide it with the agility and flexibility to grow its iconic portfolio of brands and innovate new products," he added.

The big picture: Gorsky told the Wall Street Journal that J&J decided to make the break because the businesses, their customers and markets have diverged in recent years.

  • He added that what the new company will be called and who will lead it have yet to be worked out, but the pharmaceutical and medical device company will keep the J&J name.

Worth noting: J&J currently faces more than 34,000 lawsuits claiming that its baby powder was contaminated with cancer-causing asbestos.

  • The company invoked the so-called Texas two-step maneuver in response to the lawsuits, creating a subsidiary, LTL Management, to be responsible for the payouts if it is found liable.
  • It's unclear how the baby powder liabilities will fit into the spinoff in the short term, or if the legal maneuver will be allowed.
  • Gorsky told WSJ that the lawsuits were not considered in the decision to break up the company.

Go deeper: General Electric to break up into 3 independent companies

Editor's note: This story has been corrected to note that the new consumer health company will not necessarily assume liability from the baby powder lawsuits.

Go deeper

Scoop: Over 200 papers quietly sue Big Tech

Illustration: Allie Carl/Axios

Newspapers all over the country have been quietly filing antitrust lawsuits against Google and Facebook for the past year, alleging the two firms monopolized the digital ad market for revenue that would otherwise go to local news. 

Why it matters: What started as a small-town effort to take a stand against Big Tech has turned into a national movement, with over 200 newspapers involved across dozens of states.

Allergan to pay New York $200 million in opioid settlement

Photo: David Dee Delgado/Getty Images

Drug company Allergan reached a $200 million settlement with the state of New York for its role in the opioid crisis, State Attorney General Letitia James announced Wednesday.

Why it matters: The settlement comes more than two years after James filed the lawsuit. It bars the company from selling opioids in New York.

New Zealand aims to create smoke-free generation with tobacco ban

New Zealand Prime Minister Jacinda Ardern at a December news conference in Auckland, New Zealand. Photo: Phil Walter/Getty Images

New Zealand officials announced Thursday legislative plans to outlaw smoking by making it illegal to sell or supply tobacco products to the next generation as part of a lifetime ban.

Why it matters: "People aged 14 when the law comes into effect will never be able to legally purchase tobacco," Associate Health Minister Ayesha Verrall said in a statement announcing the proposed law, part of the Smokefree 2025 Action Plan.