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 September 26, 2004

                               or

( ) Transition Report Pursuant to Section 13 or 15(d) of the
   Securities Exchange Act of 1934 for the 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.  Yes (X) No

     Indicate  by  check mark whether the  registrant  is  an
accelerated  filer (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  October  24,  2004, 2,967,726,203 shares  of  Common
Stock, $1.00 par value, were outstanding.





                                 1

                JOHNSON & JOHNSON AND SUBSIDIARIES


                         TABLE OF CONTENTS



Part I - Financial Information                        Page No.

Item 1.  Financial Statements (unaudited)

 Consolidated Balance Sheets -
   September 26, 2004 and December 28, 2003                3


 Consolidated Statements of Earnings for the Fiscal
   Third Quarters Ended September 26, 2004 and
   September 28, 2003                                      6

 Consolidated Statements of Earnings for the Fiscal
   Nine Months Ended September 26, 2004 and
   September 28, 2003                                      7


 Consolidated Statements of Cash Flows for the Fiscal
   Nine Months Ended September 26, 2004 and
   September 28, 2003                                      8

 Notes to Consolidated Financial Statements               10

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results
        of Operations                                     31


Item 3. Quantitative and Qualitative Disclosures
        About Market Risk                                 42

Item 4. Controls and Procedures                           42


Part II - Other Information

  Item 1.  Legal Proceedings                              42

  Item 5.  Exhibits and Reports on Form 8-K               42

  Signatures                                              44


                                 2





Part I - FINANCIAL INFORMATION

Item 1 - Financial Statements

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

                             ASSETS

                                 September 26,   December 28,
                                     2004           2003
Current Assets:

 Cash and cash equivalents          $ 7,348        5,377

 Marketable securities                5,746        4,146

 Accounts receivable, trade, less
  allowances for doubtful accounts
  $204(2003, $192)                    6,939        6,574

 Inventories (Note 4)                 3,669        3,588

 Deferred taxes on income             1,662        1,526

 Prepaid expenses and other
  receivables                         1,452        1,784

      Total current assets           26,816       22,995

Marketable securities, non-current       62           84

Property, plant and equipment,
 at cost                             17,632       17,052

  Less accumulated
    depreciation                      8,037        7,206

Property, plant and equipment, net    9,595        9,846

Intangible assets (Note 5)           14,764       14,168

Less accumulated amortization         3,036        2,629
 Intangible assets, net              11,728       11,539

Deferred taxes on income                955          692

Other assets                          2,933        3,107


      Total assets                  $52,089       48,263

         See Notes to Consolidated Financial Statements

                                 3

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

              LIABILITIES AND SHAREHOLDERS' EQUITY

                                 September 26,  December 28,
                                     2004          2003
Current Liabilities:

Loans and notes payable            $   454        1,139

Accounts payable                     3,646        4,966

Accrued liabilities                  2,951        2,639

Accrued rebates, returns
  and promotions                     2,855        2,308

Accrued salaries, wages and
 commissions                           995        1,452

Accrued Taxes on income              1,428          944

Total current liabilities           12,329       13,448

Long-term debt                       2,961        2,955

Deferred tax liability                 791          780

Employee related obligations         2,438        2,262

Other liabilities                    2,057        1,949

Shareholders' equity:
    Preferred stock - without par
 value (authorized and unissued
 2,000,000 shares)                       -            -

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

Note receivable from employee
 stock ownership plan                   (11)         (18)

Accumulated other comprehensive
 income (Note 8)                       (491)        (590)

Retained earnings                    35,022       30,503




                              4

Less common stock held in treasury,
 at cost (151,421,000 & 151,869,000
 shares)                              6,127        6,146
                              
Total shareholders' equity           31,513       26,869

Total liabilities and shareholders'
 equity                             $52,089       48,263

         See Notes to Consolidated Financial Statements














































                              5
               JOHNSON & JOHNSON AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF EARNINGS
            (Unaudited; dollars & shares in millions
                   except per share figures)


                            Fiscal Third Quarter Ended
                       Sept. 26, Percent Sept. 28, Percent
                         2004    to Sales   2003   to Sales


Sales to customers
 (Note 6)               $11,553   100.0   10,455   100.0

Cost of products sold     3,187    27.6    2,980    28.5

Gross Profit              8,366    72.4    7,475    71.5

Selling, marketing and
  administrative expenses 3,854    33.3    3,428    32.8

Research expense          1,198    10.4    1,177    11.3

Purchased in-process
  research and
  development                18      .2        -       -

Interest income             (49)    (.4)     (63)    (.6)

Interest expense, net of
  portion capitalized        30      .2       75      .7

Other (income)expense, net   41      .4      (91)    (.9)

Earnings before provision
  for taxes on income     3,274    28.3    2,949    28.2

Provision for taxes on
  income (Note 3)           933     8.0      877     8.4

NET EARNINGS             $2,341    20.3    2,072    19.8

NET EARNINGS PER SHARE
(Note 7)
  Basic                  $  .79              .70
  Diluted                $  .78              .69

CASH DIVIDENDS PER SHARE $  .285             .24

AVG. SHARES OUTSTANDING
  Basic                 2,968.1          2,968.0
  Diluted               3,009.0          3,008.3


         See Notes to Consolidated Financial Statements

                                6
              JOHNSON & JOHNSON AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF EARNINGS
            (Unaudited; dollars & shares in millions
                   except per share figures)


                            Fiscal Nine Months Ended
                       Sept. 26, Percent  Sept. 28, Percent
                         2004    to Sales   2003    to Sales


Sales to customers
 (Note 6)               $34,596   100.0    30,608  100.0

Cost of products sold     9,716    28.1     8,668   28.3

Gross Profit             24,880    71.9    21,940   71.7

Selling, marketing and
 administrative expenses 11,205    32.4    10,077   32.9

Research expense          3,476    10.0     3,195   10.4

Purchased in-process
  research and
  development                18      .1       918    3.0

Interest income            (123)    (.4)     (145)   (.5)

Interest expense, net of
  portion capitalized       127      .4       164     .6

Other (income)expense, net  (36)    (.1)     (203)   (.6)

Earnings before provision
  for taxes on income    10,213    29.5     7,934   25.9

Provision for taxes on
  income (Note 3)         2,921     8.4     2,582    8.4

NET EARNINGS             $7,292    21.1     5,352   17.5

NET EARNINGS PER SHARE
(Note 7)
  Basic                  $ 2.46              1.80
  Diluted                $ 2.43              1.78

CASH DIVIDENDS PER SHARE $  .81              .685

AVG. SHARES OUTSTANDING
  Basic                 2,968.1          2,968.0
  Diluted               3,004.4          3,012.0


         See Notes to Consolidated Financial Statements

                                7
             JOHNSON & JOHNSON AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                (Unaudited; Dollars in Millions)

                                   Fiscal Nine Months Ended
                                    Sept. 26,   Sept. 28,
                                       2004       2003
CASH FLOWS FROM OPERATIONS
Net earnings                        $ 7,292     5,352
Adj. to reconcile net earnings to cash flows:
Depreciation and amortization of
 property and intangibles             1,506     1,347
Purchased in-process research and
 development                             18       918
Increase in deferred taxes             (424)     (508)
Accounts receivable provisions           68       (31)
Changes in assets and liabilities, net
 of effects from acquisition of businesses:
  Increase in accounts receivable      (452)     (679)
  Increase in inventories               (91)     (231)
  (Decrease) increase in accounts
   payable and accrued liabilities     (787)      628
  Decrease (increase) in other
   current and non-current assets       545      (505)
  Increase in other current
   and non-current liabilities          995       752


NET CASH FLOWS FROM OPERATING
  ACTIVITIES                          8,670     7,043

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant
 and equipment                       (1,142)   (1,472)
Proceeds from the disposal of assets    235       334
Acquisition of businesses, net of cash
 acquired                              (330)   (2,781)
Purchases of investments             (9,121)   (5,064)
Sales of investments                  7,508     4,673
Other                                   (91)     (104)

NET CASH USED BY INVESTING
 ACTIVITIES                          (2,941)   (4,414)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends to shareholders            (2,404)   (2,033)
Repurchase of common stock             (985)     (941)
Proceeds from short-term debt           313     1,633
Retirement of short-term debt        (1,114)   (1,621)
Proceeds from long-term debt             16     1,013
Retirement of long-term debt             (1)     (108)
Proceeds from the exercise of
 stock options                          434       240

NET CASH USED BY FINANCING
 ACTIVITIES                          (3,741)   (1,817)
                              8
EFFECT OF EXCHANGE RATE CHANGES ON CASH
 AND CASH EQUIVALENTS                   (17)      144
INCREASE IN CASH AND CASH
 EQUIVALENTS                          1,971       956
CASH AND CASH EQUIVALENTS, BEGINNING
 OF PERIOD                            5,377     2,894

CASH AND CASH EQUIVALENTS,
 END OF PERIOD                      $ 7,348     3,850

ACQUISITION OF BUSINESSES
Fair value of assets acquired           369     3,096
Fair value of liabilities assumed       (39)     (315)
Net cash paid for acquisitions      $   330     2,781


         See Notes to Consolidated Financial Statements







































                                 9
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   Annual   Report  on  Form  10-K for  the  fiscal   year
ended
December    28,   2003.   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 presentation of such statements.

NOTE 2 - FINANCIAL INSTRUMENTS
The Company follows the provisions of SFAS 133 requiring that
all  derivative instruments be recorded on the balance  sheet
at fair value.
   As  of  September 26, 2004, the balance  of  deferred  net
losses   on   derivatives  included  in   accumulated   other
comprehensive   income   was  $76  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.
   For the first fiscal nine months ended September 26, 2004,
the   net  impact  of  the  hedges'  ineffectiveness  to  the
Company's  financial  statements was insignificant.  For  the
first  fiscal  nine  months ended  September  26,  2004,  the
Company  has recorded a net loss of $1 million after  tax  in
the   "other   (income)  expense,  net"   category   of   the
consolidated statement of earnings, representing  the  impact
of  discontinuance of cash flow hedges because it is probable
that the originally forecasted transactions will not occur by
the end of the originally specified time period.


NOTE 3 - INCOME TAXES
The   worldwide effective income  tax  rates  for  the  first
fiscal   nine  months  of  2004  and 2003   were  28.6%   and
32.5%  respectively.  The decrease in the effective tax  rate
for  the  first fiscal nine months of 2004 compared with  the
same  period  a  year ago was due to acquisition-related  In-
process Research and Development (IPR&D) charges in 2003 that
were  non-deductible for tax purposes.   The  2003  tax  rate
excluding  the effect of IPR&D was 29.2%.  The  decrease  was
also  due  to  the increase in taxable income  in  lower  tax
jurisdictions  relative  to  taxable  income  in  higher  tax
jurisdictions.

                            10








NOTE 4 - INVENTORIES
(Dollars in Millions)
                            Sept. 26, 2004  December 28, 2003

Raw materials and supplies         $ 1,087               966
Goods in process                     1,048               981
Finished goods                       1,534             1,641
                                   $ 3,669             3,588
                              

NOTE 5 - INTANGIBLE ASSETS
Intangible   assets  that  have  definite  useful  lives  are
amortized   over  their  useful  lives.  Goodwill   and  non-
amortizable  intangible  assets  are   assessed annually  for
impairment.  The impairment assessment was completed in   the
fiscal  fourth  quarter   of  2003  and  no  impairment   was
determined.  In the absence of a triggering event during  the
year,  future  impairment tests  will be  performed  in   the
fiscal fourth  quarter, annually.

(Dollars in Millions)
                            Sept. 26, 2004  December 28, 2003

Goodwill                           $ 6,297              6,085
Less accumulated amortization          719                695
Goodwill - net                       5,578              5,390

Trademarks (non-amortizable)         1,130              1,098
Less accumulated amortization          136                136
Trademarks (non-amortizable)- net      994                962

Patents and trademarks               3,997              3,798
Less accumulated amortization        1,027                818
Patents and trademarks - net         2,970              2,980

Other amortizable intangibles        3,340              3,187
Less accumulated amortization        1,154                980
Other intangibles - net              2,186              2,207

Total intangible assets             14,764             14,168
Less accumulated amortization        3,036              2,629
Total intangibles - net            $11,728             11,539

                              









                            11


Goodwill as of September 26, 2004 as allocated by segment of
business is as follows:
(Dollars in Millions)
                                             Med. Dev
                          Consumer   Pharm    & Diag   Total
Goodwill, net of
 accumulated amortization
 at December 28, 2003       $882       781     3,727    5,390

Acquisitions                 176        21         6      203

Translation & other            5        (3)      (17)     (15)

Goodwill as of
  September 26, 2004      $1,063       799     3,716    5,578

The  weighted  average amortization periods for  patents  and
trademarks and other intangible assets were 16 years  and  18
years, respectively.  The amortization expense of amortizable
intangible  assets  for the first fiscal  nine  months  ended
September  26,  2004  was $382 million  before  tax  and  the
estimated   amortization  expense  for  each  of   the   five
succeeding years approximates $500 million before tax.


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

SALES BY SEGMENT OF BUSINESS

                                    Fiscal Third Quarter
                                                    Percent
                                 2004     2003      Change

Consumer
 U.S.                        $  1,023      984        4.0
 International                  1,001      857       16.8
                                2,024    1,841        9.9%

Pharmaceutical
 U.S.                        $  3,694    3,285       12.5
 International                  1,791    1,550       15.5
                                5,485    4,835       13.4%

Med Devices and Diagnostics
 U.S.                        $  2,073    2,145       (3.4)
 International                  1,971    1,634       20.6
                                4,044    3,779        7.0%

U.S.                         $  6,790    6,414        5.9
International                   4,763    4,041       17.9
 Worldwide                   $ 11,553   10,455       10.5%


                            12
                              
                              
                              Fiscal Nine Months
                                                    Percent
                                 2004     2003      Change

Consumer
 U.S.                        $  3,090    2,915        6.0
 International                  2,981    2,536       17.5
                                6,071    5,451       11.4%

Pharmaceutical
 U.S.                        $ 10,980    9,825       11.8
 International                  5,308    4,559       16.4
                               16,288   14,384       13.2%

Med Devices and Diagnostics
 U.S.                        $  6,306    5,797        8.8
 International                  5,931    4,976       19.2
                               12,237   10,773       13.6%

U.S.                         $ 20,376   18,537        9.9
International                  14,220   12,071       17.8
 Worldwide                   $ 34,596   30,608       13.0%




OPERATING PROFIT BY SEGMENT OF BUSINESS

                                Fiscal Third Quarter
                                                Percent
                             2004     2003      Change

Consumer                 $    358      364       (1.6)
Pharmaceutical              1,922    1,751        9.8
Med. Dev. & Diag.(1)        1,052      931       13.0
  Segments total            3,332    3,046        9.4
Expenses not allocated
  to segments                 (58)     (97)

  Worldwide total        $  3,274    2,949       11.0%


                           Fiscal Nine Months
                                                Percent
                             2004     2003      Change

Consumer                 $  1,187    1,148        3.4
Pharmaceutical(2)           6,117    4,702       30.1
Med. Dev. & Diag.(3)        3,179    2,332       36.3
  Segments total           10,483    8,182       28.1
Expenses not allocated
  to segments                (270)    (248)

  Worldwide total        $ 10,213    7,934       28.7%
                            13

 (1)Includes $18 million of In-process Research and
    Development (IPR&D) charges related to an acquisition
    in the fiscal third quarter of 2004.
(2)Includes $737 million of IPR&D charges related to
   acquisitions for the first fiscal nine months of 2003.
 (3)Includes $18 million and $181 million of IPR&D charges
    related to acquisitions for the first fiscal nine months
    of 2004 and 2003, respectively.

                              
SALES BY GEOGRAPHIC AREA

                               Fiscal Third Quarter
                                                Percent
                             2004     2003      Change


U.S.                     $  6,790    6,414        5.9
Europe                      2,638    2,241       17.7
Western Hemisphere,
  excluding U.S.              639      576       10.9
Asia-Pacific, Africa        1,486    1,224       21.4

  Total                  $ 11,553   10,455       10.5%


                              

                               Fiscal Nine Months
                                                Percent
                             2004     2003      Change


U.S.                     $ 20,376   18,537        9.9
Europe                      8,124    6,909       17.6
Western Hemisphere,
  excluding U.S.            1,858    1,603       15.9
Asia-Pacific, Africa        4,238    3,559       19.1

  Total                  $ 34,596   30,608       13.0%













                            14


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 third
quarters ended September 26, 2004 and September 28, 2003.

(Shares in Millions)
                                  Fiscal Third Quarter Ended
                                        Sept. 26,  Sept. 28,
                                             2004       2003
Basic net earnings per share            $     .79        .70
Average shares outstanding - basic        2,968.1    2,968.0
Potential shares exercisable under
  stock option plans                        194.9       95.8
Less: shares which could be repurchased
  under treasury stock method              (168.6)     (70.4)
Convertible debt shares                      14.6       14.9
Adjusted average shares
  outstanding - diluted                   3,009.0    3,008.3
Diluted earnings per share              $     .78        .69

    The diluted  earnings per share calculation included  the
dilutive  effect of convertible debt that was offset  by  the
related  decrease in  interest  expense  of $3  million  each
for   the  fiscal third quarters ended September 26, 2004 and
September 28, 2003, respectively.
   The diluted earnings per share excluded 43 million and 125
million  shares  related  to options  for  the  fiscal  third
quarters  ended September 26,  2004  and September 28,  2003,
respectively,  as the exercise  price per  share   of   these
options  was  greater than the average  market  value,  which
would  have  resulted in an 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  nine
months ended September 26, 2004 and September 28, 2003.

(Shares in Millions)
                                   Fiscal Nine Months Ended
                                         Sept. 26,  Sept. 28,
                                             2004       2003
Basic net earnings per share           $     2.46       1.80
Average shares outstanding - basic        2,968.1    2,968.0
Potential shares exercisable under
  stock option plans                        193.4      172.9
Less: shares which could be repurchased
  under treasury stock method              (171.7)    (143.8)
Convertible debt shares                      14.6       14.9
Adjusted average shares
  outstanding - diluted                   3,004.4    3,012.0
Diluted earnings per share              $    2.43       1.78


The  diluted   earnings per share calculation  included   the
dilutive  effect of convertible debt that was offset  by  the
related

                                 15
decrease  in   interest  expense  of $11  million  each   for
the   first fiscal nine months ended September 26,  2004  and
September 28, 2003, respectively.
   The diluted earnings per share excluded 44 million  and 48
million  shares related to options for the first fiscal  nine
months  ended  September 26,  2004  and September  28,  2003,
respectively,  as the exercise  price per  share   of   these
options  was  greater than the average  market  value,  which
would  have  resulted in an anti-dilutive effect  on  diluted
earnings per share.

NOTE 8 - ACCUMULATED OTHER COMPREHENSIVE INCOME
The   total  comprehensive income for the first  fiscal  nine
months  ended  September 26, 2004 was $7.4 billion,  compared
with  $5.5   billion  for  the  same   period   a  year  ago.
Total   comprehensive   income  included  net  earnings,  net
unrealized  currency  gains and losses  on  translation,  net
unrealized  gains and losses on available for sale securities
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.

                                                         Total
                               Unrld            Gains/   Accum
                       For.    Gains/     Pens  (Losses) Other
                       Cur.    (Losses)   Liab  on Deriv Comp
                      Trans.   on Sec     Adj.  & Hedg   Inc/
                                                        (Loss)

December 28, 2003    $  (373)      27      (64)   (180)  (590)
2004 nine months changes:
  Net change associated
   with current period
   hedging transactions    -        -        -     211
  Net amount reclassed to
   net earnings            -        -        -    (107)*
  Net nine months
   changes               (46)      41        -     104     99

September 26, 2004   $  (419)      68      (64)    (76)  (491)

Note:   All amounts, other than foreign currency translation,
are net of tax.  Foreign currency translation adjustments
are not currently adjusted for income taxes, as they relate to
permanent investments in non-US subsidiaries.

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

NOTE 9 - MERGERS, ACQUISITIONS AND DIVESTITURES
There  were  no acquisitions in the fiscal first  quarter  of
2004.  DePuy's Castings business was divested in  the  fiscal
first  quarter of 2004 and did not have a material effect  on
the  Company's results of operations, cash flows or financial
position.

   On March 30, 2004, Johnson & Johnson acquired Merck's 50%
interest    in   the   Johnson   &   Johnson-Merck   Consumer
Pharmaceuticals Co. European non-prescription  pharmaceutical
joint venture for a
                                 16
net  purchase price of $230 million. This resulted in Johnson
&
Johnson  acquiring all the infrastructure  and  brand  assets
currently  managed  by  the  European  JV  including   brands
contributed by Merck (DOLORMIN (r), PEPCID (r), FRENADOL  (r)
and DACRYYO(r)) and those acquired by both companies (through
the acquisition of Woelm Pharma and Laboratoires Martin).
    On   May  18,  2004,  Johnson  &  Johnson  completed  the
acquisition of Egea Biosciences, Inc. through the exercise of
the  option  to acquire the remaining outstanding  stock  not
owned by Johnson & Johnson.  Egea Biosciences has developed a
proprietary  technology  platform called  Gene  Writer,  that
allows  for  the rapid and highly accurate synthesis  of  DNA
sequences, gene assembly, and construction of large synthetic
gene libraries.
   On June 18, 2004, Johnson & Johnson acquired the stock  of
Artemis  Medical, Inc.  Artemis was a privately held  company
founded  in 1999. Its products include ultrasound  and  x-ray
visible biopsy site breast markers as well as hybrid markers.
   On  June  28,  2004, Johnson & Johnson acquired  the  U.S.
commercial  rights  to certain patents and  know-how  in  the
field  of  sedation and analgesia from Scott  Lab,  Inc.  The
Company  incurred  a  charge for IPR&D of  approximately  $18
million before tax and $12 million after tax.
   The  total  net cash paid for acquisitions  in  the  first
fiscal nine months of 2004 was $330 million.
   On  January  29, 2003, Johnson & Johnson acquired  certain
assets  of  Orquest,  Inc.,  a privately  held  biotechnology
company focused on developing biologically based implants for
orthopaedic and spine surgery.  Orquest's principal  product,
HEALOS Bone Graft Substitute, is designed to reduce the  time
and  pain associated with standard bone graft harvesting  and
represents a therapeutic advance for patients requiring  bone
graft  material  for  spine fusion.  The Company  incurred  a
charge for IPR&D of approximately $11 million before tax  and
$8 million after tax.
    On February 10, 2003, Johnson & Johnson acquired OraPharma,
Inc., a specialty pharmaceutical company focused on the
development and commercialization of unique therapeutics.
Orapharma's initial product, ARESTIN, is the first locally
administered, time-released antibiotic encapsulated in
microspheres that control the germs that can cause periodontal
disease.  The transaction was valued at approximately $85
million, net  of  cash.
   On  March 28, 2003, Johnson & Johnson acquired 3-Dimensional
Pharmaceuticals, Inc., a company with a technology platform
focused  on  the discovery and development of  potential  new
drugs in early  stage  development for the treatment of
cardiovascular disorders, oncology and inflammation.  The
transaction was valued at approximately $88 million, net of
cash.  The Company incurred a before and after tax charge for
IPR&D of approximately $7 million.
    On  April  17,  2003,  Johnson  &  Johnson  acquired  the
CORTAID(r)  brand  business, the #3 brand  in  the  anti-itch
treatment segment of the first aid category.  The transaction
was valued at approximately $37 million.


                            17


    On April 29, 2003, Johnson & Johnson acquired Scios Inc.,
a  biopharmaceutical  company with  a  marketed  product  for
cardiovascular disease and research projects focused on auto-
immune  diseases.   Scios  was  acquired  to  strengthen  the
Company's  business in key therapeutic areas  and  technology
platforms.   Scios'  product NATRECOR(r)  is  a  novel  agent
approved  for  congestive  heart  failure  and  has   several
significant   advantages   over  existing   therapies.    The
transaction was valued at approximately $2.4 billion, net  of
cash,  and  the Company incurred a charge for IPR&D  of  $730
million  before  and  after  tax.  The  purchase  price   was
allocated to the tangible and identifiable intangible  assets
acquired  and  liabilities assumed based on  their  estimated
fair  values  at  the acquisition date.  The  excess  of  the
purchase price over the fair values of assets and liabilities
acquired was approximately $440 million and was allocated  to
goodwill.   Goodwill associated with this deal  will  not  be
deductible for tax purposes.

    On  May 9, 2003, Johnson & Johnson acquired  Inscope,  an
intraluminal   multiple   clip  applier   technology.    This
transaction was valued at $26 million.

   On  June  3, 2003, Johnson & Johnson acquired  Link  Spine
Group,  Inc., a privately owned corporation that has provided
the Company with exclusive worldwide rights to the SB CHARITE
(tm)  Artificial  Disc for the treatment of spine  disorders.
Under  the  terms of the agreement, the Company paid  a  $325
million upfront payment with further contingent payments  due
upon achievement of regulatory and other milestones, and  the
Company  incurred a charge for IPR&D of $170  million  before
and  after  tax.   The purchase price was  allocated  to  the
tangible  and  identifiable intangible  assets  acquired  and
liabilities assumed based on their estimated fair  values  at
the  acquisition date.  The excess of the purchase price over
the  fair  values  of  assets and  liabilities  acquired  was
approximately  $84  million and was  allocated  to  goodwill.
Goodwill associated with this deal will not be deductible for
tax purposes.
   The  supplemental pro forma information  for  the  current
interim  period  and the preceeding year per  SFAS  No.  141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible  Assets" are not provided as the impact  of  these
aforementioned acquisitions did not have a material effect on
the  Company's results of operations, cash flows or financial
position.
                              
NOTE 10 - PRO FORMA STOCK BASED COMPENSATION
At September 26, 2004, the Company had 21 stock-based
employee compensation plans. The Company accounted for those
plans under the recognition and measurement principles of
Accounting Principle Board Opinion No. 25 "Accounting for
Stock Issued to Employees" and its related Interpretations.
Compensation costs were not recorded in net income for stock
options, as all options granted under those plans had an
exercise price equal to the market value of the underlying
common stock on the date of grant.
   As required by SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure-an amendment of
FASB Statement No. 123," the following table shows the
estimated effect on net income and earnings per share if the
Company had applied the fair value recognition provision of
SFAS No. 123, "Accounting for Stock-Based   Compensation,"
to stock-based employee compensation.

                           18



(Dollars in Millions
Except Per Share Data)             Fiscal Third Quarter Ended
                             Sept. 26, 2004    Sept. 28, 2003
Net income,
 as reported                      $ 2,341              2,072
Less:
 Compensation
 expense(1)                            88                 87
Pro forma                         $ 2,253              1,985
Earnings per share:
 Basic - as reported                 $.79               $.70
      - pro forma                     .76                .67
 Diluted - as reported               $.78               $.69
     - pro forma                      .75                .66

(1)  Determined under fair value based method for all awards,
net of tax.


(Dollars in Millions
Except Per Share Data)             Fiscal Nine Months Ended
                             Sept. 26, 2004    Sept. 28, 2003
Net income,
 as reported                      $ 7,292              5,352
Less:
 Compensation
 expense(1)                           254                262
Pro forma                         $ 7,038              5,090
Earnings per share:
 Basic - as reported                $2.46              $1.80
      - pro forma                    2.37               1.71
 Diluted - as reported              $2.43              $1.78
     - pro forma                     2.36               1.70

  (1)  Determined under fair value based method for all awards,
net of tax.















                            19

NOTE 11 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS

Components of Net Periodic Benefit Costs
Net  periodic benefit costs for the Company's defined benefit
retirement plans and other benefit plans for the fiscal third
quarter of 2004 and 2003 include the following components:

(Dollars in Millions)
                          Retirement Plans     Other Benefit
Plans
                               Fiscal Third Quarter ended
                    Sept. 26,  Sept. 28,  Sept. 26,  Sept. 28,
                       2004       2003       2004      2003
Service cost         $ 107         81         13         7
Interest cost          114         97         26        18
Expected return on
 plan assets          (129)      (123)        (1)        -
Amortization of prior
 service cost            4          5         (1)        -
Amortization of net
 transition asset       (1)        (1)         -         -
Recognized actuarial
 losses (gains)         52         16         10         -
Curtailments and
 settlements             -          -          -         -

Net  periodic  benefit
  cost              $  147         75         47        25


Net  periodic benefit costs for the Company's defined benefit
retirement plans and other benefit plans for the first fiscal
nine   months   of  2004  and  2003  include  the   following
components:

(Dollars in Millions)
                     Retirement Plans     Other Benefit Plans
                                  Fiscal Nine Months ended
                   Sept. 26,  Sept. 28,  Sept. 26, Sept. 28,
                     2004       2003       2004     2003
Service cost        $ 319        244         37       21
Interest cost         339        293         77       53
Expected return on
 plan assets         (387)      (371)        (2)      (2)
Amortization of prior
 service cost          11         14         (2)      (2)
Amortization of net
 transition asset      (2)        (3)         -        -
Recognized actuarial
 losses (gains)       155         49         32        2
Curtailments and
 settlements            -          1          -        -

Net periodic benefit
 cost               $ 435        227        142       72

Company Contributions
As  of  September 26, 2004, the Company has contributed  $155
million  to  its  U.S.  retirement plans  during  2004.   The
Company  has no statutory requirements to further  fund  U.S.
retirement plans in 2004 but continually evaluates  the  need
for future funding.
                                 20
NOTE 12 - LEGAL PROCEEDINGS

      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 which
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 under its self-insurance program and
by third party product liability insurance.

      One group of cases against the Company concerns the
Janssen Pharmaceutica Inc. product PROPULSID, which was
withdrawn from general sale and restricted to limited use in
2000. In the wake of publicity about those events, numerous
lawsuits have been filed against Janssen, which is a wholly
owned subsidiary of the Company, and the Company regarding
PROPULSID, in state and federal courts across the country.
There are approximately 429 such cases currently pending,
including the claims of approximately 5,900 plaintiffs. In
the active cases, 415 individuals are alleged to have died
from the use of PROPULSID. These actions seek substantial
compensatory and punitive damages and accuse Janssen and the
Company of inadequately testing for and warning about the
drug's side effects, of promoting it for off-label use and of
over promotion. In addition, Janssen and the Company have
entered into agreements (tolling agreements) with various
plaintiffs' counsel halting the running of the statutes of
limitations with respect to the potential claims of a
significant number of individuals while those attorneys
evaluate whether or not to sue Janssen and the Company on
their behalf.

      In September 2001, the first ten plaintiffs in the
Rankin case, which comprises the claims of 155 PROPULSID
plaintiffs, went to trial in state court in Claiborne County,
Mississippi. The jury returned compensatory damage verdicts
for each plaintiff in the amount of $10 million, for a total
of $100 million. The trial judge thereafter dismissed the
claims of punitive damages. On March 4, 2002, the trial judge
reduced these verdicts to a total of $48 million, and denied
the motions of Janssen and the Company for a new trial. On
May 13, 2004, the Supreme Court of Mississippi reversed the
verdicts against Janssen and the Company, and remanded the
case to the trial court. The Supreme Court found the joint
trial of multiple plaintiffs' cases against Janssen was
prejudicial and directed the trial court to return the cases
of the individual plaintiffs for separate trials to their
home counties. A motion for rehearing was denied on August 5,
2004.

      In April 2002, a state court judge in New Jersey denied
plaintiffs' motion to certify a national class of PROPULSID
users for purposes of medical monitoring and refund of the
costs of purchasing PROPULSID. An effort to appeal that
ruling has been denied. In June 2002, the federal judge
presiding over the

                                 21
PROPULSID Multi-District Litigation in New Orleans, Louisiana
similarly denied plaintiffs' motion there to certify a
national class of PROPULSID users. Plaintiffs in the Multi-
District Litigation have said they are preserving their right
to appeal that ruling, and other complaints filed against
Janssen and the Company include class action allegations,
which could be the basis for future attempts to have classes
certified.

      On February 5, 2004, Janssen announced that it had
reached an agreement in principle with the Plaintiffs
Steering Committee (PSC), of the PROPULSID Federal Multi-
District Litigation (MDL), to resolve federal lawsuits
related to PROPULSID. There are approximately 4,000
individuals included in the Federal MDL of whom approximately
300 are alleged to have died from use of the drug. The
agreement becomes effective once 85 percent of the death
claims, and 75 percent of the remainder, agree to the terms
of the settlement. In addition, 12,000 individuals who have
not filed lawsuits, but whose claims are the subject of
tolling agreements suspending the running of the statutes of
limitations against those claims, must also agree to
participate in the settlement before it will become
effective. Those agreeing to participate in the settlement
will submit medical records to an independent panel of
physicians who will determine whether the claimed injuries
were caused by PROPULSID and otherwise meet the standards for
compensation. If those standards are met, a court-appointed
special master will determine compensatory damages. If the
agreement becomes effective, Janssen will pay as compensation
a minimum of $69.5 million and a maximum of $90 million,
depending upon the number of plaintiffs who enroll in the
program. Janssen will also establish an administrative fund
not to exceed $15 million, and will pay legal fees to the PSC
up to $22.5 million, subject to court approval.

      With respect to all the various PROPULSID actions
against them, Janssen and the Company dispute the claims in
those lawsuits and are vigorously defending against them
except where, in their judgment, settlement is appropriate.
Janssen and the Company believe they have adequate self-
insurance accruals and third party product liability
insurance with respect to these cases. In communications to
the Company, the excess insurance carriers have raised
certain defenses to their liability under the policies and to
date have declined to reimburse Janssen and the Company for
PROPULSID-related costs despite demand for payment. However,
in the opinion of the Company, those defenses are pro forma
and lack substance and the carriers will honor their
obligations under the policies either voluntarily or after
litigation. In March 2004, the Company commenced arbitration
against Allianz Underwriters Insurance Company, which issued
the first layer of applicable excess insurance coverage, to
obtain reimbursement of PROPULSID-related costs.

      The Company's Ethicon, Inc. subsidiary has over the
last several years had a number of claims and lawsuits filed
against it relating to VICRYL sutures. The actions allege
that the sterility of VICRYL sutures was compromised by
inadequacies in Ethicon's

                                 22
systems and controls, causing patients who were exposed to
these sutures to incur infections which would not otherwise
have occurred. Ethicon on several occasions recalled batches
of VICRYL sutures in light of questions raised about
sterility but does not believe any contamination of suture
products in fact occurred. In November 2003, a trial judge in
West Virginia certified for class treatment all West Virginia
residents who had VICRYL sutures implanted during Class I or
II surgeries from May 1, 1994 to December 31, 1997. The
certification is subject to later challenge following the
conclusion of discovery. A previous trial date has been
adjourned and not reset. Ethicon has been and intends to
continue vigorously defending against the claims.

              In  September 2004, plaintiffs in an employment
discrimination  litigation initiated against the  Company  in
2001  moved  to certify a class of all African  American  and
Hispanic salaried employees of the Company and its affiliates
in  the  United  States, 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  Company  is
expected   to   file   its  response  to  plaintiffs'   class
certification  motion  in  the  first  quarter  of  2005.   A
decision  by  the district court is not expected before  late
2005. The Company disputes the allegations in the lawsuit and
is vigorously defending against them.

Affirmative Stent Patent Litigation

      In patent infringement actions tried in Delaware
Federal Court in late 2000, Cordis Corporation, a subsidiary
of Johnson & Johnson, obtained verdicts of infringement and
patent validity, and damage awards, against Boston Scientific
Corporation and Medtronic AVE, Inc., based on a number of
Cordis vascular stent patents. On December 15, 2000, the jury
in the damage action against Boston Scientific returned a
verdict of $324 million and on December 21, 2000, the jury in
the Medtronic AVE action returned a verdict of $271 million.
These sums represent lost profit and reasonable royalty
damages to compensate Cordis for infringement but do not
include pre or post judgment interest. In February 2001 a
hearing was held on the claims of Boston Scientific and
Medtronic AVE that the patents at issue were unenforceable
owing to alleged inequitable conduct before the patent
office.

      In March and May 2002, the district judge issued post
trial rulings that confirmed the validity and enforceability
of the main Cordis stent patent claims but found certain
other Cordis patents unenforceable. Further, the district
judge granted Boston Scientific a new trial on liability and
damages and vacated the verdict against Medtronic AVE on
legal grounds. On August 12, 2003, the Court of Appeals for
the Federal Circuit found the trial judge erred in vacating
the verdict against Medtronic AVE and remanded the case to
the trial judge for further proceedings. Cordis filed motions
before the trial court on October 14, 2003 to reinstate the
verdicts against both Medtronic AVE and Boston
                                 23
Scientific and to award interest and enter injunctions
against the stent products at issue in those two cases (the
GFX and MicroStent stents of Medtronic AVE and the NIR stent
of Boston Scientific) and colorable variations thereof.
Medtronic AVE and Boston Scientific are resisting
reinstatement of these verdicts and will likely attempt to
appeal to the Court of Appeals for the Federal Circuit once
judgments are entered.

      In January 2003, Cordis filed an additional patent
infringement action against Boston Scientific in Delaware
Federal Court accusing its Express2 and TAXUS stents of
infringing one of the Cordis patents involved in the earlier
actions against Boston Scientific and Medtronic AVE. In
February 2003, Cordis moved in that action for a preliminary
injunction seeking to bar the introduction of the TAXUS stent
based on that patent. On November 21, 2003, the district
judge denied that request for a preliminary injunction and
that decision was affirmed by the Court of Appeals for the
Federal Circuit in May 2004. Cordis also has pending in
Delaware Federal Court another action against Medtronic AVE
accusing Medtronic AVE of infringement by sale of stent
products introduced by Medtronic AVE subsequent to its GFX
and MicroStent products, the subject of the earlier action
referenced above.

      In early June 2003, an arbitration panel in Chicago, in
a preliminary ruling, found in favor of Cordis in its
arbitration against ACS/Guidant involving infringement by
ACS/Guidant of a Cordis stent patent. On August 19, 2003, the
panel confirmed that ruling, rejecting the challenge of
ACS/Guidant. Under the terms of an earlier agreement between
Cordis and ACS/Guidant, the arbitration panel's ruling
obligated ACS/Guidant to make a payment of $425 million to
Cordis which was made in the fiscal fourth quarter of 2003.
As a result of resolving this matter, in the fiscal fourth
quarter, $230 million was recorded in other income and
expense (approximately $142 million after tax) relating to
past periods. The balance of the award, $195 million
(approximately $120 million after tax), will be recognized in
income in future periods over the estimated remaining life of
the intellectual property. No additional royalties for
ACS/Guidant's continued use of the technology and no
injunction are involved.

Patent Litigation Against Various Johnson & Johnson Operating
Companies

      The products of various Johnson & Johnson operating
companies are the subject of various patent lawsuits, which
could potentially affect the ability of those operating
companies to sell those products, or require the payment of
past damages and future royalties. The following chart
summarizes various patent lawsuits concerning important
products of Johnson & Johnson operating companies:



                             24
Product       Patents  Plaintiff/   Court  Trial   Date
         J&J            Patent              Date   Filed
        Oper            Holder
       Company

Stents Cordis  Jang      Boston        D.Del.  6/13/05  3/03
                      Scientific
                      Corporation
Drug   Cordis  Ding      Boston        D.Del.  6/13/05  4/03
Eluting                 Scientific
                       Corporation
Stents
Drug   Cordis  Kunz      Boston        D.Del. 10/17/05  12/03
Eluting       Grainger  Scientific
                       Corporation
Stents
Stents Cordis  Rockey    Arlaine and   S.D.Fla.  TBD    7/02
                      Gena Rockey
                      Inc.
Stents Cordis  Boneau    Medtronic     D.Del.    TBD    4/02
                         Inc.
Two-   Cordis  Kastenho- Boston        N.D.Cal.  TBD    2/02
layer          fer      Scientific
Cathet-       Forman    Corporation
ers
Remi-  Centocor Cerami    Rockefeller  E.D.Tex.  TBD    4/04
cade                     University
                         and
                         Chiron
                         Corporation
Two-   Cordis  Kastenho-  Boston       Belgium   TBD    12/03
layer          fer       Scientific
Cathet-                 (Schneider)
ers
Stents Cordis  Israel    Medinol       Multiple  1st   5/2003
                                                trial     -
                                       E.U.    Netherl 5/2004
                                       juris-    ands
                                       dictions  Jan
                                                 2005


      With respect to all of these matters, the Johnson &
Johnson operating company involved is vigorously defending
against the claims of infringement and disputing where
appropriate the validity and enforceability of the patent
claims asserted against it.

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
                                 25


of these patents. In the event the subsidiary of the Company
involved is not successful in these actions, the firms
involved will then 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.

Brand Name    Patent/NDA    Generic   Court  Trial   Date
Product       Holder      Challenger         Date   Filed
Aciphex       Eisai         Teva      SDNY    TBD  11/20/03
20 mg delay   (for          Dr.       SDNY    TBD  11/17/03
release       Janssen)      Reddy's
tablet
                            Mylan     SDNY    TBD  01/28/04
Ditropan XL   Ortho         Mylan     DWV    2/8/05 5/2/03
             McNeil,
5, 10, 15 mg  ALZA          Impax     NDCal   TBD   9/4/03
controlled
release                                                
tablet
Duragesic     Janssen,      Mylan     D Vt  8/25/03 1/25/02
             ALZA
25, 50, 75,                                            
100
micrograms/hr
patch                                                  
Levaquin      Daiichi,      Mylan     DWV   5/24/04 2/22/02
Tablets
              JJPRD,                                   
250, 500, 750 Ortho McNeil  Teva      DNJ     TBD   6/11/06
mg tablets
Levaquin      Daiichi,      Bedford/  DNJ     TBD   3/24/03
Injectable
Single use    JJPRD, Ortho  Ben                        
vials and 5                Venue
ml/mg
premix        McNeil        Sicor     DNJ     TBD  12/15/03
                          (Teva)
Levaquin      Daiichi,      American  DNJ     TBD  12/19/03
Injectable
Single use    JJPRD, Ortho  Pharmac-                   
vials         McNeil        eutical
                            Partners                    
Quixin        Daiichi,      Hi-Tech   DNJ     TBD  12/18/03
Opthalmic
Solution
(Levo-
floxacin)   Ortho McNeil  Pharmacal
Opthalmic                                              
solution
Ortho Tri-  Ortho McNeil  Barr        DNJ     TBD  10/01/03
cyclen LO
0.18 mg/0.025                                          
mg, 0.215
mg/0.025 mg                                            
and 0.25
mg/0.025 mg
Risperdal     Janssen       Mylan     DNJ     TBD  12/29/03
Tablets
.25, 0.5, 1,                Dr.       DNJ     TBD  12/29/03
2, 3, 4 mg                 Reddy's
tablets
Sporanox      Janssen       Eon Labs  EDNY  5/17/04 4/15/01
100 mg                                                 
capsule
Topamax       Ortho McNeil  Mylan     DNJ     TBD  04/12/04
25, 100, 200                                           
mg tablet
Ultracet      Ortho McNeil  Kali      DNJ     TBD  11/25/02
                          (Par)
37.5 tram/325               Teva      DNJ     TBD  02/25/04
apap tablet
                            Caraco    ED      TBD  09/22/04
                                     Mich
                                26

      In the Duragesic matter referenced above, the district
court in March 2004 found ALZA's patent valid, enforceable
and infringed by Mylan's generic. Mylan is appealing that
ruling. In June 2004, FDA ruled that Mylan's ANDA would be
subject to ALZA's period of pediatric exclusivity ending in
January 2005. In late June, Mylan filed actions against FDA
seeking to require the agency to grant it approval to market
on July 24, 2004, the day after the Duragesic patent expired.
On August 17, 2004, the district court ruled against Mylan
and in favor of FDA's recognition of pediatric exclusivity
for Duragesic. Mylan has appealed that ruling to the Court of
Appeals for the District of Columbia Circuit.

      In the action against Mylan involving Levaquin, post-
trial papers following the second phase of the trial were
submitted to the district court in July 2004 and a decision
is expected in the fourth quarter of 2004.

      In the action against Eon Labs involving Sporanox, the
district court ruled on July 28, 2004 that Janssen's patent
was valid but not infringed by Eon's generic. Janssen has
appealed this ruling to the Court of Appeals for the Federal
Circuit.

      In the action against Kali involving Ultracet, Kali has
moved for summary judgment on the issues of infringement and
invalidity. The briefing on that motion was completed in
October 2004 and a decision is expected in the fourth quarter
of 2004. With respect to claims other than that at issue in
the litigation against Kali, Ortho-McNeil has filed a reissue
application in the U.S. Patent and Trademark Office seeking
to narrow the scope of the claims.

      In the action against Mylan involving Ditropan XL,
Mylan moved for summary judgment on July 14, 2004 on the
issues of non-infringement and invalidity.   A decision is
expected in the fourth quarter of 2004.

        In the action against Mylan relating to Topamax,
Mylan on October 8, 2004 filed a motion for summary judgment
of non-infringement of Ortho-McNeil's patent.  A decision is
expected after January 1, 2005.

      With respect to all of the above matters, the Johnson &
Johnson operating company involved is vigorously defending
the validity and enforceability and asserting the
infringement of its own or its licensor's patents.

Average Wholesale Price (AWP) Litigation

      Johnson & Johnson and its pharmaceutical operating
companies, 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

                                 27
allegedly reported an inflated Average Wholesale Price 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 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.

      Ethicon Endo-Surgery, Inc., a Johnson & Johnson
operating company which markets endoscopic surgical
instruments, and the Company, are named defendants in a North
Carolina state court class action lawsuit alleging AWP
inflation and improper marketing activities against TAP
Pharmaceuticals. Ethicon Endo- Surgery, Inc. is a defendant
based on claims that several of its former sales
representatives are alleged to have been involved in
arbitrage of a TAP drug. The allegation is that these sales
representatives persuaded certain physicians in states where
the drug's price was low to purchase from TAP excess
quantities of the drug and then resell it in states where its
price was higher. Ethicon Endo- Surgery, Inc. and the Company
deny any liability for the claims made against them in this
case and are vigorously defending against it. On April 24,
2003, the trial judge certified a national class of
purchasers of the TAP product at issue. On July 6, 2004, that
class was decertified by the North Carolina Court of Appeals
and the matter remanded to the trial court for additional
consideration.

Other

      The New York State Attorney General's office and the
Federal Trade Commission issued subpoenas in January and
February 2003 seeking documents relating to the marketing of
sutures and endoscopic instruments by the Company's Ethicon,
Inc. and Ethicon Endo-Surgery, Inc. subsidiaries. The
Connecticut Attorney General's office also issued a subpoena
for the same documents. These subpoenas focus on the bundling
of sutures and endoscopic instruments in contracts offered to
Group Purchasing Organizations and individual hospitals in
which discounts are predicated on the hospital achieving
specified market share targets for both categories of
products. The operating companies involved have responded to
the subpoenas.

      On June 26, 2003, the Company received a request for
records and information from the U.S. House of
Representatives' Committee on Energy and Commerce in
connection with its investigation into pharmaceutical
reimbursements and rebates under Medicaid. The Committee's
request focuses on the drug REMICADE (infliximab), marketed
by the Company's Centocor, Inc. subsidiary. On July 2, 2003,
Centocor 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. Both

                                 28
the Company and Centocor have responded to these requests for
documents and information.

      On August 1, 2003, the Securities and Exchange
Commission (SEC) advised the Company of its informal
investigation under the Foreign Corrupt Practices Act of
allegations of payments to Polish
governmental officials by U.S. pharmaceutical companies. On
November 21, 2003, the SEC advised the Company that the
investigation had become formal and issued a subpoena for the
information previously requested in an informal fashion, plus
other background documents. The Company and its operating
units in Poland are responding to these requests.

      On December 8, 2003, the Company's Ortho-McNeil
Pharmaceutical unit received a subpoena from the United
States Attorney's office in Boston, Massachusetts seeking
documents relating to the marketing, including alleged off-
label marketing, of the drug TOPAMAX (topiramate).
Ortho-McNeil is cooperating in responding to the subpoena.
In October 2004, the U.S. Attorney's Office in Boston asked
attorneys for Ortho-McNeil Pharmaceutical to cooperate in
facilitating the subpoenaed testimony of several present
and former Ortho-McNeil witnesses before a grand jury in
Boston.  That requested cooperation is being provided.

      On January 20, 2004, the Company's Janssen unit
received a subpoena from the Office of the Inspector General
of the United States 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 from 1997 to 2002.
Janssen is cooperating in responding to the subpoena.

      In April 2004, the Company's pharmaceutical units were
requested to submit information to the Senate Finance
Committee on their use of the "nominal pricing exception" in
calculating Best Price under the Medicaid Rebate Program.
This request was sent to manufacturers for the top twenty
drugs reimbursed under the Medicaid Program.  The Company's
pharmaceutical units have responded to the request.

      On July 27, 2004, the Company received a letter request
from the New York State Attorney General's Office for
documents pertaining to marketing, off-label sales and
clinical trials for Topamax, Risperdal, Procrit, Reminyl,
Remicade and Aciphex. The Company is responding to the
request.

       On  August  9,  2004,  Johnson & Johnson  Health  Care
Systems,   Inc.,  a  Johnson  &  Johnson  operating  company,
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  J&J operating companies.  The Company's operating
entities involved are responding to the subpoena.

      On September 30, 2004, Ortho Biotech Inc. received a
                                 29
subpoena from the U.S. Office of  Inspector General's Denver,
Colorado field office seeking documents directed to sales and
marketing of Procrit from 1997 to the present.  Ortho Biotech
is responding to the subpoena.

      After a remand from the Federal Circuit Court of
Appeals in January 2003, a partial retrial was commenced in
October and concluded in November 2003 in Boston,
Massachusetts in the action Amgen v. Transkaryotic Therapies,
Inc. (TKT) and Aventis Pharmaceutical, Inc. The matter is a
patent infringement action brought by Amgen against TKT, the
developer of a gene-activated EPO product, and Aventis, which
holds marketing rights to the TKT product, asserting that
TKT's product infringes various Amgen patent claims. TKT and
Aventis dispute infringement and are
seeking to invalidate the Amgen patents asserted against
them. On October 15, 2004, the district court issued rulings
that upheld its initial findings in 2001, that Amgen's patent
claims were valid and infringed. Further proceedings and an
appeal will follow. The Amgen patents at issue in the case
are exclusively licensed to Ortho Biotech Inc., a Johnson &
Johnson operating company, in the U.S. for non-dialysis
indications. Ortho Biotech Inc. is not a party to the action.
On October 21, 2004, in a companion action brought by TKT and
Aventis against Amgen and Ortho Biotech's U.K. affiliate in
the United Kingdom, the House of Lords, the highest court in
the U.K., invalidated the pertinent claims of  Amgen's U.K.
patent on EPO which expires in December 2004.  The ruling
clears the way for the commercial launch of TKT's gene-
activated EPO product in the U.K., but has no effect outside
the U.K.  Elsewhere in Western Europe, Amgen's counterpart
to the U.K. patent at issue in the proceeding also expires in
December 2004, except in France, where it expires in November
2007.

      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 opinion of management, based on its
examination of these matters, its experience to date and
discussions with counsel, the ultimate outcome of legal
proceedings, net of liabilities already accrued in the
Company's consolidated balance sheet, is not expected to have
a material adverse effect on the Company's consolidated
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 13  -  SUBSEQUENT EVENTS
On October 7, 2004 Johnson & Johnson Consumer France S.A.S.
acquired Biapharm SAS, a privately held French producer and
marketer of skin care products centered around the leading
brand BIAFINE(r) which is used as a radiotherapy burn-healing
product.
   The American Jobs Creation Act of 2004 was signed into law
on October 22, 2004.  The Company is currently evaluating the
impact

                                 30

of this law.
   On October 26, 2004, the FDA approved the CHARITE(tm)
Artificial Disc, a device that treats severe low back pain by
replacing a damaged or worn out spinal disc with an
artificial one.  This is the first FDA approval of such a
device for spinal discs.
     

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 nine months of 2004, worldwide  sales
were  $34.6  billion, an increase of 13.0%  over  2003  first
fiscal  nine  month sales of $30.6 billion.   The  impact  of
foreign currencies
accounted  for 3.6% of the total reported fiscal  nine  month
increase.
    Sales  in the U.S. were $20.4 billion in the first fiscal
nine  months of 2004, which represented an increase  of  9.9%
over  the  same  period  last year.  Sales  in  international
markets were $14.2 billion, which represented an increase  of
17.8%, of which 9.0% was due to currency fluctuations.
    All  geographic areas throughout the world achieved sales
increases  during  the first fiscal nine months  of  2004  as
sales  increased  17.6%  in  Europe,  15.9%  in  the  Western
Hemisphere  (excluding  the U.S.)  and  19.1%  in  the  Asia-
Pacific,  Africa  region.   These  sales  gains  include  the
positive  impact  of currency fluctuations between  the  U.S.
dollar  and  foreign currencies in Europe of  11.0%,  in  the
Western  Hemisphere (excluding the U.S.) of 4.1% and  in  the
Asia-Pacific, Africa region of 7.5%.
    For   the  fiscal third quarter of 2004, worldwide  sales
were   $11.6  billion, an increase of 10.5% over 2003  fiscal
third quarter
sales  of  $10.5 billion.  The  impact of  foreign currencies
accounted   for  2.8%  of  the total  reported  fiscal  third
quarter 2004 increase.
    Sales   by   U.S.  companies were $6.8 billion   in   the
fiscal  third quarter  of 2004, which represented an increase
of  5.9%.  Sales   by  international  companies   were   $4.8
billion,   which
represented   an   increase  of 17.9%, of  which   7.1%   was
due  to currency fluctuations.
   All  geographic  areas throughout the world  posted  sales
increases  during   the  fiscal  third  quarter  of  2004  as
sales  increased  17.7%  in  Europe,  10.9%  in  the  Western
Hemisphere  (excluding  the U.S.)  and  21.4%  in  the  Asia-
Pacific,  Africa  region.   These  sales  gains  include  the
positive impact of currency fluctuations between
the U.S. dollar and foreign currencies in Europe of 9.5%,  in
the  Western Hemisphere (excluding the U.S.) of 1.5%  and  in
the Asia-Pacific, Africa region of 5.5%.


Analysis of Sales by Business Segments

Consumer
    Consumer segment sales in the first fiscal nine months of
2004  were  $6.1 billion, an increase of 11.4% over the  same
period  a  year  ago with 7.9% of operational  growth  and  a
positive currency
                                 31
impact of 3.5%. U.S. Consumer segment sales increased by 6.0%
while  international sales gains of 17.5% included a positive
currency impact of 7.5%.

Major Consumer Franchise Sales - First Fiscal Nine Months

                                Total    Operations  Currency
                 2004   2003    %Change  %Change     %Change

OTC &
 Nutritionals  $1,662  $1,433    16.0%      14.5%      1.5%
Skin Care       1,580   1,334    18.5       13.5       5.0
Women's
 Health         1,087   1,015     7.1        2.8       4.3
Baby &
 Kids Care      1,064     971     9.6        4.9       4.7
Other             678     698    (2.9)      (4.8)      1.9
Total          $6,071  $5,451    11.4%       7.9%      3.5%

   Consumer segment sales in the fiscal third quarter of 2004
were   $2.0 billion, an increase of 9.9% over the same period
a  year  ago  with 7.4% of operational growth and a  positive
currency   impact  of  2.5%.  U.S.  Consumer  segment   sales
increased  by 4.0% while international sales gains  of  16.8%
included a positive currency impact of 5.4%.

Major Consumer Franchise Sales - Fiscal Third Quarter

                                Total    Operations  Currency
                 2004   2003    %Change  %Change     %Change

OTC &
 Nutritionals  $  566  $  498    13.7%      12.7%      1.0%
Skin Care         509     421    20.9       17.1       3.8
Women's
 Health           371     358     3.6         .5       3.1
Baby &
 Kids Care        361     337     7.4        3.8       3.6
Other             217     227    (4.4)      (5.3)       .9
Total          $2,024  $1,841     9.9%       7.4%      2.5%

   Consumer segment sales growth in the fiscal third  quarter
was  attributable to strong sales performance  in  the  major
franchises
in   this  segment  including  McNeil  Over-The-Counter   and
Nutritional products, Skin Care, and Baby & Kids Care in  the
U.S.  The  growth in McNeil Over-The-Counter and  Nutritional
products  was driven by the acquisition of the remaining  50%
stake in the Johnson & Johnson-Merck Consumer Pharmaceuticals
Co.  non-prescription pharmaceuticals joint venture, and  the
continued  growth  of SPLENDA(r) Tabletop  brand  no  calorie
sweetener,   partially   offset   by   the   sale   of    the
SPLENDA(r)ingredients business on April  2,  2004.  The  Skin
Care  franchise  sales growth was broad  based,  with  strong
performance by the NEUTROGENA(r), AVEENO(r), RoC(r) and CLEAN
&  CLEAR(r) brands.  NEUTROGENA(r) achieved strong growth  in
the   U.S.   with   the   new  line  of  Advanced   Solutions
(tm)products,         and  RoC(r)  had  strong  international
growth  with  the Retinol Gold brand.  The Baby &  Kids  Care
franchise    growth    in    the    U.S.    was    led     by
JOHNSON'S(r)SOFTWASH(tm), Milk Lotion and Milk Bath products.

Pharmaceutical
    Pharmaceutical  segment sales in the  first  fiscal  nine
months of 2004 were $16.3 billion, an increase of 13.2%  over
the same period
                                 32
a  year  ago  with  10.4% of this change due  to  operational
increases
and  the  remaining  2.8% increase related  to  the  positive
impact  of currency.  The U.S. Pharmaceutical sales  increase
was  11.8%  and  the  growth in international  Pharmaceutical
sales  was 16.4% which included 9.0% related to the  positive
impact of currency.


Major Pharmaceutical Product Sales - First Fiscal Nine Months

                                Total    Operations  Currency
                 2004   2003    %Change  %Change     %Change

PROCRIT(r)/
 EPREX(r)      $2,739  $3,017   (9.2%)   (11.8%)      2.6%
RISPERDAL(r)    2,203   1,855   18.8      14.4        4.4
REMICADE(r)     1,548   1,273   21.6      21.6        0.0
DURAGESIC(r)    1,548   1,200   29.0      24.5        4.5
TOPAMAX(r)      1,029     747   37.7      35.4        2.3
Hormonal
 Contraceptives   975     847   15.1      14.0        1.1
LEVAQUIN(r)/
 FLOXIN(r)        921     824   11.9      12.0       (0.1)
Other           5,325   4,621   15.2      11.6        3.6
Total         $16,288 $14,384   13.2%     10.4%       2.8%


    Pharmaceutical segment sales in the fiscal third  quarter
of 2004 were $5.5 billion, an increase of 13.4% over the same
period  a  year  ago  with  11.1%  of  this  change  due   to
operational increases and the remaining 2.3% increase related
to  the positive impact of currency.  The U.S. Pharmaceutical
sales  increase  was  12.5% and the growth  in  international
Pharmaceutical sales was 15.5% which included 7.2% related to
the positive impact of currency.


Major Pharmaceutical Product Sales - Fiscal Third Quarter

                                Total    Operations  Currency
                 2004   2003    %Change  %Change     %Change

PROCRIT(r)/
 EPREX(r)       $ 887 $1,005    (11.7%)   (13.7%)      2.0%
RISPERDAL(r)      746    599     24.6      20.8        3.8
REMICADE(r)       545    443     22.9      22.9        0.0
DURAGESIC(r)      536    424     26.7      22.8        3.9
TOPAMAX(r)        365    253     44.6      42.7        1.9
Hormonal
 Contraceptives   304    292      4.2       3.2        1.0
LEVAQUIN(r)/
 FLOXIN(r)        270    253      7.0       7.2       (0.2)
Other           1,832  1,566     17.0      14.0        3.0
Total          $5,485 $4,835     13.4%     11.1%       2.3%


   Pharmaceutical segment sales growth was adversely affected
by  the  sales  decline  of  PROCRIT(r)  (Epoetin  alfa)  and
EPREX(r)   (Epoetin  alfa)  due  to  increased   competition.
Combined,  PROCRIT  (r)(sold in the U.S.)  and  EPREX(r)(sold
internationally)  sales declined 11.7% in  the  fiscal  third
quarter of 2004 versus the
same  period a year ago.  Sales of PROCRIT(r) in  the  fiscal
third
quarter were down 12.7% versus the same period last year.  On
a unit basis, PROCRIT(r) declined slightly when compared with
the fiscal third quarter 2003.
                                 33

   RISPERDAL(r) (risperidone), a medication that treats the
symptoms  of schizophrenia, fueled by RISPERDAL(r) CONSTA(tm)
grew  by  24.6% in the fiscal third quarter 2004. REMICADE(r)
(infliximab),  a novel monoclonal antibody therapy  indicated
to  treat  Crohn's  disease  and used  in  the  treatment  of
rheumatoid  arthritis, continued to maintain  its  leadership
position in the 
growing  Anti-TNF-a (tumor necrosis factor alpha) market.  In
September the FDA approved REMICADE(r) for expanded use as  a
first  line  therapy  in  patients with  moderate  to  severe
rheumatoid   arthritis.   Sales  of  DURAGESIC(r)   (fentanyl
transdermal  systems)  grew  by 26.7%  in  the  fiscal  third
quarter  2004.   In August, the U.S. District Court  for  the
District  of Columbia affirmed the pediatric exclusivity  for
DURAGESIC  (r)  granted to Janssen by the FDA. The  pediatric
exclusivity  will  expire on January  23,  2005.   TOPAMAX(r)
(topiramate), an antiepileptic and recently approved for  use
in  the  prevention of migraines, had strong growth over  the
same period a year ago.
   Growth was also achieved in DITROPAN XL(r) (oxybutynin
chloride), a treatment for overactive bladder, REMINYL(r)
(galantamine (HBr)), a treatment for patients with mild to
moderate Alzheimer's disease, NATRECOR(r) (nesiritide), a
treatment for acute congestive heart failure, and
ULTRACET(r)(37.5
mg tramadol hydrochloride/325 mg acetaminophen tablets), used
in the management of acute pain. CONCERTA(r)(methylphenidate
HCl), a treatment for attention deficit hyperactivity disorder,
sales continued to grow despite the current absence of patent
exclusivity in the U.S.  At present, the FDA has not approved
any generic that is substitutable for CONCERTA(r).


Medical Devices and Diagnostics
   Medical Devices and Diagnostics segment sales in the first
fiscal nine months of 2004 were $12.2 billion, an increase of
13.6% over
the  same period a year ago with 9.1% of this change  due  to
operational increases and the remaining 4.5% increase related
to the positive impact of currency.  The U.S. Medical Devices
and  Diagnostics sales increase was 8.8% and  the  growth  in
international Medical Devices and Diagnostics sales was 19.2%
which  included  9.8%  related  to  the  positive  impact  of
currency.

Major Medical Devices and Diagnostics Franchise Sales - First
Fiscal Nine Months

                                Total    Operations  Currency
                 2004   2003    %Change  %Change     %Change

DePuy          $2,468   $2,206    11.9%     7.9%       4.0%
Cordis          2,298    1,811    26.9     23.1        3.8
Ethicon         2,085    1,942     7.3      1.7        5.6
Ethicon  Endo-
 Surgery        2,047    1,894     8.1      3.7        4.4
LifeScan        1,240    1,040    19.2     15.0        4.2
Vision  Care    1,123      959    17.2     11.6        5.6
Ortho-Clinical
 Diagnostics      928      868     7.0      2.5        4.5
Other              48       53    (9.4)    (8.1)      (1.3)
Total         $12,237  $10,773    13.6%     9.1%       4.5%

34
Medical  Devices and Diagnostics segment sales in the  fiscal
third quarter of 2004 were $4.0 billion, an increase of  7.0%
over the same period a year ago with 3.6% of this change  due
to  operational  increases and the  remaining  3.4%  increase
related to the positive
impact of currency.  The U.S. Medical Devices and Diagnostics
sales  decrease  was  3.4%  and the growth  in  international
Medical  Devices  and  Diagnostics  sales  was  20.6%   which
included 7.8% related to the positive impact of currency.

Major  Medical  Devices  and Diagnostics  Franchise  Sales  -
Fiscal Third Quarter

                                Total    Operations  Currency
                 2004   2003    %Change  %Change     %Change

DePuy          $  790   $ 718     10.0%     6.9%       3.1%
Cordis            756     791     (4.4)    (7.0)       2.6
Ethicon           687     640      7.3      3.0        4.3
Ethicon  Endo-
 Surgery          672     622      8.0      4.7        3.3
LifeScan          420     362     16.1     12.6        3.5
Vision  Care      392     343     14.6     10.2        4.4
Ortho-Clinical
 Diagnostics      309     287      7.9      4.4        3.5
Other              18      16     12.5      3.8        8.7
Total          $4,044  $3,779      7.0%     3.6%       3.4%



    DePuy  franchise growth in the fiscal third  quarter  was
primarily  due  to  DePuy's orthopaedic joint  reconstruction
products  including  the knee and hip product  lines.   Solid
growth  was also reported in the area of spine.  The positive
growth  was  partially  offset by the sale  of  the  Castings
business  in  the first quarter of 2004 and weakness  in  the
neuro and trauma lines.
    Cordis sales declined by 4.4% in the fiscal third quarter
2004.  This was the result of a 37% decrease in U.S. sales of
the  CYPHER(r) Sirolimus-eluting Stent when compared  to  the
fiscal third quarter 2003. The third quarter of this year  is
the  second  full quarter with a competitive product  in  the
U.S.  marketplace.   Internationally, Cordis  sales  grew  by
51.3%  in  the fiscal third quarter.  This included 41.8%  of
operational  growth and a favorable currency impact of  9.5%.
The  launch  of  CYPHER(r)in Japan during  the  fiscal  third
quarter  2004  contributed to the strong international  sales
growth.
    On  April  2,  2004 and July 22, 2004, Cordis  Cardiology
Division  of Cordis Corporation, a Johnson & Johnson Company,
received  warning letters from the FDA regarding observations
concerning  Good  Manufacturing Practice regulations.   These
observations followed post-approval site inspections completed
in 2003, including sites involved in the production of  the
CYPHER(r) stent.  In response to the warning letters, Cordis
as met periodically with the FDA representatives at the Center
and the Districts advising them of the progress in addressing
the Quality System issues.
     Ethicon franchise growth was related to strong sales  of
VICRYL
                                 35
(r)(polyglactin  910) PLUS antibacterial coated  sutures,  as
well  as new products such as the Multipass needle introduced
in  April  2004.  Ethicon Endo-Surgery franchise  experienced
growth in
Endocutter  sales  that include products used  in  performing
bariatric  procedures, an important focus for the  franchise.
Strong sales in the Advanced Sterilization product line  were
also a key contributor to results in the quarter.
    LifeScan franchise growth was due to increased  sales  of
the  OneTouch(r)  Ultra(r) brand primarily  in  international
markets.
Vision Care franchise growth was led by continued success  in
the  Japanese  market as well as strong growth  in  the  U.S.
market led by the introduction of Acuvue(r) Advance(tm)  with
HydraClear(tm),   a   silicone  hydrogel  material   launched
nationwide in the U.S. in January 2004.

Cost of Goods Sold and Selling, General and Administrative
Expenses
Consolidated  costs of goods sold for the first  fiscal  nine
months  of  2004 decreased to 28.1% from 28.3% of sales  over
the  same period a year ago.  The cost of goods sold for  the
fiscal third quarter of 2004 was 27.6% of sales.  The cost of
goods  sold  as  a  percentage of sales in the  fiscal  third
quarter of 2003 was 28.5%.  The favorable change in the third
fiscal  quarter of 2004 was primarily in the Medical  Devices
and Diagnostics segment, related to positive mix, divestiture
of  low  gross margin businesses, and the absence of  certain
CYPHER(r)stent  related costs incurred in  2003.  There  were
also cost containment activities across all segments.
   Consolidated selling, general and administrative  expenses
as  a  percent to sales for the first fiscal nine  months  of
2004  were 32.4% versus 32.9% for the same period a year ago,
which  represented  an improvement of .5%  as  a  percent  of
sales.   This improvement was primarily due to the  Company's
focus on managing expenses. Consolidated selling, general and
administrative expenses as a percent to sales increased  from
32.8%  in  the fiscal third quarter of 2003 to 33.3%  in  the
fiscal  third  quarter of 2004.  This increase was  primarily
attributable  to  decisions to increase  investment  spending
behind  certain OTC and Consumer brands and certain  products
and regions in the Pharmaceutical segment.

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
nine months of 2004 were $3.5 billion, an increase of 8.8%
over the same period a year ago.  Research and development
spending in the fiscal third quarter of 2004 was $1.2 billion,
an increase of 1.8% over the fiscal third  quarter of 2003.
                                 36
In-Process Research & Development
In the fiscal third quarter of 2004, the Company recorded In-
process Research & Development (IPR&D) charges of $18 million
before tax and $12 million after tax as a result of the
acquisition of U.S. commercial rights to certain patents and
know-how in the field of sedation and analgesia from Scott
Lab, Inc.
   In the fiscal second quarter of 2003, the Company recorded
In-process Research & Development charges of $900 million
before and after tax related to acquisitions.  These
acquisitions included Scios Inc. and the Link Spine Group,
Inc.  Scios Inc. is a biopharmaceutical company with a
marketed product for
cardiovascular disease and research projects focused on auto-
immune diseases.  Link Spine Group, Inc. was acquired to
provide the Company with exclusive worldwide rights to the SB
Charite Artificial Disc for the treatment of spine disorders.
    In   the   fiscal   first quarter of  2003,  the  Company
recorded   IPR&D  charges  of  $15  million  after  tax  ($18
million   before   tax)   related  to  acquisitions.    These
acquisitions  included certain assets  of  Orquest,  Inc.,  a
privately-held biotechnology company  focused  on  developing
biologically-based    implants    for   orthopaedics    spine
surgery,  and   3-Dimensional   Pharmaceuticals,   Inc.,    a
company   with   a   technology  platform  focused   on   the
discovery  and development of potential new drugs  in   early
stage   development  for  the  treatment  of   cardiovascular
diseases, oncology and inflammation.


Other (Income) Expense, Net
Other  (income) expense included gains and losses related  to
the
sale  and  write-down  of certain equity  securities  of  the
Johnson  &
Johnson   Development Corporation, losses on the disposal  of
assets,    currency   gains  &  losses,  minority  interests,
litigation
settlement   expense   as   well  as  royalty   income.   The
unfavorable  change in other (income) expense  in  the  first
fiscal  nine months of 2004 as compared to the same period  a
year  ago  was due primarily to the gain associated with  the
Vascular  Access divestiture in the fiscal second quarter  of
2003.   The  unfavorable change in other (income) expense  in
the  fiscal  third quarter of 2004 as compared  to  the  same
period a year ago was due primarily to the positive impact in
2003 of the recovery of a loan that had been written off in a
prior  year,  as  well as the establishment of  an  insurance
receivable reserve and an increase in asset write-offs in the
fiscal third quarter of 2004.

OPERATING PROFIT BY SEGMENT

Consumer Segment
Operating  profit for the Consumer segment as  a  percent  to
sales  in  the  first fiscal nine months of  2004  was  19.6%
versus  21.1% over the same period a year ago.  This decrease
was  primarily due to ongoing costs associated with  a  plant
closure  and  the  decision to increase  investment  spending
behind certain OTC and Consumer brands.  Operating profit  as
a  percent to sales in the fiscal third quarter of  2004  was
17.7%  versus  19.8% over the same period a year  ago.   This
decrease  was  due  to  the decision to  increase  investment
spending behind certain OTC and Consumer brands.
                                 37
Pharmaceutical Segment
Operating profit for the Pharmaceutical segment as a  percent
to  sales  in the first fiscal nine months of 2004 was  37.6%
versus  32.7%  over  the same period a year  ago.   Excluding
IPR&D charges,
operating  profit as a percent to sales in the  first  fiscal
nine months of 2003 was 37.8%.  Operating profit as a percent
to sales in the fiscal third quarter of 2004 was 35.0% versus
36.2% over the same period a year ago.  The decrease in  2004
was  due to the decision to increase investment spending  for
certain products and in certain regions.

Medical Devices and Diagnostics Segment
Operating  profit  for  the Medical Devices  and  Diagnostics
segment as a percent to sales in the first fiscal nine months
of  2004 was 26.0% versus 21.6% over the same period  a  year
ago.   Excluding                              IPR&D  charges,
operating profit as a percent to sales was 26.1% in the first
fiscal  nine  months of 2004, and 23.3% in the  first  fiscal
nine  months of 2003.  Operating profit as a percent to sales
in the fiscal third quarter of 2004 was 26.0% versus 24.6% in
the  fiscal third quarter of 2003.  Excluding IPR&D  charges,
operating  profit as a percent to sales in the  fiscal  third
quarter of 2004 was 26.5%.  The increase in 2004 was  due  to
favorable sales mix, the impact of divestitures of low  gross
margin  businesses,  the absence of certain  CYPHER(r)  stent
related   costs  incurred  in  2003,  and  cost   containment
activities.

Interest (Income) Expense
Interest  income  decreased in both  the  first  fiscal  nine
months and
fiscal  third quarter of 2004 as compared to the same periods
a year ago.  The decrease was due to a decline in the average
rate on investments partially offset by a higher average cash
balance. The cash balance including marketable securities  at
the  end  of  the  fiscal third quarter  of  2004  was  $13.2
billion, which was
$4.2 billion higher than the same period a year ago.
    Interest expense decreased in both the first fiscal  nine
months  and fiscal third quarter of 2004 as compared  to  the
same  periods  a  year  ago.  The  decrease  is  due  to  the
redemption of commercial paper during 2004.
                              
Provision For Taxes on Income
The worldwide effective income tax rates for the first fiscal
nine  months of 2004 and 2003  were 28.6%  and   32.5%.   The
decrease in the effective tax rate for the first fiscal  nine
months  of 2004 compared with the same period a year ago  was
principally  due  to 2003 acquisition related  IPR&D  charges
that  are non-deductible for tax purposes.  The 2003 tax rate
excluding the effect of IPR&D was 29.2%.


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,   acquisitions,    share
repurchases,  dividends and debt repayments.   In  the  first
fiscal nine months of 2004, cash flow

                                 38
from operations was $8.7 billion, an increase of $1.6 billion
over
the same period a year ago.  The major factor contributing to
the
increase  in cash generated from operations was  from  a  net
income  increase of $1.0 billion, net of the non-cash  impact
of  IPR&D  charges.  Net  cash used by  investing  activities
decreased by $1.5
billion  versus the same period a year ago due to a  decrease
in acquisition activity offset by an increase in the purchase
of  investments.   Net  cash  used  by  financing  activities
increased  by  $1.9 billion primarily due to  a  decrease  in
proceeds from short and long term debt.

    On  October  1, 2004 the Company announced  that  it  had
exercised  its  option  to  redeem all  of  its  $300,000,000
aggregate principal amount of 8.72% debentures due 2024  that
remained  outstanding  on the redemption  date,  November  1,
2004.

Dividends
On  July  20, 2004, the Board of Directors declared a regular
cash  dividend of $0.285 per share, payable on  September  7,
2004 to shareholders of record as of August 17, 2004.

    On  October 22, 2004, the Board of Directors  declared  a
regular  cash  dividend  of  $0.285  per  share,  payable  on
December 7, 2004 to shareholders of record as of November 16,
2004.  The Company expects to continue the practice of paying
regular cash dividends.

OTHER INFORMATION
New Accounting Standards
In January 2003, the FASB issued FIN 46, "Consolidation of
Variable  Interest Entities - an interpretation  of  ARB  No.
51",  and  in  December  2003, issued a  revised  FIN  46(R),
"Consolidation   of   Variable   Interest   Entities   -   an
interpretation  of  ARB  No.  51",  both  of  which   address
consolidation of variable interest entities. FIN 46  expanded
the  criteria  for  consideration in  determining  whether  a
variable interest entity should be consolidated by a business
entity,   and   requires  existing  unconsolidated   variable
interest  entities (which include, but are  not  limited  to,
Special  Purpose  Entities, or SPEs) to  be  consolidated  by
their   primary   beneficiaries  if  the  entities   do   not
effectively  disperse  risks  among  parties  involved.  This
interpretation   was  immediately  applicable   to   variable
interest entities created after January 31,
2003. The adoption of this portion of FIN 46 did not have a
material effect on the Company's results of operations,  cash
flows or financial position. FIN 46 is applicable in 2004  to
variable  interest  entities in which an enterprise  holds  a
variable interest that was acquired before February 1,  2003.
The  adoption  of  this portion of FIN  46  did  not  have  a
material effect on the results of operations, cash flows  and
financial position of the Company.

In  December 2003, the FASB issued FASB Staff Position  (FSP)
FAS   No.  106-1,  "Accounting  and  Disclosure  Requirements
Related  to  the Medicare Prescription Drug, Improvement  and
Modernization Act of 2003", which is effective for interim or
annual  financial  statements of fiscal  years  ending  after
December  7,  2003. The Company elected to defer adoption  of
FSP FAS No. 106-1 until

                                 39
authoritative  guidance  was  issued,  as  allowed   by   the
Standard.  This guidance was issued by the FASB in  May  2004
via FSP FAS No. 106-2.  The Company adopted FSP FAS No. 106-1
and 106-2 in the fiscal third quarter of 2004, as allowed  by
the  Standards.  This adoption did not have a material effect
on  the  Company's  results  of  operations,  cash  flows  or
financial position.

In July 2004 the FASB ratified the EITF consensus on Issue 02-
14,  "Whether an Investor should Apply the Equity  Method  of
Accounting  to  Investments Other Than  Common  Stock".   The
Company will adopt EITF Issue 02-14 in the fourth quarter  of
2004,  as prescribed by the Standard.  This adoption  is  not
expected  to have a material effect on the Company's  results
of operations, cash flows and financial position.

The Company adopted EITF Issue 03-6 "Participating Securities
and the Two-Class Method under FASB Statement No. 128" in the
fiscal third quarter of 2004.  This adoption did not have  an
effect 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 1993 - 2003,  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  2004, 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.  On  December  8,  2003,  the
Medicare Prescription Drug Improvement and Modernization  Act
of  2003  was  enacted  that introduces a  prescription  drug
benefit  under Medicare as well as a subsidy to  sponsors  of
retiree  health  care benefit plans. The Company  elected  to
defer  the  recognition of the Act until such time  when  the
authoritative guidance was issued. This guidance  was  issued
by the FASB in May 2004.  The Company adopted the recognition
of the Act in the fiscal third quarter of 2004.





                                40
The Company also operates in an environment which is becoming
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 competition typically results
in creating a loss of market exclusivity and may result in  a
significant reduction in sales.  For further information  see
the  discussion on "Litigation Against Filers of  Abbreviated
New Drug Applications" in Note 12.

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  assumes  no
obligation  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 report on Form 10-K for the year ended December
28,  2003 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.
                                 41

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 28, 2003.

Item 4 - CONTROLS AND PROCEDURES-EVALUATION OF DISCLOSURE
CONTROLS AND PROCEDURES

Disclosure  controls and procedures.  As of 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  the  Company
records, processes, summarizes and reports in a timely manner
the information  the Company must
disclose   in  its  reports  filed   under  the    Securities
Exchange  Act.   William  C.  Weldon,   Chairman   and  Chief
Executive Officer, and Robert J. Darretta, Vice Chairman  and
Chief  Financial Officer, reviewed and  participated in  this
evaluation.  Based on this
evaluation, Messrs. Weldon and Darretta concluded that, as of
the  date  of  their  evaluation,  the  Company's  disclosure
controls and procedures were effective.

      Internal   control.  Since the date of  the  evaluation
described  above,  there  have  not  been   any   significant
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.

Part II - OTHER INFORMATION

Item 1.   Legal Proceedings

          The information called for by this item is
          incorporated herein by reference to Note 12
          included in Part I, Notes to Consolidated
          Financial Statements.



Item 5.   Exhibits and Reports on Form 8-K

   (a)    Exhibit

          Exhibit 99.3   Certifications Under Rule 13a-14(a) of
          the Securities Exchange Act Pursuant to Section 302
          of the Sarbanes-Oxley Act.

          Exhibit 99.15  Certifications Pursuant to Section 906
          of the Sarbanes-Oxley Act.




                                 42
   (b) Reports on Form 8-K

     A Report on Form 8-K was furnished on July 15, 2004,
     which included the press release for the period ended
     June 27, 2004.  Also included in this filing are the
     unaudited comparative supplementary sales data and
     condensed consolidated statement of earnings for this
     fiscal second quarter and six month period ended June
     27, 2004.
     
     A Report on Form 8-K was filed on October 4, 2004, which
     included a press release dated October 1, 2004
     announcing
     the redemption of 8.72% debentures due November 2024.

     A Report on Form 8-K was filed on October 6, 2004, which
     included a press release dated October 1, 2004
     announcing that Ortho Biotech Products, L.P., a Johnson
     & Johnson company, received a subpoena from the
     Inspector General, Department of Health and Human
     Services, requesting documents related to the sales and
     marketing of PROCRIT(r) (Epoetin Alfa)

     A report on Form 8-K was furnished on October 13, 2004,
      which included the press release for the period ended
     September 26, 2004. Also included in this filing are the
     unaudited comparative supplementary sales data and
     condensed consolidated statement of earnings for the
     fiscal third quarter and nine month period ended
     September 26, 2004.



























                                 43






                                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:  November 3, 2004            By /s/ R. J. DARRETTA
                                    R. J. DARRETTA
                                    Vice Chairman
                                    (Chief Financial Officer)


Date:  November 3, 2004            By /s/ S. J. COSGROVE
                                    S. J. COSGROVE
                                    Controller
                                    (Chief Accounting Officer)












                                44