UNITED STATES
            SECURITIES AND EXCHANGE COMMISSION
                  Washington, D.C.  20549

                        FORM 10-Q

(X)   Quarterly Report Pursuant to Section 13 or
      15(d) of the Securities Exchange Act of 1934
      for the quarterly period ended July 1, 2007

                          or

(  )  Transition Report Pursuant to Section 13 or
      15(d) of the Securities Exchange Act of 1934
      for the transition period from to

             Commission file number 1-3215


                 JOHNSON & JOHNSON
     (Exact name of registrant as specified in
                    its charter)

NEW JERSEY                              22-1024240
(State  or other jurisdiction of     (I.R.S. Employer
incorporation or organization)     Identification No.)

             One Johnson & Johnson Plaza
          New Brunswick, New Jersey 08933
      (Address of principal executive offices)

Registrant's telephone number, including area code
                 (732) 524-0400

     Indicate    by  check  mark  whether   the
registrant (1) has  filed all  reports required
to  be  filed by Section 13 or 15(d)   of   the
Securities   Exchange Act of  1934  during  the
preceding   12   months (or  for  such  shorter
period  that  the registrant was  required   to
file  such  reports),  and (2) has been subject
to such filing requirements for the past 90 days.
(X)  Yes  (  )No

  Indicate by check mark whether the registrant
is  a  large  accelerated filer, an accelerated
filer,   or   a  non-accelerated  filer.    See
definition  of  "accelerated  filer  and  large
accelerated  filer"  in  Rule  12b-2   of   the
Exchange  Act.  Large  accelerated  filer   (X)
Accelerated filer (  )   Non-accelerated  filer
(  )

  Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of
the Exchange Act).  (  ) Yes       (X) No

   Indicate   the  number of shares outstanding
of   each  of  the issuer's  classes  of common
stock, as of the latest  practicable date.

   On  July  29, 2007 2,894,509,495 shares of
Common Stock, $1.00 par value, were outstanding.

JOHNSON & JOHNSON AND SUBSIDIARIES


                         TABLE OF CONTENTS

Part I - Financial Information                Page No.

Item 1.  Financial Statements (unaudited)

 Consolidated Balance Sheets -
   July 1, 2007 and December 31, 2006            3


 Consolidated Statements of Earnings for the Fiscal
   Second Quarters Ended July 1, 2007 and
   July 2, 2006                                  5


 Consolidated Statements of Earnings for the Fiscal
   Six Months Ended July 1, 2007 and
   July 2, 2006                                  6

 Consolidated Statements of Cash Flows for the Fiscal
   Six Months Ended July 1, 2007 and
   July 2, 2006                                  7

 Notes to Consolidated Financial Statements      9

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results
        of Operations                           28

Item 3. Quantitative and Qualitative Disclosures
        About Market Risk                       41

Item 4. Controls and Procedures                 41


Part II - Other Information

Item 1 - Legal Proceedings                      42

Item 2 - Unregistered Sales of Equity Securities
           and Use of Proceeds                  42

Item 4 - Submission of Matters to a Vote of Security
           Holders                              43

Item 6 - Exhibits                               44

  Signatures                                    44





Part I - FINANCIAL INFORMATION

Item 1 - FINANCIAL STATEMENTS


          JOHNSON & JOHNSON AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                (Unaudited; Dollars in Millions)

                             ASSETS

                            July 1, 2007  December 31, 2006
Current Assets:
Cash & cash equivalents              $5,571          $4,083

Marketable securities                   400               1

Accounts receivable, trade,
less allowances for doubtful
accounts
$163 (2006,$164)                      9,470           8,712

Inventories (note 4)                  5,155           4,889

Deferred taxes on income              2,194           2,094

Prepaid expenses and other
receivables                           3,014           3,196

     Total current assets            25,804          22,975

Marketable securities, non-
current                                  17              16

Property, plant and equipment
at cost                              24,930          24,028

Less: accumulated
depreciation                       (11,545)        (10,984)

Property, plant and
equipment, net                       13,385          13,044

Intangible assets, net (note 5)      15,412          15,348

Goodwill, net (note 5)               13,754          13,340

Deferred taxes on income              3,575           3,210

Other assets                          2,736           2,623

     Total Assets                   $74,683         $70,556



    See Notes to Consolidated Financial Statements




          JOHNSON & JOHNSON AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                (Unaudited; Dollars in Millions)

              LIABILITIES AND SHAREHOLDERS' EQUITY

                            July 1, 2007  December 31, 2006

Current Liabilities:
Loans and notes payable              $4,470          $4,579

Accounts payable                      5,458           5,691

Accrued liabilities                   4,585           4,587

Accrued rebates, returns and
promotions                            2,447           2,189

Accrued salaries, wages and
commissions                           1,140           1,391

Accrued taxes on income                 883             724

     Total current
     liabilities                     18,983          19,161

Long-term debt                        2,013           2,014

Deferred taxes on income              1,361           1,319

Employee related obligations          5,654           5,584

Other liabilities                     3,550           3,160

     Total liabilities               31,561          31,238

Shareholders' Equity:

Common stock - par value
$1.00 per share (authorized
4,320,000,000 shares; issued
3,119,842,000 shares)                 3,120           3,120

Accumulated other
comprehensive income (note 8)        (1,898)         (2,118)

Retained earnings                    52,819          49,290

Less: common stock held in
treasury, at cost
(226,020,000 and 226,612,000
shares)                              10,919          10,974

     Total shareholders'
     equity                          43,122          39,318

     Total liabilities and
     shareholders' equity           $74,683         $70,556


    See Notes to Consolidated Financial Statements




          JOHNSON & JOHNSON AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF EARNINGS
       (Unaudited; dollars & shares in millions
               except per share amounts)


                              Fiscal Quarters Ended
                        July 1,  Percent  July 2, Percent
                         2007      to      2006      to
                                  Sales            Sales


Sales to customers
(Note 6)                $15,131   100.0%  $13,363   100.0%

Cost of products sold     4,358     28.8    3,788     28.3

Gross profit             10,773     71.2    9,575     71.7

Selling, marketing and
administrative expenses   5,029     33.3    4,351     32.6

Research expense          1,866     12.3    1,828     13.7

In-process research &
development (IPR&D)           -        -       87      0.6

Interest income             (95)     (.6)    (209)    (1.6)

Interest expense, net
of portion capitalized       59      0.4       13      0.1

Other income, net          (117)    (0.8)     (98)    (0.7)

Earnings before
provision for taxes on
income                    4,031     26.6    3,603     27.0

Provision for taxes on
income (Note 3)             950      6.2      783      5.9

NET EARNINGS             $3,081    20.4%   $2,820    21.1%
`
NET EARNINGS PER SHARE
Basic                     $1.06             $0.96
Diluted                   $1.05             $0.95

CASH DIVIDENDS PER
SHARE                    $0.415            $0.375

AVG. SHARES OUTSTANDING
Basic                   2,895.1           2,954.0
Diluted                 2,922.5           2,974.4


         See Notes to Consolidated Financial Statements






          JOHNSON & JOHNSON AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF EARNINGS
       (Unaudited; dollars & shares in millions
               except per share amounts)


                             Fiscal Six Months Ended
                        July 1,  Percent  July 2, Percent
                         2007      to      2006      to
                                  Sales            Sales

Sales to customers
(Note 6)                $30,168   100.0%  $26,355   100.0%

Cost of products sold     8,743     29.0    7,400     28.1

Gross profit             21,425     71.0   18,955     71.9

Selling, marketing and
administrative expenses   9,831     32.5    8,446     32.0

Research expense          3,518     11.7    3,360     12.7

In-process research &
development                 807      2.7      124      0.5

Interest income            (190)     (.6)    (406)    (1.5)

Interest expense, net
of portion capitalized      121      0.4       29      0.1

Other income, net          (345)    (1.1)    (816)    (3.1)

Earnings before
provision for taxes on
income                    7,683     25.4    8,218     31.2

Provision for taxes on
income (Note 3)           2,029      6.7    2,093      8.0

NET EARNINGS             $5,654    18.7%   $6,125    23.2%
`
NET EARNINGS PER SHARE
Basic                     $1.95             $2.07
Diluted                   $1.93             $2.05

CASH DIVIDENDS PER
SHARE                    $0.790            $0.705

AVG. SHARES OUTSTANDING
Basic                   2,894.8           2,963.0
Diluted                 2,924.9           2,982.5



         See Notes to Consolidated Financial Statements





          JOHNSON & JOHNSON AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF CASH FLOWS
           (Unaudited; Dollars in Millions)


                               Fiscal Six Months Ended
                               July 1, 2007 July 2, 2006

CASH FLOW FROM OPERATING
ACTIVITIES
Net earnings                         $5,654       $6,125
Adjustment to reconcile net
earnings to cash flow:
 Depreciation and
amortization of property
and intangibles                       1,305        1,067
 Stock based compensation               360          340
 Purchased in-process
research and development                807          124
Changes in assets and
liabilities, net of effects
from acquisitions:
 Deferred tax provision                (405)        (628)
 Accounts receivable
allowances                                1           (5)
 Increase in accounts
receivable                             (659)        (949)
 Increase in inventories               (190)        (229)
 Decrease in accounts payable
and accrued liabilities                (306)        (794)
 (Increase)/Decrease in other
current and non-current
assets                                 (424)          83
 Increase in other current
and non-current liabilities             591          696

NET CASH FLOWS FROM OPERATING
ACTIVITIES                            6,734        5,830

CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property, plant
and equipment                        (1,045)      (1,034)
Proceeds from the disposal of
assets                                  214            1
Acquisitions, net of cash
acquired                             (1,368)      (1,218)
Purchases of investments               (566)        (396)
Sales of investments                    103          322
Other (primarily intangibles)           (49)         (37)

NET CASH (USED)/PROVIDED BY
INVESTING ACTIVITIES                 (2,711)      (2,362)

CASH FLOWS FROM FINANCING
ACTIVITIES
Dividends to shareholders            (2,287)      (2,089)
Repurchase of common stock             (739)      (2,968)
Proceeds from short-term debt        15,296          500
Retirement of short-term debt       (15,449)        (723)
Proceeds from long-term debt              1            -
Retirement of long-term debt             (6)         (10)
Proceeds from the exercise of stock
options/excess tax benefits             564          332


NET CASH USED BY FINANCING
ACTIVITIES                           (2,620)      (4,958)
Effect of exchange rate
changes on cash and cash
equivalents                              85           82
Increase/ (decrease) in cash
and cash equivalents                  1,488       (1,408)
Cash and Cash equivalents,
beginning of period                   4,083       16,055

CASH AND CASH EQUIVALENTS,
END OF PERIOD                        $5,571      $14,647

Acquisitions
Fair value of assets acquired        $1,599       $1,392
Fair value of liabilities
assumed                                (231)        (174)

Net cash paid for
acquisitions                         $1,368       $1,218




    See Notes to Consolidated Financial Statements











NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - The   accompanying unaudited interim financial
statements  and  related  notes  should  be   read   in
conjunction with the Consolidated Financial  Statements
of Johnson & Johnson and Subsidiaries  (the  "Company")
and  related notes as contained in the Company's Annual
Report  on Form 10-K for the fiscal year ended December
31,  2006.   The unaudited interim financial statements
include  all  adjustments (consisting  only  of  normal
recurring  adjustments) and accruals necessary  in  the
judgment  of  management for a fair  statement  of  the
results for the periods presented.

During  the  fiscal first quarter of 2007, the  Company
adopted FASB Interpretation 48 (FIN 48), Accounting for
Uncertainty in Income Taxes - an interpretation of FASB
Statement  No  109.  This interpretation  prescribes  a
recognition threshold and measurement attribute for the
financial  statement recognition and measurement  of  a
tax  position taken or expected to be taken  in  a  tax
return.   The interpretation also provides guidance  on
derecognition, classification and other  matters.   See
note 3 for more details.

NOTE 2 - FINANCIAL INSTRUMENTS
The  Company  follows the provisions  of  Statement  of
Financial Accounting Standards (SFAS) 133, SFAS 138 and
SFAS  149 requiring that all derivative instruments  be
recorded on the balance sheet at fair value.

As  of July 1, 2007, the balance of deferred net losses
on    derivatives   included   in   accumulated   other
comprehensive  income  was $18 million  after-tax.  For
additional information, see Note 8. The Company expects
that   substantially  all  of  this  amount   will   be
reclassified into earnings over the next 12 months as a
result of transactions that are expected to occur  over
that period. The amount ultimately realized in earnings
will  differ as foreign exchange rates change. Realized
gains  and  losses are ultimately determined by  actual
exchange   rates   at  maturity  of   the   derivative.
Transactions with third parties will cause  the  amount
in accumulated other comprehensive income to affect net
earnings.  The  maximum length of time over  which  the
Company is hedging is 18 months.  The Company also uses
currency   swaps  to  manage  currency  risk  primarily
related to borrowings, which may exceed 18 months.

For  the fiscal second quarters ended July 1, 2007  and
July   2,   2006,  the  net  impact  of   the   hedges'
ineffectiveness, transactions not qualifying for  hedge
accounting  and  discontinuance  of  hedges,   to   the
Company's financial statements was insignificant. Refer
to  Note  8 for disclosures of movements in Accumulated
Other Comprehensive Income.

NOTE 3 - INCOME TAXES
The  worldwide effective income tax rates for the first
fiscal  six  months  of 2007 and 2006  were  26.4%  and
25.5%,  respectively, an increase  of  0.9%.  This  was
primarily  due  to  the IPR&D charge  of  $807  million
recorded in the fiscal first quarter of 2007, which was
non-deductible  for  tax purposes. This  was  partially
offset  by  increases in taxable income  in  lower  tax
jurisdictions relative to taxable income in higher  tax
jurisdictions  along with the Research and  Development
(R&D)  tax credit, which was not in effect in the first
fiscal nine months of 2006.

The  tax  rate for the first fiscal six months of  2006
benefited  from  a reversal of deferred  tax  valuation
allowances of $134 million associated with the  Tibotec
business.  This  benefit  was  offset  by  acquisition-
related IPR&D charges of $124 million, for which  there
was a minimal tax benefit.

The   Company  adopted  FIN  No  48,  "Accounting   for
Uncertainty in Income Taxes" effective January 1,  2007
which resulted in the recognition of an additional  $19
million  of previously unrecognized tax benefits,  with
the corresponding adjustment to retained earnings.  The
Company  had $1.1 billion of unrecognized tax  benefits
as of January 1, 2007 including the previous adjustment
mentioned  above.   The  Company  classifies   interest
expense  and  penalties  related  to  unrecognized  tax
benefits  as income tax expense.  The total  amount  of
accrued interest on January 1, 2007 was $0.2 billion.

The Company conducts business and files tax returns in
numerous countries and currently has tax audits in
progress with a number of tax authorities.  The U.S.
Internal Revenue Service (IRS)has completed their audit
for tax years through 1999; however, the years 1996
through 1999 remain open while a limited number of
issues are being considered at the IRS appeals level.
In other major jurisdictions where the Company conducts
business, the tax years remain open generally back to
the year 2000 with some jurisdictions remaining open
back to 1995.


NOTE 4 - INVENTORIES
(Dollars in Millions)

                       July 1, 2007    December 31, 2006

Raw materials and
supplies                      $1,073             $980
Goods in process               1,296            1,253
Finished goods                 2,786            2,656
Total                         $5,155           $4,889



NOTE 5 - INTANGIBLE ASSETS AND GOODWILL
Intangible  assets that have finite  useful  lives  are
amortized  over their estimated useful lives.  Goodwill
and  indefinite  lived intangible assets  are  assessed
annually   for   impairment.   The  latest   impairment
assessment  of goodwill and indefinite lived intangible
assets  was  completed in the fiscal fourth quarter  of
2006   and   no  impairment  was  determined.    Future
impairment  tests  will be performed  annually  in  the
fiscal  fourth  quarter,  or  sooner  if  warranted  by
economic conditions.





(Dollars in Millions)
                            July  1, 2007 December 31, 2006


Trademarks (non-amortizable)       $6,648         $6,609
Less accumulated amortization         142            134
Trademarks (non-amortizable)-
net                                 6,506          6,475

Patents and trademarks              5,353          5,282
Less accumulated amortization       1,863          1,695
Patents and trademarks - net        3,490          3,587

Other amortizable intangibles       7,219          6,923
Less accumulated amortization       1,803          1,637
Other intangibles - net             5,416          5,286

Total intangible assets -
gross                              19,220         18,814
Less accumulated amortization       3,808          3,466
Total intangible assets - net      15,412         15,348

Goodwill - gross                   14,490         14,075
Less accumulated amortization         736            735
Goodwill - net                    $13,754        $13,340

Goodwill as of July 1, 2007 as allocated by segment of
business is as follows:

(Dollars in Millions)
                      Consumer   Pharm  Med Dev  Total
                                         & Diag
Goodwill, net of
accumulated
amortization at
December 31, 2006       $7,866    $902   $4,572 $13,340
Acquisitions                 -       -      439     439
Translation & Other       (31)       4        2     (25)
Goodwill as of
July 1, 2007            $7,835    $906   $5,013 $13,754


The  weighted average amortization periods for  patents
and trademarks and other intangible assets are 15 years
and  27  years, respectively.  The amortization expense
of  amortizable  intangible assets for the  fiscal  six
months  ended  July 1, 2007 was $383  million  and  the
estimated  amortization expense for the five succeeding
years approximates $740 million, per year.











NOTE 6 - SEGMENTS OF BUSINESS AND GEOGRAPHIC AREAS
(Dollars in Millions)

SALES BY SEGMENT OF BUSINESS (1)

                         Fiscal Quarters Ended
                         July 1,  July 2,  Percent
                          2007     2006    Change

Consumer
U.S.                     $1,562  $1,103     41.6%
International             2,002   1,295     54.6
                          3,564   2,398     48.6

Pharmaceutical
U.S.                      3,860   3,682      4.8
International             2,289   2,128      7.6
                          6,149   5,810      5.8

Medical Devices &
Diagnostics
U.S.                      2,619   2,590      1.1
International             2,799   2,565      9.1
                          5,418   5,155      5.1

U.S.                      8,041   7,375      9.0
International             7,090   5,988     18.4
Worldwide               $15,131 $13,363     13.2%



                        Fiscal Six Months Ended
                         July 1,  July 2,   Percent
                          2007     2006     Change

Consumer
U.S.                     $3,191  $2,253     41.6%
International             3,869   2,500     54.8
                          7,060   4,753     48.5

Pharmaceutical
U.S.                      7,894   7,383      6.9
International             4,476   4,053     10.4
                         12,370  11,436      8.2

Medical Devices &
Diagnostics
U.S.                      5,203   5,110      1.8
International             5,535   5,056      9.5
                         10,738  10,166      5.6

U.S.                     16,288  14,746     10.5
International            13,880  11,609     19.6
Worldwide               $30,168 $26,355     14.5%

(1) Export and intersegment sales are not significant.

OPERATING PROFIT BY SEGMENT OF BUSINESS

(Dollars in Millions)
                       Fiscal Quarters Ended
                     July 1,  July 2,  Percent
                      2007     2006    Change

Consumer              $482    $439   9.8%
Pharmaceutical       2,131   1,697   25.6
Medical Devices &
Diagnostics (1)      1,523   1,435    6.1
  Segments total     4,136   3,571   15.8
Income/(expense)
not allocated to
segments              (105)     32
Worldwide total     $4,031  $3,603  11.9%

                        Fiscal Six Months Ended
                     July 1,  July 2,   Percent
                      2007     2006     Change

Consumer            $1,242    $904  37.4%
Pharmaceutical       4,412   3,624   21.7
Medical Devices &
Diagnostics(2)       2,238   3,595  (37.7)
  Segments total     7,892   8,123   (2.8)
Income/(expense)
not allocated to
segments              (209)     95
Worldwide total     $7,683  $8,218   (6.5)%

(1)Includes $87 million of IPR&D charges related to
acquisitions completed in the fiscal second quarter
of 2006.

(2)Includes $807 million and $124 million of IPR&D
charges related to acquisitions completed in the
first fiscal six months of 2007 and first fiscal
six months of 2006, respectively. The first fiscal
six months of 2006 also includes the gain
associated with the Guidant acquisition agreement
termination fee, less associated expenses, of $622
million before tax.


SALES BY GEOGRAPHIC AREA
(Dollars in Millions)

                       Fiscal Quarters Ended
                     July 1,  July 2,  Percent
                      2007     2006    Change

U.S.                $8,041  $7,375     9.0%
Europe               3,907   3,295     18.6
Western Hemisphere,
excluding U.S.       1,131     876     29.1
Asia-Pacific,
Africa               2,052   1,817     12.9

Total              $15,131 $13,363     13.2%




                        Fiscal Six Months Ended
                     July 1,  July 2,   Percent
                      2007     2006     Change

U.S.               $16,288 $14,746     10.5%
Europe               7,720   6,366     21.3
Western Hemisphere,
excluding U.S.       2,177   1,698     28.2
Asia-Pacific,
Africa               3,983   3,545     12.4

Total              $30,168 $26,355    14.5%



NOTE 7 - EARNINGS PER SHARE
The following is a reconciliation of basic net earnings
per  share  to diluted net earnings per share  for  the
fiscal  second quarters ended July 1, 2007 and July  2,
2006.

(Shares in Millions)           Fiscal Quarters Ended

                                 July 1,   July 2,
                                   2007      2006

Basic net earnings per share        $1.06     $0.96
Average shares outstanding -
basic                             2,895.1   2,954.0
Potential shares exercisable
under  stock option plans           201.2     227.5
Less: shares which could be
repurchased under treasury
stock method                       (177.7)   (211.0)
Convertible debt shares               3.9       3.9
Adjusted average shares
outstanding - diluted             2,922.5   2,974.4
Diluted earnings per share          $1.05     $0.95


The diluted earnings per share calculation included the
dilutive effect of convertible debt that was offset  by
the related reduction in interest expense of $1 million
and  $1  million  for the fiscal second quarters  ended
July 1, 2007 and July 2, 2006, respectively.

The diluted earnings per share calculation excluded  67
million  and  45 million shares related to options  and
restricted  stock units for the fiscal second  quarters
ended July 1, 2007 and July 2, 2006, respectively,  due
to  their anti-dilutive effect on diluted earnings  per
share.

The following is a reconciliation of basic net earnings
per share to diluted  net  earnings  per share  for the
fiscal six months ended July 1, 2007 and July 2, 2006.

(Shares in Millions)
                               Fiscal Six Months Ended
                                  July 1,    July 2,
                                   2007       2006

Basic net earnings per share        $1.95     $2.07
Average shares outstanding -
basic                             2,894.8  2,963.0
Potential shares exercisable
under stock option plans            201.4    227.4
Less: shares which could be
repurchased under treasury
stock method                       (175.2)  (211.8)
Convertible debt shares               3.9      3.9
Average shares
outstanding - diluted             2,924.9  2,982.5
Diluted earnings per share          $1.93    $2.05


The diluted earnings per share calculation included the
dilutive effect of convertible debt that was offset  by
the related reduction in interest expense of $2 million
and  $2  million for the first fiscal six months  ended
July 1, 2007 and July 2, 2006, respectively.

The diluted earnings per share calculation excluded  66
million  and  45 million shares related to options  and
restricted stock units for the first fiscal six  months
ended July 1, 2007 and July 2, 2006, respectively,  due
to  their anti-dilutive effect on diluted earnings  per
share.

NOTE 8 - ACCUMULATED OTHER COMPREHENSIVE INCOME
The total comprehensive income for the first fiscal six
months  ended  July 1, 2007 was $5.9 billion,  compared
with $6.3 billion for the same period a year ago.   The
total   comprehensive  income  for  the  fiscal  second
quarter  ended July 1, 2007 was $3.3 billion,  compared
with  $2.9  billion  for the same period  a  year  ago.
Total  comprehensive income included net earnings,  net
unrealized  currency gains and losses  on  translation,
adjustments  related  to Employee  Benefit  Plans,  net
unrealized gains and losses on securities available for
sale and net gains and losses on derivative instruments
qualifying  and  designated as cash  flow  hedges.  The
following   table   sets  forth   the   components   of
accumulated other comprehensive income.

(Dollars in Millions)
                                                            Total
                               Unrld            Gains/      Accum
                       For.    Gains/   Employ  (Losses)    Other
                       Cur.    (Losses) Benefit on Deriv    Comp
                      Trans.   on Sec    Plans  & Hedg      Inc/
                                                           (Loss)


December 31, 2006     $ (158)    61    (2,030)    9      (2,118)
2007 Six Months changes:
 Net change associated
 with current period
 hedging transactions                           (23)
 Net amount reclassed
 to net earnings                                 (4)*
 Net six months changes  144     23        80   (27)       220
July 1, 2007            $(14)    84    (1,950)  (18)    (1,898)




Amounts  in accumulated other comprehensive income  are
presented  net  of  the related  tax  impact.   Foreign
currency  translation  adjustments  are  not  currently
adjusted  for income taxes, as they relate to permanent
investments in international subsidiaries.

*Primarily offset in net earnings by changes  in  value
of the   underlying transactions.

NOTE 9 - MERGERS, ACQUISITIONS AND DIVESTITURES
There  were no acquisitions completed during the fiscal
second quarter of 2007. During the fiscal first quarter
of  2007,  the Company acquired Conor Medsystems,  Inc.
for  a  purchase price of $1.4 billion in  cash.  Conor
Medsystems,  Inc., is a cardiovascular device  company,
with new drug delivery technology.

During  the  fiscal first quarter of 2007, the  Company
completed the divestiture of the KAOPECTATE(R), UNISOM(R),
CORTIZONE(R), BALMEX(R) and ACT(R) consumer products to
Chattem, Inc. for $410 million in cash.


The  2006  acquisitions included Animas Corporation,  a
leading  maker  of insulin infusion pumps  and  related
products;  Hand  Innovations  LLC,  a  privately   held
manufacturer  of  fracture fixation  products  for  the
upper  extremities;  Future  Medical  Systems  S.A.,  a
company  that  primarily  develops,  manufactures   and
markets arthroscopic fluid management systems; Vascular
Control Systems, Inc., a  company focused on developing
medical  devices  to  treat  fibroids  and  to  control
bleeding  in  obstetric  and gynecologic  applications;
Groupe  Vendome S.A., a French marketer  of  adult  and
baby  skin  care products; ColBar LifeScience  Ltd.,  a
company  specializing  in reconstructive  medicine  and
tissue  engineering; Ensure Medical,  Inc.,  a  company
that  develops devices for post-catheterization closure
of  the  femoral  artery; and the  Consumer  Healthcare
business of Pfizer Inc., which included brands such  as
LISTERINE(R), NICORETTE(R), NEOSPORIN(R), SUDAFED(R),
BENADRYL(R) and VISINE(R).

As  a result of the Guidant acquisition termination the
Company  recorded  the  Guidant  acquisition  agreement
termination  fee,  less associated  expenses,  of  $622
million  before tax in other income during  the  fiscal
first quarter of 2006.




NOTE 10 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Components of Net Periodic Benefit Cost
Net  periodic  benefit cost for the  Company's  defined
benefit  retirement plans and other benefit  plans  for
the fiscal second quarters of 2007 and 2006 include the
following components:

(Dollars in Millions)
                         Retirement Plans     Other Benefit Plans
                                   Fiscal Quarters Ended
                         July 1,    July 2,     July 1,   July 2,
                          2007       2006        2007*     2006

Service cost               $ 134       $136        $33        $19
Interest cost                160        144         37         26
Expected return on
 plan assets                (198)      (177)         0         (1)
Amortization of prior
 service cost                  3          3         (1)        (1)
Recognized actuarial
 losses                       48         64         16         10

Net  periodic benefit cost $ 147       $170        $85        $53

*Includes other post employment benefits as per the
adoption of SFAS No. 158.

Net  periodic  benefit cost for the  Company's  defined
benefit  retirement plans and other benefit  plans  for
the  first  fiscal six months of 2007 and 2006  include
the following components:



(Dollars in Millions)
                         Retirement Plans     Other Benefit Plans
                                  Fiscal Six Months Ended
                         July 1,    July 2,     July 1,   July 2,
                          2007       2006        2007      2006

Service cost              $ 269       $262        $70       $37
Interest cost               320        284         74        52
Expected return on
 plan assets               (395)      (350)        (1)       (2)
Amortization of prior
 service cost                 5          6         (3)       (3)
Amortization of net
 transition asset             -          -          -         -
Recognized actuarial
 losses                      95        127          33       20

Net periodic benefit cost $ 294       $329        $173     $104

*Includes other post employment benefits as per the
adoption of SFAS No. 158.

Company Contributions
For  the  fiscal  six months ended July  1,  2007,  the
Company contributed $11 million and $10 million to  its
U.S.  and international retirement plans, respectively.
The  Company  does  not anticipate a minimum  statutory
funding  requirement for its U.S. retirement  plans  in
2007.  International plans will be funded in accordance
with local regulations.

NOTE 11 - LEGAL PROCEEDINGS

PRODUCT LIABILITY
The Company is involved in numerous product liability
cases in the United States, many of which concern
adverse reactions to drugs and medical devices. The
damages claimed are substantial, and while the Company
is confident of the adequacy of the warnings and
instructions for use that accompany such products, it
is not feasible to predict the ultimate outcome of
litigation. However, the Company believes that if any
liability results from such cases, it will be
substantially covered by existing amounts accrued in
the Company's balance sheet and, where available, by
third-party product liability insurance.

Multiple products of Johnson & Johnson subsidiaries are
subject to numerous product liability claims and
lawsuits, including ORTHO EVRA(R), RISPERDAL(R), DURAGESIC(R)
and the CHARITE(TM) Artificial Disc. There are
approximately 2,400 claimants who have filed lawsuits
or made claims regarding injuries allegedly due to
ORTHO EVRA(R), 700 claimants with respect to RISPERDAL(R),
250 with respect to CHARITE(TM) and 100 with respect to
DURAGESIC(R).  These claimants seek substantial
compensatory and, where available, punitive damages.

With respect to RISPERDAL(R), the Attorneys General of
three states and the Office of General Counsel of the
Commonwealth of Pennsylvania have filed actions seeking
reimbursement of Medicaid or other public funds for
RISPERDAL(R) prescriptions written for off-label use,
compensation for treating their citizens for alleged
adverse reactions to RISPERDAL(R), civil fines or
penalties, punitive damages, or other relief.  The
Attorney General of Texas has joined a qui tam action
in that state seeking similar relief.  Certain of these
actions also seek injunctive relief relating to the
promotion of RISPERDAL(R).  In addition, there are six
cases filed by union health plans seeking damages for
alleged overpayments for RISPERDAL(R), several of which
seek certification as class actions.

Numerous claims and lawsuits in the United States
relating to the drug PROPULSID(R), withdrawn from general
sale by the Company's Janssen Pharmaceutica Inc.
(Janssen) subsidiary in 2000, have been resolved or are
currently enrolled in settlement programs with an
aggregate cap below $100 million in payments by the
Company. Litigation concerning PROPULSID(R) is pending in
Canada, where a class action of persons alleging
adverse reactions to the drug has been certified.

AFFIRMATIVE STENT PATENT LITIGATION

In patent infringement actions tried in Delaware
Federal District Court in late 2000, Cordis Corporation
(Cordis), a subsidiary of Johnson & Johnson, obtained
verdicts of infringement and patent validity, and
damage awards against Boston Scientific Corporation
(Boston Scientific) and Medtronic AVE, Inc. (Medtronic)
based on a number of Cordis vascular stent patents. In
December 2000, the jury in the damage action against
Boston Scientific returned a verdict of $324 million
and the jury in the Medtronic action returned a verdict
of $271 million. Multiple post-trial proceedings and
appeals have ensued with respect to these verdicts,
with the ultimate outcome still subject to uncertainty.

Cordis also has an arbitration claim against Medtronic
accusing Medtronic of infringement by sale of stent
products introduced by Medtronic subsequent to its
products subject to the earlier action referenced
above. Those subsequent products were found to have
been licensed to Medtronic pursuant to a 1997 license
by an arbitration panel in March 2005. Further
arbitration proceedings will determine whether
royalties are owed for those products.

In January 2003, Cordis filed a patent infringement
action against Boston Scientific in Delaware Federal
District Court accusing its Express2(TM), Taxus(R) and
Liberte(R) stents of infringing the Palmaz patent that
expired in November 2005. The Liberte(R) stent was also
accused of infringing Cordis' Gray patent that expires
in 2016. In June 2005, a jury found that the
Express2(TM), Taxus(R) and Liberte(R) stents infringed the
Palmaz patent and that the Liberte(R) stent also
infringed the Gray patent. Motions filed by Boston
Scientific seeking to vacate the verdict or obtain a
new trial were denied in June 2006. Cordis expects
Boston Scientific will appeal to the U.S. Court of
Appeals for the Federal Circuit.

PATENT LITIGATION AGAINST VARIOUS JOHNSON & JOHNSON
SUBSIDIARIES

The products of various Johnson & Johnson subsidiaries
are the subject of various patent lawsuits, the
outcomes of which could potentially adversely affect
the ability of those subsidiaries to sell those
products, or require the payment of past damages and
future royalties.

In July 2005, a jury in Federal District Court in
Delaware found that the Cordis CYPHER(R) stent infringed
Boston Scientific's Ding '536 patent and that the
Cordis CYPHER(R) and BX VELOCITY(R) stents also infringed
Boston Scientific's Jang '021 patent. The jury also
found both of those patents valid. Boston Scientific
seeks substantial damages and an injunction in that
action. In June 2006, the District Court denied motions
by Cordis to overturn the jury verdicts or grant a new
trial. Cordis has moved for re-consideration of those
decisions. If reconsideration is denied, Cordis will
appeal to the Court of Appeals for the Federal Circuit.
The District Court indicated it will consider damages,
willfulness and injunctive relief after the appeals
have been decided.

Boston Scientific has brought actions in Belgium and
the Netherlands under its Kastenhofer patent to enjoin
the manufacture and sale of allegedly infringing
catheters in those countries, and to recover damages.
The hearing in the Belgian case is set for September
2007.  A decision by the lower court in the Netherlands
in Boston Scientific's favor was reversed on appeal in
April 2007.  Boston Scientific has filed an appeal to
the Dutch Supreme Court.


In Germany, Boston Scientific has several actions based
on its Ding patents pending against the Cordis CYPHER(R)
stent. Cordis was successful in these actions at the
trial level, but Boston Scientific has appealed.

The following chart summarizes various patent lawsuits
concerning products of Johnson & Johnson subsidiaries
that have yet to proceed to trial:




J&J		 		  Plaintiff/
Product        Company  Patents	  Patent Holder	     Court  Trial Date  Filed

Two-layer      Cordis   Kasten-  Boston Scientific  N.D.  Cal   10/07    02/02
Catheters               hofer    Corp.              Belgium     09/07    12/03
                        Forman


Catheters      Cordis   Fitzmau- Medtronic AVE      E.D. Tex    09/07    06/03
stent delivery          rice
systems


Contact Lenses Vision   Nicolson CIBA  Vision       M.D. Fla.     *      09/03
               Care


Stents         Cordis   Ricci    Medtronic and      E.D. Tex      *      03/07
                                 Evysio

*   Trial date to be established.

LITIGATION  AGAINST  FILERS  OF  ABBREVIATED  NEW  DRUG
APPLICATIONS (ANDAS)

The following chart indicates lawsuits pending against
generic firms that filed Abbreviated New Drug
Applications seeking to market generic forms of
products sold by various subsidiaries of the Company
prior to expiration of the applicable patents covering
those products. These ANDAs typically include
allegations of non-infringement, invalidity and
unenforceability of these patents. In the event the
subsidiary of the Company involved is not successful in
these actions, or the statutory 30-month stay expires
before a ruling from the district court is obtained,
the firms involved will have the ability, upon FDA
approval, to introduce generic versions of the product
at issue resulting in very substantial market share and
revenue losses for the product of the Company's
subsidiary.

As noted in the following chart, 30-month stays expired
during 2006 and will expire in 2007 or 2008 with
respect to ANDA challenges regarding various products:



Brand Name     Patent/NDA  Generic              Trial    Date   30-Month
Product        Holder      Challenger  Court    Date     Filed  Stay Expires

ACIPHEX(R) 20  Eisai      Teva         S.D.N.Y.  03/07   11/03      02/07
mg delay   (for Janssen)  Dr. Reddy's  S.D.N.Y.  03/07   11/03      02/07
release                   Mylan        S.D.N.Y.  03/07   01/04      02/07
tablet

AXERT(R) 6.25  Almirall   Teva         S.D.N.Y.    *     03/06      11/08
and 12.5 mg    Ortho-McNeil
               Neurologics

CONCERTA(R)   McNeil-PPC  Andrx        D.Del.      *     09/05      None
18,27,36
and 54 mg     ALZA
controlled
release tablet

ORTHO TRI CYCLEN(R)
LO           Ortho-McNeil  Barr        D.N.J.       *    10/03      02/06
0.18 mg/
0.025 mg
0.215 mg/
0.025 mg
and 0.25 mg/
0.025 mg

PEPCID
COMPLETE(R)  McNeil-PPC   Perrigo     S.D.N.Y.    02/07  02/05      06/07

RAZADYNE(TM) Janssen      Teva        D.  Del     05/07  07/05      08/08
                          Mylan       D.  Del     05/07  07/05      08/08
                          Dr. Reddy's D.  Del     05/07  07/05      08/08
                          Purepac     D.  Del     05/07  07/05      08/08
                          Barr        D.  Del     05/07  07/05      08/08
                          Par         D.  Del     05/07  07/05      08/08
                       AlphaPharm     D.  Del     05/07  07/05      08/08

RAZADYNE(TM)
ER           Janssen      Barr        D.N.J.        *    06/06      11/08
                          Sandoz      D.N.J.      05/07  07/09

RISPERDAL(R)
Tablets      Janssen      Mylan       D.N.J.      06/06  12/03      05/06
..25, 0.5, 1,
2, 3, 4                   Apotex      D.N.J.        *    06/06      11/08
mg tablets

RISPERDAL(R)
Oral
Solution     Janssen      Apotex      D.N.J.        *    03/06      08/08
1 mg/ml

TOPAMAX(R)   Ortho-McNeil  Mylan      D.N.J.        *    04/04      09/06
25,50,100,
200 mg tablet              Cobalt     D.N.J.        *    10/05      03/08


TOPAMAX(R)
SPRINKLE     Ortho-McNeil  Cobalt     D.N.J.        *    12/05      05/08
15,25 mg                   Mylan
capsule                               D.N.J.        *    10/06      03/09

ULTRACET(R)  Ortho-McNeil  Apotex     N.D. III.     *    07/07      12/09

ULTRAM ER(R) Ortho-McNeil  Par        D. Del.       *    05/07      09/09
100,200 mg
tablet


* Trial date to be established.

Trial in the action against Teva, Dr. Reddy's and Mylan
with respect to their ANDA challenges to the patent on
ACIPHEX of Eisai Pharmaceutical, Inc., Ortho McNeil
Pharmaceutical's marketing partner, proceeded before
the district court in New York in April 2007.  On May
11, 2007, the Court held that the ACIPHEX compound
patent is enforceable.  The Court had previously held
that the patent is valid.  Teva has appealed both
decisions to the Court of Appeals for the Federal
Circuit.

In the action against Mylan and Dr. Reddy's
Laboratories regarding RISPERDAL(R) (risperidone) tablets
and M-Tabs, the District Court in New Jersey ruled, on
October 13, 2006, that the RISPERDAL(R) patent was valid,
enforceable, and infringed by the generic products at
issue, and entered an injunction prohibiting Mylan and
Dr. Reddy's from marketing their generic risperidone
products until a date no earlier than patent expiration
in December 2007. Mylan appealed that ruling.  On May
11, 2007, the Court of Appeals affirmed the District
Court's judgment of patent validity and enforceability.

In the action against Mylan with respect to the patent
on TOPAMAX(R), the District Court in New Jersey, on
October 24, 2006, granted the motion of the Company's
subsidiary Ortho-McNeil Pharmaceutical, Inc. (Ortho-
McNeil) for a preliminary injunction barring launch by
Mylan of its generic version of TOPAMAX(R). On
February 2, 2007, the District Court granted Ortho-
McNeil's motion for summary judgment dismissing Mylan's
claim the patent was obvious, the only remaining issue
in the case. The Court entered judgment in the case for
Ortho-McNeil, and entered an injunction prohibiting
Mylan from marketing its generic topiramate products
until a date no earlier than patent expiration in
September 2008.  Mylan has appealed this ruling.

In the action against Perrigo regarding a patent for
PEPCID COMPLETE(R), the District Court for the Southern
District of New York, on June 5, 2007, held that the
patent was invalid as obvious.  The Company's
subsidiary McNEIL-PPC, Inc. will appeal the decision
with its partners, Merck & Co., Inc., and Johnson &
Johnson*Merck Consumer Pharmaceuticals Co.

In the action against Barr and AlphaPharm with respect
to their ANDA challenges to the RAZADYNE(R) patent that
Janssen licenses from Synaptech, Inc., a four-day non-
jury trial was held in the District Court in Delaware
in May 2007.  The Court has yet to issue its ruling in
that action.

In the weeks following the adverse ruling in the
DITROPAN XL(R) ANDA litigation against Mylan in September
2005, Johnson & Johnson and ALZA received seven
antitrust class action complaints filed by purchasers
of the product. They allege that Johnson & Johnson and
ALZA violated federal and state antitrust laws by
knowingly pursuing baseless patent litigation, and
thereby delaying entry into the market by Mylan and
Impax.


AVERAGE WHOLESALE PRICE (AWP) LITIGATION
Johnson & Johnson and several of its pharmaceutical
subsidiaries, along with numerous other pharmaceutical
companies, are defendants in a series of lawsuits in
state and federal courts involving allegations that the
pricing and marketing of certain pharmaceutical
products amounted to fraudulent and otherwise
actionable conduct because, among other things, the
companies allegedly reported an inflated Average
Wholesale Price (AWP) for the drugs at issue. Most of
these cases, both federal actions and state actions
removed to federal court, have been consolidated for
pre-trial purposes in a Multi-District Litigation (MDL)
in Federal District Court in Boston, Massachusetts. The
plaintiffs in these cases include classes of private
persons or entities that paid for any portion of the
purchase of the drugs at issue based on AWP, and state
government entities that made Medicaid payments for the
drugs at issue based on AWP.

The MDL Court identified classes of Massachusetts-only
private insurers providing "Medi-gap" insurance
coverage and private payers for physician-administered
drugs where payments were based on AWP ("Class 2" and
"Class 3"), and a national class of individuals who
made co-payments for physician-administered drugs
covered by Medicare ("Class 1"). A trial of the two
Massachusetts-only class actions concluded before the
MDL Court in December 2006. On June 21, 2007, the MDL
Court issued post-trial rulings, dismissing the Johnson
& Johnson defendants from the case regarding all claims
of Classes 2 and 3.  The MDL Court subsequently
indicated it would dismiss against the Johnson &
Johnson defendants all claims by the Class 1 plaintiffs
as well. Trial in the action brought by the Attorney
General of the State of Alabama making allegations
related to AWP is set for the first quarter of 2008.
Additional AWP cases brought by various Attorneys
General are expected to be set for trial in 2008.

OTHER
In July 2003, Centocor Corporation received a request
that it voluntarily provide documents and information
to the criminal division of the U.S. Attorney's Office,
District of New Jersey, in connection with its
investigation into various Centocor marketing
practices. Subsequent requests for documents have been
received from the U.S. Attorney's Office. Both the
Company and Centocor responded, or are in the process
of responding, to these requests for documents and
information.

In December 2003, Ortho-McNeil received a subpoena from
the U.S. Attorney's Office in Boston, Massachusetts
seeking documents relating to the marketing, including
alleged off-label marketing, of the drug TOPAMAX(R)
(topiramate). Additional subpoenas for documents have
been received. Ortho-McNeil is cooperating in
responding to the subpoenas. In October 2004, the U.S.
Attorney's Office in Boston asked attorneys for Ortho-
McNeil to cooperate in facilitating the subpoenaed
testimony of several present and former Ortho-McNeil
employees before a federal grand jury in Boston.
Cooperation in securing the testimony of additional
witnesses before the grand jury has been requested and
is being provided.

In January 2004, Janssen received a subpoena from the
Office of the Inspector General of the U.S. Office of
Personnel Management seeking documents concerning sales
and marketing of, any and all payments to physicians in
connection with sales and marketing of, and clinical
trials for, RISPERDAL(R) (risperidone) from 1997 to 2002.
Documents subsequent to 2002 have also been requested.
An additional subpoena seeking information about
marketing of and adverse reactions to RISPERDAL(R) was
received from the U.S. Attorney's Office for the
Eastern District of Pennsylvania in November 2005.
Janssen is cooperating in responding to these
subpoenas.

In August 2004, Johnson & Johnson Health Care Systems,
Inc. (HCS), a Johnson & Johnson subsidiary, received a
subpoena from the Dallas, Texas U.S. Attorney's Office
seeking documents relating to the relationships between
the group purchasing organization, Novation, and HCS
and other Johnson & Johnson subsidiaries. The Company's
subsidiaries involved have responded to the subpoena.

In September 2004, Ortho Biotech Inc. (Ortho Biotech),
received a subpoena from the U.S. Office of Inspector
General's Denver, Colorado field office seeking
documents directed to sales and marketing of PROCRIT(R)
(Epoetin alfa) from 1997 to the present, as well as to
dealings with U.S. Oncology Inc., a healthcare services
network for oncologists. Ortho Biotech has responded to
the subpoena.


In March 2005, DePuy Orthopaedics, Inc. (DePuy), a
Johnson & Johnson subsidiary, received a subpoena from
the U.S. Attorney's Office, District of New Jersey,
seeking records concerning contractual relationships
between DePuy Orthopaedics and surgeons or surgeons-in-
training involved in hip and knee replacement and
reconstructive surgery. Other leading orthopaedic
companies are known to have received a similar
subpoena. DePuy Orthopaedics is responding to the
subpoena as well as several follow-on subpoenas for
documents. A number of employees of DePuy have been
subpoenaed to testify before a grand jury in connection
with this investigation.

In June 2005, the U.S. Senate Committee on Finance
requested the Company to produce information regarding
use by several of its pharmaceutical subsidiaries of
educational grants. A similar request was sent to other
major pharmaceutical companies. In July 2005, the
Committee specifically requested information about
educational grants in connection with the drug
PROPULSID(R). A follow up request was received from the
Committee for additional information in January 2006.

In July 2005, Scios Inc. (Scios), a Johnson & Johnson
subsidiary, received a subpoena from the U.S.
Attorney's Office, District of Massachusetts, seeking
documents related to the sales and marketing of
NATRECOR(R). Scios is responding to the subpoena. In
early August 2005, Scios was advised that the
investigation would be handled by the U.S. Attorney's
Office for the Northern District of California in
San Francisco.

In September 2005, Johnson & Johnson received a
subpoena from the U.S. Attorney's Office, District of
Massachusetts, seeking documents related to sales and
marketing of eight drugs to Omnicare, Inc., a manager
of pharmaceutical benefits for long-term care
facilities. The Johnson & Johnson subsidiaries involved
are responding to the subpoena. Several employees of
the Company's pharmaceutical subsidiaries have been
subpoenaed to testify before a grand jury in connection
with this investigation.

In February 2006, Johnson & Johnson received a subpoena
from the U.S. Securities & Exchange Commission (SEC)
requesting documents relating to the participation by
several Johnson & Johnson subsidiaries in the United
Nations Iraq Oil For Food Program. The subsidiaries are
cooperating with the SEC in producing responsive
documents.

In June 2006, DePuy received a subpoena from the U.S.
Department of Justice, Antitrust Division, requesting
documents related to the manufacture, marketing and
sale of orthopaedic devices, and had search warrants
executed in connection with the investigation. DePuy is
responding to the request for documents. In the wake of
publicity about the subpoena, DePuy was served with
five civil antitrust class actions.

In September 2006, Janssen received a subpoena from the
Attorney General of the State of California seeking
documents regarding sales and marketing and side-
effects of RISPERDAL(R), as well as interactions with
State officials regarding the State's formulary for
Medicaid-reimbursed drugs. Janssen is in the process of
responding to the subpoena.

In November 2006, Centocor received a subpoena seeking
documents in connection with an investigation being
conducted by the Office of the United States Attorney
for the Central District of California regarding
Centocor's Average Selling Price (ASP) calculations for
REMICADE(R) under the company's Contract Purchase
Program. Centocor is producing material responsive to
the subpoena and cooperating with the investigation.

In February 2007, Johnson & Johnson voluntarily
disclosed to the U.S. Department of Justice (DOJ) and
the U.S. Securities and Exchange Commission (SEC) that
subsidiaries outside the United States are believed to
have made improper payments in connection with the sale
of medical devices in two small-market countries, which
payments may fall within the jurisdiction of the
Foreign Corrupt Practices Act (FCPA). In the course of
continuing dialogues with the agencies, other issues
potentially rising to the level of FCPA violations in
additional markets have been brought to the attention
of the agencies by the Company.  The Company has
provided and will continue to provide additional
information to DOJ and SEC, and will cooperate with the
agencies' reviews of these matters.

On March 5, 2007, Cordis Corporation received a letter
request for documents from the Committee on Oversight
and Government Reform of the U.S. House of
Representatives regarding marketing and safety of drug-
eluting stents.  Cordis is cooperating in responding to
the request.

On March 12, 2007, the Company announced that it had
received separate subpoenas from the U.S. Attorney's
Office in Philadelphia, the U.S. Attorney's Office in
Boston and the U.S. Attorney's Office in San Francisco.
The subpoenas relate to investigations by these three
offices referenced above concerning, respectively,
sales and marketing of RISPERDAL(R) by Janssen, TOPAMAX(R)
by Ortho-McNeil and NATRECOR(R) by Scios.  The subpoenas
request information regarding the Company's corporate
supervision and oversight of these three subsidiaries,
including their sales and marketing of these drugs.
The Company is cooperating in responding to these
requests.  In addition, the U.S. Attorney's office in
Boston has issued subpoenas to several employees of
Johnson & Johnson.

On March 21, 2007, the Company received a letter from
the Committee on Energy and Commerce of the U.S. House
of Representatives seeking answers to several questions
regarding marketing and safety of PROCRIT(R), the
erythropoietin product sold by the Company's Ortho-
Biotech subsidiary.   On May 30, 2007, Senator
Grassley, the ranking member of the United States
Senate Committee on Finance, sent the Company a letter
seeking information relating to PROCRIT(R).  Although
there are some differences between the two letters, the
Senate request in large measure overlaps with the House
request.  The Company provided its initial response on
July 9, 2007.  On May 10, 2007, the New York State
Attorney General issued a subpoena seeking information
relating to PROCRIT(R).  Like the House and Senate
requests, the subpoena asks for materials relating to
PROCRIT(R) safety, marketing and pricing.  The Company is
responding to these requests.

On April 27, 2007, the Company received two subpoenas
from the Office of the Attorney General of the State of
Delaware.  The subpoenas seek documents and information
relating to nominal pricing agreements.  For purposes
of the subpoenas, nominal pricing agreements are
defined as agreements under which the Company agreed to
provide a pharmaceutical product for less than ten
percent of the Average Manufacturer Price for the
product.  The Company is responding to the subpoenas
and will cooperate with the inquiry.

In September 2004, plaintiffs in an employment
discrimination litigation initiated against the Company
in 2001 in Federal District Court in New Jersey moved
to certify a class of all African American and Hispanic
salaried employees of the Company and its affiliates in
the U.S., who were employed at any time from November
1997 to the present. Plaintiffs seek monetary damages
for the period 1997 through the present (including
punitive damages) and equitable relief. The Court
denied plaintiffs' class certification motion in
December 2006 and their motion for reconsideration in
April 2007. Plaintiffs are seeking to appeal these
decisions.

In late December 2005 and early 2006, three purported
class actions were filed on behalf of purchasers of
endo-mechanical instruments against the Company and its
wholly-owned subsidiaries, Ethicon, Inc., Ethicon Endo-
Surgery, Inc., and Johnson & Johnson Health Care
Systems, Inc. These challenge suture and endo-
mechanical contracts with Group Purchasing
Organizations and hospitals,in which discounts are
predicated on a hospital achieving specified market
share targets for both categories of products.  These
actions have been filed in the Federal District Court
for the Central District of California.

In November 2005, Amgen filed suit against Hoffmann-
LaRoche, Inc. in the U.S. District Court for the
District of Massachusetts seeking a declaration that
the Roche product CERA, which Roche has indicated it
will seek to introduce into the United States,
infringes a number of Amgen patents concerning EPO.
Amgen licenses  EPO for sale in the United States to
the Company's Ortho Biotech Inc. subsidiary for non-
dialysis indications. Trial in this action will
commence in October 2007.

In October 2006, Wyeth, Inc. initiated litigation in
Delaware against Cordis Corporation alleging that
Cordis breached the license and supply agreement
pursuant to which Wyeth supplies Cordis the drug
Rapamycin which is used in connection with Cordis'
CYPHER(R) Sirolimus-eluting Stent. Cordis has commenced
its own action in Delaware seeking a declaration that
no breach has occurred.

With respect to all the above matters, the Company and
its subsidiaries are vigorously contesting the
allegations asserted against them and otherwise
pursuing defenses to maximize the prospect of success.
The Company and its subsidiaries involved in these
matters continually evaluate their strategies in
managing these matters and, where appropriate, pursue
settlements and other resolutions where those are in
the best interest of the Company.

The Company is also involved in a number of other
patent, trademark and other lawsuits incidental to its
business. The ultimate legal and financial liability of
the Company in respect to all claims, lawsuits and
proceedings referred to above cannot be estimated with
any certainty. However, in the Company's opinion, based
on its examination of these matters, its experience to
date and discussions with counsel, the ultimate outcome
of legal proceedings, net of liabilities accrued in the
Company's balance sheet, is not expected to have a
material adverse effect on the Company's financial
position, although the resolution in any reporting
period of one or more of these matters could have a
significant impact on the Company's results of
operations and cash flows for that period.

NOTE 12 - SUBSEQUENT EVENT

On July 31, 2007 the Company announced initiatives that
are expected to generate pre-tax, annual cost savings
of $1.3-$1.6 billion for 2008 in an effort to improve
its overall cost structure. The company expects to take
associated pre-tax, restructuring charges in the range
of $550-$750 million in the second half of 2007.

Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations
Analysis of Consolidated Sales
For  the  first  fiscal six months of  2007,  worldwide
sales  were  $30.2 billion, a total increase  of  14.5%
including  an operational increase of 12.1%  over  2006
first   fiscal  six  months  sales  of  $26.4  billion.
Currency had a positive impact of 2.4% for the  period.
The  acquisition  of Pfizer Inc.'s Consumer  Healthcare
business  net  of related divestitures  increased  both
total sales growth and operational growth by 7.1%.

Sales by U.S. companies were $16.3 billion in the first
fiscal  six  months  of  2007,  which  represented   an
increase  of  10.5%  over the same  period  last  year.
Sales  by  international companies were $13.9  billion,
which  represented a total increase of 19.6%  including
an operational increase of 14.2%, and a positive impact
from  currency of 5.4% over the first fiscal six months
of 2006.

Sales by companies in Europe experienced an increase of
21.3%, including an operational growth of 13.0%  and  a
positive  impact  from  currency  of  8.3%.   Sales  by
companies  in  the  Western Hemisphere,  excluding  the
U.S.,  experienced  total  growth  of  28.2%  including
operational growth of 25.5% and a positive impact  from
currency  of  2.7%.  Sales by companies  in  the  Asia-
Pacific,  Africa region posted sales growth  of  12.4%,
with  operational growth of 10.9% and a positive impact
from currency of 1.5%.

For  the fiscal second quarter of 2007, worldwide sales
were  $15.1 billion, a total increase of 13.2%  and  an
operational increase of 10.8%, over 2006 fiscal  second
quarter  sales of $13.4 billion.  Currency fluctuations
positively  impacted sales by 2.4% for the period.  The
acquisition   of  Pfizer  Inc.'s  Consumer   Healthcare
business  net  of related divestitures  increased  both
total sales growth and operational growth by 7.1%.

Sales by U.S. companies were $8.0 billion in the fiscal
second  quarter of 2007, which represented an  increase
of  9.0%.  Sales by international companies  were  $7.1
billion,  which represented a total increase of  18.4%,
including  an  operational increase  of  13.0%,  and  a
positive  impact from currency of 5.4% over the  fiscal
second quarter of 2006.

Sales  by  companies  in  Europe  experienced  a  total
increase of 18.6%, with operational growth of 11.0% and
a  positive  impact from currency of  7.6%.   Sales  by
companies  in  the  Western Hemisphere,  excluding  the
U.S.,  experienced  total growth of 29.1%,  operational
growth of 24.1% and a positive impact from currency  of
5.0%.   Sales by companies in the Asia-Pacific,  Africa
region  posted sales growth of 12.9%, with  operational
growth of 11.3% and a positive impact from currency  of
1.6%.



Analysis of Sales by Business Segments

Consumer
Consumer  segment sales in the first fiscal six  months
of  2007 were  $7.1 billion, an increase of 48.5%  over
the  same  period a year ago, with 45.4% of operational
growth  and  a positive currency impact of  3.1%.  U.S.
Consumer   segment  sales  increased  by  41.6%   while
international  sales experienced a  total  increase  of
54.8%,  an  operational  increase  of  48.9%,  with   a
positive currency impact of 5.9%.

The  acquisition  of Pfizer Inc.'s Consumer  Healthcare
business  net  of  the  related divestitures  increased
total  sales growth for the total Consumer  Segment  by
39.4%.

Major Consumer Franchise Sales - First Fiscal Six Months
(Dollars in Millions)

                  July 1,  July 2,   Total  Operations  Currency
                   2007     2006     Change   Change     Change

OTC Pharm & Nutr  $2,463   $1,286    91.5%    89.4%       2.1%
Skin Care          1,521    1,313    15.9     12.7        3.2
Baby & Kids Care     934      827    12.8      8.5        4.3
Women's Health       884      814     8.6      4.8        3.8
Oral Care Products   713      197       *        *        2.0
Other                545      316    72.5     70.1        2.4

Total             $7,060   $4,753    48.5%    45.4%       3.1%

*Percentages greater than 100%


Consumer segment sales in the fiscal second quarter  of
2007 were  $3.6 billion, an increase of 48.6% over  the
same period a year ago with 45.1% of operational growth
and  a  positive currency impact of 3.5%. U.S. Consumer
segment  sales  increased by 41.6% while  international
sales  experienced  a  total  increase  of  54.6%,   an
operational increase of 48.1%, with a positive currency
impact of 6.5%.


The  acquisition  of Pfizer Inc.'s Consumer  Healthcare
business  net  of  the  related divestitures  increased
total  sales growth for the total Consumer  Segment  by
39.7%.

Major Consumer Franchise Sales - Fiscal Second Quarter
(Dollars in Millions)

                  July 1,  July 2,   Total  Operations  Currency
                   2007     2006     Change   Change     Change

OTC Pharm & Nutr  $1,206     $633     90.6%     88.4%     2.2%
Skin Care            757      654     15.8      12.1      3.7%
Baby & Kids Care     487      421     15.6      10.6      5.0
Women's Health       463      415     11.4       7.0      4.4
Oral Care Products   353      104        *         *      2.2
Other                298      171     74.3      71.7      2.6

Total             $3,564   $2,398     48.6%    45.1%      3.5%

*Percentages greater than 100%


The  OTC  Pharmaceuticals  and  Nutritionals  franchise
achieved   operational  growth  of  88.4%.   This   was
attributable to new products from acquisitions, as well
as  growth  for adult analgesics and SPLENDA(R)  products.
The  impact  on  OTC Pharmaceuticals  and  Nutritionals
total  sales  growth due to newly acquired brands  from
Pfizer  Inc. was 71.0% in the fiscal second quarter  of
2007.

The Skin Care franchise operational growth of 12.1% was
driven  by  strong performances from the  AVEENO(R), and
NEUTROGENA(R) product lines as well as the addition of the
Pfizer  and  Group Vendome products. These  gains  were
partially  offset  by softer sales of  Johnson's  Adult
products.  The impact on Skin Care total  sales  growth
due  to newly acquired brands from Pfizer Inc. was 5.1%
in the fiscal second quarter of 2007.

The  Baby  & Kids Care franchise operational growth  of
10.6%  was  the  result of the strong  performances  of
cleansers,  lotions and creams and hair care  products.
The  impact on Baby & Kids Care total sales growth  due
to   newly   acquired  brands  from  Pfizer  Inc.   and
divestitures related to the acquisition was 1.8% in the
fiscal second quarter of 2007.

The   Women's  Health  franchise  achieved  operational
growth  of 7.0%, which was attributable to new products
related  to acquisitions. The impact on Women's  Health
total  sales  growth due to newly acquired brands  from
Pfizer  Inc. was 4.9% in the fiscal second  quarter  of
2007.

The   Oral   Care  franchise  operational  growth   was
attributable to new products from acquisitions such  as
LISTERINE(R) mouthwashes. An operational sales decline  in
the   toothbrush,  floss  and  mouth   fresheners   and
whitening  products,  was due to new  product  launches
included in the fiscal second quarter of 2006  as  well
as  increased competition in 2007. The impact  on  Oral
Care  total  sales growth due to newly acquired  brands
from  Pfizer  Inc.  and  divestitures  related  to  the
acquisition was greater than 100%.


Pharmaceutical
Pharmaceutical  segment sales in the first  fiscal  six
months of 2007 were $12.4 billion, a total increase  of
8.2%  over the same period a year ago with 6.2% of this
change  due to operational increases and the  remaining
2.0%  increase  related  to  the  positive  impact   of
currency.   The U.S. Pharmaceutical sales increase  was
6.9%    and   the   total   growth   in   international
Pharmaceutical  sales  was 10.4%,  with  4.7%  of  this
change  due to operational increases and the  remaining
5.7%  increase  related  to  the  positive  impact   of
currency.

Major Pharmaceutical Product Revenues - First Fiscal Six Months
(Dollars in Millions)

                  July 1,  July 2,   Total  Operations  Currency
                   2007     2006     Change   Change     Change

Anti-psychotics     $2,315   $2,055  12.7%    10.2%     2.5%
REMICADE(R)          1,600    1,457   9.8      9.8        -
PROCRIT(R)/EPREX(R)  1,575    1,594  (1.2)    (3.6)     2.4
TOPAMAX(R)           1,188      965  23.1     21.8      1.3
LEVAQUIN(R)/FLOXIN(R)  843      744  13.3     13.3        -
ACIPHEX(R)/PARIET(TM)  672      614   9.4      6.3      3.1
DURAGESIC(R)/Fentanyl
 Transdermal           591      661 (10.5)   (13.5)     3.0
CONCERTA(R)            508      452  12.3     10.9      1.4
Hormonal
 Contraceptives        477      501  (4.9)    (6.2)     1.3
Other                2,601    2,393   8.7      5.4      3.3

Total              $12,370  $11,436   8.2%     6.2%     2.0%


Pharmaceutical  segment  sales  in  the  fiscal  second
quarter of 2007 were $6.1 billion, a total increase  of
5.8%  over the same period a year ago with 3.8% of this
change  due to operational increases and the  remaining
2.0%  increase  related  to  the  positive  impact   of
currency.  The U.S. Pharmaceutical sales  increase  was
4.8%  and  the  growth in international  Pharmaceutical
sales  was  7.6%,  with  2.0% of  this  change  due  to
operational  increases and the remaining 5.6%  increase
related to the positive impact of currency.




Major Pharmaceutical Product Revenues - Fiscal Second Quarter
(Dollars in Millions)

                  July 1,  July 2,   Total  Operations  Currency
                   2007     2006     Change   Change     Change

Anti-psychotics     $1,137   $1,036  9.7%      7.3%     2.4%
REMICADE(R)            869      777  11.9     11.9        -
PROCRIT(R)/EPREX(R)    758      808  (6.1)    (8.5)     2.4
TOPAMAX(R)             578      495  16.8     15.5      1.3
LEVAQUIN(R)/FLOXIN(R)  364      343   6.1      6.0      0.1
ACIPHEX(R)/PARIET(TM)  336      308   9.1      5.9      3.2
DURAGESIC(R)/Fentanyl
 Transdermal           289      336 (14.1)   (16.8)     2.7
CONCERTA(R)            255      217  17.8     16.3      1.5
Hormonal
 Contraceptives        240      247  (3.2)    (4.6)     1.4
Other                1,323    1,243   6.4      3.0      3.4

Total               $6,149   $5,810  5.8%      3.8%     2.0%


Sales  growth  within the segment  was  led  by  strong
performances   from   TOPAMAX(R) (topiramate),   REMICADE(R)
(infliximab),  CONCERTA(R)  and   RISPERDAL(R)  CONSTA(R)
(risperidone). Generic competition related to DURAGESIC(R)
(fentanyl transdermal system) and DITROPAN(R) in the  U.S,
as well as SPORANOX(R) (itraconazole), DURAGESIC(R) (fentanyl
transdermal  system)  and  RISPERDAL  oral  in  certain
countries  outside  the  U.S., continue  to  negatively
impact sales during the fiscal second quarter of 2007.

The  anti-psychotic franchise which includes RISPERDAL(R)
oral  (risperidone),  a  medication  that  treats   the
symptoms of schizophrenia and bipolar mania, RISPERDAL(R)
CONSTA(R)  (risperidone)  a long  acting  injectable  and
INVEGA(TM)  (paliperdone) Extended-Release tablets for  the
treatment of schizophrenia, achieved operational growth
of  7.3%  in the fiscal second quarter of 2007.   Sales
growth  was positively impacted by the U.S.  launch  of
INVEGA(TM) and the global success of RISPERDAL(R) CONSTA(R).
The patent for the RISPERDAL(R) compound will expire in
the U.S.  and most  major  markets  outside  the U.S. by
December   2007.   In   March,  the  U.S. Food and Drug
Administration (FDA) granted  pediatric  exclusivity
for   RISPERDAL(R),   which  extends   the   marketing
exclusivity  in  the  U.S.  for RISPERDAL(R)  oral  to the
end of June 2008.  In 2006, worldwide sales of RISPERDAL(R)
oral  were $3.3  billion  and U.S.  sales  were $2.1.  The
expiration  of  a  product  patent  or  loss  of  market
exclusivity can result in a significant reduction in sales.

REMICADE(R)  (infliximab), a biologic  approved  for  the
treatment  of  Crohn's disease, ankylosing spondylitis,
psoriasis, psoriatic arthritis, ulcerative colitis  and
use   in   the   treatment  of  rheumatoid   arthritis,
experienced  strong operational growth  of  11.9%  over
prior year fiscal second quarter. This continued growth
was  driven by expanded indications and overall  market
growth.  During  the  fiscal second  quarter  of  2007,
REMICADE(R)   received   approval   from   the   European
Commission  (EU)  for  the  pediatric  Crohn's  disease
indications.   REMICADE(R)   is  experiencing   increased
competition which may negatively impact the future rate
of sales growth.

PROCRIT(R) (Epoetin  alfa)  and  EPREX(R) (Epoetin   alfa)
performance  combined had an operational sales  decline
of  8.5%,  as  compared  to prior  year  fiscal  second
quarter. PROCRIT(R) experienced an operational decline of
14.3%  primarily  due to a decline  in  the  market  as
compared  to  prior year fiscal second  quarter,  while
EPREX(R) had operational growth of 2.3%. On July 30, 2007
The  Centers for Medicare and Medicaid (CMS)  issued  a
National    Coverage   Determination    (NCD),    which
significantly   limits  the  future  reimbursement   of
Erythropoiesis Stimulating Agents (ESA's)  in  oncology
in  the  U.S.  In the U.S., Epoetin alfa  products  are
subject to a label change, which may negatively  impact
future  sales. The label for Epoetin alfa  products  is
also under review in jurisdictions outside the U.S.

TOPAMAX(R) (topiramate), which  has  been  approved  for
adjunctive and monotherapy use in epilepsy, as well  as
for    the   prophylactic   treatment   of   migraines,
experienced  strong  operational  growth  of  15.5%  as
compared  to  prior  year fiscal  second  quarter.  The
growth in the U.S. was due to continued growth of share
in  the  migraine  indication, while outside  the  U.S.
sales declined slightly on an operational basis due  to
generic competition in certain markets.

LEVAQUIN(R) (levofloxacin)/FLOXIN(R) achieved operational
growth  of 6.0% over prior year fiscal second  quarter.
This  was primarily due to favorable market growth.  In
March the FDA granted pediatric exclusivity in the U.S.
for LEVAQUIN(R),  which  will  extend   the   marketing
exclusivity by six months to June 2011.

ACIPHEX(R)/PARIET(R) a proton pump  inhibitor,  achieved
operational  growth of 5.9% as compared to  prior  year
fiscal second quarter.

DURAGESIC(R)/Fentanyl  Transdermal (fentanyl  transdermal
system)  experienced an operational  sales  decline  of
16.8%  over the fiscal second quarter of 2006 primarily
due to continued generic erosion.

CONCERTA(R) (methylphenidate HCl), a product for the
treatment of attention deficit hyperactivity disorder,
achieved operational sales growth of 16.3% over the
fiscal second quarter of 2006. Although the original
CONCERTA(R) patent expired in 2004, the FDA has not
approved any generic version that is substitutable for
CONCERTA(R). Two parties have filed Abbreviated New Drug
Applications (ANDAs) for generic versions of CONCERTA(R),
which are pending and may be approved at any time.

The  hormonal  contraceptive franchise  experienced  an
operational  sales decline of 4.6% primarily  resulting
from  generic competition in oral contraceptives. ORTHO
EVRA(R)(norelgestromin/ethinyl estradiol), the   first
contraceptive patch approved by the FDA, experienced  a
decline  in  sales as a result of labeling changes  and
negative media coverage concerning product safety. This
was  partially  offset by growth in ORTHO TRI-CYCLEN(R)
LO  (norgestimate/ethinyl estradiol), a low  dose  oral
contraceptive.

Medical Devices and Diagnostics
Medical  Devices and Diagnostics segment sales  in  the
first fiscal six months of 2007 were $10.7 billion,  an
increase of 5.6% over the same period a year ago,  with
3.2%  of  this change due to operational increases  and
the  remaining  2.4% increase related to  the  positive
impact  of  currency.   The U.S.  Medical  Devices  and
Diagnostics sales increase was 1.8% and the  growth  in
international Medical Devices and Diagnostics sales was
9.5%, which included operational increases of 4.6%  and
an  increase of 4.9% related to the positive impact  of
currency.

Major Medical Devices and Diagnostics Franchise Sales -
Fiscal Six Months
(Dollars in Millions)

                  July 1,  July 2,   Total  Operations  Currency
                   2007     2006     Change   Change     Change

DEPUY(R)          $2,292   $2,074     10.5%     7.7%     2.8%
ETHICON ENDO-
 SURGERY(R)        1,848    1,651     11.9      9.0      2.9
CORDIS(R)          1,780    2,143    (16.9)   (18.3)     1.4
ETHICON(R)         1,771    1,590     11.4      7.8      3.6
LIFESCAN(R)        1,145    1,027     11.6      8.6      3.0
Vision Care        1,066      915     16.4     15.7      0.7
ORTHO-CLINICAL
 DIAGNOSTICS(R)      799      738      8.2      6.0      2.2
Other                 37       28     32.1     31.4      0.7

Total            $10,738  $10,166      5.6%     3.2%     2.4%


Medical  Devices and Diagnostics segment sales  in  the
fiscal  second  quarter of 2007 were $5.4  billion,  an
increase of 5.1% over the same period a year ago,  with
2.8%  of this change due to operational growth and  the
remaining 2.3% increase related to the positive  impact
of  currency.  The U.S. Medical Devices and Diagnostics
sales increase was 1.1% and the growth in international
Medical  Devices and Diagnostics sales was 9.1%,  which
included operational growth of 4.4% and an increase  of
4.7% related to the positive impact of currency.

Major Medical Devices and Diagnostics Franchise Sales
Fiscal Second Quarter
(Dollars in Millions)

                  July 1,  July 2,   Total  Operations  Currency
                   2007     2006     Change   Change     Change

DEPUY(R)          $1,135   $1,035     9.7%      7.0%     2.7%
ETHICON ENDO-
 SURGERY(R)          957      857    11.7       8.9      2.8
ETHICON(R)           901      816    10.4       6.7      3.7
CORDIS(R)            852    1,068  (20.3)     (21.6)     1.3
LIFESCAN(R)          596      522   14.2       11.2      3.0
Vision Care          553      474   16.5       16.3      0.2
ORTHO-CLINICAL
 DIAGNOSTICS(R)      406      368   10.3        8.1      2.2
Other                 18       15   20.0       19.4      0.6

Total             $5,418   $5,155    5.1%       2.8%     2.3%



The  DePuy franchise's operational growth of 7.0%  over
the same period a year ago was primarily due to DePuy's
orthopaedic joint reconstruction products including the
hip  and  knee  product lines.  Strong performance  was
also achieved in Mitek sports medicine products.

The Ethicon Endo-Surgery franchise achieved operational
growth of 8.9% over prior year fiscal second quarter. A
major  contributor of growth continues to be endocutter
sales,   which  include  products  used  in  performing
bariatric  procedures for the treatment of obesity,  an
important  focus area for the franchise.  Additionally,
strong results were achieved with the continued success
of the  HARMONIC  ACE(R),  an  ultrasonic  cutting  and
coagulating surgical device.

Ethicon worldwide sales grew operationally by 6.7% from
the  same  period  in  the prior year,  resulting  from
strong  growth  in  the  hemostasis,  biosurgicals  and
meshes and women's health product lines.

The  Cordis franchise experienced an operational  sales
decline  of  21.6%  over the fiscal second  quarter  of
2006.  These  results were impacted by lower  sales  of
CYPHER(R) Sirolimus-eluting  Coronary  Stent   due   to
increased  competition in Europe and Japan as  well  as
global  contraction  of the drug-eluting  stent  market
following  reports of a potential risk  of  late  stent
thrombosis  associated  with the  use  of  drug-eluting
stents.  These results were partially offset by  strong
sales growth achieved by the Biosense Webster business.
The   growth  of  the  Biosense  Webster  business  was
primarily driven by the sales of AcuNav(TM)  Ultrasound
Catheters.

On  June 13, 2007 the U.S. Food and Drug Administration
(FDA)  notified Cordis that all items outlined  in  the
Warning  Letters  received  in  April  and  July   2004
regarding  Good Manufacturing Practice regulations  and
Good Clinical Practice regulations have been resolved.

The  LifeScan franchise achieved operational growth  of
11.2% over the fiscal second quarter of 2006 reflecting
the continued success of the ULTRA(R) product lines.  An
additional  contributor was the growth  of  the  Animas
business, driven by new product launches.

The  Vision Care franchise operational sales growth  of
16.3%  was  led  by  the continued  global  success  of
ACUVUE(R) OASYS(TM), ACUVUE(R) ADVANCE(TM) Brand Contact
Lenses for Astigmatism and the 1-DAY ACUVUE(R) product
lines.

The   Ortho-Clinical  Diagnostics  franchise   achieved
operational  growth  of  8.1% over  the  fiscal  second
quarter of 2006. The Immunohematology product line  was
a  major  contributor  in the  U.S.,  as  well  as  the
continued growth of the Chagas screening assay  in  the
U.S.

Cost of Products Sold and Selling, Marketing and
Administrative Expenses
Consolidated  costs  of products  sold  for  the  first
fiscal six months of 2007 increased to 29.0% from 28.1%
of  sales  as compared to the same period a  year  ago.
The cost of products sold for the fiscal second quarter
of  2007 increased to 28.8% from 28.3% of sales in  the
same  period a year ago.  The increase was due  to  the
impact  of  newly  acquired consumer  brands  partially
offset  by  cost improvements primarily in the  Medical
Devices and Diagnostics segment.

Consolidated   selling,  marketing  and  administrative
expenses  for  the  first fiscal  six  months  of  2007
increased  0.5%  over  the  same  period  a  year  ago.
Consolidated   selling,  marketing  and  administrative
expenses as a percent to sales for the first fiscal six
months  of  2007 were 32.5% versus 32.0% for  the  same
period a year ago. Consolidated selling, marketing  and
administrative  expenses for the fiscal second  quarter
of 2007 increased 0.7% over the same period a year ago.
As  a percent to sales, consolidated selling, marketing
and administrative expenses were 33.3% versus 32.6% for
the  same period a year ago. Increases in the quarterly
and six month periods were attributable to the addition
of  the  newly acquired consumer brands to the  mix  of
businesses   partially   offset   by   continued   cost
containment  efforts  primarily in  the  Pharmaceutical
business.

Research & Development
Research activities represent a significant part of the
Company's business.  These expenditures relate  to  the
development  of new products, improvement  of  existing
products,  technical support of products and compliance
with governmental regulations for the protection of the
consumer.  Worldwide costs of research activities,  for
the   first  fiscal  six  months  of  2007  were   $3.5
billion,  an  increase of 4.7% over the same  period  a
year  ago.    Research and development spending in  the
fiscal  second  quarter of 2007 was  $1.9  billion,  an
increase  of  2.1%  over the fiscal second  quarter  of
2006. As a percent to sales, the level of research  and
development  spending decreased  for  both  the  fiscal
second quarter and the first fiscal six months of  2007
as compared to the same period a year ago. The decrease
as  compared to 2006 was primarily due to the inclusion
in  2006 of the $165 million up front payment to Vertex
Pharmaceuticals   for  the  rights   to   develop   and
commercialize  VX-950  for  Hepatitis  C  in   selected
regions,  including Europe. An additional  contributing
factor  to  the  decrease as  a  percent  to  sales  in
research and development was the change in the  mix  of
businesses  with  the inclusion of the  newly  acquired
consumer products.


In-Process Research & Development(IPR&D)
In  the fiscal second quarter of 2007, the Company  had
no IPR&D charges. In the fiscal second quarter of 2006,
the  Company  recorded  IPR&D charges  of  $87  million
before  tax,  with  no  tax  benefit,  related  to  the
acquisition of Vascular Control Systems, Inc.

Other (Income) Expense, Net
Other   (income) expense, net is the account where  the
Company  records gains and losses related to  the  sale
and  write-down  of  certain equity securities  of  the
Johnson  &  Johnson Development Corporation, gains  and
losses on the disposal of fixed assets, currency  gains
and losses, minority interests, litigation settlements,
as well as royalty income. As a percent to sales, other
(income) expense, net for the fiscal second quarter  of
2007  was similar to the fiscal second quarter of 2006.
The  unfavorable change in other (income) expense,  net
for the first fiscal six months of 2007 as compared  to
the  same period a year ago was $471 million. This  was
primarily  due  to the net gain of $175 million  before
tax  related  to  the  divestiture  of  certain  brands
recorded  in  the  fiscal first  quarter  of  2007,  as
compared  to the same period a year ago, which included
a  gain  of  $622  million  recorded  for  the  Guidant
acquisition agreement termination fee, less  associated
expenses.

OPERATING PROFIT BY SEGMENT
Consumer Segment
Operating profit for the Consumer segment as a  percent
to  sales  in the first fiscal six months of  2007  was
17.6%  versus 19.0% over the same period  a  year  ago.
Operating  profit as a percent to sales in  the  fiscal
second quarter of 2007 was 13.5% versus 18.3% over  the
same  period a year ago. This decrease was  related  to
integration costs and other operating expenses  related
to newly acquired products.

Pharmaceutical Segment
Operating  profit for the Pharmaceutical segment  as  a
percent to sales in the first fiscal six months of 2007
was 35.7% versus 31.7% over the same period a year ago.
Operating  profit as a percent to sales in  the  fiscal
second quarter of 2007 was 34.7% versus 29.2% over  the
same  period  a  year ago.  For both periods  in  2007,
operating  profit margin improved, as compared  to  the
same  periods a year ago. This was due to the inclusion
of   the  $165  million  up  front  payment  to  Vertex
Pharmaceuticals   for  the  rights   to   develop   and
commercialize  VX-950  for  Hepatitis  C  in   selected
regions in the fiscal second quarter of 2006 as well as
cost  containment  efforts in  selling,  marketing  and
administrative expenses in the first fiscal six  months
of 2007.

Medical Devices and Diagnostics Segment
Operating   profit   for  the   Medical   Devices   and
Diagnostics segment as a percent to sales in the  first
fiscal  six months of 2007 was 20.8% versus 35.4%  over
the  same  period a year ago.  Operating  profit  as  a
percent  to sales in the fiscal second quarter of  2007
was 28.1% versus 27.8% over the same period a year ago.
The  primary  driver of the decline  in  the  operating
profit  margin  in the Medical Devices and  Diagnostics
segment for the fiscal six months over the same  period
a year ago was the acquisition related IPR&D charges of
$807  million incurred during the fiscal six months  of
2007 versus $124 million incurred during the fiscal six
months  of 2006. Partially offsetting this decline  was
the  impact of cost improvements in cost of goods sold.
Additionally,  the  first fiscal  six  months  of  2006
included   the   gain  associated  with   the   Guidant
acquisition agreement termination fee, less  associated
expenses, of $622 million before tax.

Interest (Income) Expense
Interest income decreased in both the first fiscal  six
months and fiscal second quarter of 2007 as compared to
the  same  periods a year ago. The cash balance,  which
included marketable securities, was $6.0 billion at the
end  of the fiscal second quarter of 2007.  This was  a
decrease  of $8.7 billion from the same period  a  year
ago.  The  decline  was primarily  due  to  acquisition
activity  and the stock repurchase program  during  the
fiscal year 2006.

Interest expense increased in both the first fiscal six
months and fiscal second quarter of 2007 as compared to
the  same  periods a year ago, resulting from a  higher
debt position. This was due to acquisition activity and
the  stock  repurchase program during the  fiscal  year
2006.


Provision For Taxes on Income
The  worldwide effective income tax rates for the first
fiscal  six  months  of 2007 and 2006  were  26.4%  and
25.5%,  respectively, an increase in the effective  tax
rate  of  0.9%.  This was primarily due  to  the  IPR&D
charge  of  $807 million recorded in the  fiscal  first
quarter  of  2007,  which  was non-deductible  for  tax
purposes. This unfavorable change was partially  offset
by   increases   in  taxable  income   in   lower   tax
jurisdictions relative to taxable income in higher  tax
jurisdictions along with the impact of the Research and
Development tax credit, which was not in effect in  the
first fiscal nine months of 2006.

The  tax  rate for the first fiscal six months of  2006
benefited  from  a reversal of tax allowances  of  $134
million associated with the Tibotec business. This 2006
benefit  was  offset by 2006 acquisition-related  IPR&D
charges  of $124 million, for which there was a minimal
tax benefit and a high tax rate related to the gain  of
$622  million  before tax associated with  the  Guidant
acquisition agreement termination fee.


LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Cash  generated  from  operations  provided  the  major
sources  of  funds  for  the growth  of  the  business,
including  working  capital, capital expenditures,  and
acquisitions. In the first fiscal six months  of  2007,
cash flow from operations was $6.7 billion, an increase
of  $0.9 billion over the same period a year ago.  This
increase  was  primarily due  to  the  change  of  $0.5
billion in accounts payable and accrued liabilities  as
well  as  a  decrease  in accounts receivable  of  $0.3
billion  versus the same period a year  ago.  Net  cash
used  by  investing activities increased by $.3 billion
primarily  due to a $0.2 billion increase  in  proceeds
from   the   disposal  of  assets.  This  is   due   to
divestitures  related  to the acquisition  of  Consumer
Healthcare  business of Pfizer Inc. Net  cash  used  by
financing   activities  decreased   by   $2.3   billion
primarily  due  to  a  $2.2  billion  decrease  in  the
repurchase of common stock over the same period a  year
ago.  During the first fiscal six months of  2006  $2.7
billion  was utilized for the stock repurchase program.
Cash   and  current  marketable  securities  were  $6.0
billion at the end of the fiscal second quarter of 2007
as compared with $14.7 billion at fiscal second quarter
of  2006, a decrease of $8.7 billion, which was due  to
acquisition  activity  and the  2006  stock  repurchase
program.

On July 9, 2007, the Company announced that its Board
of Directors has approved a stock repurchase program,
authorizing the Company to buy back up to $10 billion
of the Company's common stock.  Share repurchases will
take place on the open market from time to time based
on market conditions.  The repurchase program has no
time limit and may be suspended for periods or
discontinued at any time.  Any shares acquired will be
available for general corporate purposes.  The Company
intends to fund the share repurchase program through a
combination of  available  cash and debt.  The Company
does  not  expect  its  triple-A  credit rating to be
effected by the share repurchase program.

Dividends
On  April  26, 2007, the Board of Directors declared  a
regular  cash dividend of $0.415 per share, payable  on
June  12, 2007 to shareholders of record as of May  29,
2007.  This  represented an increase of  10.7%  in  the
quarterly  dividend rate and was the  45th  consecutive
year  of  cash dividend increases.

On  July  16, 2007, the Board of Directors  declared  a
regular  cash dividend of $0.415 per share, payable  on
September  11,  2007 to shareholders of  record  as  of
August 28, 2007.

The Company expects to continue the practice of paying
regular cash dividends.


OTHER INFORMATION
New Accounting Standards
In September 2006, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting
Standards No 157, Fair Value Measurements.  This
statement defines fair value, establishes a framework
for measuring fair value under generally accepted
accounting principles, and expands disclosures about
fair value measurements.  The statement is effective in
the fiscal first quarter of 2008 and the Company will
adopt the statement at that time.  The Company believes
that the adoption of SFAS No 157 will not have a
material effect on its results of operations, cash
flows or financial position.

In  June  2006, the FASB issued FASB Interpretation  48
(FIN 48), Accounting for Uncertainty in Income Taxes  -
an  interpretation  of  FASB  Statement  No  109.  This
interpretation prescribes a recognition  threshold  and
measurement  attribute  for  the  financial   statement
recognition and measurement of a tax position taken  or
expected   to   be   taken  in  a  tax   return.    The
interpretation also provides guidance on derecognition,
classification  and other matters.  The  statement  was
effective  for the fiscal year 2007   and  the  Company
adopted the Interpretation at that time. See Note 3  to
the  Unaudited  Consolidated Financial  Statements  for
more details.

In  February 2007, the FASB issued Statement  No.  159,
Fair  Value  Option for Financial Assets and  Financial
Liabilities, which permits an entity to measure certain
financial  assets  and financial  liabilities  at  fair
value. Statement 159 is effective for fiscal year  2008
but  early  adoption  is  permitted.  The  Company   is
currently   in   the   process   of   evaluating   this
pronouncement  and the impact of the adoption  of  FASB
159 would have on its results of operations, cash flows
and financial position.

EITF  Issue 07-3: Accounting for Nonrefundable  Advance
Payments  for  Goods or Services Received  for  Use  in
Future Research and Development Activities. This  Issue
is effective for financial statements issued for fiscal
years  beginning after December 15, 2007. The  adoption
of  EITF  07-3  is not expected to have  a  significant
impact  on  the  Company's results of operations,  cash
flows and financial position.


Economic and Market Factors
Johnson  & Johnson is aware that its products are  used
in  an  environment  where, for  more  than  a  decade,
policymakers,  consumers and businesses have  expressed
concern  about the rising cost of health care.  Johnson
&   Johnson  has  a  long-standing  policy  of  pricing
products responsibly. For the period 1996 through  2006
in  the  United  States, the weighted average  compound
annual growth rate of Johnson & Johnson price increases
for  health  care products (prescription and  over-the-
counter drugs, hospital and professional products)  was
below the U.S. Consumer Price Index (CPI).

Inflation rates, even though moderate in many parts  of
the  world  during 2006, continue to have an effect  on
worldwide  economies  and,  consequently,  on  the  way
companies operate. In the face of increasing costs, the
Company  strives to maintain its profit margins through
cost reduction programs, productivity improvements  and
periodic  price increases.  The Company  faces  various
worldwide  health  care  changes  that  may  result  in
pricing   pressures  that  include  health  care   cost
containment  and  government  legislation  relating  to
sales, promotions and reimbursement.

The   Company   also   operates   in   an   environment
increasingly  hostile to intellectual property  rights.
Generic  drug  firms  have filed Abbreviated  New  Drug
Applications seeking to market generic forms of most of
the  Company's  key pharmaceutical products,  prior  to
expiration  of  the applicable patents  covering  those
products. In the event the Company is not successful in
defending  a lawsuit resulting from an Abbreviated  New
Drug  Application filing, the generic firms  will  then
introduce  generic  versions of the product  at  issue,
resulting in very substantial market share and  revenue
losses.  For further information see the discussion  on
"Litigation  Against  Filers of  Abbreviated  New  Drug
Applications" included in Item 1. Financial  Statements
(unaudited)-    Notes    to   Consolidated    Financial
Statements, Note 11.

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS
This  Form  10-Q  contains forward-looking  statements.
Forward-  looking statements do not relate strictly  to
historical  or  current  facts and  anticipate  results
based  on  management's  plans  that  are  subject   to
uncertainty.   Forward-looking   statements   may    be
identified by the use of words like "plans," "expects,"
"will,"  "anticipates," "estimates" and other words  of
similar  meaning  in  conjunction  with,  among   other
things,  discussions  of future  operations,  financial
performance, the Company's strategy for growth, product
development,  regulatory approval, market position  and
expenditures.

Forward-looking   statements  are  based   on   current
expectations  of  future  events.  The  Company  cannot
guarantee that any forward- looking statement  will  be
accurate,  although the Company believes  that  it  has
been  reasonable  in its expectations and  assumptions.
Investors should realize that if underlying assumptions
prove inaccurate or that unknown risks or uncertainties
materialize, actual results could vary materially  from
the  Company's expectations and projections.  Investors
are therefore cautioned not to place undue reliance  on
any  forward-looking statements. The Company  does  not
undertake  to update any forward-looking     statements
as  a  result  of new information or future  events  or
developments.

Risks   and  uncertainties  include  general   industry
conditions  and competition; economic conditions,  such
as   interest   rate   and   currency   exchange   rate
fluctuations; technological advances, new products  and
patents attained by competitors; challenges inherent in
new product development, including obtaining regulatory
approvals;  challenges  to patents;  U.S.  and  foreign
health   care   reforms  and  governmental   laws   and
regulations;   trends   toward   health    care    cost
containment;  increased scrutiny  of  the  health  care
industry  by  government agencies; product efficacy  or
safety   concerns  resulting  in  product  recalls   or
regulatory action.

The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2006 contains, as an Exhibit, a
discussion  of  additional  factors  that  could  cause
actual results to differ from expectations. The Company
notes   these  factors  as  permitted  by  the  Private
Securities Litigation Reform Act of 1995.

Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

There  has  been  no  material change in the Company's
assessment of its sensitivity to market risk since its
presentation set forth in  Item 7A,  "Quantitative and
Qualitative  Disclosures  About  Market  Risk," in its
Annual Report on Form  10-K for the  fiscal year ended
December 31, 2006.

Item 4 - CONTROLS AND PROCEDURES

Disclosure controls and procedures. At the end  of  the
period  covered  by this report, the Company  evaluated
the  effectiveness of the design and operation  of  its
disclosure  controls  and  procedures.   The  Company's
disclosure  controls  and procedures  are  designed  to
ensure that information required to be disclosed by the
Company  in the reports that it files or submits  under
the  Securities  Exchange Act is  recorded,  processed,
summarized  and  reported,  within  the  time   periods
specified  in  the  SEC's rules and forms.   Disclosure
controls  and  procedures include, without  limitation,
controls   and  procedures  designed  to  ensure   that
information required to be disclosed by the Company  in
the   reports  that  it  files  or  submits  under  the
Securities Exchange Act is accumulated and communicated
to  the  Company's management, including its  principal
executive and principal financial officers, or  persons
performing similar functions, as appropriate  to  allow
timely   decisions   regarding   required   disclosure.
William   C.  Weldon,  Chairman  and  Chief   Executive
Officer, and Dominic J. Caruso, Vice President, Finance
and Chief Financial Officer,  reviewed and participated
in  this evaluation.  Based on this evaluation, Messrs.
Weldon and Caruso concluded that, as of the end of  the
period covered by this report, the Company's disclosure
controls and procedures were effective.

Internal  control.  During the period covered  by  this
report, there were no changes in the Company's internal
control  over financial reporting that have  materially
affected,   or  are  reasonably  likely  to  materially
affect,  the Company's internal control over  financial
reporting.

Part II - OTHER INFORMATION

Item 1 - LEGAL PROCEEDINGS

The information called for by this item is incorporated
herein by reference to Note 11 included in Part I, Item
1,   Financial  Statements  (unaudited)  -   Notes   to
Consolidated Financial Statements.


Item 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS

(c) Purchases of Equity Securities by the Issuer and
Affiliated Purchasers.

The  following table provides information with  respect
to  Common  Stock purchases by the Company  during  the
fiscal  second quarter of 2007.  Common Stock purchases
on  the  open  market are made as part of a  systematic
plan to meet the Company's compensation programs.


                             Total            Average
                             Number of        Price
                             Shares           Paid per
         Fiscal Month        Purchased        Share

         April 2, 2007
         through
         April 29,2007
         2007                759,900           $64.28

         April 30, 2007
         through
         May 27, 2007      3,508,300           $63.07

         May 28, 2007
         through
         July 1, 2007      2,788,400           $62.41

         Total             7,056,600           $62.94


On July 9, 2007, the Company announced that its Board
of Directors has approved a stock repurchase program,
authorizing the Company to buy back up to $10 billion
of the Company's common stock.  Share repurchases will
take place on the open market from time to time based
on market conditions.  The repurchase program has no
time limit and may be suspended for periods or
discontinued at any time.  Any shares acquired will be
available for general corporate purposes.  The Company
intends to  fund the share  repurchase  program through
a combination of available cash and debt. The Company
does not expect its triple-A credit rating to be
effected by the share repurchase program.


Item 4 - Submission of Matters to a Vote of Security
Holders

(a)   The annual meeting of the shareholders of the
Company was held on April 26, 2007.

(b)  Election of the directors is set forth in (c)
below.

(c)  The shareholders elected all the Company's
nominees for director and ratified the appointment of
PricewaterhouseCoopers LLP as the Company's independent
registered accounting firm for the fiscal year 2007.
The shareholders did not approve the shareholder
proposal on majority voting requirements for director
nominees or the shareholder proposal on the
Supplemental Retirement Plan.

1.   Election of Directors:

                   Shares For*    Shares Withheld

M. S. Coleman    2,466,892,805      66,572,007
J. G. Cullen     2,448,973,367      84,491,445
M. M. E. Johns   2,466,990,283      66,474,529
A. G. Langbo     2,450,076,051      83,388,761
S. L. Lindquist  2,468,186,923      65,277,889
L. F. Mullin     2,465,217,964      68,246,848
C. A. Poon       2,451,698,460      81,766,352
C. Prince        2,378,580,307     154,884,505
S. S Reinemund   2,468,193,021      65,271,791
D. Satcher       2,467,154,212      66,310,600
W. C. Weldon     2,448,815,553      84,649,259

*Includes 532,746,949 broker non-votes

2.   Ratification of Appointment of
     PricewaterhouseCoopers LLP:

     For*            2,461,102,118
     Against            45,531,421
     Abstain            26,831,273

     *Includes 532,746,949 broker non-votes

3.    Shareholder proposal on majority voting
      requirements for director nominees:

      For                881,161,926
      Against          1,083,580,571
      Abstain             35,975,366
      Broker Non-vote    532,746,949


4 .   Proposal on Supplemental Retirement Plan:

      For                645,742,277
      Against          1,314,642,129
      Abstain             40,333,457
      Broker Non-vote    532,746,949


Item 6 - EXHIBITS


         Exhibit  31.1  Certifications under Rule  13a-
         14(a) of the Securities Exchange Act pursuant
         to Section 302 of the Sarbanes-Oxley Act of
         2002 - Filed  with  this document.

         Exhibit  32.1   Certifications  pursuant   to
         Section 906 of the  Sarbanes-Oxley Act of
         2002 - Furnished  with this   document.








                      SIGNATURES

Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.



                                   JOHNSON & JOHNSON
                                     (Registrant)




Date:  August 8, 2007           By /s/ D. J. CARUSO
                                   D. J. CARUSO
                                   Vice President, Finance;
                                   Chief Financial Officer
                                   (Principal Financial Officer)



Date:  August 8, 2007           By /s/ S. J. COSGROVE
                                  S. J. COSGROVE
                                  Controller
                                  (Principal Accounting Officer)