Jessica Moore
Vice President, Investor Relations at Johnson & Johnson
Good morning. This is Jessica Moore, Vice President of Investor Relations for Johnson & Johnson. Welcome to our company's review of business results for the fourth quarter and full year of 2021 and our financial outlook for 2022. Joining me on today's call are Joaquin Duato, Chief Executive Officer; and Joe Wolk, Executive Vice President, Chief Financial Officer. A few logistics before we get into the details. This review is being made available via webcast, accessible through the Investor Relations section of the Johnson & Johnson website at investor.jnj.com, where you can also find additional materials, including today's presentation and associated schedules.
Please note that today's presentation includes forward-looking statements regarding, among other things, our future operating and financial performance and the anticipated separation of the company's Consumer Health business. We encourage you to review the cautionary statement included in today's presentation, which identifies certain risks and factors that may cause the company's actual results to differ materially from those projected. In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-19 pandemic and other marketplace dynamics.
This means that results could change at any time, and the contemplated impact of COVID-19 on the company's business results and outlook is a best estimate based on the information available as of today's date. A further description of these risks, uncertainties and other factors can be found in our SEC filings, including our 2020 Form 10-K and subsequent Form 10-Qs, along with reconciliations of the non-GAAP financial measures utilized for today's discussion to the most comparable GAAP measures. These materials are also available at investor.jnj.com. Several of the products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies.
This slide acknowledges those relationships. Moving to today's agenda, I will review the fourth quarter sales and P&L results for the corporation and the three business segments and additionally full year 2021 results for the enterprise. Joe will provide some additional business commentary, insights about our cash position and capital allocation deployment and our guidance for 2022. Joaquin will close the call by sharing his perspective on the healthcare environment and his strategic priorities as the new CEO of Johnson & Johnson. The remaining time will be available for your questions. We anticipate the webcast will last up to 90 minutes.
Now to recap the fourth quarter; worldwide sales were $24.8 billion for the fourth quarter of 2021, an increase of 10.4% versus the fourth quarter of 2020. Operational sales growth, which excludes the effect of translational currency, increased 11.6%, as currency had a negative impact of 1.2 points. In the U.S., sales increased 3%. In regions outside the U.S., our reported sales growth was 18.5%. Operational sales growth outside the U.S. was 21.2%, with currency negatively impacting our reported O-U.S. results by 2.7 points. Excluding the net impact of acquisitions and divestitures, adjusted operational sales growth was 12.3% worldwide, 3.1% in the U.S., and 22.4% outside the U.S.
I would like to remind everyone that our 2020 fiscal year included additional shipping days, which negatively impacted 2021 fourth quarter growth by approximately 400 basis points and full year growth by about 100 basis points. These impacts can be roughly applied across all segments but were more heavily skewed to the U.S. Turning now to earnings. For the quarter net earnings were $4.7 billion, and diluted earnings per share were $1.77 versus diluted earnings per share of $0.65 a year ago. Excluding after-tax intangible asset amortization expense and special items for both periods, adjusted net earnings for the quarter were $5.7 billion and adjusted diluted earnings per share were $2.13, representing increases of 14.4% and 14.5% respectively compared to the fourth quarter of 2020.
On an operational basis, adjusted diluted earnings per share increased 17.2%. For the full year 2021, consolidated sales were $93.8 billion, an increase of 13.6% compared to the full year of 2020. Operationally, full year sales grew 12.2% with currency having a positive impact of 1.4 points. Sales growth in the U.S. was 9.3%. In regions outside the U.S., our reported year-over-year sales growth was 18.2%. Operational sales outside the U.S. grew by 15.3% with currency positively impacting our reported O-U.S. results by 2.9 points.
Excluding the net impact of acquisition and divestitures, adjusted operational sales growth was 12.8% worldwide, 9.5% in the U.S. and 16.6% outside the U.S. Net earnings for the full year 2021 were $20.9 billion, and diluted earnings per share were $7.81 versus diluted earnings per share of $5.51 a year ago. 2021 adjusted net earnings were $26.2 billion and adjusted diluted earnings per share was $9.80 representing increases of 22.2% and 22% respectively versus full year 2020. On an operational basis adjusted diluted earnings per share increased by 20.2%.
Beginning with Consumer Health, I will now comment on business segment sales performance for the fourth quarter, highlighting items that build upon the slides you have in front of you. Unless otherwise stated, percentages quoted represent the operational sales change in comparison to the fourth quarter of 2020 and therefore exclude the impact of currency translation. While not part of the prepared remarks for today's call, we have provided additional commentary on our website for the full year 2021 sales by segment to assist you in updating your models.
Worldwide Consumer Health sales total $3.7 billion and grew 1.8% with growth in the U.S. of 1.3% and 2.1% outside the U.S. Excluding the impact of acquisitions and divestitures, worldwide adjusted operational sales growth was 2.9%. Consumer Health was negatively impacted by the 2020 additional shipping days, worth approximately 400 basis points, which can be roughly applied to all franchises as well as industry-wide external supply constraints primarily due to raw material availability and labor shortages, largely reflected in our Skin Health and Beauty business, worth approximately 360 basis points.
Adjusting for these items, solid results were primarily driven by above-market growth in OTC. E-commerce continues to have strong double-digit growth. Finally, when comparing to 2019, Consumer Health grew approximately 4% in the quarter. When adjusting for acquisition and divestitures, sales growth was closer to 5%. Over-the-Counter Medicines globally grew 15.8% due to increased incidence in U.S. adult and pediatric fever and worldwide category recovery in cough, cold and flu and digestive health. The U.S. also saw share gains primarily in TYLENOL and MOTRIN.
Strength was seen across multiple areas in the portfolio including analgesics, upper respiratory, digestive health, naturals and antismoking aids. The Skin Health and Beauty franchise declined 7.1% driven by external supply constraints primarily in NEUTROGENA and OGX and divestitures worth approximately 230 basis points, primarily due to Sedona, the salon-based portion of Dr.Ci:Labo in Asia-Pacific. Declines were partially offset by market recovery and e-commerce strength. Oral care declined globally 6.5% as compared to strong double-digit growth in the prior year driven by the floss divestiture worth approximately 170 basis points and category declines in EMEA.
Declines were partially offset by successful brand building and promotional campaigns in Asia-Pacific. The Baby Care franchise declined 0.8% with U.S. declines at 7.5% and growth of 1.3% outside the U.S. Declines were driven by prior-year retailers stocking and external supply constraints in the U.S. partially offset by e-commerce growth of AVEENO Baby in Asia-Pacific. Wound care declined 6.4% primarily due the divestiture of the professional tape business worth approximately 150 basis points partially offset by strong performance of BAND-AID brand adhesive bandages in the U.S. Women's health grew 1.3% driven by market recovery in Latin America.
Moving on to our Pharmaceutical segments; worldwide pharmaceutical sales of $14.3 billion grew 17.9% enabled by strength in all regions with U.S. sales increasing by 4.2% and O-U.S. sales increasing by 36.9%. Worldwide sales included a $1.6 billion contribution from the COVID-19 vaccine. Excluding the net impact of acquisitions and divestitures, worldwide growth was 18.6%. Our strong portfolio of products and commercial capabilities has enabled us to deliver the 10th consecutive full year of worldwide above-market adjusted operational growth.
Our Immunology therapeutic area delivered global sales growth of 7.1% driven by strong performance of TREMFYA and STELARA offset by declines in REMICADE due to biosimilar competition. TREMFYA was up 82.8% worldwide with continued share growth and additional penetration into the psoriatic arthritis indication. U.S. share increased nearly 3 points in both the psoriasis and psoriatic arthritis indications. STELARA grew 5.1% worldwide driven by strong share gains in Crohn's disease and ulcerative colitis with increases of roughly 4 points and roughly 6 points respectively in the U.S.
Current quarter growth was impacted by a negative prior period rebate adjustment and reserve adjustment recorded in Q4 2021 in the U.S. worth approximately 700 basis points of worldwide growth for the quarter versus the prior year. Our oncology portfolio delivered another robust quarter with worldwide growth of 12.3%. DARZALEX continued its double-digit performance with 33.4% growth in the quarter driven by share gains, increased penetration of the subcutaneous formulation in the U.S. and EU and continued launches globally.
DARZALEX grew share across all lines of therapy with nearly 8 points of share growth in the U.S. this quarter. ERLEADA grew 61.3% worldwide driven by strong share uptake, increased market penetration in the U.S., and new launches outside of the U.S. IMBRUVICA maintained its market leadership position, however declined 3.1% worldwide due to competitive pressures from novel oral agents. U.S. decline was partially offset by growth in all regions outside of the U.S. Neuroscience grew 7.1% worldwide driven by the paliperidone long-acting portfolio posting market and share growth due to increased new patient starts, strong persistency globally and the launch of INVEGA HAFYERA in the quarter.
The Cardiovascular, metabolism and other business declined 13.8% worldwide due to competitive pressures in INVOKANA and biosimilar competition for PROCRIT. Our pulmonary hypertension portfolio was roughly flat driven by COVID-19 market constraints and generic entrants and other pulmonary hypertension, offset by U.S. share uptake in both OPSUMIT and UPTRAVI. I'll now turn your attention to the Medical Devices segment. Worldwide in a five sales were $6.9 billion growing 5.3%. Excluding the net impact of acquisitions and divestitures, primarily the divestiture of ASP, adjusted operational sales grew 5.6% worldwide.
The Medical Devices market continued to be impact by COVID-19 with the Omicron variant contributing to a softening of recovery trends in medical and surgical procedures especially late in the quarter. Consistent with prior COVID-19 surges, impacts were more acute in areas deemed to be more deferrable in nature including spine and knees. Comparing to 2019, Medical Devices grew about 4% on an adjusted operational basis. On a full year basis Medical Devices growth versus 2019 was just over 4.5% building on the pre-COVID growth momentum.
Interventional Solutions continued to demonstrate strong performance delivering another quarter of double-digit worldwide growth at 15.3% driven by market recovery, successful penetration of new products and commercial execution across both electrophysiology and CERENOVUS. Advanced Surgery grew 7.6% worldwide driven by market recovery, expansion into tier 2 and 3 hospitals in China and performance of newer products such as NCLX-1 in energy, Echelon Plus and Endocutters and SURGICEL powder in biosurgery.
Monarch System orders in the fourth quarter mark the highest number of orders in any quarter since launch, and, more importantly, as a positive indicator of Monarch technology adoption and patient treatment regiments, we continue to see strong growth in the number of Monarch-enabled bronchoscopy procedures with total procedures since launch exceeding 12,000. In fact, 2021 Monarch procedures more than doubled those performed in the prior year. General Surgery grew 1.7% worldwide led by Wound Closure primarily due to market recovery coupled with innovation penetration.
Inventory dynamics in the prior year negatively impacted Wound Closure U.S. results by about 350 basis points and positively impacted results outside the U.S. by about 250 basis points. Worldwide Orthopedics declined 0.7% versus prior year reflecting the continued impact of COVID-19 on procedures. Worldwide Trauma delivered growth of 2.0% driven by continued market stabilization and the success of recently launched products partially offset by competitive pressures in China. The positive impact on growth from prior-year inventory contractions in China was primarily offset by the additional shipping days in 2020.
Worldwide Hips grew 2.7% driven by continued strength from our portfolio including the active stem and technologies such as VELYS hip navigation, sustaining our leadership in the anterior approach. Growth in the Outpatient Surgery channel in the U.S. and market recovery outside the U.S. were additional contributors to growth. Worldwide Knees was relatively flat with the decline of 4.2% in the U.S. and growth of 6.5% outside the U.S. The U.S. market was negatively impacted by COVID-19 and healthcare resource constraints on procedures.
These impacts were partially offset by strong growth in the outpatient channel and positive momentum from recently launched products including the VELYS robotic-assisted solution and our ATTUNE portfolio. Growth outside the U.S. was driven by market recovery and success of products such as ATTUNE Revision. Lastly, in Orthopedics, Worldwide Spine declined 9.4% primarily driven by a deceleration in procedure volumes related to COVID-19 and health system resource constraints. Partially offsetting this decline are the positive impacts from the continued success of new products such as X-Pac, CONDUIT and SYMPHONY, and prior-year inventory reductions in China contributing approximately 360 basis points to worldwide growth.
Worldwide Vision grew 11%. Contact lens and other grew 7.1% worldwide. U.S. growth of 9.4% was driven by successful commercial campaigns and adoption of recently launched ACUVUE OASYS multifocal for presbyopia. U.S. growth was impacted by inventory fluctuations in both the current and prior year worth about 550 basis points. Growth outside the U.S. of 5.8% was driven by market recovery coupled with strength of new product launches such as ACUVUE Divine Fresh. Surgical Vision grew 22.1% globally with both the U.S. and O-U.S. businesses growing double digits. These positive results were driven by market recovery and share gains from recent differentiated product launches across all Surgical Vision product lines, including TECNIS Eyhance and TECNIS Synergy in our ocular lenses using cataract Surgery.
Now regarding our consolidated statement of earnings for the fourth quarter of 2021; I'd like to now highlight a few noteworthy items that have changed on the statement of earnings compared to the same quarter last year. As reported earlier, our adjusted earnings per share of $2.13 reflects a reported increase of 14.5% and an operational increase of 17.2%. Cost of products sold leveraged by 270 basis points primarily driven by favorable mix within the Pharmaceutical business, a reduction in prior year COVID-19-related costs in the Medical Devices business and favorable mix within the enterprise with a larger portion of sales from the Pharmaceutical business.
Selling, marketing and administered remained relatively flat, driven by increased brand marketing expense in the Consumer Health business, mostly offset by expense leveraging in the Pharmaceutical business. We continue to invest in research and development at competitive levels, investing 19% of sales this quarter. This was higher than the fourth quarter of 2020 by 110 basis points, driven by portfolio progression in the Pharmaceutical business and higher investment in the Medical Devices business. The other income and expense line is a net expense of $9 million in the fourth quarter of 2021, compared to net expense of $2.4 billion last year.
This was driven by lower litigation expenses. Regarding taxes in the quarter, our effective tax rate increased to 2.1% compared to a benefit of 5.5% in the fourth quarter of 2020. This increase was primarily driven by the prior year tax benefit associated with litigation expenses, partially offset by one-time tax benefits in the fourth quarter 2021. Excluding special items, the effective tax rate was 10.4% versus 11.4% in the same period last year. I encourage you to review our upcoming 2021 10-K for additional details on specific tax matters.
Lastly, I'll direct your attention to the boxed section of the slide, where we have also provided our income before tax, net earnings and earnings per share adjusted to exclude the impact of intangible amortization expense and special items. Let's now look at adjusted income before tax by segment. In the fourth quarter of 2021, our adjusted income before tax for the enterprise as a percentage of sales increased from 24.9% to 25.6%, primarily driven by the COVID-19 recovery. The following are the main drivers of adjusted income before tax by segment. Medical Devices improved by 160 basis points, driven by recovery of prior year COVID-19 production-related slowdowns and related inventory impacts.
Consumer Health margins declined by 460 basis points, primarily driven by increased brand marketing expenses and inflationary pressure, partially offset by supply chain efficiencies. The improvement in Pharmaceutical margins of 110 basis points was primarily driven by favorable product mix and selling, marketing and administration leverage. This slide provides our full year consolidated statement of earnings. As reported today, our full year 2021 adjusted earnings per share of $9.80 reflects a reported increase of 22% and an operational increase of 20.2%.
The growth is primarily related to COVID-19 recovery, realized predominantly in our Medical Devices business. Lastly, I will direct your attention to the boxed section of the slide, where we have also provided our income before tax, net earnings and earnings per share adjusted to exclude the impact of intangible amortization expense and special items. Moving to the next slide; our full year 2021 adjusted income before tax for the enterprise improved by 170 basis points versus 2020. Looking at the adjusted pretax income by segment, Medical Devices improved by 870 basis points to 25.7%, primarily driven by recovery of prior year COVID-19 production-related slowdowns and related inventory impacts. Pharmaceutical margins declined by 150 basis points to 40.5%, primarily driven by R&D portfolio progression.
Consumer Health margins were flat at 23.8%, driven by increased brand marketing expense and inflationary pressure, partially offset by supply chain efficiencies. We continue to advance our strong pipeline of innovative medicines and products. This progress is supported by our commitment to investment in R&D that have increased $2.6 billion, or 21%, on a full year basis. In the quarter we received approval by the European Commission for the long-acting injectable antipsychotic therapy BYANNLI for the maintenance treatment of schizophrenia in adult patients.
This approval makes BYANNLI the first twice yearly treatment for adults living with schizophrenia, providing the longest available dosing interval for an antipsychotic medication to be approved in Europe. Additionally, RYBREVANT received conditional marketing authorization in EMEA. RYBREVANT, a bispecific therapy targeting both EGFR and cMet, is the first treatment approved for patients with non-small cell lung cancer with EGFR exon 20 insertion mutation after failure of platinum-based therapy. Finally, we submitted a biologics license application to the U.S.
FDA seeking approval of Teclistamab for the treatment of patients with relapsed or refractory multiple myeloma as aligned with our strategy to expand treatment options for multiple myeloma patients. Teclistamab is an investigational off-the-shelf T-cell redirecting bi-specific antibody targeting both BCMA and CD3. Consistent with our disciplined approach to portfolio prioritization, we are discontinuing the select Phase III study assessing the efficacy and safety of selexipag as an add-on to the standard of care therapy in patients with inoperable CTEPH as the study did not meet its primary endpoint.
Medical Devices announced a strategic collaboration with Microsoft to further develop a secure and compliant digital ecosystem with a goal of connecting devices across the entire portfolio. This collaboration will help enhance the use of artificial intelligence and machine learning in order to generate insights leading to smarter, less invasive and more personalized solutions across the entire patient care continuum.
This concludes the sales and P&L highlights for Johnson & Johnson's fourth quarter and full year 2021. I am now pleased to turn the call over to Joe Wolk.
