Johnson & Johnson (JNJ) Earnings Call Transcript & Summary

Hello. This is Chris DelOrefice, Vice President of Investor Relations, and it is my pleasure to welcome you to our third Health for Humanity webcast to review Johnson & Johnson's sustainability progress in 2019 and share insights into our goals going forward. We provide this forum to augment our Health for Humanity Report that was published this month and is available on our website at investor.jnj.com. Before we discuss the topics highlighted in our 2019 Health for Humanity Report, I want to address how Johnson & Johnson is engaging in the dialogue and responding to the issue of racism and discrimination that is a significant focal point across the United States. Alex Gorsky addressed all employees, stating unequivocally that racism and discrimination in any form is unacceptable and that black lives matter. This is reflective of our credo and how we value all our employees. We believe each and every employee must be provided an inclusive work environment where they are considered an individual. We must respect their diversity and dignity and recognize their merit. We know our decade-long commitment to diversity and inclusion has been a key driver of innovation and impactful business outcomes for the last 134 years. In 2019, we were proud to launch our inaugural You Belong: Diversity & Inclusion Impact Review, an annual review which tracks our progress in achieving our vision to be yourself, change the world. Our next review will be released in the fall of this year and will be shared at youbelong.jnj.com. However, as much as Johnson & Johnson prides itself on being a diverse and inclusive workplace, we know that as the largest health care company in the world, we need to do more. One important area of focus for our company is the urgent need to address the inequities in medical care that have long plagued ethnic communities, gaps that have recently been both highlighted and exacerbated by the COVID-19 pandemic. We are working on a major initiative that will help to address issues like underrepresentation in clinical trials, equipping community health workers and strengthening existing community medical systems. This initiative, in conjunction with our efforts to combat the COVID-19 pandemic, reflects Johnson & Johnson's patient-centric focus on innovative health care. Alex noted on our first quarter earnings call 4 fundamental principles that have strongly positioned Johnson & Johnson to tackle COVID-19, including our long-standing belief in driving both performance and purpose with equal commitment; our strategic advantage of being the most broadly based health care company in the industry; our unparalleled scientific expertise and innovation; and the world-class talent, capabilities and dedication of our 132,000 colleagues worldwide. These principles and our credo-driven values provide us with the foundation and unique capabilities to tackle this current global health pandemic. Some of the efforts we have made to address COVID-19 impacts include: taking precautions to support the safety and well-being of our employees, contractors, and the communities in which we live and work; collaborating to accelerate the development of a COVID-19 vaccine, and as we announced, we have accelerated the initiation of the first-in-human clinical trial to begin in the second half of July; screening compounds to determine if they could help treat those who have the virus; continuing to supply the critical medicines, devices and products customers and patients depend on; leveraging our vast global innovation center networks to access additional novel science and technologies to help effectively address the COVID-19 pandemic; mobilizing to provide Johnson & Johnson equipment and products as well as financial donations and medically trained personnel to support organizations and health care workers on the front lines. Now turning to today's agenda. We are extremely proud of the significant advancements we have made in providing you with additional transparency and insights into our work to improve the trajectory of Health for Humanity around the globe. On today's webcast, we have several Johnson & Johnson leaders representing a variety of perspectives on topics that are of highest interest to our stakeholders based on the outcome of our 2019 Priority Topics Assessment that will be discussed later in the agenda. During the webcast today, you will hear from, first, Dirk Brinckman, Worldwide Vice President, Regulatory Law, who leads the work of the company's enterprise governance and policy organization, will provide an ESG overview of our governance, risk management, oversight, reporting and disclosure. Next, the following leaders will provide updates for their respective areas of responsibility and participate in the Q&A session along with Dirk at the end of the webcast. New to this year's webcast, we are joined by Ashley Watson, our Chief Compliance Officer, who will discuss business ethics and compliance; Paulette Frank, Vice President, Global Environmental Health, Safety & Sustainability; Joanne Waldstreicher, Chief Medical Officer; Carol Montandon, Chief Quality Officer, who succeeded Francois Sallans following his retirement; and last to present will be recently appointed Global Head of Public Health, Martin Fitchet. A few logistics before we get into the details. Please note that today's webcast includes forward-looking statements. We encourage you to review the cautionary statement included in today's presentation, which identifies certain factors that may cause the company's actual results to differ materially from those projected. Our SEC filings, including our 2019 Form 10-K and subsequent Form 10-Q, are available at investor.jnj.com. Additionally, some products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies. This slide acknowledges those relationships. We anticipate today's webcast to last approximately 90 minutes, including the Q&A portion. [Operator Instructions] Again, thank you for joining us today and your interest in Johnson & Johnson. Dirk?

Chris, thank you. In addition to leading the work of the company's enterprise governance and policy organization, I serve on the J&J law department leadership team as Worldwide Vice President, leading the Global Regulatory Law group and the team providing legal support to our supply chain, procurement, real estate and technology organizations. I appreciate the opportunity to share with you today more detail about our Health for Humanity strategy, which includes our sustainability, governance and environmental, social and governance, or ESG, risk oversight. As Chris mentioned, as the world's largest health care company, Johnson & Johnson has a unique ability to apply its expertise and partnering power to solve some of the most difficult global health challenges. We seek to advance a world where healthy people thrive in healthy communities on a healthy planet. And to achieve all of that, we need a healthy company built for the long term with a strong foundation of responsible business practices. We interact with numerous stakeholders at the global, national and local level. Our credo, written more than 75 years ago, was ahead of its time with regard to stakeholder engagement as it acknowledges the diversity of those groups to whom we are responsible. It serves as our guide for creating long-term value for our company and for society. In these times, with our credo as our North Star, we recognize the criticality of proactively connecting with our stakeholders to make our company stronger and better informed. When it relates to stakeholder engagement on ESG topics and strategies, our Priority Topics Assessment, or PTA, is our mechanism to engage with and understand the views of our stakeholders on topics that they believe are a priority for Johnson & Johnson. The PTA process helps us to identify and prioritize these ESG topics, and we conducted our latest PTA in 2019. Building on learnings from prior assessments, which we've conducted every 2 to 3 years since 2008, we enhanced the PTA methodology to conduct deeper and broader stakeholder engagement across a larger number of applicable ESG topics. The results of our PTA, including this latest one, inform and shape our sustainability priorities, public goal setting, reporting and disclosure. For those familiar with our goal setting, we are in the final year of our Health for Humanity 2020 Goals and our United Nations Sustainable Development Goal commitments. We are proud of the progress made on these goals, which were set to take advantage of the unique constellation of strengths across the company and our ability to create sustainable and scalable impact. We are currently working on our next generation of ambitious public commitments that are aligned to our company's purpose, reflect the areas where our stakeholders expect us to lead and help fuel the global agenda for a sustainable future for all. So what is new for 2019 related to our reporting and disclosure? We are pleased to share enhanced reporting and disclosure in a number of areas delivering on stakeholder feedback, which includes many of our investors. We streamlined our report to focus more exclusively on the progress made in 2019. We are reporting for the first time against the Sustainability Accounting Standards Board, or SASB standards, for all 3 business segments in response to the continuously evolving information needs of our investors. Further reinforcing our commitment to reporting high-quality, validated data, we have for the first time externally assured, high-value data metric clusters in the areas of quality, human capital development, philanthropy and environmental governance, which adds to the already externally assured data for our carbon emissions Health for Humanity 2020 Goals and UN SDG commitments. To continue providing useful and relevant information to our stakeholders, we have enhanced our approach to sustainability reporting by publishing an A to Z index of relevant ESG topics on our jnj.com website. This section on our website includes additional disclosures on our priority topics and should be reviewed in conjunction with the annual performance and progress updates provided in the Health for Humanity Report. These positions and policies will help our stakeholders understand how we are managing the risk of these relevant ESG topics and embedding sustainability into decision-making, which is a critical component of sustainability governance. Robust governance structures with clear chains of accountability enable us to deliver on both our commitments and stakeholder expectations. Our sustainability governance includes Board of Directors oversight, management accountability, corporate policies and management systems and clearly stated public policies and positions on key ESG topics. Those ESG topics are well integrated into our business strategy and operations. We view effective management of ESG matters as a business fundamental and see continuous improvement in these areas because they underpin the long-term success of our company and our ability to deliver value for our stakeholders. The Executive Committee is directly accountable for the creation and execution of our sustainability strategy and delivering against commitments. The EC annually reviews progress against our Health for Humanity strategy and goals, and several EC members review the annual Health for Humanity Report prior to publication. The Board has overall accountability for oversight of our sustainability strategy, programs and practices through the Science, Technology & Sustainability Committee of the Board. The STSC reviews annual progress against our Health for Humanity strategy and goals as well as our overall ESG efforts. We have extended our efforts to better inform shareholders with expanded disclosure in our 2020 proxy statement by providing further background on Board oversight of strategy and risk, by including a narrative on the oversight of human capital management and by highlighting the industry recognitions of our work to advance ESG practices as well as ESG progress highlights. In addition to the Board of Directors' ESG oversight, the J&J Enterprise Governance Council serves as the primary governance body overseeing ESG topics and supporting the company's enterprise risk management framework. Our ERM framework assists the board and management teams in identifying potential business risks. In 2019, we updated the J&J ERM framework to align with the Committee of Sponsoring Organizations of the Treadway Commission's 2017 ERM Framework update, which highlights the importance of considering risk both in the strategy-setting process and in driving performance. The update also reflects the role of the Enterprise Governance Council in overseeing ESG risks and strategy. The Enterprise Governance Council, or EGC, is comprised of senior leaders who represent our Consumer Health, Medical Devices and Pharmaceutical business segments and our global enterprise functions with line of sight to and ability to impact ESG issues. Throughout 2019, the EGC continued to lead the initiatives to embed ESG considerations in business decisions. Specifically, the EGC provided oversight for the company's latest Priority Topics Assessment aimed at identifying priority ESG topics. The council also oversaw the establishment of the Enterprise Human Rights Governance Council, which reports to the EGC and is responsible for strengthening our approach to human rights due diligence and management. In July 2019, the EGC kicked off the process for setting the company's next generation of sustainability goals mentioned earlier. In closing, we understand that our long-term performance and resiliency as an enterprise advancing Better Health For All is of great interest to investors. We hope that our reporting enhancements and added transparency and disclosure help reinforce understanding of our sustainable business model. And I'd like to hand it over now to Ashley Watson, our Chief Compliance Officer.

Thanks, Dirk, and good morning, everyone. I'm Ashley Watson. I joined the Johnson & Johnson team as Chief Compliance Officer at the beginning of 2019. I previously served as Chief Compliance Officer at Merck and Hewlett-Packard and have served in anticorruption, ethics, compliance and legal roles for more than 25 years. I'm here to share more about how we think about anticorruption efforts, ethics and compliance. Any discussion about ethics and compliance at Johnson & Johnson has to start with our credo. For more than 75 years, the values it espouses has guided decision-making across Johnson & Johnson. Put simply and to reiterate what we have heard from others today, our credo challenges us to put the needs and well-being of the people we serve first. But our credo is more than just a moral compass. We believe it's a recipe for business success. It truly guides our actions and defines the company's culture in a way that I've never experienced in my career. This is of particular importance when it comes to our compliance program, where our primary focus is to ensure that any employee or anyone who acts on behalf of Johnson & Johnson does not engage in improper promotion or take other action that can ultimately harm the patients, doctors and nurses, mothers and fathers and all others who use our products and services. And so with that as our guide, we really think about compliance organized into 3 pillars: prevent, detect and correct. With our strong culture, we aspire to prevent all violations. But we conduct business around the world in extremely complex environments, so we've built processes that allow us to quickly detect and investigate potential issues so that we can thoroughly and promptly correct when needed. When you are the world's largest broadly based health care company, it's incredibly important to have dedicated compliance teams for each of the business segments. This helps those teams stay close to the business and really understand the risks and needs of a particular business. But we also have global cross-business segment support in the compliance office and elsewhere in the company so we can also have a bigger-picture enterprise view. We do that through our Anti-Corruption Program Office, our global operations team, our investigations teams and our global audit group, which is independent from the compliance organization. This allows us to have consistency in our approach and share knowledge across the enterprise but also to customize our programs and our efforts to meet specific sector, regional and even local needs that can arise. I don't need to read all the elements to you, but I do think I'll highlight a couple of things from each of our compliance pillars. I believe prevention links back to our credo. From a compliance perspective, there's nothing more important than a company's culture, especially the tone at the top and the support from leadership. That is something Johnson & Johnson has demonstrated in a way that is exceptional. We have strong engagement from the Executive Committee and oversight from our Board of Directors, specifically the Regulatory Compliance Committee. We have a strong, independent compliance organization that is properly resourced and staffed, and we have compliance committees at every level, allowing business leaders to focus on risk management and prevention. In fact, leadership accountability is a key touch point in performance and compensation reviews each year. J&J employees are also a key element in our prevention efforts. We educate and train our employees every year to make sure they understand our shared responsibility for compliance, ethics and integrity. In 2019, 90,000 employees and 95% of sales and marketing employees completed our annual health care compliance training. In addition, 97% of assigned employees completed our Code of Business Conduct training. At the detect stage, we are also very fortunate to have the resources to conduct robust data analytics and monitoring, regular risk assessments, audits and third-party due diligence as part of our anticorruption program office. And of course, we have multiple ways for people to raise concerns. One of the primary mechanisms is our Credo Hotline, which includes the ability for employees and outside parties to report issues anonymously where permitted. And then finally, when we correct, we look for ways to better prevent and detect the issues in the future. We conduct thorough investigations of all allegations that come in and take appropriate action to discipline, up to and including termination. We also implement corrective actions beyond discipline. Identifying why something happened and how we can keep it from occurring again are vital aspects of our compliance program. Thanks for the opportunity to share how we approach compliance at Johnson & Johnson. I will now turn the webcast over to Paulette.

Thank you, Ashley. Hello. I'm Paulette Frank, and I lead our global Environmental, Health, Safety & Sustainability organization. As the world's largest, most broadly based health care company, we understand that human health is inextricably linked to environmental health. Healthy people need a healthy planet. We have been setting public environmental performance goals, including goals to reduce our carbon footprint, for over 30 years. We remain committed to improving the environmental performance of our operations, extended supply chains and products. Our latest progress against our environmental health goals was released in our 2019 Health for Humanity Report earlier this month. Specifically, we have achieved the following environmental results: In 2019, products across each of our business segments representing 22% of Johnson & Johnson revenue achieved our internal EARTHWARDS recognition for multiple environmental improvements. This achievement exceeded our 2020 goal of 20% of our revenue being generated from EARTHWARDS-recognized products. EARTHWARDS is the Johnson & Johnson approach for developing, measuring and recognizing products with multiple environmental improvements in our product portfolios. In 2019, we also advanced our climate goals by reducing Scope 1 and Scope 2 greenhouse gas emissions by 32% globally since 2010, exceeding our 2020 target of 20%. By the end of 2019, 30% of our electricity was produced or procured from renewable energy sources, and we signed 4 new power purchase agreements with one in Belgium, Ireland, Mexico and the Netherlands, totaling over 370,000 megawatt-hours of renewable energy per year, putting us on track to exceed our 2020 goal of 35% renewable electricity powering our operations by the end of 2020. Finally, we delivered on our 2020 water stewardship goal a year early with 100% of high water risk sites having developed and funded risk mitigation plans. Given the global COVID-19 pandemic, we had considered if there might be COVID-19-related impacts to the ultimate achievement of our 2020 environmental goals. While there may be short-term impacts related to the COVID-19 pandemic, some positive, some negative, on our environmental footprint indicators related to waste, water and energy, we do not expect these impacts to be significant nor to affect our achievement of our 2020 environmental goals. In 2019, Johnson & Johnson received several recognitions for our commitment to environmental stewardship. We were recognized with CDP A ratings, their highest score, for our actions to cut carbon emissions, support a low-carbon economy and manage water resources sustainably. These ratings place Johnson & Johnson among the top 2% of all companies surveyed and demonstrate our commitment to environmental stewardship and transparency. Our CDP climate disclosures are aligned with the industry-led Financial Stability Board Task Force on Climate-related Financial Disclosures, also known as TCFD. Within the CDP forest surveys, we received an A- in the palm oil and an A- in the timber categories. We're continuing to advance our responsible sourcing criteria for palm- and wood fiber-derived products. We also now cover 100% of our palm oil-based derivatives volumes with certification schemes endorsed by the Roundtable for Sustainable Palm Oil, also known as the RSPO. In addition, for the third consecutive year, Johnson & Johnson has been awarded a position on the CDP supplier engagement leader board for our work engaging with suppliers on climate change. In 2019, we also received recognition from the Environmental Protection Agency Green Power Leadership Award for our continued engagement in renewable energy projects in the United States. As a signatory to the New Plastics Economy Global Commitment, Johnson & Johnson Consumer Health has committed to 4 targets: one, the elimination of single-use or unnecessary problematic packaging; two, the reduction in reliance on the single-use model; three, the use of more recycled materials in our packaging; and four, the recyclability, reusability or compostability of 100% of our plastic packaging by the year 2025. In 2019, our leadership brands progressed several plastics packaging improvement initiatives. Some key highlights include: LE PETIT MARSEILLAIS launched a shower gel concentrate that reduces packaging by an estimated 60% and refill packs for its liquid soaps. We reduced the weight of our LISTERINE packaging to reduce PET plastic packaging by approximately 400 metric tons per year. Following a rigorous portfolio and market assessment, we set a 2025 15% post-consumer recycled content target across all plastic packaging by weight in our Consumer Health portfolio. We also rolled out a more rigorous internal Design for Recyclability Policy for product development teams to ensure our plastics packaging for new products is recyclable at practice and at scale towards our 100% recyclability aspiration. And we continued our engagement and joined several new recycling collaborations. For example, we continue to fund efforts to advance the recycling of plastic squeeze tubes in North America in partnership with More Recycling. We continued our involvement as a founding partner of the Closed Loop Infrastructure Fund, which we have supported since 2015. We joined the Materials Recovery for the Future initiative, the collaboration of leading members of the packaging value chain in North America committed to developing research solutions for recycling flexible packaging curbside. And we were one of the initial funders of The Recycling Partnership's new Pathway to Circularity initiative. In closing, Johnson & Johnson continues to be deeply committed to the health of our planet as we believe it is vitally important to our overall mission as a health care company. We look forward to continuing our progress on our 2020 environmental goals, collaborating with partners for even greater impact and using our voice to engage more stakeholders to care for the planet like our health depends on it, because it does. Thank you. I will now turn the webcast over to Joanne Waldstreicher.

Thank you so much, Paulette. From the earliest days of Johnson & Johnson, we have pioneered innovations that have profoundly improved people's lives by addressing critical unmet needs. Safety continues to be a common thread throughout all the solutions we've brought to patients and consumers for more than 130 years. That commitment to safety remains just as strong today and is central to how we operate as a company. We're guided by our credo as well as the strict quality and safety standards followed by our teams and our continuous drive to improve and innovate. Every day, we follow a simple rule: put people at the center of every decision we make. As a scientist and a physician working in industry, I came to understand and truly appreciate the importance of keeping patients at the center and inviting patients and their advocates to engage in critical decision-making. That understanding inspired a novel idea we implemented in 2013 to take a different approach to medical and consumer safety by creating an internal but functionally independent group within J&J that takes a patient-centered approach to advancing evidence- and science-based decision-making grounded in bioethical principles and values. Today, the office of the Chief Medical Officer, which I lead, is a global, functionally independent group responsible for guiding medical safety and championing bioethical decisions across Johnson & Johnson's Pharmaceuticals, Medical Devices and Consumer product sectors. By being functionally independent not only of commercial but also of regulatory, quality and even R&D, we're able to lead and make often difficult decisions about the safety of J&J's product while always keeping the best interest of patients and consumers at the center of everything we do. Our work is focused on: working to make Johnson & Johnson products as safe as possible for the people who use them; advancing evidence- and science-based decision-making so that patient safety always comes first in every decision that we make as a company; championing initiatives and policies that allow us to listen to and learn from patients; and working to make sure we're guided by a framework of bioethical principles and values so that in addition to being patient centered, we also remain fair, transparent and respectful of the rights and welfare of all people. One of my highest priorities right now is our work to combat and prevent COVID-19. By working collaboratively with scientists around the world, we're making progress to accelerate the development of a vaccine for COVID-19. Our goal is to begin conducting clinical trials by the second half of July. We're also working with global partners to screen our library of molecules in order to determine if any of them could help treat those who already have the virus. In the face of this pandemic, we remain committed to allocating our resources fairly and responsibly with the aim of saving as many lives as possible. Anticipating the potential increase in demand for products that may be effective against COVID-19 but are as yet unproven, Johnson & Johnson set up a working group to develop an ethical decision-making framework which would guide decision-making and try to allocate our supply of products as fairly and responsibly as possible. Consistent with J&J's credo, the framework puts an emphasis on reducing suffering, saving the greatest number of lives and supporting those who are working on the front lines of the pandemic. First, we're committed to standing by those patients who are already using our medicines and products and receiving important, sometimes life-saving benefits. Our next priority is supply for well-designed, randomized clinical trials that will provide important safety and efficacy data to inform clinical practice. Our third priority is to supply studies or registries that are not designed as randomized clinical trials but may collect and share valuable information. Remaining supply should be allocated as fairly as possible. We do this in collaboration with medical, ethical and epidemiological experts and base our decisions on the best available information about the pandemic with the aim to save as many lives as possible. Our focus is to encourage global cooperation and engagement while ensuring we learn as much as possible as quickly as possible to inform the ongoing public health response and to allow for proper scientific evaluation of new interventions being tested. We shared our perspectives with other organizations and publicly on our website with the hope of inviting comments and serving as a useful resource for other organizations that may be considering how to allocate their supply during the COVID-19 pandemic. One important group we shared the bioethical framework with was the New York University Langone's Compassionate Use Advisory Committee or CompAC. We asked for their review and feedback of the framework. CompAC is an independent body of ethicists, physicians and patient representatives which provides guidance to the Janssen Pharmaceutical businesses of Johnson & Johnson on the ethical allocation of drugs in development in the context of pre-approval access or compassionate use. By utilizing an external group of independently selected experts to review compassionate use requests, along with clear centralized procedures, CompAC ensures a more consistent, transparent and equitable means to navigate the challenges of pre-approval access for investigational medicines. Since November 2015, nearly 5,000 patients have received access to investigational medicines through our compassionate use platform. Last year, the Reagan-Udall Foundation for the FDA recognized the work of CompAC by selecting it as the recipient of its Innovation Award. The award highlights the impact of independent groups working together using a fair, transparent and objective process to help patients. Today and every day, we strive to put people first and drive decisions based on evidence and scientific data shaped by our values and ethics. We look forward to sharing more in the days, weeks and years to come as we work together to make a difference for the patients and consumers who use our products every day. Thank you. I'll now turn it over to Carol Montandon.

Thank you, Joanne. Hello. I'm Carol Montandon. And as Chris mentioned, in July last year, I succeeded Francois Sallans as the Johnson & Johnson Chief Quality Officer. While the leadership has changed, I want to ensure you that our priorities have not. Across our organization, we continue to ensure that the Johnson & Johnson companies consistently produce the highest-quality products and that we follow all relevant policies, laws and regulations. Over the course of my 25-plus years at J&J, I've witnessed the evolution of quality and compliance and the great strides that have been made to drive proactive quality and innovation, transform the patient and consumer experience and deliver end-to-end value for the business. The rapidly evolving business environment and the growing and changing expectations of the patients, consumers and customers we serve require us to take an even greater outside-in focus moving forward. To respond to these growing and changing expectations, we continue to evolve our ways of working, using our insights and analytics to set the priorities and drive future-focused innovation to better anticipate customer needs. In these next few minutes, I will describe how we are living into the value set by our credo that in serving our customers, everything we do must be of high quality. At J&J, as others have mentioned earlier, our credo serves as a guide for our actions and charts a course for our success. Our commitment to quality is embedded through a proactive quality management approach, which drives end-to-end quality excellence across all stages of our product life cycle by adhering to: quality policies and quality standards, which set the requirements that every J&J company must achieve; quality risk management principles, requiring that risk be identified, assessed and mitigated; compliance monitoring through audits and inspections both internally and externally with our partners; rigorous internal communications and escalation procedures that keep management informed of quality and compliance issues; and ongoing and continuous enhancement of processes, technologies and talent. These key elements make our quality management system customer centric, provide continuous improvement and incorporate quality as a universal discipline. In 2019, to help our Johnson & Johnson companies more quickly leverage emerging technologies and better serve our customers, we began revising our quality policies and quality standards to improve clarity, map specific requirements to the applicable regulatory requirements from which they were derived and to incorporate health authority expectations, all while enabling flexibility for our diverse business segments. More details regarding our position on quality and compliance as well as our quality management framework can be found on jnj.com, ESG Policies & Positions page. In addition, last year, our leadership imperatives were also refreshed to ensure we are equipped to lead well into the future. The leadership imperatives defined a clear set of behaviors and expectations and guide how every one of our approximately 132,000 employees is expected to lead regardless of role, level or tenure. While our commitment to live our credo and deliver with the highest standards of quality remains, this year the enhanced leadership imperatives explicitly include the commitment of every J&J employee to pursue the highest standards of quality, safety, compliance and ethics. This imperative, along with others, is embedded into our performance and talent development processes and is a part of our annual goal setting and performance reviews. This helps to ensure that across businesses, borders and functions, every J&J employee shares the same commitment to quality. Our continuous improvement efforts across all our businesses help to maintain a reliable supply of high-quality products and successful compliance profile. In 2018, we had 619 health authority inspections and 480 of them had 0 observations. In 2019, we had 521 health authority inspections and 381 had 0 observations. We had 16% less health authority inspections in 2019 and 18% less health authority observations. While the number of inspections and observations will fluctuate year-to-year, I am pleased that for 6 consecutive years, we have had no inspections that led to further regulatory enforcement actions. This is a solid indicator that we have a quality system that is robust and meeting health authority expectations globally and that positions us as a leader in our industry. One area that has been of particular interest to you is our recall rate. You will note a change in our recall rate reporting for 2019. To provide greater differentiation in our performance across our businesses, we are providing you with recall rates for our 3 company sectors. At the enterprise level, our focus on product quality is achieving a positive trend in overall recall reduction. In fact, when you look back at the past 7 years, we have seen a 78% reduction in the total number of recalls across our sectors. This is particularly impressive given the growth of our business in this same period. This would not have been possible without our focus on robust product design, failure investigation, root cause identification and robust preventive and corrective actions. The reporting of product removals by sector aligns with the 3 sustainability accounting board standards against which we are disclosing: biotechnology and pharmaceuticals, medical equipment and supplies and household and personal care products for our OTC products. Our quality systems are built to proactively detect problems, identify root causes and make sustainable corrective actions. We will always take the appropriate actions to address issues that have the potential to impact product performance or safety. Just as important as continuously improving existing capabilities is implementing new capabilities to provide the highest-quality experiences for our patients, consumers and customers in an increasingly connected and personalized world. As Chris mentioned in the opening, I would like to take some time to share how COVID-19 accelerated our quality vision and spurred new ideas grounded in the outside in. One example of how we are working in new, innovative spaces includes the use of smart glasses, wearable computers featuring a head-mounted display in the form of eyeglasses. The glasses' function is a hands-free smartphone letting users access apps by voice commands. We deployed smart glasses to sites around the world to mitigate the inability to be on site for several key activities such as internal audits and batch record review as well as training. We also employed smart glasses when a local government prohibited older, more vulnerable employees from accessing the site, including colleagues who had the most experience in operating the equipment in the quality control lab. Through the use of smart glasses, qualified operators were able to guide local staff to properly use equipment and allow business continuity. We are also leveraging robots to assist in remote execution of audits. See the picture of Pat and Steve, the robotic auditors? Through collaboration with operations and quality, one of our sites is able to use telepresence devices to perform lab tours for auditors that cannot travel to the site. To support frontline health care and safety workers experiencing PPE shortages due to the COVID-19 pandemic, our sterility assurance team has validated a method to disinfect N95 masks for reuse. Our goal is for this disinfection method to be able to be used globally using equipment readily available. Additionally, in a short period of time and in collaboration with various R&D functions, we created an innovative quality framework to support continuation of clinical trials during the global pandemic. This framework was built around the concept of conducting trial visits through home health care, direct-to-patient delivery of investigational product and telemedicine services, all within regulatory guidelines. As can be seen, the COVID-19 pandemic has intensified our focus and accountability to respond with agility in a compliant manner to manage risk while continuing to meet our regulatory requirements. Our robust quality systems, successful record of health authority inspections, continuous improvement mindset, transparency, ongoing development of talent and enhancement of our capabilities enables us to continue to fulfill our credo commitments and to supply high-quality products to those we have the privilege to serve. Thank you, and let me now turn the call to Martin Fitchet.

Thank you, Carol. Hello. My name is Dr. Martin Fitchet, and since February this year, I have the privilege of leading Johnson & Johnson's Global Public Health organization. Within GPH, we are focused on developing and delivering innovative medicines and technologies and making them available, affordable and accessible to vulnerable and underserved populations around the world. We are now 5 years on from the formation of GPH organization and have established a team of innovators dedicated to solving some of the most complex global health challenges. Building on Chris' opening remarks about COVID-19, it will be impossible to speak about global health challenges without first acknowledging the tremendous human suffering that this pandemic is causing, particularly among the vulnerable populations that we serve. Already fragile health systems are being strained with resources diverted and access to health care threatened. COVID-19 has a potential to undo hard-won progress. For example, sobering projections from the World Health Organization, UNAIDS and Stop TB have shown that a disruption to HIV and tuberculosis services in high-burden countries may result in hundreds of thousands of deaths and millions of new infections as a result of lockdowns necessary to limit the spread of COVID-19. Understanding such threats could emerge, as well as their potential direct and indirect impact, was a central tenet to our focus on global health here at Johnson & Johnson. As we look to the next decade, we will continue to focus on addressing the immediate needs of our patients while also preparing for where the future needs will lie. GPH is a fully fledged end-to-end organization that includes R&D, global strategy and external affairs and also field teams deployed in Africa, Asia and other geographies. We aim to pioneer meaningful and transformational innovation to improve lives globally. We believe that all people, no matter where they live, deserve timely access to life-saving innovation. To achieve that, GPH sits somewhere between our commercial business and our philanthropic work. At this intersection, we're able to leverage the extensive resources and expertise from across Johnson & Johnson, including its world-class talent, broad capabilities and learnings from across our Consumer, Medical Device and Pharmaceutical sectors and the health system-strengthening efforts of our Global Community Impact colleagues. We deliver impact from a lab to the hardest-to-reach places and resource-limited settings in 3 ways. We drive innovation across the continuum of care to develop the new technologies, treatments and vaccines needed to make progress against some of the world's most life-threatening diseases. Recognizing we can't do this alone, we bring together public and private resources through multi-sector partnerships, invest in science both inside and outside of our walls and offer academic and scientific institutions access to our molecular libraries. We bring our unique know-how, capabilities and resources together with partners to catalyze and accelerate access to care and services. For instance, as something quite new to global health, we're leveraging the incredible consumer-centered design thinking and insight capabilities from Johnson & Johnson Consumer Health to develop programs that resonate and ensure greater applicability and acceptability by patients and at-risk populations. And we are committed to engage in sustainably coordinated advocacy and engagement on the most pressing public health challenges. Our primary focus today is targeting transformational health outcomes for individuals and communities in resource-limited settings. This include bold aspirations to end the epidemics of HIV and tuberculosis, reduce the burden of neglected tropical diseases and address critical issues such as mental health and tackle the threat of drug-resistant infections and, of course, global pandemics like COVID-19 and Ebola. Diving into our programs, let me start with our progress on TB to illustrate the impact of our end-to-end approach. As many of you know, TB is the world's deadliest infectious disease. In 2018, there were 10 million cases and 1.5 million deaths globally, and nearly all of these deaths occurred in low- and middle-income countries. Growing drug resistance is making an already difficult situation worse. Nearly 0.5 million people develop drug-resistant TB, or DR-TB, each year. And DR-TB is now the leading contributor to deaths from antimicrobial resistance. J&J has been supporting global efforts to end DR-TB and combat AMR, both in our labs and on the ground in high-burden countries, for more than 20 years. In 2012, we introduced bedaquiline, the first novel TB medicine in nearly half a century. Since then, we have partnered extensively in high-burden countries to provide access to and ensure appropriate use of our treatment. As part of this effort, we donated 105,000 courses of treatment to 80 countries free of cost through a 4-year donation program operated in partnership with the U.S. Agency for International Development and JSC Pharmastandard to help enable countries to build much needed capacity to introduce a new medicine. And we will now offer our medicine at a not-for-profit price in more than 130 low- and middle-income countries. In total, between 2012 and 2019, we delivered 188,000 courses of bedaquiline to patients in 138 countries. We are very proud of the progress we've made on our Health for Humanity 2020 Goal to deliver access to bedaquiline-based treatment regimens. As a matter of fact, of the 37,000 patients provided access in 2016 and 2017, an estimated 32,000 have been potentially cured based on the 87.8% cure rate. Beyond this, we worked closely with governments and local partners in high-burden countries to train frontline health workers, enhance diagnostic and surveillance capacity and raise awareness and reduce stigma around TB at the community level. Today, thanks to these concerted efforts, the World Health Organization recommends our medicine as a core component of treatment regimens for all pulmonary DR-TB patients. More patients than ever before are benefiting from shorter, all-oral regimens with better treatment outcomes. We're not stopping here. In 2018, we launched a 10-year initiative aimed to further expanding access to our medicine, improving diagnosis rates to reach the missing millions of TB patients and accelerating R&D to develop the next game-changing treatments. Just last month, the pediatric formulation of our medicine received FDA approval for use in eligible patients, marking an important milestone for children suffering from MDR-TB. This work will be enabled by the $500 million commitment we made last year to fight HIV and TB over a 4-year period. We are proud of the progress we've made and committed to building on our successes and lessons learned to date to help make TB history. Our work on vaccines is also particularly noteworthy and indicative of our collaborative approach in building multi-sector alliances to address major global health challenges and advocate for greater investment in securing our global health security. As Chris shared, we continue to make significant progress in our COVID-19 response. In parallel, we remain focused on advancing our preventative Ebola vaccine regimen to licensure and recently received a CHMP positive opinion from the European Medicines Agency. We are equally focused on supporting containment of the Ebola outbreak that emerged in the Democratic Republic of the Congo in 2018. In February, I saw firsthand on a mission to DRC the global efforts underway to respond to the Ebola outbreak in that country. On that trip, I saw how our commitment of up to 500,000 vaccine regimens was being deployed through an international consortium in the DRC and the efforts underway at the border with DRC and Rwanda, where we have supported a large-scale vaccination program with commitment of up to a further 200,000 regimens. In addition, we have deployed novel technology to support tracking and monitoring of volunteers who have been vaccinated through these programs. Thanks to advances in science and new global partnerships, we continue to make significant progress and are committed to leverage our full capabilities to prevent, detect and respond to a broad range of pandemic threats. Our deep commitment is matched by the progress we've made against our Health for Humanity 2020 Goals. For instance, we have an incredible track record of investing research and development resources and supporting access to treatment to effectively combat soil-transmitted helminths, also known as intestinal worms. Once again, we delivered on our commitment to children who've been impacted by intestinal worms by cumulatively donating 800 million doses of VERMOX in 42 countries with 415 million children having been targeted for treatment. In total, 1.6 billion doses of VERMOX have been donated since 2006. This progress also helped us to exceed our Global Disease Challenges and UN Sustainable Development Goals commitment. It is particularly important because of the damaging effect of intestinal worms on the development of children. Symptoms like fatigue, anemia and malnutrition make it difficult for children to concentrate in school and limit their academic performance and ultimately their potential. Building on our longstanding commitment, in April 2019, we received WHO prequalification for a chewable formulation of VERMOX with Peru becoming the first country globally to receive VERMOX CHEWABLE as part of mass drug administration campaigns in October 2019. Previously, mebendazole was taken as a solid oral pill, which is often difficult for young children to swallow. The new chewable tablet will ensure that more children as young as 1 year old have a safe and effective treatment for intestinal worms. And in July 2019, we proudly announced a new commitment to ensure 1 billion additional doses of this new formulation are delivered to at-risk children in developing countries through 2025 so children in the world's poorest countries can achieve their full potential and thrive. This progress is complemented by our efforts in other areas of high unmet need, as outlined in our Health for Humanity 2020 Goals and in the Health for Humanity Report. In conclusion, let me reiterate that our ultimate goal is to close the gap of inequity and pave the way to a healthier future for the world's most vulnerable and underserved populations because we believe good health makes anything possible. When individuals and families are healthy, it creates a ripple effect, enabling thriving communities and stronger economies. Thank you for your time.

Thank you, Martin. Appreciate it. And thanks to all the speakers on the webcast today. In addition to the speakers you've already heard from today, we're very fortunate to also have Matt Orlando, Johnson & Johnson's Corporate Secretary; Adrian Thomas, Vice President, Strategy and External Affairs, Global Public Health; along with Kristen Mulholland, Head of Global Total Rewards and Human Resources, to answer your questions that we previously received and, if time permits, any additional questions we receive during the webcast. We will now turn the conversation to address your submitted questions. Lisa, our first question, please.

Thanks, Chris. To start off the Q&A, many investors are asking about the status of the vaccine and the impact of COVID-19.

Terrific. I think that's a very appropriate place to start. And thank you to everyone for your interest today and the questions we've received. We appreciate you taking the time. So as I mentioned earlier, just maybe to kind of set this up bigger picture, we've been working towards mitigating and ultimately ending the COVID-19 pandemic. We will continue to bring forth our full breadth of resources in an effort to deliver the best science, scale up our production to ensure critical medicines and products can be supplied and support our employees and the communities, including all frontline workers, as we combat this pandemic. This does include our efforts to accelerate the development of a vaccine for COVID-19. And as we just announced on our June 1 press release and Joanne mentioned as well in her remarks, we're pleased to have accelerated our first-in-human study to start in mid-July versus the original timing estimated to be in September. This acceleration is in large part due to the innovative science and scalable production platforms we've been utilizing in our work on Ebola, Zika and HIV, in addition to the collaboration with valued partners such as BARDA, in the accelerated development of a safe and effective vaccine for the novel coronavirus. Specific to manufacturing, we continue to expand new vaccine manufacturing capabilities through collaborations. This was announced with Emergent BioSolutions, Catalent Biologics as an example to enable delivering 1 billion doses by 2021. The company plans to begin production at risk imminently and commits to bring an affordable vaccine to the public on a not-for-profit basis for emergency pandemic use. So let me turn it to Joanne. Maybe you can add how we're thinking about the safety and allocation processes related to the vaccine. And then we can hear from some of our other leaders too about how COVID-19 is impacting your areas of responsibility.

Thanks so much, Chris. In terms of allocation in the face of the pandemic, we're collaborating with global health organizations and key national and international stakeholders. Our goal is to make our vaccine available for those populations at greatest risk and where it could provide the greatest benefit according to our vaccine's profile. In terms of safety, our fundamental goal here is to provide patients and consumers and health care providers with products that are safe and effective. To this end, we take an evidence- and science-based, ethics- and values-driven approach to medical safety, putting people, patients and consumers, their well-being first and foremost in our decision-making and actions. As you know, beginning in July 2020, the safety of our vaccine candidate will be extensively tested starting with a cohort of people over the summer. After the initial cohort, it will be expanded to larger cohorts in a stepwise approach. Johnson & Johnson is partnering with health authorities and the world's best scientists to provide the safety and efficacy data necessary to support worldwide use of our vaccine candidate. Our vaccine was designed using a vector that has been studied in our HIV, Ebola, RSV and Zika clinical trials involving more than 67,000 people, so we do have experience with the safety and tolerability of this vaccine platform. While we are moving with extreme speed for our vaccine clinical trial program, we are working to meet high standards for clinical testing and expectations for quality and safety. Let me now turn it over to Carol, who's going to amplify what we're doing to keep quality processes continuing during COVID-19 pandemic. Carol?

Thanks so much, Joanne. It's important to note that quality and compliance associates around the globe have been part of our on-site heroes who have continued to go to work every day in our manufacturing plants during this global pandemic to support the manufacturing, testing and release of all our products. In addition, as shared during my presentation, we are using innovation and technology, such as smart glasses and robots, to continue to provide oversight activities and to stay connected in a remote work environment. To ensure the effectiveness of our quality management systems, manage risk and make sure that operations continue to function smoothly, agility is key, agility in adapting our internal process to comply with restrictions on travel and in-person meetings and agility working on site to review quality records, test our products and provide on-floor QA support. While restrictions remain in place and the full extent of the impact of COVID-19 remains to be seen, regulatory requirements will not change, nor should the expectations of delivering high-quality products to our patients and consumers. Now I will turn to Kristen to speak about our employee support.

Thanks, Carol. As the pandemic emerged, we quickly adapted our facilities and implemented enhanced safety measures while remaining open and operational to continue to supply the critical medicines, devices and products people depend upon. While many of our facilities remain open, we have moved to a work-from-home approach for office-based employees who are able to perform their work remotely. For those who work in a facility that is essential to advancing our science or ensuring the supply of our high-demand products, we are committed to their health and safety as they continue to work on site. We have introduced enhanced cleaning procedures, increased social distancing and limited access to critical areas, among other steps. We are also supporting our employees in their roles outside of work as a mother, as fathers, as caregivers, family members and community members by offering various policies around the world to help them prioritize what's most important. We provided 100% of base salary and benefits to those who may be a primary caregiver and are unable to work remotely due to a COVID-19-related family care issue, underlying health issue or connectivity issue from March 13 through May 15. In the spirit of our credo and longstanding commitment to frontline health care workers, we also introduced a new medical personnel leave policy, which is a global minimum paid leave for up to 14 weeks over the course of a year. We're also encouraging our employees and managers to evaluate a flexible or adjusted schedules where possible to help our employees balance their responsibilities. We know that our employees can only be at their best for their colleagues, families and communities when they take care of all aspects of their health: physical, mental and emotional. Through our global Employee Assistance Program, employees have access to counselors who understand pandemic-related stress and are available around the clock by phone or on the web. We also expanded access to a digital resilience tool, providing new tips daily to support mental well-being during this complicated time. Finally, in an effort to encourage our employees to consider virtual medicine as a first line of defense, we are offering a complementary telemedicine advice for COVID-related 19 (sic) [ COVID-19-related ] symptoms. Now let me summarize our return-to-workplace plans. The next phase of our journey involves gradually and thoughtfully returning more of our people to workplaces and field operations globally, safely and effectively. We have a phased return to the workplace approach that includes 3 waves with clear, globally consistent criteria. We also are implementing workplace enhancements across approximately 1,100 properties. We are setting clear expectations for employees: updated signage, mandatory training and a new ways of working campaign that will drive adoption of new behaviors. With operating companies conducting business in virtually all countries around the world, this global approach leverages best practices from our China and other teams who've already successfully navigated initial waves of returning to the workplace. Our approach balances insights from credible external scientific sources and our own Johnson & Johnson subject matter experts who know what it takes to care for a person's overall well-being. Now let me hand it over to Adrian Thomas to talk about impact on access to medicines.

Thanks, Kristen. I appreciate the question. It's been something we've been monitoring very closely over the last several months. There's no question that the COVID-19 pandemic has impacted access to medicines globally. We've seen with the lockdown that patients being able to access care and caregivers being available to provide that care has been impacted all over the world. We continue to monitor the situation, but more than that, we're also committed to advancing our other public health programs. As you may have seen recently, our Ebola vaccine received a positive European opinion this month, and we expect to have formal approval and WHO prequalification completed towards the end of the year. We have to be sure and we're making efforts to ensure that this vaccine will be available in the countries that desperately need it, particularly today when we see there's been a recent new outbreak of Ebola in the northern parts of the DRC. We've been working with the Vatican and other stakeholders in HIV where we've seen pediatric new treatment initiations decrease for HIV. We will continue to make sure that our pediatric medicines are available, and we're working with other stakeholders to try and remove roadblocks and enable access to children who need these critical medicines. In the world of tuberculosis, we've seen that the lockdown, the confinement of people in small spaces, particularly in the poorer areas of Africa and of Asia, have resulted in a slowdown of new treatments but also a worrying increase in infections. Here, not only have we donated N95 masks, other surgical masks and PPE to governments, hospitals and states in India, we've also launched our innovative QuickFire Challenge. What we've done here is we've worked with universities, academics and global institutions to ask the question of people living in the midst of COVID-19 and caring for patients with TB and HIV how can we make sure that they receive their treatment, how can we make sure that new patients are identified and how can we make sure that care is available for patients with other global health diseases other than COVID-19. And those results will be published very, very soon. I want to finish by talking about a collaboration right now that we're working on in the world of tuberculosis. Our new pediatric formulation for tuberculosis was approved by the FDA last month, and it's our intention to make sure that this first new medicine in drug-resistant TB is available to children this year. We're working with a global fund. We're working with the Stop TB Partnership, the Global Drug Facility, and USAID and others to make sure that we can launch this new pediatric product, find children who need treatment and make sure they receive the appropriate treatment. So whilst it is certainly a concern and we are seeing a worrying slowdown in the identification and treatment of patients with existing public health diseases that we focus on and it is impacting access to medicines, we're working very closely to monitor the situation but get in front of it. And with that, I'll hand it over to Ashley Watson to talk about the impact on our compliance programs.

Thanks, Adrian. Fortunately, our compliance program, particularly our monitoring program, is set up so that we can do almost all of our work remotely if needed. Of course, we've made adjustments to support the changes the business has made in response to COVID-19. As you would expect, J&J has needed to identify ways to interact virtually with our stakeholders, and my team has supported those efforts. I'll now pass it to Matt to share more information about the Board.

Thank you, Ashley, and hello, everyone. The Board believes that leadership in health care requires strong governance and robust oversight of the company's most significant ESG opportunities and risks in accordance with its credo values. This includes the company's quality and compliance practices, its R&D pipeline and its human capital management strategies. While the COVID-19 pandemic is an unprecedented crisis, our credo values have defined our approach to the crisis and informed the Board's oversight approach. As you have heard from my colleagues, we are using our best-in-class R&D capabilities to develop a vaccine that we hope will benefit people around the world. We have committed to providing a potential vaccine at a non-for-profit cost to enable access for communities around the world while not sacrificing our quality and compliance standards. Throughout the crisis, the company is continuing to support its employees, enabling those that can work from home and investing resources to ensure that those who must be at work can operate in a safe environment, as you heard from Kristen earlier. The Board is devoting a substantial amount of additional time to oversee the company's response to the coronavirus pandemic. The Board has held off-cycle committee meetings as well as added time to Board meetings and teleconference meetings to review and discuss the impact of the crisis and the company's actions. Senior management has also provided regular updates on company activities. There was also a question, I can just maybe address it now, that came in earlier about why J&J has a higher level of litigation relative to its peers. And firstly, I think it is important to keep in mind that litigation in the U.S. is a big business and has been increasingly so for some time. There is a pattern where almost every business sector has been impacted by mass tort litigation, and J&J is not immune. So while we know we are not alone in facing mass tort claims, it may appear to be a more frequent target because of the broad base of our company's business portfolio, large number of products with a significant market share and presence across the pharmaceutical, consumer health and medical device industries, which are frequent targets of the plaintiffs' bar. In this environment, we must at times be willing to go to trial when the science, facts and law are on our side. We also have to remain open to resolving cases through settlement when and where that's appropriate to do so and in the best interest of the company. We have a proven track record of being able to successfully and appropriately manage this balance. And it's also important to keep in mind that the decision to bring a lawsuit or a jury's verdict is not a medical, scientific or regulatory conclusion about the safety of our products. And as we've heard throughout this webcast, product quality and safety are not only top business priorities for Johnson & Johnson, they are also core obligations embodied in our credo. We have strong quality programs to ensure that our products are safe and strong compliance programs designed to investigate any issues in a meaningful way. With that, I'll now turn it back to Lisa.

Thanks, Matt. The next question is directed towards Dirk. Can you provide your perspective on the alignment to the SASB reporting and how this might evolve moving forward?

Sure. Thanks, Lisa, and great question. Look, we greatly value feedback from our shareholders. And in our recent engagements, many of our shareholders shared with us how much they value disclosure on ESG matters that is comparable across companies and focused really on the most material ESG risks. And so many specifically mentioned in that context the SASB framework, the Sustainability Accounting Standards Board framework. So we've discussed that feedback with our leadership and Board, and we believe that including SASB metrics is an important step in our commitment to providing clear and transparent disclosure to our shareholders and other stakeholders. Our 2019 report marks the first time that J&J has reported against the SASB standards. And as the world's most broadly based health care company active in Consumer Health, Medical Devices and pharmaceuticals, we have included disclosures related to 3 SASB industry standards that most closely align to our business. And Carol referred to that earlier. So against the biotechnology and pharmaceutical standard, medical equipment and supplies and household and personal care products. So our reporting against the SASB standards is a voluntary disclosure to support the evolving information needs of our investors. And as such, we are committed to providing investors with useful, relevant and meaningful sustainability information, and we have selected metrics from the 3 SASB sector standards. Look, we will continue to evaluate these topics in the future. And accordingly, our disclosures may evolve over time in this regard. But thank you for the question.

Thanks, Dirk. The next question is for Carol. Looking at the report, how should an investor interpret your 2019 metrics?

Thanks, Lisa. Great question. We continue to sustain our successful record of inspections and demonstrate that our quality system is robust by our continued year-on-year reduction in recalls. It's important to note that the number of inspections will always fluctuate year-over-year due to a variety of factors, including entering new geographies, engaging with new health authorities, individual country requirements on frequency of infections and emerging countries increasing their health authority inspections. It's also important to recognize that we will very likely see a reduction in the number of health authority inspections when we report to you this time next year. Health authorities around the globe have suspended on-site inspections due to the COVID-19 pandemic. In many cases, they have only been performing for-cause inspections necessary to secure public safety. From a recall perspective, we aim to reduce the number of recalls each year. We do not set a specific numeric goal because we do not want the goal to have unintended consequences. Here at J&J, we have a very thorough and independent process in place to make recall decisions that is not influenced by any commercial considerations or goals or metrics. Timely execution of a recall when a problem has been identified is the right thing to do for our patients and consumers and should not be influenced by any metric. Thanks, Lisa.

Thanks, Carol. And our next question is about compliance, so for Ashley. How do you evaluate your compliance programs?

Thanks, Lisa. We are engaged externally with ethics and compliance organizations as well as compliance industry groups to make sure we are current on the latest risks and solutions. We also use benchmarking tools as well as periodic external assessments to make sure we are measuring our program accurately. And of course, we have regular monitoring and audits as well as the corrective action I mentioned earlier to check our program on a continuous basis.

Okay. Thank you. And then for Adrian, would Johnson & Johnson consider establishing access plans for all of its late-stage R&D projects?

Yes. Thanks, Lisa. Look, I think it's important to note that access to medicines is one of the greatest challenges that our industry faces, and that's not going to change. We've been a leader in access to medicines for almost a decade now, and we've faced this challenge head on not as a donation issue but really as a critical business issue. Today, I sit in the Global Public Health organization, Johnson & Johnson Global Public Health, which was founded in 2014 in response to the challenge of access and is a fully integrated R&D-accessing commercial and operations organization with staff and a field team in Africa. But also, we work with our operating companies and businesses all over the world on pharmaceutical access. We have representation on the company's most senior access committee, the Global Pharmaceutical Access Committee, where we consider access not just to infectious disease products or diseases of -- that are neglected or tropical but where every single product is approved all over the world. The access policies include access to people who live in public health populations. I think as we look forward to this and think about, well, what we're doing formally, we have commitments right now within the global public health population not just to COVID-19, not just to tuberculosis, not just to HIV, mental health, but also we have commitments to respiratory syncytial virus, to noncommunicable diseases and beyond. It's a formal area the company is committed to, and I'm very proud of the results that we're achieving. However, we have to be strategic, we have to be focused and we have to make sure that we don't create virtual access, but we actually go from innovation to impact. We reach people, and that's the commitment that we have at Johnson & Johnson. Thanks, Lisa.

Thanks, Adrian. And our last question comes in for Kristen Mulholland. Does Johnson & Johnson have any ESG targets which are linked to executive compensation? If not, would the company consider introducing any?

Thanks, Lisa. Yes, we do. As described in our 2020 proxy statement, the company uses several strategic objectives as part of its scorecard that would be considered ESG metrics. These objectives included our sustainability efforts, specifically reducing plastic in our packaging and in our carbon footprint, diversity, culture of inclusion, employee health and safety and employee engagement. These measures are included in the Board's evaluation of our overall company performance, which is the primary basis for its evaluation of our CEO's and other executives' performance.

We did have one final question on -- for Adrian regarding how do we price bedaquiline and how will you expand access?

Thanks, Lisa. Bedaquiline was the first new antibiotic developed for drug-resistant tuberculosis in almost half a century, 50 years, approved in late December 2012. It's now available in over 130 countries. The UN -- or United Nations', sorry, high-level meeting established aspirational targets for the world to treat patients with TB, to find the so-called missing millions and eliminate this disease or eradicate the disease by 2030. Bedaquiline has been transformational in changing outcomes of patients with drug-resistant tuberculosis. I talked briefly before about the pediatric formulation, which was approved this year by the FDA -- or last month by the FDA. That's a key part of this. We constantly monitor affordability and access, and I'm very, very pleased to say that we're working currently with the global drug facility, the global fund against HIV, malaria and tuberculosis. And we're working with U.S.A. and other stakeholders to identify ways that we can make sure that we're accelerating the identification of people who have TB, the screening to make sure they either are or are not drug resistant and then to get the appropriate treatment which, by the WHO guidelines which were recently published, identified bedaquiline as a core member of that treatment regimen. So what I can say to you is that we're committed to it, we're working on it, and we have a not-for-profit price globally for high-burden countries which is approximating USD 400. But we will be introducing very soon a volume-based program to encourage aspirational treatment to find the missing millions, treat them and cure them. And we'll be discussing those probably in the next month or so. But it's top of mind, and we're committed to it, Lisa.

Great. Well, thank you, Adrian, for that. I appreciate that. And thank you to all of our speakers on the call today. And certainly, thanks to everyone who was able to join the webcast today for your ongoing interest in Johnson & Johnson and your thoughtful questions. We hope you found this forum informative. And again, just to remind you, review the full Health for Humanity Report for any areas we did not address on today's call. And certainly, if we did not get to your question on our webcast today, please do reach out to us. We'd be happy to respond. I wish everyone a great day and thank you again. Take care.