PFE 10-K diff: FY 2024-12-31 → FY 2025-12-31
Paragraph-level diff of Risk Factors (Item 1A) and Management's Discussion & Analysis (Item 7).
Item 1A · Risk Factors
+60 paragraphs −53 paragraphs ~53 changed
FY 2024-12-31 (earlier)
ITEM 1A. RISK FACTORSThis section describes the material risks to our business, which should be considered carefully in addition to the other information in this report and our other filings with the SEC. Investors should be aware that it is not possible to predict or identify all such factors and that the following is not meant to be a complete discussion of all potential risks or uncertainties. Additionally, our business is subject to general risks applicable to any company, such as economic conditions, geopolitical events, extreme weather and natural disasters. If known or unknown risks or uncertainties materialize, our business operations, financial condition, operating results (including components of our financial results), cash flows, prospects, reputation or credit ratings could be adversely affected now and in the future, potentially in a material way. The following discussion of risk factors contains forward-looking statements, as discussed in the Forward-Looking Information and Factors that May Affect Future Results section.RISKS RELATED TO OUR BUSINESS, INDUSTRY AND OPERATIONS:
MANAGED CARE TRENDSPrivate payors, such as health plans, and other managed care entities, such as PBMs, continue to take action to manage the utilization and costs of drugs in the U.S., the single largest market for biopharmaceutical products. The negotiating power of MCOs, PBMs and other private third-party payors has increased due to consolidation, and they, along with state and federal governments, increasingly employ formularies to control costs and encourage utilization of certain drugs, including through the use of deductibles, utilization management tools, cost sharing or formulary placement. They may demand rebates and/or fees from biopharmaceutical manufacturers for preferred placement on a drug formulary. The growing availability and use of higher cost innovative specialty pharmaceutical medicines that treat rare or life threatening conditions also has generated increased payor interest in the development of cost-containment strategies. These initiatives have increased consumers’ interest in drug prices and input in medication choices, as they pay for a larger portion of their prescription costs and may cause them to favor lower-cost generic alternatives. We may fail to obtain or maintain timely or adequate pricing or formulary placement of our products, or fail to obtain such formulary placement at favorable pricing net of rebates.
Third-party payors also use additional measures such as new-to-market blocks, exclusion lists, indication-based pricing and value-based pricing/contracting to improve their cost containment efforts and cost efficiency. Such payors are also increasingly imposing utilization management tools requiring prior authorization for a branded product or requiring the patient to first fail on one or more other products before permitting access to a particular branded medicine. As the U.S. private third-party payor market consolidates further, and as the IRA prices become publicly available, we may face greater pricing pressure from private third-party payors as they continue to drive more of their patients to use lower cost alternatives or seek even larger rebates to control costs or offset losses from the IRA. For additional information on the IRA, see the Item 1. Business –– Pricing Pressures and Managed Care Organizations and ––Government Regulation and Price Constraints and Item 1A. Risk Factors –– Pricing and Reimbursement sections.
Also, business arrangements in this area are subject to a high degree of government scrutiny, and available safe harbors under applicable federal and state fraud and abuse laws are subject to change through legislative and regulatory action, as well as evolving judicial interpretations. Our approach to these arrangements may also be informed by such government and industry guidance.COMPETITIVE PRODUCTSCompetitive product launches have and may erode future sales of our products, including our existing products and those currently under development, or result in product obsolescence. Such launches continue to occur, and potentially competitive products are in various stages of development. We cannot predict with accuracy the timing or impact of the introduction of competitive products that treat or prevent diseases and conditions like those treated or prevented by our in-line products and product candidates.
Some of our competitors may have competitive, technical or other advantages over us for the development of technologies and processes or greater experience in particular therapeutic areas, and consolidation among certain pharmaceutical and biotechnology companies can enhance such advantages. These advantages may make it difficult for us to compete with them successfully to discover, develop and market new products and for our current products to compete with new products or indications they may bring to market. Our products and product candidates compete, and may compete in the future, against products or product candidates that offer higher rebates or discounts, exclusionary contracting, lower prices, equivalent or superior efficacy, better safety profiles, easier administration, earlier market availability or other competitive features, including potential preference to prescribe existing competitor treatments over our novel therapies. For example, with the growing competition in the vaccine space, we are subject to increasing discounts to meet competitive dynamics and to help ensure our vaccines are available in retail pharmacies. If we are unable to compete effectively, this could reduce actual or anticipated future sales, which could negatively impact our results of operations.
Pfizer Inc. 2024 Form 10-K
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In addition, competition from manufacturers of generic drugs, including from generic versions of competitors’ branded products that lose their market exclusivity, is a major challenge for our branded products. Certain of our products have experienced significant generic competition over the last few years. We anticipate a more significant impact of reduced revenues from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations. See the Item 1. Business—Patents and Other Intellectual Property Rights section. In China, we expect to continue to face intense competition by certain generic manufacturers, which has resulted, and may result in the future, in price cuts and volume loss of some of our products.In addition, our patented products may face generic or biosimilar competition before patent-based and/or regulatory exclusivity expires, including from “at-risk” launch (despite pending patent infringement litigation against the generic or biosimilar product) by a manufacturer of a generic or biosimilar version of one of our patented products. Generic and biosimilar manufacturers have filed or could file applications with the FDA seeking approval of product candidates that they claim do not infringe our or our collaboration and licensing partners’ patents or claim that our or our collaboration and licensing partners’ patents are not valid. We and our licensing and collaboration partners also face challenges in various jurisdictions by generic drug manufacturers to patents covering products for which we have patent rights, licenses or co-promotion rights. See Note 16A1 .
We may become subject to competition from biosimilars referencing our biologic products if competitors are able to obtain marketing approval for such biosimilars.
We also commercialize biosimilar products that compete with products of others, including other biosimilar products. The number of current and forthcoming competing biosimilars, coupled with Medicare’s average sales price-based provider reimbursement methodology, is expected to increase pricing pressures on our biosimilar products. Uptake of our biosimilars may be lower due to various factors, such as access challenges where our product may not receive appropriate coverage/reimbursement access or remains in a disadvantaged position relative to an innovator product.
For additional information on competition our products face, see the Item 1. Business — Competition section.
CONCENTRATIONWe recorded revenues of more than $1 billion for each of 11 products that collectively accounted for 66% of Total revenues in 2024. For example, Eliquis accounted for 12% of Total revenues in 2024. See Notes 1 and 17 . If these products or any of our other major products were to, or continue to (if applicable), experience loss of patent protection (if applicable), changes in prescription or vaccination purchasing or growth rates, reduced product demand, material product liability litigation, unexpected side effects or safety concerns, regulatory proceedings or investigations, lower governmental and/or regulatory confidence, negative publicity affecting doctor or patient confidence, pressure from competitive products, changes in recommendations and coverage, changes in labeling, pricing and access pressures, including those related to the IRA, or supply shortages or if a new, more effective product should be introduced, the adverse impact on our revenues could be significant and our revenue forecasts and expectations could prove to be inaccurate and we may fail to meet these expectations. In particular, certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face increased generic competition over the next few years. While additional patent-based or regulatory exclusivity expiries will continue, we expect a moderate impact of reduced revenues due to patent expiries in 2025 and anticipate a more significant impact of reduced revenues from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations. In addition, patents covering a number of our best-selling products are, or have been, the subject of pending legal challenges. For additional information on our patents, see the Item 1. Business — Patents and Other Intellectual Property Rights section. For Comirnaty and Paxlovid, while we believe that these products have the potential to provide ongoing stable revenue streams for Pfizer for the foreseeable future, revenues of these products have decreased substantially over time. For Paxlovid, utilization is expected to follow infection trends, and revenues may fluctuate based on the timing, duration and severity of COVID-19 infections. For information on risks associated with Comirnaty and Paxlovid, see the COVID-19 section below.In addition, certain of our customers account for a significant portion of our revenues. If one of our significant customers should encounter financial or other difficulties, it might decrease the amount of business such customer does with us and/or we might be unable to timely collect all the amounts that such customer owes us or at all, which could negatively impact our results of operations. In addition, we expect that consolidation and integration of pharmacy chains and wholesalers will increase competitive and pricing pressures on pharmaceutical manufacturers, including us. See Note 17C for a discussion of our significant customers.
RESEARCH AND DEVELOPMENTThe discovery and development of new products, as well as the development of additional uses for existing products, are necessary for the continued strength of our business. Our product lines must be replenished over time to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well as to provide for earnings growth, primarily through internal R&D or through collaborations, acquisitions, JVs, licensing or other arrangements. Growth depends in large part on our ability to identify and develop new products or new indications for existing products that address unmet medical needs and receive reimbursement from payors. However, balancing current growth, investment for future growth and the delivery of shareholder return remains a major challenge. The costs of product development continue to be high and are growing, as are regulatory requirements in many therapeutic areas, which may affect the complexity of drug trials, and the number of candidates we are able to fund as well as the sustainability of the R&D portfolio. Decisions made early in the development process of a drug or vaccine candidate can have a substantial impact on the marketing strategy and payor reimbursement possibilities if the candidate receives regulatory approval. We try to plan clinical trials prudently and to reasonably anticipate and address challenges, but there is no assurance that an optimal balance between trial conduct, speed and desired outcome will be achieved. In addition, potential quality issues may be identified in the course of a clinical trial that cannot be remediated to the satisfaction of a regulatory authority that may take actions within the scope of its enforcement authority, including excluding data and placing restrictions on future clinical trials.
Additionally, our product candidates can fail at any stage of the R&D process, and may not receive regulatory approval even after many years of R&D. We may fail to correctly identify compounds or indications for which our science is promising or allocate R&D investment resources efficiently, and failure to invest in the right technology platforms, therapeutic areas, product classes, geographic markets and/or licensing opportunities could adversely impact the productivity of our pipeline. Further, even if we identify areas with the greatest commercial potential, the scientific approach may not succeed despite the significant investment required for R&D, and the product may not be as competitive as expected because of the highly dynamic regulatory and market environments and the hurdles in terms of access, coverage and reimbursement.
Pfizer Inc. 2024 Form 10-K
16GLOBAL OPERATIONSWe operate on a global scale and could be affected by currency and interest rate fluctuations; capital and exchange controls; local and global economic conditions including inflation, recession, volatility and/or lack of liquidity in capital markets; expropriation and other restrictive government actions; changes in intellectual property; legal protections and remedies; trade regulations; tariffs; tax laws and regulations; and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including the ongoing conflicts between Russia and Ukraine and in the Middle East and their economic consequences, geopolitical instability, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.Some emerging market countries may be particularly vulnerable to periods of financial, economic or political instability or significant currency fluctuations or may have limited resources for healthcare spending. As a result of these and other factors, our strategy to grow in emerging markets may not be successful, and any growth rates in these markets may not be sustainable. Additionally, local economic conditions may adversely affect the ability of payors, as well as our distributors, customers, suppliers and service providers, to pay for our products, or otherwise to buy necessary inventory or raw materials, and to perform their obligations under agreements with us.
Government financing and economic pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria (e.g., through health technology assessments) or other means of cost control. For additional information on government pricing pressures, see the Item 1. Business—Government Regulation and Price Constraints section.We continue to monitor the global trade environment and potential trade conflicts, sanctions and impediments that could impact our business. If trade restrictions or tariffs reduce global economic activity, potential impacts could include declining sales; increased costs; volatility in foreign exchange rates; a decline in the value of our financial assets and pension plan investments; required increases of our pension funding obligations; increased government cost control efforts; delays or failures in the performance of customers, suppliers and other third parties on whom we may depend for the performance of our business; and the risk that our allowance for doubtful accounts may not be adequate. In addition, issued or future executive orders or other new or changes in laws, regulations or policy regarding tariffs, could have a material adverse effect on our business, earnings and financial guidance. The actual impact of the new tariffs on our business is subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs imposed by other countries.
We operate in many countries and transact in many different currencies. Changes in the value of those currencies relative to the U.S. dollar, or high inflation or deflation in those countries, can impact our revenues, costs and expenses and our financial guidance. Significant portions of our revenues, costs and expenses, as well as our substantial international net assets, are exposed to exchange rate changes. In 2024, 39% of our total revenues were derived from international operations, including 19% from Europe and 13% from China, Japan and the rest of the Asia Pacific region. Future changes in exchange rates or economic conditions and the impact they may have on our results of operations, financial condition or business are difficult to predict. For additional information about our exposure to foreign currency risk, see the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A.In addition, our borrowing, pension benefit and postretirement benefit obligations and interest-bearing investments are subject to risk from changes in interest and exchange rates. The risks related to interest-bearing investments and borrowings and the measures we have taken to help contain them are discussed in the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A and Note 7E . For additional details on critical accounting estimates and assumptions for our benefit plans, see the Significant Accounting Policies and Application of Critical Accounting Estimates and Assumptions—Benefit Plans section within MD&A and Note 11 .
PRODUCT MANUFACTURING, SALES AND MARKETING RISKS
We could encounter difficulties, delays or inefficiencies in our supply chain, product manufacturing and distribution networks, as well as sales or marketing, due to regulatory actions, shut-downs, work stoppages or strikes, approval delays, withdrawals, recalls, penalties, supply disruptions, shortages or stock-outs at our facilities or third-party facilities that we rely on, reputational harm, the impact to our facilities due to health pandemics or natural or man-made disasters, including as a result of climate change, product liability or unanticipated costs. Examples of such difficulties or delays include the inability to increase or maintain production capacity commensurate with demand; challenges related to component materials to maintain supply and/or appropriate quality standards throughout our supply network and/or comply with applicable regulations; inability to supply certain products due to voluntary product recalls or withdrawals, including, for example, our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved; and supply chain disruptions at our facilities or at a supplier or vendor. In addition, we engage contract manufacturers, and, from time to time, our contract manufacturers may face difficulties or are unable to manufacture our products at the necessary quantity or quality levels.Regulatory agencies periodically inspect our manufacturing facilities, as well as third-party facilities that we rely on, to evaluate compliance with cGMP or other applicable requirements. Failure to comply with these requirements may subject us to possible legal or regulatory actions, such as warning letters, suspension of manufacturing, seizure of product, injunctions, debarment, product recalls, delays or denials of product approvals, import bans or denials of import certifications. In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines and we are actively engaging with regulatory authorities on this topic. If nitrosamines are detected above certain levels in our products, this may lead to market action for such products. For example, i n 2021, Pfizer recalled all lots of Chantix due to the presence of a nitrosamine, N-nitroso-varenicline, at or above the acceptable intake limits communicated by various regulatory authorities. Regulatory authorities have since issued updated guidance on nitrosamine acceptable intake levels. With this guidance, which included an updated intake level for N-nitroso-varenicline, we have started making regulatory submissions to potentially enable Chantix to return to market in the U.S. and in certain international markets.See the Overview of Our Performance, Operating Environment, Strategy and Outlook — Our Operating Environment section within MD&A.COLLABORATIONS AND OTHER RELATIONSHIPS WITH THIRD PARTIESWe depend on third-party collaborators, service providers, and others in the research, development, manufacturing and commercialization of our products and product candidates and also enter into JVs and other business development transactions. To achieve expected longer-term benefits, we may make substantial upfront payments as part of these transactions, which may negatively impact our earnings or cash flows. We rely heavily on these parties for multiple aspects of our drug development, manufacturing and commercialization activities, but we do not control many aspects of those activities. We also outsource certain services, including activities related to transaction processing, accounting, IT, manufacturing, clinical trial recruitment and execution, clinical lab services, non-clinical research, safety services, integrated facilities
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management and other areas. In conducting clinical trials, we may depend on contract research organizations to handle regulatory filings, monitor site performance and raise potential quality matters relating to clinical trials. Failure by one or more of the third-party collaborators, service providers and others to complete activities on schedule or in accordance with our expectations or to meet their contractual or other obligations to us; failure of one or more of these parties to comply with applicable laws or regulations; disruptions in one or more of these parties’ businesses, including unexpected demand for or shortage of raw materials or components, cyber-attacks on supplier systems, labor disputes or shortage and inclement weather, as well as natural or man-made disasters or pandemics; or any disruption in the relationships between us and these parties have or could delay or prevent the development, approval, manufacturing or commercialization of our products and product candidates, expose us to suboptimal quality of service delivery or deliverables, result in repercussions such as missed deadlines or other timeliness issues, erroneous data and supply disruptions, and could also result in non-compliance with legal or regulatory requirements or industry standards, including Good Clinical Practice (GCP) and other requirements, or subject us to reputational harm, all with potential negative implications for our product pipeline and business. Further, our revenues will be adversely affected by the termination or expiration of collaboration and co-promotion agreements that we have entered into and that we may enter into from time to time.COUNTERFEIT PRODUCTSOur reputation, in-line and pipeline portfolios render our medicines and vaccines prime targets for counterfeiters. Counterfeits pose a significant risk to patient health and safety because of the conditions under which they are manufactured—often in unregulated, unlicensed, uninspected, and unsanitary sites—as well as the lack of regulation of their contents. Failure to mitigate this threat could adversely impact consumers who use our products, potentially causing them harm. This situation, in turn, may result in the loss of patient confidence in the Pfizer name and in the integrity of our medicines and vaccines, and potentially impact our business through lost sales, product recalls, and possible litigation. The prevalence of counterfeit medicines is an industry-wide issue due to a variety of factors, including the adoption of e-commerce. As consumers increasingly turn to the internet as a source for many products including medicines, they are at the same time increasingly exposed to fake medicines via the internet as criminals increasingly distribute counterfeit and substandard medicines through “rogue” online pharmacies. The internet exposes patients to greater risk as it is a preferred vehicle for dangerous counterfeit offers and scams that target unsuspecting consumers. Traffic to these generally deceptive pharmacy sites is largely driven by misplaced trust in sophisticated internet retailers and social media offers coupled with the convenience e-commerce affords consumers. Counterfeiters generally target any medicine or vaccine boasting strong demand and we have observed heightened counterfeit and fraud attempts to our internal medicine portfolio, as well as products utilized in the treatment of COVID-19.We consistently invest in an enterprise-wide strategy to aggressively combat counterfeit threats by educating patients and healthcare providers about the risks, investing in innovative technologies to detect and disrupt sophisticated internet offers and scams, proactively monitoring and interdicting supply with the help of law enforcement, and advising legislators and regulators. However, our efforts and those of others may not be entirely successful, and the presence of counterfeit medicines may continue to increase.
RISKS RELATED TO GOVERNMENT REGULATION AND LEGAL PROCEEDINGS:
PRICING AND REIMBURSEMENTOur future results could be adversely affected by changes in U.S. and international governmental regulations that mandate price controls, create coverage criteria, or limit patient access to our products. In addition to the expansion of price controls in the U.S. in the IRA, the adoption of more restrictive coverage policies and price controls in new and existing jurisdictions, or the failure to obtain or maintain coverage and pricing could also adversely impact revenue. We expect pricing pressures and other cost containment measures for drugs and vaccines will continue.
In the U.S., pharmaceutical product pricing is subject to government and public scrutiny and calls for reform, and many of our products are subject to increasing pricing pressures as a result. We expect to see continued focus by the U.S. government on regulating pricing and access to medicine. For example, the drug pricing provisions of the IRA are being implemented over the next several years. The IRA directs HHS to set the prices of certain high-expenditure, single-source drugs and biologics covered under Medicare. The IRA also imposes rebates under Medicare Part B and Medicare Part D which require manufacturers to pay rebates if price increases outpace inflation relative to a benchmark period, and replaces the Medicare Part D coverage gap discount program with a new discounting program. The drug pricing provisions of the IRA began to be implemented in 2022 and implementation efforts will continue in coming years. In August 2023, CMS published the first ten medicines subject to the MDPNP, which included Eliquis. In August 2024, the government released the new Medicare price for Eliquis, which will become effective January 1, 2026. On January 17, 2025, CMS announced the selection of another 15 drugs from Medicare Part D for the maximum fair price, with prices to be set and effective on January 1, 2027. Ibrance and Xtandi were included in the list of 15 drugs selected. Another 15 drugs from Medicare Part B or Medicare Part D will be selected by February 1, 2026, for the maximum price to be set and in effect by January 1, 2028. It is possible that more of our products could be selected in future years, which could, among other things, lead to lower revenues prior to expiry of intellectual property protections. Health plans may also require rebates in addition to the maximum fair price for preferred placement on a Medicare plan formulary. The MDPNP is currently subject to legal challenges and therefore, the outcome remains uncertain. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. For additional information, see the Item 1. Business — Government Regulation and Price Constraints section.
Payors may give preference to generic drugs and biosimilars more aggressively to generate savings and attempt to stimulate additional price competition. In addition, we expect that consolidation and integration among pharmacy chains, wholesalers and PBMs will increase pricing pressures in the industry. Some states have implemented, and others are considering, patient access constraints or cost cutting under state regulated programs including the Medicaid program. States have continued to focus on addressing drug costs, generally by increasing price transparency or attempting to limit drug price increases for state-regulated insurance. Measures to regulate prices or payment for pharmaceutical products, including legislation on drug importation and prescription drug affordability boards (PDABs) that seek to impose reimbursement limits for certain drugs, could adversely affect our business. For additional information on U.S. pricing and reimbursement, see the Item 1. Business — Government Regulation and Price Constraints section.
We encounter similar regulatory and legislative issues in most other countries in which we operate. In certain markets, such as in EU member states, the U.K., Japan, China, Canada, Australia and New Zealand, governments have significant power as large single payors to regulate prices, access criteria, or impose other means of cost control, particularly as a result of recent global financing pressures. For example, the QCE and VBP tender process in China has resulted in significant price cuts for off-patent medicines. Additionally, in the EU, the EC proposed the largest reform of EU pharmaceutical legislation in 20 years. In April 2024, the European Parliament introduced amendments to the EC’s proposal. The EU legislative process remains ongoing, with several stages still required before the reform can receive final approval. This reform may alter
Pfizer Inc. 2024 Form 10-K
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regulatory exclusivity periods for our products and may add burdensome obligations that impact access. In addition, with the European Regulation on Health Technology Assessment (EU HTA-R) taking effect in January 2025, we are engaging and monitoring application of the EU’s new clinical assessment program to new oncology products and certain biologic products submitted to the EMA. For additional information regarding these government initiatives, see the Item 1. Business — Government Regulation and Price Constraints section. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In addition, in many countries, with respect to our vaccines, we participate in a tender process for selection in national immunization programs. Failure to win national immunization tenders or to obtain acceptable pricing, as well as recent entry of additional competitors, could adversely affect our business.U.S. HEALTHCARE REGULATIONThe U.S. healthcare industry is highly regulated and subject to frequent and substantial changes. Any significant additional efforts at the U.S. federal or state levels to reform the healthcare system by changing the way healthcare is provided or funded could have a material impact on us. For additional information on U.S. healthcare regulation, see the Item 1. Business––Government Regulation and Price Constraints section. Other U.S. federal or state legislative or regulatory action and/or policy efforts could adversely affect our business, including, among others, general budget control actions, changes in patent laws, the importation of prescription drugs to the U.S. at prices that are regulated by foreign governments, revisions to reimbursement of biopharmaceuticals under government programs that could reference international prices or require new discounts, limitations on interactions with healthcare professionals and other industry stakeholders, restrictions on pharmaceutical advertising, or the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines. In addition, we may face increased risks to, among other things, our business, revenue, earnings, reputation or financial guidance, as a result of potential changes to vaccine or other healthcare policy in the U.S.Any additional reduction of U.S. federal spending on entitlement programs beyond the IRA, including Medicare, Medicaid, or any other publicly funded or subsidized health programs, and the 340B Program, may affect payment for our products or services provided using our products. Any other significant spending reductions or cost controls affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented could have an adverse impact on our results of operations. The IRA is being implemented largely through government guidance and as its effect on Medicare and commercial markets evolve, we will continue to evaluate the potential impacts to our business.We expect additional drug cost containment efforts at both the federal and state levels. Further, commercial payors often follow Medicare coverage policy and payment limitations when setting their own payment rates. Any reduction in cost or other containment measures may similarly be adopted by commercial plans. Coverage policies and reimbursement rates for commercial plans may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products, less favorable coverage policies and reimbursement rates may be implemented in the future.DEVELOPMENT, REGULATORY APPROVAL AND MARKETING OF PRODUCTS
The discovery and development of drugs, vaccines and biological products are time consuming, costly and unpredictable. The outcome is inherently uncertain and involves a high degree of risk due to the following factors, among others:• The process from early discovery to design and adequate implementation of clinical trials to regulatory approval can take many years and have high costs.
• We may have difficulties recruiting and enrolling patients for clinical trials on a consistent basis.
• Product candidates can and do fail at any stage of the process, including as the result of unfavorable pre-clinical and clinical trial results, or unfavorable new pre-clinical or clinical data and further analyses of existing pre-clinical or clinical data, including results that may not support further clinical development of the product candidate or indication.• We may need to amend our clinical trial protocols or conduct additional clinical trials under certain circumstances, for example, to further assess appropriate dosage or collect additional safety data.
• We may not be able to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, regulatory approval dates and/or launch dates.
• We may not be able to successfully address all the comments received from regulatory authorities such as the FDA and the EMA, or be able to obtain approval for new products and indications from regulators.Regulatory approvals of our products depend on myriad factors, including regulatory determinations as to the product’s safety and efficacy. In the context of public health emergencies like the COVID-19 pandemic, regulators evaluate various factors and criteria to potentially allow for marketing authorization on an emergency or conditional basis. Additionally, clinical trial and other product data are subject to differing interpretations and assessments by regulatory authorities. As a result of regulatory interpretations and assessments or other developments that may occur during the review process, or even after a product is authorized or approved for marketing, a product’s commercial potential could be adversely affected by potential emerging concerns or regulatory decisions regarding or impacting the scope of indicated patient populations, labeling or marketing, manufacturing processes, safety issues and/or other matters, including decisions relating to emerging developments regarding potential product impurities. Also, certain of our products have received and may in the future receive approvals under accelerated approval pathways where continued approval may be contingent upon confirmatory studies demonstrating the anticipated clinical benefit and/or safety profile.
We may not be able to receive or maintain favorable recommendations by technical or advisory committees, such as the ACIP or an FDA Advisory Committee, which may impact the availability or commercial potential of our products and product candidates. Further, claims and concerns that may arise regarding the safety and/or efficacy of in-line products and product candidates can negatively impact current or future product sales, as applicable, and potentially lead to regulator-directed risk evaluations and assessments, asset impairments, and/or consumer fraud, product liability and other litigation and claims, as well as product recalls or withdrawals, including our voluntary withdrawal of all lots of Oxbrtya in all markets where it is approved, and any regulatory or other impact on Oxbryta or other sickle cell disease assets. Regulatory requirements may also result in a more challenging, expensive and lengthy regulatory approval process than anticipated due to requests for, among other things, additional or more extensive clinical trials prior to granting approval, or increased post-approval requirements. For these and other reasons discussed in this Risk Factors section, we may not obtain the approvals we expect within the timeframe we anticipate, or at all.
Pfizer Inc. 2024 Form 10-K
19POST-AUTHORIZATION/APPROVAL DATAAs a condition to granting marketing authorization or approval of a product, the FDA may require, or the sponsor may voluntarily agree to undertake, post-marketing commitments such as additional clinical trials or other studies. The results generated in these trials have in the past impacted certain of our products and could impact our products in the future, such as by resulting in the loss of marketing approval, changes in labeling, and/or new or increased concerns about safety and/or efficacy, including newly discovered adverse events. Regulatory agencies in countries outside the U.S. often have similar regulations and may impose comparable requirements, although there are differences between the U.S., the EU and other international regulatory requirements, which may contribute to inconsistency or uncertainty in the marketability of our products across different jurisdictions. Post-marketing studies and clinical trials, whether conducted by us or by others, whether mandated by regulatory agencies or conducted voluntarily, and other emerging data about products, such as adverse event reports, may also adversely affect the availability or commercial potential of our products. Further, if safety or efficacy concerns are raised about a product in the same class as one of our products, those concerns could implicate the entire class; and this, in turn, could have an adverse impact on the availability or commercial viability of our product(s) or product candidates as well as other products in the class. The potential regulatory, commercial or other implications of post-marketing study results typically cannot immediately be determined. In September 2024, we made the decision to voluntarily withdraw Oxbryta in all markets where it is approved based on the totality of clinical data that indicated at that time the overall benefit of Oxbryta no longer outweighs the risk in the approved sickle cell patient population. For more information, see the Product Developments section within MD&A.
The terms of our EUA for Comirnaty require that we conduct post-observational studies to evaluate the association between the Pfizer-BioNTech COVID-19 Vaccine (Original monovalent), Pfizer-BioNTech COVID-19 Vaccine, Bivalent, and the Pfizer-BioNTech COVID-19 Vaccine (2023-2024 Formula), and a pre-specified list of adverse events of special interest, including myocarditis and pericarditis, along with deaths and hospitalizations, and severe COVID-19. The required study populations include individuals specified in our September 2023 authorization letter (reissued) as well as populations of interest, such as healthcare workers, pregnant women, immunocompromised individuals and subpopulations with specific comorbidities. Additionally, in relation to the FDA approval for Comirnaty, we are required to complete certain post marketing study requirements and commitments through 2024 and beyond.LEGAL MATTERSWe are and may be involved in various legal proceedings, including patent litigation, product liability and other product-related litigation, including personal injury, consumer fraud, off-label promotion, securities, antitrust and breach of contract claims, commercial and other asserted and unasserted matters, environmental, government and tax investigations, employment litigation, tax litigation and other legal proceedings that arise from time to time in the ordinary course of our business. Litigation is inherently unpredictable, and excessive verdicts do occur. Although we believe that our claims and defenses in matters in which we are a defendant are substantial, we have in the past and could in the future incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations.Claims against our patents include challenges to the coverage and/or validity of our patents on various products or processes. There can be no assurance as to the outcome of these matters, and a loss in any of these cases could result in a loss of patent protection for the product at issue, which could lead to a significant loss of sales of that product and could materially affect future results of operations.We are also involved in government investigations that arise in the ordinary course of our business. There continues to be a significant volume of government investigations and litigation against companies operating in our industry, both in the U.S. and around the world. Government investigations and actions have and could result in substantial criminal and civil fines and/or criminal charges, limitations on our ability to conduct business in applicable jurisdictions, corporate integrity or deferred prosecution agreements and other disciplinary actions, as well as reputational harm, including as a result of increased public interest in the matter. In addition, in a qui tam lawsuit in which the government declines to intervene, the relator may still pursue a suit for the recovery of civil damages and penalties on behalf of the government.
Our sales and marketing activities, the pricing of our products and other aspects of our business are subject to extensive regulation under the FFDCA, the MDRP, the FCPA and other federal and state statutes, including those discussed elsewhere in this Form 10-K, as well as the AKS, anti-bribery laws, the False Claims Act, consumer protection statutes and similar laws in international jurisdictions. In addition to the potential for changes to relevant laws, the compliance and enforcement landscape is informed by government litigation, settlement precedent, advisory opinions, and special fraud alerts. Our approach to certain practices may evolve over time in light of these types of developments.
Requirements or industry standards in the U.S. and certain jurisdictions abroad require pharmaceutical manufacturers to track and disclose financial interactions with healthcare professionals and healthcare providers and can increase government and public scrutiny of such financial interactions. If an interaction is found to be improper, government enforcement actions and penalties could result. Like many companies in our industry, we have from time to time received, and may receive in the future, inquiries and subpoenas and other types of information demands from government authorities. In addition, we have been and may in the future be subject to claims and other actions related to our business activities, brought by governmental authorities, as well as consumers and private payors. In some instances, we have incurred significant expense, civil payments, fines and other adverse consequences as a result of these claims, actions and inquiries. Such claims, actions and inquiries may relate to alleged non-compliance with laws and regulations associated with the dissemination of product (approved and unapproved) information, potentially resulting in government enforcement action and reputational damage. These risks may be heightened by the use of AI in our operations as well as in our digital marketing, including social media, mobile applications and blogger outreach, as well as direct-to-consumer marketing and digital platform offerings.In connection with the resolution of a U.S. government investigation concerning independent copay assistance organizations that provide financial assistance to Medicare patients, in 2018, we entered into a Corporate Integrity Agreement with the Office of the Inspector General of the HHS (OIG), which expired in May 2023. Pfizer submitted its final annual report in October 2023 and the OIG officially closed the matter in January 2025.
We and certain of our subsidiaries are also subject to numerous contingencies arising in the ordinary course of business relating to legal claims and proceedings, including environmental contingencies. Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. While we have accrued for worldwide legal liabilities, no guarantee exists that additional costs will not be incurred or additional payments will not be required beyond the amounts accrued.For additional information, including information regarding certain legal proceedings in which we are involved in, see Note 16A .Pfizer Inc. 2024 Form 10-K
20RISKS RELATED TO INTELLECTUAL PROPERTY, TECHNOLOGY AND SECURITY:
INTELLECTUAL PROPERTY PROTECTION
Our success largely depends on our ability to market technologically competitive products. We rely and expect to continue to rely on a combination of intellectual property, including patent, trademark, trade dress, copyright, trade secret and domain name protection laws, as well as confidentiality and license agreements, to protect our intellectual property and proprietary rights. If we fail to obtain and maintain adequate intellectual property protection, we may not be able to prevent third parties from launching generic or biosimilar versions of our branded products, from using our proprietary technologies or from marketing products that are very similar or identical to ours. Our currently pending or future patent applications may not result in issued patents or be granted on a timely basis. Similarly, any term extensions that we seek may not be granted on a timely basis, if at all, and any term adjustments related to patent office delays in obtaining a patent may be reduced or eliminated entirely due to risks associated with changes in law relating to patent terms. In addition, our issued patents may not contain claims sufficiently broad to protect us against claims regarding validity, enforceability, scope and effective term made by parties with similar technologies or products or provide us with any competitive advantage, including patent-based exclusivity in a particular technology or product area.Further, legal or regulatory action by various stakeholders or governments could potentially result in us not seeking intellectual property protection for or agreeing not to enforce or being restricted from enforcing intellectual property related to our products. For example, the WTO’s June 2022 Ministerial Decision on the Agreement on Trade-Related Aspects of Intellectual Property Rights seeks to make it easier for certain WTO members to issue a compulsory license on COVID-19 vaccines.The scope of our patent claims also may vary between countries, as individual countries have distinct patent laws, and our ability to enforce our patents depends on the laws of each country, its enforcement practices, and the extent to which certain countries engage in policies or practices that weaken a country’s intellectual property framework (e.g., laws or regulations that promote or provide broad discretion to issue a compulsory license). In countries that provide some form of regulatory exclusivity, mechanisms exist permitting some form of challenge to our patents by competitors or generic drug marketers prior to or immediately following the expiration of such regulatory exclusivity, and generic companies are employing aggressive strategies, such as “at-risk” launches that challenge our patent rights. Most of the suits involve claims by generic drug manufacturers that patents covering our products, uses, processes or dosage forms are invalid and/or do not cover the product of the generic or biosimilar drug manufacturer. Independent actions have been filed alleging that our assertions of, or attempts to enforce, patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws. Such claims may also be brought as counterclaims to actions we bring to enforce our patents. We are also party to other patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payors, governments or other parties are seeking damages from us for alleged delay of generic entry. We also are often involved in other proceedings, such as inter partes review, post-grant review, re-examination or opposition proceedings, before the U.S. Patent and Trademark Office, the European Patent Office, or other foreign counterparts relating to our intellectual property or the intellectual property rights of others. Also, if one of our patents or a competitors’ patents is found to be invalid in such proceedings, generic or biosimilar products could be introduced into the market resulting in the erosion of sales of our existing products. For additional information, including information regarding certain legal proceedings in which we are involved, see Note 16A1 . Further, if we are unable to maintain our existing license agreements or other agreements pursuant to which third parties grant us rights to intellectual property, our operating results and financial condition could be adversely affected.We currently hold trademark registrations and have trademark applications pending in many jurisdictions, any of which may be the subject of a governmental or third-party objection, which could prevent the maintenance or issuance of the trademark. As our products mature, our reliance on our trademarks and trade dress to differentiate us from our competitors increases and, as a result, our business could be adversely affected if we are unable to prevent third parties from adopting, registering or using trademarks and trade dress that infringe, dilute or otherwise violate our rights. We seek to protect our proprietary information, including our trade secrets and proprietary know-how, by requiring our employees, consultants, other advisors and other third parties to execute proprietary information and confidentiality agreements upon the commencement of their relationship with us. Despite these efforts and precautions, we may be unable to prevent a third-party from copying or otherwise obtaining and using our trade secrets or our other intellectual property without authorization, and legal remedies may not adequately compensate us for the damages caused by such unauthorized use. Further, others may independently and lawfully develop substantially similar or identical products that circumvent our intellectual property by means of alternative designs or processes or otherwise.THIRD-PARTY INTELLECTUAL PROPERTY CLAIMS
A properly functioning intellectual property regime is essential to our business model. We are committed to respecting the valid intellectual property rights of other companies, but the patent granting process is imperfect. Accordingly, the pursuit of valid business opportunities may require us to challenge intellectual property rights held by others that we believe were improperly granted, including challenges through negotiation and litigation, and such challenges may not always be successful.
Part of our business depends upon identifying biosimilar opportunities and launching products to take advantage of those opportunities, which may involve litigation, associated costs and time delays, and may ultimately not be successful. These opportunities may arise in situations where patent protection of equivalent branded products has expired or been declared invalid, or where products do not infringe the patents of others. In some circumstances we may take action, such as litigation, asserting that our products do not infringe patents of existing products or that those patents are invalid or unenforceable in order to achieve a “first-to-market” or early market position for our products.Third parties may claim that our products infringe one or more patents owned or controlled by them. Claims of intellectual property infringement can be costly and time-consuming to resolve, may delay or prevent product launches, and may result in significant royalty payments or damages or potential licensing agreements. For example, our R&D in a therapeutic area may not be first and another company or entity may have obtained relevant patents before us. We are involved in patent-related disputes with third parties over our attempts to market pharmaceutical products, including related to Abrysvo, Comirnaty and Paxlovid. As we expand our mRNA portfolio, patent-related disputes may increase. Once we have final regulatory approval of the related products, we may decide to commercially market these products even though associated legal proceedings (including any appeals) have not been resolved (i.e., “at-risk” launch). If one of our marketed products (or a product of our collaboration/licensing partners to which we have licenses or co-promotion rights) is found to infringe valid patent rights of a third party, such third party may be awarded significant damages or royalty payments, or we may be prevented from further sales of that product. Such damages may be enhanced as much as three-fold if we or one of our subsidiaries is found to have willfully infringed valid patent rights of a third party.
Pfizer Inc. 2024 Form 10-K
21
INFORMATION TECHNOLOGY AND SECURITY
Significant disruptions of IT systems or breaches of information security could adversely affect our business. We extensively rely upon sophisticated IT systems (including cloud services) to operate our business. We produce, collect, process, store and transmit large amounts of confidential information (including personal information and intellectual property), and we deploy and operate an array of technical and procedural controls to maintain the confidentiality, integrity and availability of such confidential information. We develop and operate digital systems to engage patients, healthcare providers, governments, payors and supply chain partners to conduct business and deliver medicines, digital diagnostics, clinical trials and digital therapies. Such systems include mobile applications, wearable devices, internet websites and other digital technologies that may be targets of attack. We have outsourced significant elements of our operations, including significant elements of our IT infrastructure and, as a result, we manage relationships with many third-party providers who may or could have access to our confidential information. We rely on technology developed, supplied and/or maintained by third-parties that may make us vulnerable to “supply chain” style cyber-attacks. Further, technology and security vulnerabilities of acquisitions, business partners or third-party providers may not be identified during due diligence or soon enough to mitigate exploitation. The size and complexity of our IT and information security systems, and those of our third-party providers (and the large amounts of confidential information that is present on them), make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by, but not limited to, our employees, contingent workers, service providers, business partners, customers or malicious attackers. As a global pharmaceutical company, our systems and assets are the target of frequent cyber-attacks. Such cyber-attacks are of ever-increasing levels of sophistication, including the use of adversarial AI techniques, and are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage, extortion, property destruction and personal information theft) and expertise, including, but not limited to, organized criminal groups, “hacktivists,” nation states, employees, business partners and others. Due to the nature of some of these attacks, there is a risk that they may remain undetected for a period of time. While we have invested in the protection of data and IT and develop and maintain systems and controls, our efforts, like those of other similar companies, have not always and may not in the future prevent service interruptions, extortion, theft of confidential, personal or proprietary information, compromise of data integrity or unauthorized information disclosure. Any technology service interruption or breach of our systems could adversely affect our business operations and/or result in potential legal liability, the loss of personal data, confidential information or intellectual property. Such incidents could require disclosure to government authorities and/or regulators and could require notification to impacted individuals and any incident could result in financial, legal, business and reputational harm to us. We maintain cyber liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
AI is increasingly being used in the biopharmaceutical and global healthcare industries. As with many developing technologies, AI presents risks and challenges. For example, algorithms may be flawed or trained on content without the necessary intellectual property rights or other legal rights or permissions; data sets may not be appropriate for the intended use, of poor quality, contain biased information, or become corrupted during a cyber-attack; and inappropriate or controversial data practices by data scientists, engineers, and end-users could impair results. If the outputs that AI produces or assists in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability and brand or reputational harm. Furthermore, use of AI may lead to the release of confidential information which may impact our ability to realize the benefits of our data, including intellectual property.GENERAL RISKS
BUSINESS DEVELOPMENT ACTIVITIES AND STRATEGIC GOALSWe have established significant growth goals, which we plan to achieve, in part, by not only advancing our own product pipelines and maximizing the value of our existing products, but also through various forms of business development activities, which can include alliances, licenses, JVs, collaborations, equity- or debt-based investments, dispositions, divestments, mergers and acquisitions. We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities. The success of our business development activities is dependent on the availability and accurate evaluation of appropriate opportunities, competition from others that are seeking similar opportunities and our ability to successfully identify, structure and execute transactions, including the ability to satisfy closing conditions in the anticipated timeframes or at all, and our ability to successfully integrate acquired businesses and develop and commercialize acquired products. Pursuing, executing and consummating these transactions may require substantial investment, which may require us to obtain additional equity or debt financing, which has in the past and could in the future result in increased leverage and/or a downgrade of our credit ratings and could limit our ability to obtain future financing. We have incurred substantial indebtedness to fund our acquisition of Seagen. We financed a portion of the transaction with the proceeds from the $31 billion of long-term debt issued in May 2023, plus additional short-term indebtedness issued prior to the acquisition. The amount of debt that we have incurred could have significant consequences including, among other things, reducing our operating or financial flexibility, requiring a portion of our cash flow from operations to make interest payments and reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business. To the extent we incur additional indebtedness or interest rates increase, these risks could increase further.
The success of our business development transactions depends on our ability to realize the anticipated benefits of these transactions and is subject to numerous risks and uncertainties, many of which are outside of our control. Unsuccessful clinical trials, regulatory hurdles, new information and commercialization challenges, among other factors, may adversely impact revenue and income contribution from business development transactions, including from acquired products and businesses, and may lead to impairment of acquired assets. We may fail to generate expected revenue growth for our existing products, product pipeline and contribution from these transactions or from acquired products or businesses or we may fail to achieve anticipated cost savings, within expected time frames or at all, which may impact our ability to meet our growth objectives. In certain transactions, we may agree to provide certain transition services for an extended period of time, which may divert our focus and resources that would otherwise be invested into maintaining or growing our business. Similarly, the accretive impact anticipated from certain transactions may not be realized or may be delayed. Integration of acquired products or businesses may result in the loss of key employees, the disruption of ongoing business, including third-party relationships, or inconsistencies in standards, controls, procedures and policies. Further, while we seek to mitigate risks and liabilities through, among other things, due diligence, we may be exposed to risks and liabilities as a result of business development transactions. There is no assurance that we will be able to acquire attractive businesses or enter into strategic business relationships on favorable terms ahead of our competitors, or that such acquisitions or strategic business development relationships will be accretive to earnings or improve our competitive position.
Where we invest in or otherwise obtain debt or equity securities of third parties in connection with business development transactions, such as our ownership interest in Haleon, we may be unable to direct or influence the management, operational decisions and policies of such companies
Pfizer Inc. 2024 Form 10-K
22
and the value of the acquired securities will fluctuate and may lose value. Any future distribution or sale of such securities will be subject to prevailing market conditions and other factors, including the size of our ownership stake, at the time of such distribution or sale and there is no assurance as to the price that such securities will ultimately be sold or that such securities will be sold at all.PANDEMICS
Pandemics, such as the COVID-19 pandemic, have impacted and may in the future impact our business, operations and financial condition and results. Related risks and challenges for our business include, among others: uncertainty regarding the severity and duration of a pandemic; impacts to business operations; decreased demand for certain of our products; increased costs of doing business; manufacturing disruptions and delays; supply chain disruptions and shortages, including challenges related to reliance on third-party suppliers resulting in reduced availability of materials or components used in the development, manufacturing, distribution or administration of our products; evolving macroeconomic factors and conditions, including general economic uncertainty, unemployment rates and recessionary pressures; changes in labor markets, including challenges related to our human capital and talent development; unknown consequences on our business performance and initiatives stemming from the substantial investment of time and other resources to any potential pandemic response; increased difficulty and uncertainty regarding predicting or estimating future performance; pace of post-pandemic recovery, disruption and volatility within the financial or credit markets; and our financial performance in general.
COVID-19We face risks and uncertainties related to our COVID-19 products, including Comirnaty and Paxlovid or any potential future COVID-19 vaccines, treatments or combinations, including, among others, the risk that as the market for COVID-19 products remains endemic and seasonal, demand for our COVID-19 products has and may continue to be reduced or not meet expectations, which has and may continue to lead to reduced revenues, excess inventory or other unanticipated charges; risks related to our ability to develop and commercialize variant adapted vaccines, combinations and/or treatments; uncertainties related to recommendations and coverage for, and the public’s adherence to, vaccines, boosters, treatments or combinations; risks related to our ability to accurately predict revenue for Comirnaty and Paxlovid or any potential future COVID-19 vaccines or treatments; whether and when EUA or biologics license applications or amendments to any such applications may be filed in particular jurisdictions for Comirnaty or any other potential vaccine or vaccine candidates, including those related to potential future annual boosters, re-vaccinations, or vaccines in additional populations, and if obtained, whether or when such EUA or licenses, or existing EUAs, will expire or terminate; whether and when additional supply or purchase agreements will be reached or existing agreements will be modified; potential third-party royalties or other claims related to Comirnaty or Paxlovid; and the other risks and uncertainties discussed throughout this Item 1A. Risk Factors.
RESPONSIBLE BUSINESS GROWTH
Pfizer is subject to transitional and physical risks related to climate change. Transitional risks include, for example, a disorderly global transition away from fossil fuels that may result in increased energy prices; customer preference for low or no-carbon products; stakeholder pressure to decarbonize assets; or new legal or regulatory requirements that result in new or expanded carbon pricing, taxes, restrictions on GHG emissions, and increased GHG disclosure and transparency. These risks could increase operating costs, including the cost of our electricity and energy use, or otherwise increase compliance costs. Physical risks to our operations include water stress and drought; flooding and storm surge; wildfires; extreme temperatures and storms, which could impact pharmaceutical production, increase costs, or disrupt supply chains of medicines for patients. For example, our manufacturing facility in Rocky Mount, NC was damaged by a tornado in July 2023. For additional details on the impact of the tornado in Rocky Mount, NC, see the Overview of Our Performance, Operating Environment, Strategy and Outlook — Our Operating Environment section within MD&A. Our supply chain is subject to these same transitional and physical risks and would likely pass along any increased costs to us.
In June 2022, Pfizer established our fourth consecutive GHG reduction goal with new near- and long-term targets to achieve the Science Based Target Initiative’s voluntary Net-Zero Standard by 2040. While we are working to develop and implement emission reduction plans to achieve our voluntary climate goals, various factors, including the long time horizons and commercial availability of new technologies to enable the emission reductions, in the time and scale needed, may present inherent risk in our ability to meet these goals. Additionally, success may depend on the actions of governments and third parties and may require, among other things, significant capital investment; R&D; and government policies and incentives to foster innovation and reduce costs of technologies that may not currently exist or be available at scale.
Certain governmental authorities, non-governmental organizations, customers, investors, employees, and other stakeholders are increasingly sensitive to matters perceived to be related to responsible business growth, such as equitable access to medicines and vaccines, product quality and safety, human capital, diversity, equity and inclusion, environmental stewardship, support for local communities, value chain environmental and social due diligence, and corporate governance and transparency. In addition, governments and the public expect companies like us to report on our business practices with respect to human rights, responsible sourcing and environmental impact, as well as the actions of our third-party contractors and suppliers around the world. This focus may lead to new expectations or requirements that could result in increased costs associated with research, development, manufacture, or distribution of our products. Our ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for companies to establish validated Net Zero targets or offer more sustainable products. While we are committed to responsible business growth, if we do not meet, or are perceived not to meet, our goals or other stakeholder expectations in these key areas, we risk negative stakeholder reaction, including from proxy advisory services, as well as damage to our brand and reputation, reduced demand for our products or other negative impacts on our business and operations. While we monitor a broad range of corporate responsibility matters, we cannot be certain that we will manage such matters successfully, or that we will successfully meet the expectations of investors, employees, consumers, governments and other stakeholders.MARKET FLUCTUATIONS IN OUR EQUITY AND OTHER INVESTMENTS
Changes in the fair value of certain equity investments that are recognized in net income may result in increased volatility of our income. See Note 4 and the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A.Our pension benefit obligations and postretirement benefit obligations are subject to volatility from changes in the fair value of equity investments and other investment risk in the assets funding these plans, as well as changes in the appropriate discount rate. See the Significant Accounting Policies and Application of Critical Accounting Estimates and Assumptions — Benefit Plans section within MD&A and Note 11 .
Pfizer Inc. 2024 Form 10-K
23COST AND EXPENSE CONTROL AND UNUSUAL EVENTSGrowth in costs and expenses, changes in product and geographic mix and the impact of acquisitions, divestitures, restructurings, internal reorganizations, product withdrawals, recalls and other unusual events that could result from evolving business strategies, evaluation of asset realization and organizational restructuring could adversely affect future results. Such risks and uncertainties include, in particular, our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including our enterprise-wide cost realignment program and manufacturing optimization program, other corporate strategic initiatives and any acquisitions, divestitures or other initiatives, as well as potential disruption of ongoing business, such as potential impacts on our ability to deliver on our pipeline as planned. Additionally, as a result of these initiatives, we may experience a loss of continuity, loss of accumulated knowledge or intellectual property and/or inefficiency, adverse effects on employee morale, loss of key employees and/or other retention issues during transitional periods. Reorganizations and restructurings can require a significant amount of time and focus, which may divert attention from operating and growing our business. If we fail to achieve some or all of the expected benefits of restructuring, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.INTANGIBLE ASSETS, GOODWILL AND EQUITY-METHOD INVESTMENTSOur consolidated balance sheet contains significant amounts of intangible assets, including IPR&D and goodwill. For IPR&D assets, the risk of failure is significant, and there can be no certainty that these assets ultimately will yield successful products. Our ability to realize value on these significant investments is often contingent upon, among other things, regulatory approvals and market acceptance. As such, IPR&D assets may become impaired and/or be written off in the future if the associated R&D effort is abandoned or is curtailed. For goodwill, all reporting units can confront events and circumstances that can lead to a goodwill impairment charge such as, among other things, unanticipated competition, an adverse action or assessment by a regulator, a significant adverse change in legal matters or in the business climate and/or a failure to replace the contributions of products that lose market exclusivity. Our other intangible assets, including developed technology rights and brands, face similar risks for impairment. Our equity-method investments may also be subject to impairment charges that may result from the occurrence of unexpected adverse events or management decisions that impact our estimates of expected cash flows to be generated from these investments. We may recognize impairment charges as a result of a weak economic environment, challenging market conditions, decisions by management, or events related to particular customers or asset types, such as the development of competing assets by us or others, regulatory actions or product recalls or withdrawals. Any such impairment charge of our intangible assets, goodwill and equity-method investments may be significant. See Note 4 for a discussion of recent impairments of intangible assets. For additional details, see the S ignificant Accounting Policies and Application of Critical Accounting Estimates and Assumptions — Asset Impairments section within MD&A.CHANGES IN LAWS AND ACCOUNTING STANDARDSOur future results could be adversely affected by changes in laws, regulations or policies, or their interpretation, including, among others, changes in accounting standards, tariffs, tax laws and regulations internationally and in the U.S., including, without limitation, the IRA, the adoption of global minimum taxation requirements outside the U.S. generally effective in most jurisdictions since January 1, 2024 and potential changes to existing tax laws, tariffs, competition laws, privacy laws and environmental laws or changes to other laws, regulations and policies in the U.S., including by the U.S. Presidential administration and Congress, as well as in other countries. For example, issued or future executive orders or other new or changes in laws, regulations or policy regarding tariffs, could have a material adverse effect on our business, earnings and financial guidance. The actual impact of the new tariffs on our business is subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs imposed by other countries. See Government Regulation and Price Constraints for additional information regarding privacy and other laws. For additional information on changes in tax laws or rates or accounting standards, see the Provision/(Benefit) for Taxes on Income and New Accounting Standards sections within MD&A and Note 1B .ITEM 1C. CYBERSECURITY
Managing cybersecurity risk is a crucial part of our overall strategy for safely operating our business. We incorporate cybersecurity practices into our Enterprise Risk Management (ERM) program. Management is responsible for assessing and managing risk, including through the ERM program, subject to oversight by our BOD. Our cybersecurity policies and practices are aligned with NIST (National Institute of Standards and Technology) industry standards.
Consistent with our overall ERM program and practices, our cybersecurity program includes:
• Vigilance : We maintain a global cybersecurity operation that endeavors to detect, prevent, contain, and respond to cybersecurity threats and incidents in a prompt and effective manner with the goal of minimizing business disruptions.
• External Collaboration : We collaborate with public and private entities, including intelligence and law enforcement agencies, industry groups and third-party service providers to identify, assess and mitigate cybersecurity risks.
• Systems Safeguards : We deploy technical safeguards that are designed to protect our information systems, products, operations and sensitive information from cybersecurity threats. These include firewalls, intrusion prevention and detection systems, disaster recovery capabilities, malware and ransomware prevention, access controls and data protection. We continuously conduct vulnerability assessments to identify new risks and periodically test the efficacy of our safeguards through both internal and external penetration tests.
• Education : We provide periodic training for all personnel regarding cybersecurity threats, with such training appropriate to the roles, responsibilities and access of the relevant Company personnel. Our policies require all workers to report any real or suspected cybersecurity events.
• Supplier Ecosystem Management : We extend our cybersecurity management control expectations to our supply chain ecosystem, as appropriate. This includes identifying cybersecurity risks presented by third parties.
• Incident Response Planning : We have established, and maintain and periodically test, incident response plans that direct our response to cybersecurity events and incidents. Such plans include the protocol by which certain significant or potentially material incidents would be communicated to executive management, our BOD, external regulators and shareholders, as appropriate.
• Enterprise-Wide Coordination : We engage relevant stakeholders from across the Company to identify emerging risks and respond to cybersecurity threats. This cross-functional approach includes personnel from our R&D, manufacturing, commercial, technology, legal, compliance, internal audit and other business functions.Pfizer Inc. 2024 Form 10-K
24• Governance : Our BOD’s oversight of cybersecurity risk management is led by the Audit Committee, which oversees our ERM program. Cybersecurity threats, risks and mitigation are periodically reviewed by the Audit Committee and such reviews include both internal and independent assessment of risks, controls and effectiveness.
Our risk assessment efforts have indicated that we are a target for theft of intellectual property, financial resources, personal information, and trade secrets from a wide range of actors including nation states, organized crime, malicious insiders and activists. The impacts of attacks, abuse and misuse of Pfizer’s systems and information could include, without limitation, loss of assets, operational disruption and damage to Pfizer’s reputation.
A key element of managing cybersecurity risk is the ongoing assessment and testing of our processes and practices through auditing, assessments, drills and other exercises focused on evaluating the sufficiency and effectiveness of our risk mitigation. We regularly engage third parties to perform assessments of our cybersecurity measures, including information security maturity assessments and independent reviews of our information security control environment and operating effectiveness. Certain results of such assessments and reviews are reported by the Chief Information Security Officer (CISO) to certain senior leaders, the Audit Committee and the BOD, as appropriate, and we make adjustments to our cybersecurity processes and practices as necessary based on the information provided by the third-party assessments and reviews .
The Audit Committee oversees cybersecurity risk management, including the policies, processes and practices that management implements to prevent, detect and address risks from cybersecurity threats. The Audit Committee receives periodic briefings on, and discusses with our CISO, cybersecurity risks and risk management practices, including, for example, recent developments in the external cybersecurity threat landscape, evolving standards, vulnerability assessments, third-party and independent reviews, technological trends and considerations arising from our supplier ecosystem. The Audit Committee may also promptly receive information regarding certain significant or potentially material cybersecurity incidents that may occur, including any ongoing updates regarding the same.
Our CISO is a member of our management team who is principally responsible for overseeing our cybersecurity risk management program, in partnership with other business leaders across the Company. We believe our CISO and the information security organization have the appropriate expertise, background and depth of experience relating to monitoring the prevention, mitigation, detection and remediation of cybersecurity incidents to manage risks arising from cybersecurity threats. The CISO works in coordination with other members of the management team, including, among others, the Chief Digital Officer, the Chief Financial Officer and the Chief Legal Officer and their designees.
Our CISO, along with leaders from our privacy and corporate compliance functions, collaborate to implement a program designed to manage our exposure to cybersecurity risks and to promptly respond to cybersecurity incidents. Prompt response to incidents is delivered by multi-disciplinary teams in accordance with our incident response plan. Through ongoing communications with these teams during incidents, the CISO monitors the triage, mitigation and remediation of cybersecurity incidents, and reports such incidents to executive management, the Audit Committee and other Pfizer colleagues in accordance with our cybersecurity policies and procedures, as is appropriate.For the fiscal year ended December 31, 2024 , we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. For further discussion of the risks associated with cybersecurity incidents, see the Item 1A. Risk Factors—Information Technology and Security section in this Form 10-K.
FY 2025-12-31 (later)
ITEM 1A. RISK FACTORSThis section describes the material risks to our business, which should be considered carefully in addition to the other information in this report and our other filings with the SEC. Investors should be aware that it is not possible to predict or identify all such factors and that the following is not meant to be a complete discussion of all potential risks or uncertainties. Additionally, our business is subject to general risks applicable to any company, such as economic conditions, geopolitical events, extreme weather and natural disasters. If known or unknown risks or uncertainties materialize, our business operations, financial condition, operating results (including components of our financial results), cash flows, prospects, reputation or credit ratings could be materially adversely affected now and in the future. The following discussion of risk factors contains forward-looking statements, as discussed in the Forward-Looking Information and Factors that May Affect Future Results section.RISKS RELATED TO OUR BUSINESS, INDUSTRY AND OPERATIONS:
MANAGED CARE TRENDSPrivate payors, such as health plans, and other managed care entities, such as PBMs, continue to take action to manage the utilization and costs of drugs in the U.S., the single largest market for biopharmaceutical products. The negotiating power of MCOs, PBMs and other private third-party payors has increased due to consolidation, and they, along with state and federal governments, increasingly employ tools to control costs and encourage utilization of certain drugs, including through the use of deductibles, utilization management tools, cost sharing or formulary placement. They may demand rebates and/or fees from biopharmaceutical manufacturers for preferred formulary placement, or for unrestricted access on a drug formulary. The growing availability and use of higher-cost innovative specialty pharmaceutical medicines that treat rare life-threatening conditions has also increased payor interest in the deployment of cost-containment strategies. We may fail to obtain or maintain timely or adequate pricing or formulary placement of our products, or fail to obtain such formulary placement at pricing that reflects the value of the treatment.
Some payers are directing beneficiaries to third-party patient assistance programs, rather than covering certain treatments. In other instances, insurers disallow manufacturers’ co-pay assistance from counting toward reaching the deductible or out-of-pocket maximum. Both approaches can delay access to treatment or result in treatment abandonment. Further, consumers are facing responsibility for a larger portion of their prescription costs, or administrative hurdles to access, and may favor lower-cost, or generic alternatives, or seek direct-to-consumer medications outside of insurance plans.
Third-party payors also use additional measures such as new-to-market blocks, exclusion lists, carve-outs or indication-based pricing and value-based pricing/contracting to improve their cost containment efforts and cost efficiency. Such payors are also increasingly imposing utilization management tools requiring prior authorization for a branded product or requiring the patient to first fail on one or more other products before permitting access to a particular branded medicine. As the U.S. third-party payor market consolidates further, and as the IRA prices become publicly available, we may face greater pricing pressure from third-party payors, including insurers and PBMs, as they continue to drive more of their patients to use lower cost alternatives or seek even larger rebates to control costs or offset losses from the IRA and other market pressures. For additional information on the IRA see the Item 1. Business –– Pricing Pressures and Managed Care Organizations and ––Government Regulation and Price Constraints and Item 1A. Risk Factors –– Pricing and Reimbursement sections.
Also, business arrangements in this area are subject to a high degree of government scrutiny, and available exceptions and safe harbors under applicable federal and state fraud and abuse laws are subject to change through legislative and regulatory action, as well as evolving judicial interpretations. Our approach to these arrangements may also be informed by such government and industry guidance.COMPETITIVE PRODUCTSCompetitive product launches have and may erode future sales of our products, including our existing products and those currently under development, or result in product obsolescence. Such launches continue to occur, and potentially competitive products are in various stages of development. We cannot predict with accuracy the timing or impact of the introduction of competitive products that treat or prevent diseases and conditions like those treated or prevented by our in-line products and product candidates. In addition to the impact of competitive product launches, we are facing an increasing number of potential competitors worldwide, including from China, that have expanded R&D capabilities.
Some of our competitors may have competitive, technical or other advantages over us for the development of technologies and processes or greater experience in particular therapeutic areas, and technological innovation and/or consolidation among certain pharmaceutical and biotechnology companies can enhance such advantages. These advantages may make it difficult for us to compete with them successfully to discover, develop and market new products and for our current products to compete with new products or indications they may bring to market. Our products and product candidates compete, and may compete in the future, against products or product candidates that offer higher rebates or discounts, exclusionary contracting, lower prices, equivalent or superior efficacy and/or coverage, better safety or tolerability profiles, easier administration, earlier market availability or other competitive features, including greater brand recognition or potential preference to prescribe existing competitor treatments over our novel therapies. For example, with the growing competition in the vaccine space, we are subject to increasing discounts to meet competitive dynamics and to help ensure our vaccines are available in retail pharmacies. If we are unable to compete effectively, this could reduce actual or anticipated future sales, which could negatively impact our results of operations.
Several manufacturers, including Pfizer, have signed voluntary agreements with the Trump Administration designed to ensure U.S. patients pay lower prices for their prescription medicines. This may impact the competitive environment, including pricing dynamics for any of our current or potential future products, as well as contracting with payers.
In addition, competition from manufacturers of generic drugs, including from generic versions of competitors’ branded products that lose their market exclusivity, is a major challenge for our branded products. Certain of our products have experienced significant generic competition over the last few years. We anticipate a significant reduction of revenue from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations, with the rate of the reduction of revenues from patent-based or regulatory exclusivity expiries expected to significantly accelerate over the next few years. See the Item 1. Business—Patents and Other Intellectual Property Rights
Pfizer Inc. 2025 Form 10-K
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section. In China, we expect to continue to face intense competition by certain generic manufacturers, which has resulted, and may result in the future, in price cuts and volume loss of some of our products.In addition, our patented products may face generic or biosimilar competition before patent-based and/or regulatory exclusivity expires, including from “at-risk” launch (despite pending patent infringement litigation against the generic or biosimilar product) by a manufacturer of a generic or biosimilar version of one of our patented products. Generic and biosimilar manufacturers have filed or could file applications with the FDA seeking approval of product candidates that they claim do not infringe our or our collaboration and licensing partners’ patents or claim that our or our collaboration and licensing partners’ patents are not valid. We and our licensing and collaboration partners also face challenges in various jurisdictions by generic drug manufacturers to patents covering products for which we have patent rights, licenses or co-promotion rights. See Note 16A1 .
We may become subject to competition from biosimilars referencing our biologic products if competitors are able to obtain marketing approval for such biosimilars.
We also commercialize biosimilar products that compete with products of others, including other biosimilar products. The number of current and forthcoming competing biosimilars, coupled with Medicare’s average sales price-based provider reimbursement methodology, is expected to increase pricing pressures on our biosimilar products. Uptake of our biosimilars may be lower due to various factors, such as access challenges where our product may not receive appropriate coverage/reimbursement access or remains in a disadvantaged position relative to an innovator product.
For additional information on competition our products face, see the Item 1. Business — Competition section.
CONCENTRATIONWe recorded revenues of more than $1 billion for each of 12 products that collectively accounted for 65% of Total revenues in 2025. For example, Eliquis accounted for 13% of Total revenues in 2025. See N otes 1 and 17 . If these products or any of our other major products were to, or continue to (if applicable), experience loss of patent protection (if applicable), changes in prescription or vaccination purchasing or growth rates, reduced product demand, material product liability litigation, unexpected side effects or safety concerns, regulatory proceedings or investigations, lower governmental and/or regulatory confidence, negative publicity affecting doctor or patient confidence, pressure from competitive products, changes in recommendations and coverage, changes in labeling, pricing and access pressures, including those related to the IRA and MFN, or supply shortages or if a new, more effective product should be introduced, the adverse impact on our revenues could be significant and our revenue forecasts and expectations could prove to be inaccurate and we may fail to meet these expectations. In particular, certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face new or increased generic competition over the next few years. We anticipate a significant reduction of revenue from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations. In addition, patents covering a number of our best-selling products are, or have been, the subject of pending legal challenges. For additional information on our patents, see the Item 1. Business — Patents and Other Intellectual Property Rights section. Furthermore, our recent business development initiatives have been concentrated in certain therapeutic areas — for example, our acquisitions of Metsera and Seagen represent significant investments in obesity and oncology, respectively, which are extremely competitive therapeutic areas. In addition, revenues from Comirnaty and Paxlovid have decreased substantially over time and could continue to decrease. For Paxlovid, utilization is expected to follow infection trends, and revenues may fluctuate based on the timing, duration and severity of COVID-19 infections. For information on risks associated with Comirnaty and Paxlovid, see the COVID-19 section below.In addition, certain of our customers account for a significant portion of our revenues. If one of our significant customers should encounter financial or other difficulties, it might decrease the amount of business such customer does with us and/or we might be unable to timely collect all the amounts that such customer owes us or at all, which could negatively impact our results of operations. In addition, we expect that consolidation and integration of pharmacy chains and wholesalers will increase competitive and pricing pressures on pharmaceutical manufacturers, including us. See Note 17C for a discussion of our significant customers.
RESEARCH AND DEVELOPMENTThe discovery and development of new products, as well as the development of additional uses for existing products, are necessary for the continued strength of our business. Our product lines must be replenished over time to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well as to provide for earnings growth, primarily through internal R&D or through collaborations, acquisitions, JVs, licensing or other arrangements, including co-funding agreements with third-parties . Growth depends in large part on our ability to identify and develop new products or new indications for existing products that address unmet medical needs and receive reimbursement from payors. However, balancing current growth, investment for future growth and the delivery of shareholder return remains a major challenge. The costs of product development continue to be high and are growing, as are regulatory requirements in many therapeutic areas, which may affect the complexity of drug trials, and the number of candidates we are able to fund as well as the sustainability of the R&D portfolio. Decisions made early in the development process of a drug or vaccine candidate can have a substantial impact on the marketing strategy and payor reimbursement possibilities if the candidate receives regulatory approval. We try to plan clinical trials prudently and to reasonably anticipate and address challenges, but there is no assurance that an optimal balance between trial conduct, speed and desired outcome will be achieved. In addition, potential quality issues may be identified in the course of a clinical trial that cannot be remediated to the satisfaction of a regulatory authority that may take actions within the scope of its enforcement authority, including excluding data and placing restrictions on future clinical trials.
Additionally, our product candidates can fail at any stage of the R&D process, and may not receive regulatory approval even after many years of R&D. We may fail to correctly identify compounds or indications for which our science is promising or allocate R&D investment resources efficiently, and failure to invest in the right technology platforms, therapeutic areas, product classes, geographic markets and/or licensing opportunities could adversely impact the productivity of our pipeline. Further, even if we identify areas with the greatest commercial potential, the scientific approach may not succeed despite the significant investment required for R&D, and the product may not be as competitive as expected because of, among other things, the highly dynamic regulatory and market environments, the competitive landscape and the hurdles in terms of access, coverage and reimbursement. In addition, changes in the commercial landscape may impact our decisions around future product development.
Pfizer Inc. 2025 Form 10-K
17GLOBAL OPERATIONSWe operate on a global scale and could be affected by currency and interest rate fluctuations; global trade tensions; capital and exchange controls; local and global economic conditions including inflation, recession, volatility and/or lack of liquidity in capital markets; expropriation and other restrictive government actions; changes in intellectual property; legal protections and remedies; trade regulations; tariffs; tax laws and regulations; and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including, without limitation, the conflicts between Russia and Ukraine and in the Middle East and their economic consequences, geopolitical instability, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.Some emerging market countries may be particularly vulnerable to periods of financial, economic or political instability or significant currency fluctuations or may have limited resources for healthcare spending. As a result of these and other factors, our strategy to grow in emerging markets may not be successful, and any growth rates in these markets may not be sustainable. Additionally, local economic conditions may adversely affect the ability of payors, as well as our distributors, customers, suppliers and service providers, to pay for our products, or otherwise to buy necessary inventory or raw materials, and to perform their obligations under agreements with us.
Government financing and economic pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria (e.g., through health technology assessments) or other means of cost control. For additional information on government pricing pressures, see the Item 1. Business—Government Regulation and Price Constraints section.We continue to monitor the global trade environment and potential trade conflicts, sanctions and impediments that could impact our business. If trade restrictions or tariffs reduce global economic activity, potential impacts could include declining sales; increased costs; volatility in foreign exchange rates; a decline in the value of our financial assets and pension plan investments; required increases of our pension funding obligations; increased government cost control efforts; delays or failures in the performance of customers, suppliers and other third parties on whom we may depend for the performance of our business; and the risk that our allowance for doubtful accounts may not be adequate. In addition, issued or future executive orders, or other new or changes in laws, regulations or policy regarding tariffs or other trade or foreign policy, could have a material adverse effect on our business, earnings, cash flow, liquidity and financial guidance. As discussed above, in September 2025, Pfizer entered into a voluntary agreement with the Trump Administration and will receive a three-year grace period during which time Pfizer products will not face Section 232 tariffs, provided we further invest in manufacturing in the U.S. We face risks and uncertainties associated with the agreement and negotiating the binding final agreement, including the possibility of, among other things, unfavorable terms and increased costs related to tariffs and investment requirements and our ability to meet those investment requirements, as well as the possibility of tariffs that could be outside the scope of the agreement. The actual impact of any new tariffs on our business would be subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs or other retaliatory actions imposed by other countries.
We operate in many countries and transact in many different currencies. Changes in the value of those currencies relative to the U.S. dollar, or high inflation or deflation in those countries, can impact our revenues, costs and expenses and our financial guidance. Significant portions of our revenues, costs and expenses, as well as our substantial international net assets, are exposed to exchange rate changes. In 2025, 41% of our total revenues were derived from international operations, including 21% from Europe and 12% from China, Japan and the rest of the Asia Pacific region. Future changes in exchange rates or economic conditions and the impact they may have on our results of operations, financial condition or business are difficult to predict. For additional information about our exposure to foreign currency risk, see the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A.In addition, our borrowing, pension benefit and postretirement benefit obligations and interest-bearing investments are subject to risk from changes in interest and exchange rates. The risks related to interest-bearing investments and borrowings and the measures we have taken to help contain them are discussed in the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A and Note 7E . For additional details on critical accounting estimates and assumptions for our benefit plans, see the Significant Accounting Policies and Application of Critical Accounting Estimates and Assumptions—Benefit Plans section within MD&A and Note 11 .
PRODUCT MANUFACTURING, SALES AND MARKETING RISKS
We could encounter difficulties, delays or inefficiencies in our supply chain, product manufacturing and distribution networks, as well as sales or marketing, due to regulatory actions, shut-downs, work stoppages or strikes, approval delays, withdrawals, recalls, penalties, supply disruptions, shortages or stock-outs at our facilities or third-party facilities that we rely on, reputational harm, the impact to our facilities due to health pandemics or natural or man-made disasters, including as a result of climate change, product liability or unanticipated costs. Examples of such difficulties or delays include the inability to increase or maintain production capacity commensurate with demand; challenges related to component materials to maintain supply and/or appropriate quality standards throughout our supply network and/or comply with applicable regulations; inability to supply certain products due to voluntary product recalls or withdrawals, including, for example, our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved; and supply chain disruptions at our facilities or at a supplier or vendor. In addition, we engage contract manufacturers, and, from time to time, our contract manufacturers may face difficulties or are unable to manufacture our products at the necessary quantity or quality levels.Regulatory agencies periodically inspect our manufacturing facilities, as well as third-party facilities that we rely on, to evaluate compliance with cGMP or other applicable requirements. Failure to comply with these requirements may subject us to possible legal or regulatory actions, such as warning letters, suspension of manufacturing, seizure of product, injunctions, debarment, product recalls, delays or denials of product approvals, import bans or denials of import certifications. In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines and we are actively engaging with regulatory authorities on this topic. If nitrosamines are detected in products, this may lead to submission of comprehensive data packages to regulatory authorities to support discussions on the relevant intake limit for the product and potential impact on patient supply, and, in some instances, may lead to market action for such products. For example, i n 2021, Pfizer recalled Chantix due to the presence of a nitrosamine, N-nitroso-varenicline, at or above acceptable intake limits communicated by various regulatory authorities. Following issuance of updated guidance on acceptable intake limits for N-nitroso-varenicline by regulatory authorities, in 2025, Chantix returned to market in the U.S. and in certain international markets.See the Overview of Our Performance, Operating Environment, Strategy and Outlook — Our Operating Environment section within MD&A.Pfizer Inc. 2025 Form 10-K
18COLLABORATIONS AND OTHER RELATIONSHIPS WITH THIRD PARTIESWe depend on third-party collaborators, service providers, and others in the research, development, manufacturing and commercialization of our products and product candidates and also enter into JVs and other business development transactions. To achieve expected longer-term benefits, we may make substantial upfront payments as part of these transactions, which may negatively impact our earnings or cash flows. We rely heavily on these parties for multiple aspects of our drug development, manufacturing and commercialization activities, but we do not control many aspects of those activities. We also outsource certain services, including activities related to transaction processing, accounting, IT, manufacturing, clinical trial recruitment and execution, clinical lab services, non-clinical research, safety services, integrated facilities management and other areas. In conducting clinical trials, we may depend on contract research organizations to handle regulatory filings, monitor site performance and raise potential quality matters relating to clinical trials. Failure by one or more of the third-party collaborators, service providers and others to complete activities on schedule or in accordance with our expectations or to meet their contractual or other obligations to us; failure of one or more of these parties to comply with applicable laws or regulations; disruptions in one or more of these parties’ businesses, including unexpected demand for or shortage of raw materials or components, cyber-attacks on supplier systems, labor disputes or shortage and inclement weather, as well as natural or man-made disasters or pandemics; or any disruption in the relationships between us and these parties have or could delay or prevent the development, approval, manufacturing or commercialization of our products and product candidates, expose us to suboptimal quality of service delivery or deliverables, result in repercussions such as missed deadlines or other timeliness issues, erroneous data and supply disruptions, and could also result in non-compliance with legal or regulatory requirements or industry standards, including Good Clinical Practice (GCP) and other requirements, or subject us to reputational harm, all with potential negative implications for our product pipeline and business. Further, our revenues will be adversely affected by the termination or expiration of collaboration and co-promotion agreements that we have entered into and that we may enter into from time to time.COUNTERFEIT PRODUCTSOur reputation, in-line and pipeline portfolios render our medicines and vaccines prime targets for counterfeiters. Counterfeits pose a significant risk to patient health and safety because of the conditions under which they are manufactured—often in unregulated, unlicensed, uninspected, and unsanitary sites—as well as the lack of regulation of their contents. Failure to mitigate this threat could adversely impact consumers who use our products, potentially causing them harm. This situation, in turn, may result in the loss of patient confidence in the Pfizer name and in the integrity of our medicines and vaccines, and potentially impact our business through lost sales, product recalls, and possible litigation. The prevalence of counterfeit medicines is an industry-wide issue due to a variety of factors, including the adoption of e-commerce and the proliferation of heavily marketed compounded medicines. As consumers increasingly turn to the internet as a source for many products including medicines, they are at the same time increasingly exposed to fake medicines via the internet as criminals increasingly distribute counterfeit and substandard medicines through “rogue” online pharmacies. The internet exposes patients to greater risk as it is a preferred vehicle for dangerous counterfeit offers and scams that target unsuspecting consumers. Traffic to these generally deceptive pharmacy sites is largely driven by misplaced trust in sophisticated internet retailers and social media offers coupled with the convenience e-commerce affords consumers. Counterfeiters generally target any medicine or vaccine boasting strong demand and we have observed heightened counterfeit and fraud attempts to our internal medicine portfolio, our oncology portfolio, as well as products utilized in the treatment of COVID-19 and competitor products in therapeutic areas where we are conducting R&D.We consistently invest in an enterprise-wide strategy to aggressively combat counterfeit threats by educating patients and healthcare providers about the risks, investing in innovative technologies to detect and disrupt sophisticated internet offers and scams, proactively monitoring and interdicting supply with the help of law enforcement, and advising legislators and regulators. However, our efforts and those of others may not be entirely successful, and the presence of counterfeit medicines may continue to increase.
RISKS RELATED TO GOVERNMENT REGULATION AND LEGAL PROCEEDINGS:
PRICING AND REIMBURSEMENTOur future results could be adversely affected by new or changes in U.S. and international governmental regulations that mandate price controls, use international reference pricing, including MFN, increase required rebates, establish mandatory CMMI pilots (which are models designed to test certain payment and delivery systems to determine whether they result in cost savings), create coverage criteria, or limit patient access to our products. For instance, government cuts to Affordable Care Act (ACA) subsidies and state Medicaid funding could have a material impact on the pricing and demand for our products. In addition to the expansion of price controls in the U.S. in the IRA, or through a CMMI demonstration program affecting Medicare or Medicaid, the adoption of more restrictive coverage policies and price controls in new and existing jurisdictions, or the failure to obtain or maintain coverage and pricing could also adversely impact revenue. We expect pricing pressures and other cost containment measures for drugs and vaccines will continue.
In the U.S., pharmaceutical product pricing is subject to government and public scrutiny and calls for reform, and, as a result, many of our products are subject to increasing pricing pressures. We expect to see continued focus by the U.S. government on regulating pricing and access to medicine. For example, in May and July 2025, the Trump Administration issued the MFN Initiatives and, in September 2025, we announced an agreement with the Trump Administration in which we voluntarily agreed to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries (the MFN Agreement). We are also participating in the TrumpRx.gov platform, which allows U.S. patients to purchase certain medicines at significant discounts to current retail prices. These discounts may adversely affect revenue generated from participating drugs. Further, we face risks and uncertainties associated with the MFN Agreement, including the possibility of, among other things, unfavorable impacts to pricing and access. The MFN Agreement and broader U.S. policy efforts to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries is subject to risks and uncertainties and could, among other things, negatively impact our pricing strategies, product demand or access, or competitive positioning across global markets, and may adversely affect revenues in certain markets.
Additionally, the drug pricing provisions of the IRA are being implemented over the next several years. The IRA directs HHS to set the prices of certain high-expenditure, single-source drugs and biologics covered under Medicare. The IRA also imposes rebates under Medicare Part B and Medicare Part D which require manufacturers to pay rebates if price increases outpace inflation relative to a benchmark period, and replaces the Medicare Part D coverage gap discount program with a new discounting program. The drug pricing provisions of the IRA began to be implemented in 2022 and implementation efforts will continue in the coming years. In August 2023, CMS published the first ten medicines subject to the MDPNP, which included Eliquis. In August 2024, the government released the new Medicare price for Eliquis, which became effective January 1, 2026. In January 2025, CMS announced the selection of another 15 drugs from Medicare Part D for the Maximum Fair Price, with prices to be set and effective on January 1, 2027. Ibrance and Xtandi were included in the list of 15 drugs selected. Another 15 drugs from
Pfizer Inc. 2025 Form 10-K
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Medicare Part B or Medicare Part D were selected on January 27, 2026, for the Maximum Fair Price to be set and effective on January 1, 2028. Xeljanz was included in the list of 15 drugs selected. It is possible that more of our products could be selected in future years, which could, among other things, lead to lower revenues. Health plans may also require rebates in addition to the Maximum Fair Price for preferred placement on a Medicare plan formulary. The MDPNP is currently subject to legal challenges and therefore, the outcome remains uncertain. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. For additional information, see the Item 1. Business — Government Regulation and Price Constraints section.
Payors may give preference to generic drugs and biosimilars more aggressively to generate savings and attempt to stimulate additional price competition. In addition, we expect that consolidation and integration among pharmacy chains, wholesalers and PBMs will increase pricing pressures in the industry. Some states have implemented, and others are considering, patient access constraints or cost cutting under state regulated programs including the Medicaid program. States have continued to focus on addressing drug costs, generally by increasing price transparency or attempting to limit drug price increases for state-regulated insurance. Measures to regulate prices or payment for pharmaceutical products, including legislation on drug importation, international reference pricing and prescription drug affordability boards (PDABs) that seek to impose reimbursement limits for certain drugs, could adversely affect our business. For additional information on U.S. pricing and reimbursement, see the Item 1. Business — Government Regulation and Price Constraints section.
We encounter similar regulatory and legislative issues in most other countries in which we operate. In certain markets, such as in EU member states, the U.K., Japan, China, Canada and Australia, governments have significant power as large single payors to regulate prices, access criteria, or impose other means of cost control, particularly as a result of global financing pressures. For example, the QCE and VBP tender process in China has resulted in significant price cuts for off-patent medicines. Additionally, in the EU, the European Parliament and the European Council reached an agreement in December 2025 on the EU Pharma Package – the largest reform of the EU’s Pharmaceutical Legislation in 20 years. The reform still requires formal approval by both institutions and will enter into force upon publication in the EU’s Official Journal, expected in 2026. Most provisions are expected to apply from 2028, following a two-year transition period. This landmark reform is expected to significantly influence the way innovative medicines are developed, authorized, monitored, and accessed across the EU.
In addition, the European Regulation on Health Technology Assessment (EU HTA-R) took effect in January 2025, introducing a single EU-level submission file for joint clinical assessments for oncology medicines and advanced therapy medicinal products. The EU HTA-R will be extended to orphan medicines in January 2028 and, as of 2030, will cover all medicinal products authorized in the EU through the centralized marketing authorization procedure. For additional information regarding these government initiatives, see the Item 1. Business — Government Regulation and Price Constraints section. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In addition, in many countries, with respect to our vaccines, we participate in a tender process for selection in national immunization programs. Failure to win national immunization tenders or to obtain acceptable pricing, as well as recent entry of additional competitors, could adversely affect our business.U.S. HEALTHCARE REGULATIONThe U.S. healthcare industry is highly regulated and subject to frequent and substantial changes. Major U.S. healthcare reform occurred with the passage of the OBBBA on July 4, 2025, a budget reconciliation bill that includes significant funding cuts to Medicaid, the Health Insurance Marketplaces, and the Medicare Physician Fee Schedule. The Congressional Budget Office (CBO) estimates the OBBBA will reduce federal healthcare spending and lead to a 10 million increase in the U.S. uninsured population, all of which could lead to increased pricing controls and lower demand for our products. Any additional efforts at the U.S. federal or state levels to reform the healthcare system by changing the way healthcare is provided or funded could have a material impact on us. For additional information on U.S. healthcare regulation, see the Item 1. Business––Government Regulation and Price Constraints section. Other U.S. federal or state legislative or regulatory action and/or policy efforts could adversely affect our business, including, among others, general budget control actions, changes in patent laws, the importation of prescription drugs to the U.S. at prices that are regulated by foreign governments, revisions to reimbursement of biopharmaceuticals under government programs that could reference international prices or require new discounts, including through a CMMI demonstration, the FDA's recently adopted policy of disclosing Complete Response Letters for unapproved drug candidates and the attendant risk of disclosure of trade secrets or confidential commercial information, limitations on interactions with healthcare professionals and other industry stakeholders, restrictions on pharmaceutical advertising, or the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines. In addition, we may face increased risks to, among other things, our business, revenue, earnings, reputation or financial guidance, as a result of recent or potential changes to vaccine or other healthcare policy in the U.S. Further, the evolving vaccine landscape is becoming more challenging and increases risks to Pfizer. Among other things, risks include changing regulatory requirements, including for potential development or approval of our vaccine candidates, government investigations, changes in legislation, policy, liability landscape or other administrative actions, changes, delays or failure to receive recommendations, reimbursement, regulatory approvals and coverage for our vaccines, restrictions on pharmaceutical advertising and changes to government agencies and advisory boards. For example, in January 2026, the CDC unilaterally reduced the number of immunizations routinely recommended for all children in the U.S.Any additional reduction of U.S. federal spending on entitlement programs beyond the IRA, including Medicare, Medicaid, or any other publicly funded or subsidized health programs, and the 340B Program, may affect payment for our products or services provided using our products. Any other significant spending reductions or cost controls affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented could have an adverse impact on our results of operations. The IRA is being implemented largely through government guidance and as its effect on Medicare and commercial markets evolve, we will continue to evaluate the potential impacts to our business.We expect additional drug cost containment efforts at both the federal and state levels, as evidenced by the MFN Initiatives and the December 2025 issue by HHS of proposed rules for mandatory CMMI pilots which could require additional price concessions. Further, commercial payors often follow Medicare coverage policy and payment limitations when setting their own payment rates. Any reduction in cost or other containment measures may similarly be adopted by commercial plans. Coverage policies and reimbursement rates for commercial plans may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products, less favorable coverage policies and reimbursement rates may be implemented in the future.DEVELOPMENT, REGULATORY APPROVAL AND MARKETING OF PRODUCTS
The discovery and development of drugs, vaccines and biological products are time consuming, costly and unpredictable. The outcome is inherently uncertain and involves a high degree of risk due to the following factors, among others:Pfizer Inc. 2025 Form 10-K
20• The process from early discovery to design and adequate implementation of clinical trials to regulatory approval can take many years and have high costs.
• We may have difficulties recruiting and enrolling patients for clinical trials on a consistent basis.
• Product candidates can and do fail at any stage of the process, including as the result of unfavorable pre-clinical and clinical trial results, or unfavorable new pre-clinical or clinical data and further analyses of existing pre-clinical or clinical data, including results that may not support further clinical development of the product candidate or indication.• Regulatory decisions or feedback could impact the future development of our product candidates, including our vaccine candidates such as our next generation pneumococcal conjugate vaccine candidate.• We may need to amend our clinical trial protocols or conduct additional clinical trials under certain circumstances, for example, to further assess appropriate dosage or collect additional safety data.
• We may not be able to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, regulatory approval dates and/or launch dates.
• We may not be able to successfully address all the comments received from regulatory authorities such as the FDA and the EMA, or be able to obtain approval for new products and indications from regulators.• We may experience increasing inconsistencies and unexpected changes in the evaluations and determinations made by the FDA during the process of applying for marketing approvals of our products due to reductions in workforce, personnel movements, and policy changes.
Regulatory approvals of our products depend on a myriad of factors, including regulatory determinations as to the product’s safety and efficacy. In the context of public health emergencies like the COVID-19 pandemic, regulators evaluate various factors and criteria to potentially allow for marketing authorization on an emergency or conditional basis. Additionally, clinical trial and other product data are subject to differing interpretations and assessments by regulatory authorities. As a result of regulatory interpretations and assessments or other developments that may occur during the review process, or even after a product is authorized or approved for marketing, a product’s commercial potential could be adversely affected by potential emerging concerns or regulatory decisions regarding or impacting the scope of indicated patient populations, labeling or marketing, manufacturing processes, safety issues and/or other matters, including decisions relating to developments regarding potential product impurities. Also, certain of our products have received and may in the future receive approvals under accelerated approval pathways, or other determinations of regulatory flexibility by the FDA, where continued approval may be contingent upon confirmatory studies demonstrating the anticipated clinical benefit and/or safety profile.
We may not be able to receive or maintain favorable recommendations by technical or advisory committees, such as the ACIP or an FDA Advisory Committee, which may impact the availability or commercial potential, or insurance coverage of our products and product candidates. In addition, administrative decisions relating to our products or product candidates may not follow the expected process. For example, as discussed above, in January 2026 the CDC unilaterally reduced the number of immunizations routinely recommended for all children in the U.S. Further, claims and concerns that may arise regarding the safety and/or efficacy of in-line products and product candidates can negatively impact current or future product sales, as applicable, and potentially lead to regulator-directed risk evaluations and assessments, asset impairments, and/or consumer fraud, product liability and other litigation and claims, as well as product recalls or withdrawals, including our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved, and any regulatory or other impact on Oxbryta or other sickle cell disease assets. Regulatory requirements may also result in a more challenging, expensive and lengthy regulatory approval process than anticipated due to requests for, among other things, additional or more extensive clinical trials prior to granting approval, or increased post-approval requirements. For these and other reasons discussed in this Risk Factors section, we may not obtain the approvals we expect within the timeframe we anticipate, or at all.POST-AUTHORIZATION/APPROVAL DATAAs a condition to granting marketing authorization or approval of a product, the FDA may require, or the sponsor may voluntarily agree to undertake, post-marketing commitments such as additional clinical trials or other studies. The results generated in these trials have in the past impacted certain of our products and could impact our products in the future, such as by resulting in the loss of marketing approval, changes in labeling, and/or new or increased concerns about safety and/or efficacy, including newly discovered adverse events. Regulatory agencies in countries outside the U.S. often have similar regulations and may impose comparable requirements, although there are differences between the U.S., the EU and other international regulatory requirements, which may contribute to inconsistency or uncertainty in the marketability of our products across different jurisdictions. Post-marketing studies and clinical trials, whether conducted by us or by others, whether mandated by regulatory agencies or conducted voluntarily, and other emerging data about products, such as adverse event reports, may also adversely affect the availability or commercial potential of our products. Further, if safety or efficacy concerns are raised about a product in the same class as one of our products, those concerns could implicate the entire class; and this, in turn, could have an adverse impact on the availability or commercial viability of our product(s) or product candidates as well as other products in the class. The potential regulatory, commercial or other implications of post-marketing study results typically cannot immediately be determined. In September 2024, we made the decision to voluntarily withdraw Oxbryta in all markets where it was approved based on the totality of clinical data that indicated at that time the overall benefit of Oxbryta no longer outweighed the risk in the approved sickle cell patient population. Following a comprehensive process, in October 2025, the EMA adopted a negative opinion on benefit-risk for Oxbryta for the treatment of hemolytic anemia due to SCD, recommending that the marketing authorization for the product remain suspended. In the U.S., Pfizer’s engagement with the FDA is ongoing. For more information, see the Product Developments section within MD&A.LEGAL MATTERSWe are and may be involved in various legal proceedings, including patent litigation, product liability and other product-related litigation, including personal injury, consumer fraud, off-label promotion, securities, antitrust and breach of contract claims, commercial and other asserted and unasserted matters, environmental legal proceedings, government and tax investigations, employment litigation, tax litigation and other legal proceedings that arise from time to time in the ordinary course of our business. Litigation is inherently unpredictable, and excessive verdicts do occur. Although we believe that our claims and defenses in matters in which we are a defendant are substantial, we have in the past and could in the future incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations.Claims against our patents include challenges to the coverage and/or validity of our patents on various products or processes. There can be no assurance as to the outcome of these matters, and a loss in any of these cases could result in a loss of patent protection for the product at issue, which could lead to a significant loss of sales of that product and could materially affect future results of operations.Pfizer Inc. 2025 Form 10-K
21We are also involved in government investigations that arise in the ordinary course of our business. There continues to be a significant volume of government investigations and litigation against companies operating in our industry, both in the U.S. and around the world. Government investigations and actions have and could result in substantial criminal and civil fines and/or criminal charges, limitations on our ability to conduct business in applicable jurisdictions, corporate integrity or deferred prosecution agreements and other disciplinary actions, as well as reputational harm, including as a result of increased public interest in the matter. In addition, in a qui tam lawsuit in which the government declines to intervene, the relator may still pursue a suit for the recovery of civil damages and penalties on behalf of the government.
Our sales and marketing activities, the pricing of our products and other aspects of our business are subject to extensive regulation under the FFDCA, the MDRP, the FCPA and other federal and state statutes, including those discussed elsewhere in this Form 10-K, as well as the AKS, anti-bribery laws, the False Claims Act, consumer protection statutes and similar laws in international jurisdictions. In addition to the potential for changes to relevant laws, the compliance and enforcement landscape is informed by government litigation, settlement precedent, advisory opinions, and special fraud alerts. Our approach to certain practices may evolve over time in light of these types of developments.
Requirements or industry standards in the U.S. and certain jurisdictions abroad require pharmaceutical manufacturers to track and disclose financial interactions with healthcare professionals and healthcare providers and can increase government and public scrutiny of such financial interactions. If an interaction is found to be improper, government enforcement actions and penalties could result. Like many companies in our industry, we have from time to time received, and may receive in the future, inquiries and subpoenas and other types of information demands from government authorities. In addition, we have been and may in the future be subject to claims and other actions related to our business activities, brought by governmental authorities, as well as consumers and private payors. In some instances, we have incurred significant expense, civil payments, fines and other adverse consequences as a result of these claims, actions and inquiries. Such claims, actions and inquiries may relate to alleged non-compliance with laws and regulations associated with the dissemination of product (approved and unapproved) information, potentially resulting in government enforcement action and reputational damage. These risks may be heightened by the use of AI in our operations as well as in our digital marketing, including social media, mobile applications and blogger outreach, as well as direct-to-consumer marketing and digital platform offerings.We and certain of our subsidiaries are also subject to numerous contingencies arising in the ordinary course of business relating to legal claims and proceedings, including environmental contingencies. Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. While we have accrued for worldwide legal liabilities which we have assessed as probable and reasonably estimable, no guarantee exists that additional costs will not be incurred or additional payments will not be required beyond the amounts accrued.For additional information, including information regarding certain legal proceedings in which we are involved in, see Note 16A .RISKS RELATED TO INTELLECTUAL PROPERTY, TECHNOLOGY AND SECURITY:
INTELLECTUAL PROPERTY PROTECTION
Our success largely depends on our ability to market technologically competitive products. We rely and expect to continue to rely on a combination of intellectual property, including patent, trademark, trade dress, copyright, trade secret and domain name protection laws, as well as confidentiality and license agreements, to protect our intellectual property and proprietary rights. If we fail to obtain and maintain adequate intellectual property protection, we may not be able to prevent third parties from launching generic or biosimilar versions of our branded products, from using our proprietary technologies or from marketing products that are very similar or identical to ours. Our currently pending or future patent applications may not result in issued patents or be granted on a timely basis. Similarly, any term extensions that we seek may not be granted on a timely basis, if at all, and any term adjustments related to patent office delays in obtaining a patent may be reduced or eliminated entirely due to risks associated with changes in law relating to patent terms. In addition, our issued patents may not contain claims sufficiently broad to protect us against claims regarding validity, enforceability, scope and effective term made by parties with similar technologies or products or provide us with any competitive advantage, including patent-based exclusivity in a particular technology or product area.Further, legal or regulatory action by various stakeholders or governments could potentially result in us not seeking intellectual property protection for or agreeing not to enforce or being restricted from enforcing intellectual property related to our products.The scope of our patent claims also may vary between countries, as individual countries have distinct patent laws, and our ability to enforce our patents depends on the laws of each country, its enforcement practices, and the extent to which certain countries engage in policies or practices that weaken a country’s intellectual property framework (e.g., laws or regulations that promote or provide broad discretion to issue a compulsory license). In countries that provide some form of regulatory exclusivity, mechanisms exist permitting some form of challenge to our patents by competitors or generic drug marketers prior to or immediately following the expiration of such regulatory exclusivity, and generic companies are employing aggressive strategies, such as “at-risk” launches that challenge our patent rights. Most of the suits involve claims by generic drug manufacturers that patents covering our products, uses, processes or dosage forms are invalid and/or do not cover the product of the generic or biosimilar drug manufacturer. Independent actions have been filed alleging that our assertions of, or attempts to enforce, patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws. Such claims may also be brought as counterclaims to actions we bring to enforce our patents. We are also party to other patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payors, governments or other parties are seeking damages from us for alleged delay of generic entry. We also are often involved in other proceedings, such as inter partes review, post-grant review, re-examination or opposition proceedings, before the U.S. Patent and Trademark Office, the European Patent Office, or other foreign counterparts relating to our intellectual property or the intellectual property rights of others. Also, if one of our patents or a competitors’ patents is found to be invalid in such proceedings, generic or biosimilar products could be introduced into the market resulting in the erosion of sales of our existing products. For additional information, including information regarding certain legal proceedings in which we are involved, see Note 16A1 . Further, if we are unable to maintain our existing license agreements or other agreements pursuant to which third parties grant us rights to intellectual property, our operating results and financial condition could be adversely affected.We currently hold trademark registrations and have trademark applications pending in many jurisdictions, any of which may be the subject of a governmental or third-party objection, which could prevent the maintenance or issuance of the trademark. As our products mature, our reliance on our trademarks and trade dress to differentiate us from our competitors increases and, as a result, our business could be adversely affected if we are unable to prevent third parties from adopting, registering or using trademarks and trade dress that infringe, dilute or otherwise violate our rights. We seek to protect our proprietary information, including our trade secrets and proprietary know-how, by requiring our employees, consultants, other advisors and other third parties to execute proprietary information and confidentiality agreements upon the commencement of
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their relationship with us. Despite these efforts and precautions, we may be unable to prevent a third-party from copying or otherwise obtaining and using our trade secrets or our other intellectual property without authorization, and legal remedies may not adequately compensate us for the damages caused by such unauthorized use. Further, others may independently and lawfully develop substantially similar or identical products that circumvent our intellectual property by means of alternative designs or processes or otherwise.THIRD-PARTY INTELLECTUAL PROPERTY CLAIMS
A properly functioning intellectual property regime is essential to our business model. We are committed to respecting the valid intellectual property rights of other companies, but the patent granting process is imperfect. Accordingly, the pursuit of valid business opportunities may require us to challenge intellectual property rights held by others that we believe were improperly granted, including challenges through negotiation and litigation, and such challenges may not always be successful.
Part of our business depends upon identifying biosimilar opportunities and launching products to take advantage of those opportunities, which may involve litigation, associated costs and time delays, and may ultimately not be successful. These opportunities may arise in situations where patent protection of equivalent branded products has expired or been declared invalid, or where products do not infringe the patents of others. In some circumstances we may take action, such as litigation, asserting that our products do not infringe patents of existing products or that those patents are invalid or unenforceable in order to achieve a “first-to-market” or early market position for our products.Third parties may claim that our products infringe one or more patents owned or controlled by them. Claims of intellectual property infringement can be costly and time-consuming to resolve, may delay or prevent product launches, and may result in significant royalty payments or damages or potential licensing agreements. For example, our R&D in a therapeutic area may not be first and another company or entity may have obtained relevant patents before us. We are involved in patent-related disputes with third parties over our attempts to market pharmaceutical products. Once we have final regulatory approval of the related products, we may decide to commercially market these products even though associated legal proceedings (including any appeals) have not been resolved (i.e., “at-risk” launch). If one of our marketed products (or a product of our collaboration/licensing partners to which we have licenses or co-promotion rights) is found to infringe valid patent rights of a third party, such third party may be awarded significant damages or royalty payments, or we may be prevented from further sales of that product. Such damages may be enhanced as much as three-fold if we or one of our subsidiaries is found to have willfully infringed valid patent rights of a third party. Potential expansion of our mRNA portfolio could result in an increase in patent-related disputes as well. For additional information, including information regarding certain legal proceedings in which we are involved, see Note 16A1 .
INFORMATION TECHNOLOGY AND CYBERSECURITY
Significant disruptions of IT systems or breaches of information security could adversely affect our business. We extensively rely upon sophisticated IT systems (including cloud services) to operate our business. We produce, collect, process, store and transmit large amounts of confidential information (including personal information and intellectual property), and we deploy and operate an array of technical and procedural controls to maintain the confidentiality, integrity and availability of such confidential information. We develop and operate digital systems to engage patients, healthcare providers, governments, payors and supply chain partners to conduct business and deliver medicines, digital diagnostics, clinical trials and digital therapies. Such systems include mobile applications, wearable devices, internet websites and other digital technologies that may be targets of attack. We have outsourced significant elements of our operations, including significant elements of our IT infrastructure and, as a result, we manage relationships with many third-party providers who may or could have access to our confidential information. We rely on technology developed, supplied and/or maintained by third-parties that may make us vulnerable to “supply chain” style cyber-attacks. Further, technology and security vulnerabilities of acquisitions, business partners or third-party providers may not be identified during due diligence or soon enough to mitigate potential risks. The size and complexity of our IT and information security systems, and those of our third-party providers (and the large amounts of confidential information present on them), make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by, but not limited to, our employees, contingent workers, service providers, business partners, customers or malicious attackers. As a global pharmaceutical company, our systems and assets are the target of frequent cyber-attacks. Such cyber-attacks are of ever-increasing levels of sophistication, including the use of adversarial AI techniques (for example, AI may be used to automate phishing attacks and other forms of social engineering, and accelerate vulnerability exploitation), and are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage, extortion, property destruction and personal information theft) and expertise, including, but not limited to, organized criminal groups, “hacktivists,” nation states, employees, business partners and others. Due to the sophistication of some of these attacks, there is a risk that they may remain undetected for a period of time. While we have invested in the protection of data and IT and develop and maintain systems and controls, our efforts, like those of other similar companies, have not always prevented and may not in the future prevent service interruptions, extortion, theft of confidential, personal or proprietary information, compromise of data integrity or unauthorized information disclosure. Any technology service interruption or breach of our systems could adversely affect our business operations and/or result in potential legal liability, the loss of personal data, confidential information or intellectual property. Such incidents could require disclosure to government authorities and/or regulators and could require notification to affected individuals and any incident could result in financial, legal, business and reputational harm to us. We maintain cyber liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
AI, including machine learning and generative AI, is increasingly being used in the biopharmaceutical and global healthcare industries. We have begun deploying AI in various parts of our internal and external operations, including in R&D, and continue to explore further use cases for AI, and our investments in AI may not yield anticipated benefits. As with many developing technologies, AI presents risks and challenges. For example, existing regulatory frameworks governing the use, development, and deployment of AI, including regulatory guidance on the use of AI in medical products, remain uncertain and subject to significant change. New regulatory requirements could impose significant compliance costs, limit our ability to deploy AI, require changes to our practices (including documentation, risk management, testing, or transparency measures), or increase litigation and enforcement risk. In addition, AI may be used by payors to limit access to care or to deny prior authorization requests, which could impact Pfizer’s business results. Further, AI technology itself can give rise to risks. Generative AI output is probabilistic in nature and may not be reproducible or generate consistent results over time. AI can generate outputs that are false, misleading, incomplete, or inconsistent, and may be difficult to monitor, explain, or reproduce. AI performance may also degrade over time due to changes in inputs, data drift, updates by vendors, or adversarial manipulation. AI design or training may be flawed, including as a result of external vendors or others training AI models on content without the necessary intellectual property rights or other legal rights or permissions or using data sets that may not be appropriate for the intended use, of poor quality, contain biased information, or that become corrupted during a cyber-attack; and flawed or inappropriate data practices by data scientists, engineers, and end-users could impair results. If the output that AI produces or assists in producing is deficient or inaccurate, we could be subjected to competitive harm, regulatory scrutiny, potential legal liability and brand or reputational harm. The use of AI
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may also lead to the unauthorized release of confidential or proprietary information which may impact our ability to realize the benefits of our data, including intellectual property. Further, reliance on third-party AI tools or services that incorporate AI may expose our organization to compliance gaps that are outside of our control. In addition, we could face risks related to our reliance on a small number of AI models or service providers.GENERAL RISKS
BUSINESS DEVELOPMENT ACTIVITIES AND STRATEGIC GOALSWe have established financial and strategic goals, which we plan to achieve, in part, by not only advancing our own product pipelines and maximizing the value of our existing products, but also through various forms of business development activities, which can include alliances, licenses, JVs, collaborations, equity- or debt-based investments, dispositions, divestments, mergers and acquisitions, including our recent acquisition of Metsera. We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities. The success of our business development activities is dependent on the availability and accurate evaluation of appropriate opportunities, competition from others seeking similar opportunities and our ability to successfully identify, structure and execute transactions, including the ability to satisfy closing conditions in the anticipated timeframes or at all, and our ability to successfully integrate acquired businesses and develop and commercialize acquired products. Pursuing, executing and consummating these transactions may require substantial investment, which may require us to obtain additional equity or debt financing, which has in the past and could in the future result in increased leverage and/or a downgrade of our credit ratings and could limit our ability to obtain future financing. We incurred substantial indebtedness to fund certain of our acquisitions. For example, we financed a portion of the acquisitions of Seagen and Metsera with the proceeds from the issuance of long-term debt, plus additional short-term indebtedness issued prior to such acquisitions. Such short-term indebtedness was subsequently repaid. The amount of debt that we have incurred could have significant consequences including, among other things, reducing our operating or financial flexibility, requiring a portion of our cash flow from operations to make interest payments and reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business. To the extent we incur additional indebtedness or interest rates increase, these risks could increase further.
The success of our business development transactions depends on our ability to realize the anticipated benefits of these transactions and is subject to numerous risks and uncertainties, many of which are outside of our control. Unsuccessful clinical trials, regulatory hurdles, new information, changes in competitive dynamics and commercialization challenges, among other factors, may adversely impact revenue and income contribution from business development transactions, including from acquired products and businesses, and may lead to impairment of acquired assets. We may fail to generate expected revenue growth for our existing products, product pipeline and contribution from these transactions or from acquired products or businesses or we may fail to achieve anticipated cost savings, within expected time frames or at all, which may impact our ability to meet our growth objectives. In certain transactions, we may agree to provide certain transition services for an extended period of time, which may divert our focus and resources that would otherwise be invested into maintaining or growing our business. Similarly, the accretive impact anticipated from certain transactions may not be realized or may be delayed. Integration of acquired products or businesses may result in the loss of key employees, the disruption of ongoing business, including third-party relationships, or inconsistencies in standards, controls, procedures and policies. Further, while we seek to mitigate risks and liabilities through, among other things, due diligence, we may be exposed to risks and liabilities as a result of business development transactions. There is no assurance that we will be able to acquire attractive businesses or enter into strategic business relationships on favorable terms ahead of our competitors, or that such acquisitions or strategic business development relationships will be accretive to earnings or improve our competitive position.
Where we invest in or otherwise obtain debt or equity securities of third parties in connection with business development transactions, we may be unable to direct or influence the management, operational decisions and policies of such companies and the value of the acquired securities will fluctuate and may lose value. Any future distribution or sale of such securities will be subject to prevailing market conditions and other factors, including the size of our ownership stake, at the time of such distribution or sale and there is no assurance as to the price that such securities will ultimately be sold or that such securities will be sold at all.PANDEMICS
Pandemics, such as the COVID-19 pandemic, have impacted and may in the future impact our business, operations and financial condition and results. Related risks and challenges for our business include, among others: uncertainty regarding the severity and duration of a pandemic; impacts to business operations; decreased demand for certain of our products; increased costs of doing business; manufacturing disruptions and delays; supply chain disruptions and shortages, including challenges related to reliance on third-party suppliers resulting in reduced availability of materials or components used in the development, manufacturing, distribution or administration of our products; evolving macroeconomic factors and conditions, including general economic uncertainty, unemployment rates and recessionary pressures; changes in labor markets, including challenges related to our human capital and talent development; unknown consequences on our business performance and initiatives stemming from the substantial investment of time and other resources to any potential pandemic response; increased difficulty and uncertainty regarding predicting or estimating future performance; pace of post-pandemic recovery, disruption and volatility within the financial or credit markets; and our financial performance in general.
COVID-19We face risks and uncertainties related to our COVID-19 products, including Comirnaty and Paxlovid or any potential future COVID-19 vaccines, treatments or combinations, including, among others, the risk that as the market for COVID-19 products remains endemic and seasonal and/or COVID-19 infection rates do not follow prior patterns, demand for our COVID-19 products has and may continue to be reduced or not meet expectations, which has and may continue to lead to reduced revenues, excess inventory or other unanticipated charges; risks related to our ability to develop, receive regulatory approval for, and commercialize variant adapted vaccines, combinations and/or treatments; uncertainties related to recommendations and coverage for, and the public’s adherence to, vaccines, boosters, treatments or combinations, including uncertainties related to the potential impact of narrowing recommended patient populations; risks related to our ability to accurately predict revenue for Comirnaty and Paxlovid or any potential future COVID-19 vaccines or treatments; whether and when EUA or biologics license or drug applications or amendments to any such applications may be filed in particular jurisdictions for Paxlovid or Comirnaty or any other potential vaccine or vaccine candidates or product candidates, including those related to potential future annual boosters, re-vaccinations, or vaccines in additional populations, and if obtained, whether or when such EUA or licenses, or existing EUAs, will expire, terminate or be revoked; whether and when additional supply or purchase agreements will be reached or existing agreements will be modified; potential third-party royalties or other claims related to Comirnaty or Paxlovid; and the other risks and uncertainties discussed throughout this Item 1A. Risk Factors.
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RESPONSIBLE BUSINESS PRACTICES
Pfizer is subject to transitional and physical risks related to climate change. Transitional risks include, for example, a disorderly global transition away from fossil fuels that may result in increased energy prices; customer preference for low or no-carbon products; stakeholder pressure to decarbonize assets; or new legal or regulatory requirements that result in new or expanded carbon pricing, taxes, restrictions on GHG emissions, and increased GHG disclosure and transparency. These risks could increase operating costs, including the cost of our electricity and energy use, or otherwise increase compliance costs. Physical risks to our operations include water stress and drought; flooding and storm surge; wildfires; extreme temperatures and storms, which could impact pharmaceutical production, increase costs, or disrupt supply chains of medicines for patients. Our supply chain is subject to these same transitional and physical risks and would likely pass along any increased costs to us.
In June 2022, Pfizer established our fourth consecutive GHG reduction goal with new near- and long-term targets to achieve the Science Based Target Initiative’s voluntary Net-Zero Standard by 2040. While we are working to implement emission reduction plans to achieve our voluntary climate goals, various factors, including the long time horizons and commercial availability of new technologies to enable emission reductions, in the time and scale needed, may present inherent risk in our ability to meet these goals. Additionally, success may depend on the actions of governments and third parties and may require, among other things, significant capital investment; R&D; and government policies and incentives to foster innovation and reduce costs of technologies that may not currently exist or be available at scale.
Certain governmental authorities, non-governmental organizations, customers, investors, employees, and other stakeholders have differing views on matters perceived to be related to responsible business practices, such as equitable access to medicines and vaccines, product quality and safety, human capital, diversity, equity and inclusion, environmental stewardship, support for local communities, value chain environmental and human rights due diligence, and corporate governance and transparency. In addition, certain governments and the public expect companies like us to report on our business practices with respect to human rights, responsible sourcing and environmental impact, as well as the actions of our third-party contractors and suppliers around the world. This focus may lead to new expectations or requirements that could result in increased costs associated with research, development, manufacture, or distribution of our products. Our ability to compete could also be affected by changing customer preferences and requirements, such as demand for companies to establish Net Zero targets or offer more sustainable products. While we are committed to responsible business practices, if we do not meet, or are perceived not to meet, our goals or other stakeholder expectations in these key areas, we risk negative stakeholder reaction, as well as damage to our brand and reputation, reduced demand for our products or other negative impacts on our business and operations.MARKET FLUCTUATIONS IN OUR EQUITY AND OTHER INVESTMENTS
Changes in the fair value of certain equity investments that are recognized in net income may result in increased volatility of our income. See Note 4 and the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A.Our pension and postretirement plans are subject to volatility from changes in the fair value of equity investments and other investment risk in the assets funding these plans, as well as changes in the appropriate discount rates used to measure the plans’ obligations. See the Significant Accounting Policies and Application of Critical Accounting Estimates and Assumptions — Benefit Plans section within MD&A and Note 11 .COST AND EXPENSE CONTROL AND UNUSUAL EVENTSGrowth in costs and expenses, changes in product and geographic mix and the impact of acquisitions, divestitures, restructurings, internal reorganizations, product withdrawals, recalls and other unusual events that could result from evolving business strategies, evaluation of asset realization and organizational restructuring could adversely affect future results. Such risks and uncertainties include, in particular, our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including our enterprise-wide cost realignment program and manufacturing optimization program, other corporate strategic initiatives and any acquisitions, divestitures or other initiatives, as well as potential disruption of ongoing business, such as potential impacts on our ability to deliver on our pipeline as planned. Additionally, as a result of these initiatives, we may experience a loss of continuity, loss of accumulated knowledge or intellectual property and/or inefficiency, adverse effects on employee morale, loss of key employees and/or other retention issues during transitional periods. Reorganizations and restructurings can require a significant amount of time and focus, which may divert attention from operating and growing our business. If we fail to achieve some or all of the expected benefits of restructuring or other initiatives, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.INTANGIBLE ASSETS, GOODWILL AND EQUITY-METHOD INVESTMENTSOur consolidated balance sheet contains significant amounts of intangible assets, including IPR&D and goodwill. For IPR&D assets, the risk of failure is significant, and there can be no certainty that these assets ultimately will yield successful products. Our ability to realize value on these significant investments is often contingent upon, among other things, regulatory approvals and market acceptance. As such, IPR&D assets have and may become impaired and/or be written off in the future if the associated R&D effort is abandoned or is curtailed. For goodwill, all reporting units can confront events and circumstances that can lead to a goodwill impairment charge such as, among other things, unanticipated competition, an adverse action or assessment by a regulator, a significant adverse change in legal matters or in the business climate and/or a failure to replace the contributions of products that lose market exclusivity. Our other intangible assets, including developed technology rights, brands and licensing agreements, face similar risks for impairment. Our equity-method investments may also be subject to impairment charges that may result from the occurrence of unexpected adverse events or management decisions that impact our estimates of expected cash flows to be generated from these investments. We may recognize impairment charges as a result of a weak economic environment, challenging market conditions, decisions by management, or events related to particular customers or asset types, such as the development of competing assets by us or others, regulatory actions or product recalls or withdrawals. Any such impairment charge of our intangible assets, goodwill and equity-method investments may be significant. See Note 4 for a discussion of recent impairments of intangible assets. For additional details, see the S ignificant Accounting Policies and Application of Critical Accounting Estimates and Assumptions — Asset Impairments section within MD&A.CHANGES IN LAWS AND ACCOUNTING STANDARDSOur future results could be adversely affected by changes in laws, regulations or policies, or their interpretation, including, among others, new or changes in accounting standards, tariffs, tax laws and regulations internationally and in the U.S., including, without limitation, the IRA, and the OBBBA, which is still subject to further guidance; the adoption of global minimum taxation requirements outside the U.S. generally effective in most jurisdictions since January 1, 2024; government cost-cutting measures and related impacts on, among other matters, government staffing, resources and ability to timely review and process regulatory or other submissions; restrictions related to certain data transfers, including data security, data localization and cross border data transfer regulations, and transactions involving certain countries; and potential changes to
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existing tax laws, tariffs, competition laws, privacy laws and environmental laws or changes to other laws, regulations or policies in the U.S., including by the U.S. Presidential administration and Congress, as well as in other countries. For example, issued or future executive orders or other new or changes in laws, regulations or policy regarding tariffs or other trade or foreign policy, could have a material adverse effect on our business, earnings, cash flow, liquidity and financial guidance. The actual impact of any new tariffs on our business would be subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs or other retaliatory actions imposed by other countries. In the EU, several recently adopted or proposed legislative initiatives may affect our business, including the EU Pharma Package, the EU HTA -R, the EU Critical Medicines Act, and the EU Biotech Act, as well as legislation such as the EU AI Act, EU Data Act, and the EU Health Data Space Regulation, among others. See the Item 1. Business — G overnment Regulation and Price Constraints section for additional information regarding privacy and other laws. For additional information on changes in tax laws or rates or accounting standards, see the Provision/(Benefit) for Taxes on Income and New Accounting Standards sections within MD&A and Note 1B .ITEM 1C. CYBERSECURITY
Managing cybersecurity risk is a crucial part of our overall strategy for safely operating our business. We incorporate cybersecurity practices into our Enterprise Risk Management (ERM) program. Management is responsible for assessing and managing risk, including through the ERM program, subject to oversight by our BOD. Our cybersecurity policies and practices are aligned with NIST (National Institute of Standards and Technology) industry standards.
Consistent with our overall ERM program and practices, our cybersecurity program includes:
• Vigilance : We maintain a global cybersecurity operation that endeavors to detect, prevent, contain, and respond to cybersecurity threats and incidents in a prompt and effective manner with the goal of minimizing business disruptions.
• External Collaboration : We collaborate with public and private entities, including intelligence and law enforcement agencies, industry groups and third-party service providers to identify, assess and mitigate cybersecurity risks.
• Systems Safeguards : We deploy technical safeguards that are designed to protect our information systems, products, operations and sensitive information from cybersecurity threats. These include firewalls, intrusion prevention and detection systems, disaster recovery capabilities, malware and ransomware prevention, access controls and data protection. We continuously conduct vulnerability assessments to identify new risks and periodically test the efficacy of our safeguards through both internal and external penetration tests.
• Education : We provide periodic training for all personnel regarding cybersecurity threats, with such training appropriate to the roles, responsibilities and access of the relevant Company personnel. Our policies require all workers to report any real or suspected cybersecurity events.
• Supplier Ecosystem Management : We extend our cybersecurity management control expectations to our supply chain ecosystem, as appropriate. This includes identifying cybersecurity risks presented by third parties.
• Incident Response Planning : We have established, and maintain and periodically test, incident response plans that direct our response to cybersecurity events and incidents. Such plans include the protocol by which certain significant or potentially material incidents would be communicated to executive management, our BOD, external regulators and shareholders, as appropriate.
• Enterprise-Wide Coordination : We engage relevant stakeholders from across the Company to identify emerging risks and respond to cybersecurity threats. This cross-functional approach includes personnel from our R&D, manufacturing, commercial, technology, legal, compliance, internal audit and other business functions.• Governance : Our BOD’s oversight of cybersecurity risk management is led by the Audit Committee, which oversees our ERM program. Cybersecurity threats, risks and mitigation are periodically reviewed by the Audit Committee and such reviews include both internal and independent assessment of risks, controls and effectiveness.
Our risk assessment efforts have indicated that we are a target for theft of intellectual property, financial resources, personal information, and trade secrets from a wide range of actors including nation states, organized crime, malicious insiders and activists. The impacts of attacks, abuse and misuse of Pfizer’s systems and information could include, without limitation, loss of assets, operational disruption and damage to Pfizer’s reputation.
A key element of managing cybersecurity risk is the ongoing assessment and testing of our processes and practices through auditing, assessments, drills and other exercises focused on evaluating the sufficiency and effectiveness of our risk mitigation. We regularly engage third parties to perform assessments of our cybersecurity measures, including information security maturity assessments and independent reviews of our information security control environment and operating effectiveness. Certain results of such assessments and reviews are reported by the Chief Information Security Officer (CISO) to certain senior leaders, the Audit Committee and the BOD, as appropriate, and we make adjustments to our cybersecurity processes and practices as necessary based on the information provided by the third-party assessments and reviews .
The Audit Committee oversees cybersecurity risk management, including the policies, processes and practices that management implements to prevent, detect and address risks from cybersecurity threats. The Audit Committee receives periodic briefings on, and discusses with our CISO, cybersecurity risks and risk management practices, including, for example, recent developments in the external cybersecurity threat landscape, evolving standards, vulnerability assessments, third-party and independent reviews, technological trends and considerations arising from our supplier ecosystem. The Audit Committee may also promptly receive information regarding certain significant or potentially material cybersecurity incidents that may occur, including any ongoing updates regarding the same.
Our CISO is a member of our management team who is principally responsible for overseeing our cybersecurity risk management program, in partnership with other business leaders across the Company. We believe our CISO and the information security organization have the appropriate expertise, background and depth of experience relating to monitoring the prevention, mitigation, detection and remediation of cybersecurity incidents to manage risks arising from cybersecurity threats. The CISO works in coordination with other members of the management team, including, among others, the Chief Digital Officer, the Chief Financial Officer and the Chief Legal Officer and their designees.
Our CISO, along with leaders from our privacy and corporate compliance functions, collaborate to implement a program designed to manage our exposure to cybersecurity risks and to promptly respond to cybersecurity incidents. Prompt response to incidents is delivered by multi-disciplinary teams in accordance with our incident response plan. Through ongoing communications with these teams during incidents, the CISO monitors the triage, mitigation and remediation of cybersecurity incidents, and reports such incidents to executive management, the Audit Committee and other Pfizer colleagues in accordance with our cybersecurity policies and procedures, as is appropriate.Pfizer Inc. 2025 Form 10-K
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For the fiscal year ended December 31, 2025 , we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. For further discussion of the risks associated with cybersecurity incidents, see the Item 1A. Risk Factors—Information Techn ology and Cyber s ecurity section in this Form 10-K.
Item 7 · Management's Discussion & Analysis
+333 paragraphs −354 paragraphs ~333 changed
FY 2024-12-31 (earlier)
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERALThe following MD&A is intended to assist the reader in understanding our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources, and is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data in this Form 10-K. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found within MD&A in our 2023 Form 10-K.References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates. Although foreign exchange rate changes are part of our business, they are not within our control and because they can mask positive or negative trends in the business, we believe presenting operational variances excluding these foreign exchange changes provides useful information to evaluate our results.In the first quarter of 2024, we reclassified royalty income (substantially all of which is related to our Biopharma segment) from Other (income)/deductions––net and began presenting Royalty revenues as a separate line item within Total revenues in our consolidated statements of operations. Prior-period amounts have been recast to conform to the current presentation.OVERVIEW OF OUR PERFORMANCE, OPERATING ENVIRONMENT, STRATEGY AND OUTLOOK
Financial Highlights –– The following is a summary of certain financial performance metrics (in billions, except per share data):2024 Total Revenues––$63.6 billion 2024 Net Cash Flow from Operations––$12.7 billion
An increase of 7% compared to 2023 An increase of 46% compared to 2023
2024 Reported Diluted EPS––$1.41 2024 Adjusted Diluted EPS (Non-GAAP)––$3.11**
An increase of over 100% compared to 2023 An increase of 69% compared to 2023** For additional information regarding Adjusted diluted EPS (which is a non-GAAP financial measure), including reconciliations of certain GAAP Reported to non- GAAP Adjusted information, see the Non-GAAP Financial Measure: Adjusted Income section within MD&A.Our Business and Strategy –– Pfizer Inc. is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend and significantly improve their lives. See the Item 1. Business ––About Pfizer section. As a science-driven global biopharmaceutical company, we remain focused on advancing our pipeline, supporting our marketed brands and deploying capital responsibly, with a focus on initiatives that can help contribute to our long-term revenue and future growth. Most of our revenues come from the manufacture and sale of biopharmaceutical products. We believe that our medicines and vaccines provide significant value for healthcare providers and patients, and we continuously evaluate how we can best collaborate with patients, physicians and payors to support and expand patient access to reliable, affordable healthcare around the world. In addition, we continually seek to expand and broaden our product portfolio offerings through prioritized development of our pipeline and business development opportunities targeted at critical unmet patient needs. As a result, our commercial organizational structure and R&D operations are critical to the successful execution of our business strategy. Our ability to fulfill our purpose, Breakthroughs that change patients’ lives , remains a core focus and underscores our commitment to addressing the needs of society to help sustain long-term value creation for all stakeholders.
Our 2025 key priorities are:
1. Improve R&D productivity with sharpened focus
2. Expand margins and maximize operational efficiency
3. Achieve commercial excellence in our key categories
4. Optimize capital allocation.
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One way we believe we will be more efficient, effective and able to execute on these strategic priorities is through technology, including AI.
In 2024, we managed our commercial operations through a global structure consisting of three operating segments: Biopharma, PC1 and Pfizer Ignite. Biopharma was the only reportable segment. See Note 1 7 A and the Item 1. Business––Commercial Operations section. At the beginning of 2025, we made the following changes within our Biopharma reportable segment that went into effect on January 1, 2025 to support our continued focus on commercial execution and to further strengthen Pfizer’s capabilities and leadership in discovering and developing breakthrough medicines and vaccines:
• transitioned the Pfizer U.S. Oncology commercial organization and the global Oncology marketing organization, which were part of the former Pfizer Oncology Division, into the Pfizer U.S. Commercial Division, which now focuses on the commercialization of Pfizer’s entire product portfolio in the U.S. and is led by the Chief U.S. Commercial Officer, Executive Vice President; and
• combined our global ORD and PRD organizations to form a single Pfizer R&D organization that is responsible for all R&D activities across all therapeutic areas.
In the fourth quarter of 2023, we announced that we launched a multi-year, enterprise-wide cost realignment program (Realigning Our Cost Base Program) that aims to realign our costs with our longer-term revenue expectations. In the second quarter of 2024, we announced that we launched a multi-year, multi-phased program to reduce our costs of goods sold (Manufacturing Optimization Program), which is expected to include operational efficiencies, network structure changes, and product portfolio enhancements. See Note 3 . For a description of anticipated savings related to these programs, see the Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives section within MD&A .
R&D: We believe we have a strong pipeline and are well-positioned for future growth. R&D is at the heart of fulfilling our purpose to deliver breakthroughs that change patients’ lives as we work to translate advanced science and technologies into the medicines and vaccines that may be the most impactful for patients. Innovation, drug discovery and development are critical to our success. In addition to discovering and developing new products, our R&D efforts seek to add value to our existing products by improving their effectiveness and ease of dosing and by discovering potential new indications. See the Item 1. Business — Research and Development section for our R&D priorities and strategy.We seek to leverage a strong pipeline, organize around expected operational growth drivers and capitalize on trends creating long-term growth opportunities, including:
• an aging global population that is generating increased demand for innovative medicines and vaccines that address patients’ unmet needs; and
• advances in both biological science and platform technologies that are enhancing the delivery of potential breakthrough new medicines and vaccines.Our Business Development Initiatives –– We are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, but also through various business development activities. We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities. We assess our business, assets and scientific capabilities/portfolio as part of our regular, ongoing portfolio review process and also continue to consider business development activities that will help advance our business strategy. See Note 2 for significant recent activities.
Our 2024 Performance
Total Revenues ––Total revenues increased $4.1 billion, or 7%, to $63.6 billion in 2024 from $59.6 billion in 2023, reflecting an operational increase of $4.4 billion, or 7%, partially offset by an unfavorable impact of foreign exchange of $349 million, or approximately 1%. The operational increase was primarily driven by Paxlovid, the addition of legacy Seagen revenues in full-year 2024 following the acquisition in December 2023, and growth from the Vyndaqel family and Eliquis, partially offset by declines in Comirnaty. The operational increase for Paxlovid was primarily due to: (i) a non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023 related to the expected return of an estimated 6.5 million treatment courses of EUA labeled U.S. government inventory and (ii) revenue in 2024 of $1.2 billion from two one-time items: a $771 million favorable final adjustment recorded in the first quarter of 2024 to the aforementioned $3.5 billion revenue reversal; and $442 million from the one-time contractual delivery of treatment courses to the U.S. SNS. See Note 17C . Excluding contributions from Comirnaty and Paxlovid, Total revenues increased 12% operationally.The following chart outlines the components of the net change in Total revenues :See the Total Revenues by Geography and Total Revenues––Selected Product Discussion sections within MD&A for more information, including a discussion of key drivers of our revenue performance. Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues anticipated in the fall and winter seasons, and Paxlovid revenues trend with infection rates. See also The Global
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Economic Environment––COVID-19 section below for information about our COVID-19 products. For information regarding the primary indications or class of certain products, see Note 17C .
Income from Continuing Operations Before Provision/(Benefit) for Taxes on Income –– The increase in Income from continuing operations before provision/(benefit) for taxes on income of $7.0 billion, to $8.0 billion in 2024 from $1.1 billion in 2023, was primarily attributable to (i) a decrease in Cost of Sales, (ii) higher revenues and (iii) a decrease in Restructuring charges and certain acquisition-related costs, partially offset by (iv) higher net interest expense, (v) net periodic benefit costs associated with pension and other postretirement plans incurred in 2024 versus net periodic benefit credits in 2023, (vi) lower net gains on equity securities and (vii) an increase in Amortization of intangible assets.
See the Analysis of the Consolidated Statements of Operations section within MD&A and Note 4 . For information on our tax provision and effective tax rate, see the Provision/(Benefit) for Taxes on Income section within MD&A and Note 5 .Our Operating Environment ––We, like other businesses in our industry, are subject to certain industry-specific challenges. These include, among others, the topics listed below. See also the Item 1. Business––Government Regulation and Price Constraints and Item 1A. Risk Factors sections.
Regulatory Environment––Pipeline Productivity –– Our product lines must be replenished over time to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well as to provide for earnings growth, primarily through internal R&D or through collaborations, acquisitions, JVs, licensing or other arrangements. As a result, we devote considerable resources to our R&D activities which, while essential to our growth, incorporate a high degree of risk and cost, including whether a particular product candidate or new indication for an in-line product will achieve the desired clinical endpoint or safety profile, will be approved by regulators or will be successful commercially. Clinical trials are conducted to determine, among other things, whether an investigational drug, vaccine or device is safe and effective for a particular patient population. After a product has been approved or authorized and launched, we continue to monitor its safety as long as it is available to patients, including conducting postmarketing trials, voluntarily or pursuant to a regulatory request. For the entire life of the product, we collect safety data and report safety information to the FDA and other regulators. Regulatory authorities evaluate potential safety concerns and take any regulatory action deemed necessary and appropriate. Such action(s) may include: updating a product’s labeling, restricting its use, communicating new safety information or, in rare cases, seeking to suspend or remove a product from the market.Intellectual Property Rights and Collaboration/Licensing Rights –– The loss, expiration or invalidation of intellectual property rights, patent litigation settlements and judgments, and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues. Certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face increased generic competition over the next few years. While additional patent-based or regulatory exclusivity expiries will continue, we expect a moderate impact of reduced revenues due to patent expiries in 2025 and anticipate a more significant impact of reduced revenues from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations. We continue to vigorously defend our patent rights against infringement, and we will continue to support efforts that strengthen worldwide recognition of patent rights while taking necessary steps to help ensure appropriate patient access.
For additional information on patent rights we consider most significant to our business as a whole, see the Item 1. Business––Patents and Other Intellectual Property Rights section. For a discussion of recent developments with respect to patent litigation involving certain of our products, see Note 16A1 .
Regulatory Environment/Pricing and Access––Government and Other Payor Group Pressures –– The pricing of medicines and vaccines by pharmaceutical manufacturers and the cost of healthcare, which includes medicines, vaccines, medical services and hospital services, continues to be important to payors, governments, patients, and other stakeholders. Federal and state governments and private third-party payors in the U.S. continue to take action to manage the utilization and cost of drugs, including increasingly employing formularies to control costs and encourage utilization of certain drugs, including through the use of deductibles, utilization management tools, cost sharing or formulary placement. We consider a number of factors impacting the pricing of our medicines and vaccines. Within the U.S., we often engage with patients, doctors and healthcare plans. We also often provide significant discounts from the list price to insurers, including PBMs and MCOs. The price that patients pay in the U.S. for prescribed medicines and vaccines is ultimately set by healthcare providers and insurers, including government healthcare programs. Governments globally, as well as private third-party payors in the U.S., may use a variety of measures to control costs, including, among others, legislative or regulatory pricing reforms, drug formularies (including tiering and utilization management tools), cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced localization as a condition of market access, “international reference pricing” (i.e., the practice of a country linking its regulated medicine prices to those of other countries), quality consistency evaluation processes and volume-based procurement. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In the U.S., we expect to see continued focus by the U.S. government on regulating drug pricing and access to medicine. The drug pricing provisions of the IRA are being implemented over the next several years. In August 2023, CMS published the first ten medicines subject to the MDPNP, which requires manufacturers of select drugs to engage in a process with the federal government to set new Medicare prices which would go into effect in 2026. Eliquis was among the first ten medicines subject to MDPNP. In August 2024, the government released the new Medicare price for Eliquis, which, effective January 1, 2026, will be required to be offered to all Medicare beneficiaries and to covered entities participating in the 340B Program that dispense Eliquis to a Medicare beneficiary if that maximum fair price is lower than the discounted price such entities are offered under the 340B Program ceiling price calculation. The Eliquis Medicare price is factored into our long-term financial planning, in accordance with our standard financial reporting and forecasting protocols. On January 17, 2025, CMS announced the selection of another 15 drugs from Medicare Part D for the maximum fair price, with prices to be set and effective on January 1, 2027. Ibrance and Xtandi were included in the list of 15 drugs selected. Another 15 drugs from Medicare Part B or Medicare Part D will be selected by February 1, 2026, for the maximum price to be set and in effect by January 1, 2028. It is possible that more of our products could be selected in future years, which could, among other things, lead to lower revenues prior to expiry of intellectual property protections. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. The IRA made significant changes to the Medicare Part D benefit design, which will impact Pfizer revenues in 2025, including: an expected favorable impact from the $2,000 annual out-of-pocket cap and new Prescription Payment Plan, more than offset by an expected unfavorable impact from the sunsetting of the Coverage Gap Discount Program and the addition of new manufacturer discounts in the initial and catastrophic coverage phases. We anticipate a net unfavorable impact to revenue in 2025 of approximately $1 billion, year-over-year, related to the Medicare Part D Redesign changes that take effect in 2025. We expect these changes will more acutely impact our higher-priced medicines as they are expected to reach catastrophic coverage earlier in the year. In addition, changes to the MDRP or the 340B Program, including legal or legislative developments at the federal or state level with respect to the 340B Program, could
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have a material impact on our business. See the Item 1. Business –– Pricing Pressures and Managed Care Organizations and ––Government Regulation and Price Constraints and the Item 1A. Risk Factors –– Pricing and Reimbursement sections.Impact of the July 2023 Tornado in Rocky Mount, North Carolina (NC) –– Our manufacturing facility in Rocky Mount, NC was damaged by a tornado in July 2023. The facility is a key producer of sterile injectables and is responsible for manufacturing nearly 25 percent of all our sterile injectables—including anesthesia, analgesia, and micronutrients. Supply of medicines has recovered from the impact of the tornado. We incurred losses in 2023 and 2024 that were partially offset by insurance recoveries received.Product Supply –– We periodically encounter supply delays, disruptions and shortages, including due to voluntary product recalls and natural or man-made disasters. In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines and we are actively engaging with regulatory authorities on this topic. If nitrosamines are detected above certain levels in our products, this may lead to market action for such products. For example, in 2021, Pfizer recalled all lots of Chantix due to the presence of a nitrosamine, N-nitroso-varenicline, at or above acceptable intake limits communicated by various regulatory authorities. Regulatory authorities have since issued updated guidance on nitrosamine acceptable intake levels. With this guidance, which included an updated intake level for N-nitroso-varenicline, we have started making regulatory submissions to potentially enable Chantix to return to market in the U.S. and in certain international markets.
Except for the impact of the tornado in Rocky Mount, NC discussed above, we have not seen a significant disruption of our supply chain in 2024 and through the date of filing of this Form 10-K, and all of our manufacturing sites globally have continued to operate at or near normal levels. We do not anticipate the availability of raw materials to have a significant impact on our operations in 2025, but are monitoring potential supply chain disruptions as a result of ongoing geopolitical and trade negotiations, which could, among other things, impact costs. We are continuing to monitor and implement mitigation strategies to reduce any potential risk or impact including active supplier management, qualification of additional suppliers and advanced purchasing to the extent possible. For information on risks related to product manufacturing, see the Item 1A. Risk Factors––Product Manufacturing, Sales and Marketing Risks section.
Voluntary Withdrawal of Oxbryta –– See the Product Developments section within MD&A.
The Global Economic Environment ––In addition to the industry-specific factors discussed above, we, like other businesses of our size and global extent of activities, are exposed to economic cycles. Certain factors in the global economic environment that may impact our global operations include, among other things, currency and interest rate fluctuations, capital and exchange controls, local and global economic conditions including inflation, recession, volatility and/or lack of liquidity in capital markets, expropriation and other restrictive government actions, changes in intellectual property, legal protections and remedies, trade regulations, tariffs, tax laws and regulations and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including the ongoing conflicts between Russia and Ukraine and in the Middle East and their economic consequences, geopolitical instability, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change. Government pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria or other means of cost control. In addition, issued or future executive orders or other new or changes in laws, regulations or policy regarding tariffs, could have a material adverse effect on our business, earnings and financial guidance. The actual impact of the new tariffs on our business is subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs imposed by other countries. We are evaluating opportunities and developing plans which may help mitigate the potential impact of tariffs on our business and operations. For additional information on risks related to our global operations and changes in laws, see the Item 1A. Risk Factors—Global Operations and –– Changes in Laws and Accounting Standar ds sections.
COVID-19 ––In response to COVID-19, we developed Paxlovid and collaborated with BioNTech to jointly develop Comirnaty. As part of our strategy for COVID-19, we are continuing to make significant investments in breakthrough science. This includes continuing to evaluate Comirnaty and Paxlovid, including against new variants of concern, developing variant adapted vaccine candidates and developing potential combination respiratory vaccines and potential next generation vaccines and therapies. We are also evaluating Paxlovid for certain pediatric patients. See the Product Developments section within MD&A.
In 2023, we principally sold Comirnaty globally under government contracts. In September 2023, Comirnaty transitioned to traditional commercial market sales in the U.S., triggered by the expiration of contracts and the COVID-19 vaccines from Pfizer and BioNTech purchased through them becoming either depleted or not used following the introduction of a new variant vaccine. Internationally, sales of Comirnaty in international developed markets were generally under government contracts in 2023 and 2024, and in emerging markets, under a combination of private channels and government contracts; in both cases, we started transitioning to commercial markets in 2024. Due to the commercial market transition as well as the seasonality of demand for COVID-19 vaccinations, the majority of our global revenues for Comirnaty were recorded in the fourth quarter of 2024. In 2025, for Comirnaty we expect vaccination rates and market share in commercial markets and revenue phasing similar to 2024, primarily concentrated in the second-half of the year. We have assumed no material U.S. policy changes for our vaccines portfolio in 2025 for purposes of our financial guidance, but see Item 1A. Risk Factors—U.S. Healthcare Regulati on for a description of risks and uncertainties that could impact revenue from our portfolio of vaccines.
In 2023, we principally sold Paxlovid globally to government agencies. On October 13, 2023, we announced an amended agreement with the U.S. government, which facilitated the transition of Paxlovid to traditional commercial markets in the U.S. in November 2023, with minimal uptake of NDA-labeled commercial product before January 1, 2024 (see Note 17C ). Internationally, for Paxlovid, most markets have now transitioned to commercial markets, and we are expecting most revenue for Paxlovid to be generated through commercial channels. In 2025, we expect utilization for Paxlovid to follow infection rates and stable market share, and revenues may fluctuate based on the timing, duration and severity of COVID-19 cases.
For information on risks associated with our COVID-19 products, as well as COVID-19 intellectual property disputes, see the Item 1A. Risk Factors — COVID-19 , — Intellectual Property Protectio n and –– Third-Party Intellectual Property Claims sections as well as Notes 16A1 and 17C .
Israel/Hamas Conflict ––Our local operations have been impacted by the armed conflict between Israel and Hamas that began on October 7, 2023. For the years ended December 31, 2024 and 2023, the business of our Israeli subsidiary represented less than 1% of our consolidated revenues and assets. We are closely monitoring developments in this conflict, including evaluating potential impacts to our business, customers, suppliers, employees, and operations in Israel and elsewhere in the Middle East that may impact global operations. At this time, longer term impacts from these events to the Company are uncertain and subject to change.
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Russia/Ukraine Conflict ––Our local operations have been impacted by the armed conflict between Russia and Ukraine. For the years ended December 31, 2024 and 2023, the business of our Russia and Ukraine subsidiaries represented less than 1% of our consolidated revenues and assets. While we are monitoring the effects of the conflict between Russia and Ukraine, the situation continues to evolve and the long-term implications, including the broader economic consequences of the conflict, potential additional sanctions, and actions by our customers or suppliers (including financial institutions) are difficult to predict at this time.
For information on risks associated with these conflicts, see the Item 1A. Risk Factors—Global Operations section.SIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
Following is a discussion about the critical accounting estimates and assumptions impacting our consolidated financial statements. Also, see Note 1C .For a description of our significant accounting policies, see Note 1 . Of these policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of the most subjective and the most complex judgments: Acquisitions ( Note 1D ); Fair Value ( Note 1E ); Revenues ( Note 1G ); Asset Impairments ( Note 1M ); Tax Assets and Liabilities and Income Tax Contingencies ( Note 1Q ); Pension and Postretirement Benefit Plans ( Note 1R ); and Legal and Environmental Contingencies ( Note 1S ).For a discussion of recently adopted accounting standards, see Note 1B .
Acquisitions
We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair value as of the acquisition date. To estimate fair value, we utilize an exit price approach from the perspective of a market participant. For further detail on acquisition accounting, see Note 1D . For further detail on the techniques and methodologies that we use to estimate fair value, see Note 1E . Historically, intangible assets have been the most significant fair values within our business combinations. We utilize an income approach to estimate the acquisition date fair value of each identifiable intangible asset. Some of the more significant estimates and assumptions inherent in this approach include the amount and timing of projected net cash flows, the discount rate, the tax rate, and, for IPR&D assets, the probability of technical and regulatory success (PTRS). All of these judgments and estimates can materially impact our results of operations. For further information on our process to estimate the fair value of intangible assets, see Asset Impairments below.
We estimate the fair value of acquired inventory, including finished goods and work in process, by determining the estimated selling price when completed, less an estimate of costs to be incurred to complete and sell the inventory, and an estimate of a reasonable profit allowance for those manufacturing and selling efforts. The fair value of inventory is recognized in our results of operations as the inventory is sold. Some of the more significant estimates and assumptions inherent in the estimate of the fair value of inventory include stage of completion, costs to complete, costs to dispose and selling price.We estimate the fair value of acquired PP&E using a combination of the cost and market approaches. Some of the more significant estimates and assumptions inherent in these approaches are the values of asset replacement costs, comparable assets and estimated remaining economic lives of the assets.Revenues
Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate estimates of our future experience, our results could be materially affected. The potential of our estimates to vary (sensitivity) differs by program, product, type of customer and geographic location. However, estimates associated with U.S. Medicare, Medicaid and performance-based contract rebates are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this lag, our recording of adjustments to reflect actual amounts can incorporate revisions of several prior quarters. Rebate accruals are product specific and, therefore for any period, are impacted by the mix of products sold as well as the forecasted channel mix for each individual product. For further information, see the Product Revenue Deductions section within MD&A and Note 1G .
Asset ImpairmentsWe review all of our long-lived assets for impairment indicators throughout the year. We perform impairment testing for indefinite-lived intangible assets and goodwill at least annually and for all other long-lived assets whenever impairment indicators are present. When necessary, we record charges for impairments of long-lived assets for the amount by which the fair value is less than the carrying value of these assets. Our impairment review processes are described in Note 1M .Examples of events or circumstances that may be indicative of impairment include:
• A significant adverse change in legal factors or in the business climate that could affect the value of the asset. For example, a successful challenge of our patent rights would likely result in generic competition earlier than expected.
• A significant adverse change in the extent or manner in which an asset is used such as a restriction imposed by the FDA or other regulatory authorities, withdrawals or other unusual items that could affect our ability to manufacture or sell a product.
• An expectation of losses or reduced profits associated with an asset. This could result, for example, from a change in development plans or a change in a government reimbursement program that results in an inability to sustain projected product revenues and profitability. This also could result from the introduction of a competitor’s product that impacts projected revenue growth, as well as the lack of acceptance of a product by patients, physicians and payors. For IPR&D projects, this could result from, among other things, a change in outlook based on clinical trial data, a delay in the projected launch date or additional expenditures to commercialize the product.Pfizer Inc. 2024 Form 10-K
32• Changes in development plans and/or de-prioritization of certain assets.
Identifiable Intangible Assets ––We use an income approach, specifically the discounted cash flow method to determine the fair value of intangible assets, other than goodwill. We start with a forecast of all the expected net cash flows associated with the asset, which incorporates the consideration of a terminal value for indefinite-lived assets, and then we apply an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions that impact our fair value estimates include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the projections and the impact of technological advancements and risk associated with IPR&D assets, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the jurisdictional mix of the projected cash flows.While all intangible assets other than goodwill can face events and circumstances that can lead to impairment, those that are most at risk of impairment include IPR&D assets (approximately $18.9 billion as of December 31, 2024) and newly acquired or recently impaired indefinite-lived brand assets. IPR&D assets are high-risk assets, given the uncertain nature of R&D. Newly acquired and recently impaired indefinite-lived assets are more vulnerable to impairment as the assets are recorded at fair value and are then subsequently measured at the lower of fair value or carrying value at the end of each reporting period. As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively impact our ability to recover the carrying value and can result in an impairment charge.
Goodwill ––Our goodwill impairment review work as of December 31, 2024 concluded that none of our goodwill was impaired and we do not believe the risk of impairment is significant at this time, as the fair value of each of our reporting units is significantly higher than their respective net book values.In our review, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors that we consider include, for example, macroeconomic and industry conditions, overall financial performance and other relevant entity-specific events. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then perform a quantitative fair value test.
When we are required to determine the fair value of a reporting unit, we typically use the income approach. The income approach is a forward-looking approach to estimating fair value and relies primarily on internal forecasts. Within the income approach, we use the discounted cash flow method. We start with a forecast of all the expected net cash flows for the reporting unit, which includes the application of a terminal value, and then we apply a reporting unit-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of technological risk and competitive, legal and/or regulatory forces on the projections, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.
For all of our reporting units, there are a number of future events and factors that may impact future results and that could potentially have an impact on the outcome of subsequent goodwill impairment testing. For a list of these factors, see the Forward-Looking Information and Factors That May Affect Future Result s and the Item 1A. Risk Factors sections.
Benefit Plans
For a description of our different benefit plans, see Note 11 .
Our assumptions reflect our historical experiences and our judgment regarding future expectations that have been deemed reasonable by management. The judgments made in determining the costs of our benefit plans can materially impact our results of operations.
The following provides (i) at the end of each year, the expected annual rate of return on plan assets for the following year, (ii) the actual annual rate of return on plan assets achieved in each year, and (iii) the weighted-average discount rate used to measure the benefit obligations at the end of each year for our U.S. pension plans and our international pension plans (a) :2024 2023 2022U.S. Pension PlansExpected annual rate of return on plan assets 7.7 % 8.0 % 7.5 %
Actual annual rate of return on plan assets 1.3 10.4 (22.4)
Discount rate used to measure the plan obligations 5.7 5.4 5.4International Pension PlansExpected annual rate of return on plan assets 4.9 5.1 4.5
Actual annual rate of return on plan assets 6.4 (4.6) (26.0)
Discount rate used to measure the plan obligations 4.1 4.4 3.8(a) For detailed assumptions associated with our benefit plans, see Note 11B .Expected Annual Rate of Return on Plan Assets ––The assumptions for the expected annual rate of return on all of our plan assets reflect our actual historical return experience and our long-term assessment of forward-looking return expectations by asset classes, which is used to develop a weighted-average expected return based on the implementation of our targeted asset allocation in our respective plans.
The expected annual rate of return on plan assets for our U.S. plans and international plans is applied to the fair value of plan assets at each year-end and the resulting amount is reflected in our net periodic benefit costs in the following year. Differences between the actual rate of return on plan assets and the expected annual rate of return on plan assets are immediately recognized through earnings upon remeasurement.Pfizer Inc. 2024 Form 10-K
33The following illustrates the sensitivity of net periodic benefit costs to a 50 basis point decline in our assumption for the expected annual rate of return on plan assets, holding all other assumptions constant (in millions, pre-tax):Assumption Change Increase in 2025Net Periodic
Benefit Costs
Expected annual rate of return on plan assets (a)50 basis point decline $86(a) The estimate excludes any potential mark-to-market adjustments.The actual return on plan assets was $652 million during 2024 .Discount Rate Used to Measure Plan Obligations ––The weighted-average discount rate used to measure the plan obligations for our U.S. defined benefit plans is determined at least annually and evaluated and modified, as required, to reflect the prevailing market rate of a portfolio of high-quality fixed income investments, rated AA/Aa or better, that reflect the rates at which the pension benefits could be effectively settled. The discount rate used to measure the plan obligations for our significant international plans is determined at least annually by reference to investment grade corporate bonds, rated AA/Aa or better, including, when there is sufficient data, a yield-curve approach. These discount rate determinations are made in consideration of local requirements. The measurement of plan obligations at the end of the year will affect (i) the actuarial (gains)/losses recognized in our net periodic benefit cost for that year and (ii) the amount of service cost and interest cost reflected in our net periodic benefit costs in the following year.
The following illustrates the sensitivity of net periodic benefit costs and benefit obligations to a 10 basis point decline in our assumption for the discount rate, holding all other assumptions constant (in millions, pre-tax):Assumption Change Decrease in 2025 Net Periodic Benefit Costs
Increase to 2024 Benefit Obligations
Discount rate 10 basis point decline $5 $208
The change in the discount rates used in measuring our plan obligations as of December 31, 2024 resulted in an increase in the measurement of our aggregate plan obligations by approximately $25 million.Income Tax Assets and Liabilities
Income tax assets and liabilities include income tax valuation allowances and accruals for uncertain tax positions. See Notes 1Q and 5 , as well as the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A .
Contingencies
We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies, guarantees and indemnifications. See Notes 1Q , 1S , 5D and 16 .
ANALYSIS OF THE CONSOLIDATED STATEMENTS OF OPERATIONS
Total Revenues by Geography
The following presents worldwide Total revenues by geography:
Year Ended December 31, % Change
Worldwide U.S. International Worldwide U.S. International(MILLIONS) 2024 2023 2022 2024 2023 2022 2024 2023 2022 24/23 23/22 24/23 23/22 24/23 23/22Operating segments:
Biopharma$ 62,400 $ 58,237 $ 99,826 $ 38,332 $ 27,749 $ 42,920 $ 24,068 $ 30,488 $ 56,905 7 (42) 38 (35) (21) (46)Pfizer CentreOne1,146 1,272 1,342 278 352 390 868 920 952 (10) (5) (21) (10) (6) (3)Pfizer Ignite82 44 7 82 44 7 — — — 85 * 85 * — —
Total revenues $ 63,627 $ 59,553 $ 101,175 $ 38,691 $ 28,145 $ 43,317 $ 24,936 $ 31,408 $ 57,858 7 (41) 37 (35) (21) (46)
2024 v. 2023
The following provides an analysis of the worldwide change in Total revenues by geographic areas from 2023 to 2024:(MILLIONS) Worldwide U.S. International
Operational growth/(decline):Worldwide growth from Paxlovid
$ 4,452 $ 5,905 $ (1,453)
Increase in revenues from legacy Seagen, which was acquired in December 2023
3,223 3,071 153
Worldwide growth from the Vyndaqel family, Eliquis, Xtandi and Nurtec ODT/Vydura, partially offset by declines from Xeljanz, Ibrance, Abrysvo, Inlyta and the Prevnar family
2,403 1,770 633Worldwide declines from Comirnaty(5,907) (400) (5,507)
Decline in oncology biosimilars, largely due to lower net price in the U.S. (362) (338) (24)
Other operational factors, net 614 538 76Operational growth/(decline), net4,423 10,546 (6,123)
Unfavorable impact of foreign exchange (349) — (349)Total revenues increase/(decrease)$ 4,074 $ 10,546 $ (6,472)
Pfizer Inc. 2024 Form 10-K
34
2023 v. 2022
The following provides an analysis of the worldwide change in Total revenues by geographic areas from 2022 to 2023:
(MILLIONS) Worldwide U.S. International
Operational growth/(decline):
Worldwide declines from Comirnaty
$ (26,427) $ (6,374) $ (20,053)
Worldwide declines from Paxlovid
(17,506) (11,803) (5,703)
Worldwide growth from the Vyndaqel family, Eliquis, the Prevnar family and Inlyta, partially offset by worldwide declines from Ibrance and Xeljanz
1,079 1,081 (2)
Increase in revenues from Nurtec ODT/Vydura and Oxbryta, which were acquired in the fourth quarter of 2022
972 949 23
Revenues from Abrysvo, primarily driven by launch of the older adult indication in the U.S. in July 2023
890 888 2
Revenues from legacy Seagen products subsequent to the acquisition on December 14, 2023
132 132 —
Other operational factors, net
260 (45) 305
Operational growth/(decline), net
(40,600) (15,172) (25,428)
Unfavorable impact of foreign exchange (1,022) — (1,022)
Total revenues increase/(decrease)
$ (41,621) $ (15,172) $ (26,450)See the Total Revenues––Selected Product Discussion section within MD&A for additional analysis and Note 17C .
Product Revenue Deductions –– Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these product revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends.
The following presents information about product revenue deductions:
Year Ended December 31,(MILLIONS) 2024 2023 2022
Medicare rebates $ 4,145 $ 997 $ 838
Medicaid and related state program rebates 2,252 1,655 973
Performance-based contract rebates 6,497 5,159 3,575
Chargebacks 12,698 9,828 7,560
Sales allowances 6,444 6,790 5,460
Sales returns and cash discounts
1,852 5,619 1,290
Total (a)
$ 33,888 $ 30,048 $ 19,697
(a) The increase in revenue deductions in 2024 was primarily driven by the transition of Paxlovid and Comirnaty to commercial markets, an increase in sales from legacy Seagen products acquired in December 2023, sales growth from the Vyndaqel family, and higher sales of acquired products, partially offset by a $771 million favorable final adjustment recorded in the first quarter of 2024 to the estimated non-cash Paxlovid revenue reversal of $3.5 billion recorded in the fourth quarter of 2023 (see Note 17C ).Product revenue deductions are primarily a function of product sales volume, mix of products sold, contractual or legislative discounts and rebates.
For information on our accruals for product revenue deductions, including the balance sheet classification of these accruals, see Note 1G .Total Revenues—Selected Product Discussion
Biopharma
Revenue
(MILLIONS) Year Ended Dec. 31, % ChangeProduct Global Revenues Region 2024 2023 Total Oper. Operational Results Commentary
Eliquis $7,366
Up 10%(operationally)U.S. $ 4,803 $ 4,228 14 Growth driven primarily by continued oral anti-coagulant adoption and market share gains in the non-valvular atrial fibrillation indication in the U.S. and certain markets in Europe, partially offset by declines due to loss of patent-based exclusivity and generic competition in certain international markets.
Int’l. 2,563 2,519 2 3
Worldwide $ 7,366 $ 6,747 9 10
Prevnar family $6,411
Down 1%(operationally)U.S. $ 4,233 $ 4,265 (1) Declines driven by fewer adult vaccinations in the U.S. and lower pediatric indication sales in most international developed markets and certain emerging markets, partially offset by growth in the pediatric indication in the U.S. reflecting recovered market share as a result of the Prevnar 20 launch in 2023, as well as strong uptake of the adult indication in certain international markets.
Int’l. 2,178 2,236 (3) (1)
Worldwide $ 6,411 $ 6,501 (1) (1)
Pfizer Inc. 2024 Form 10-K
35
Revenue
(MILLIONS) Year Ended Dec. 31, % Change
Product Global Revenues Region 2024 2023 Total Oper. Operational Results Commentary
Paxlovid $5,716
Up *(operationally)U.S. $ 4,616 $ (1,289) * Growth primarily driven by:
• a non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023 (see Note 17C );
• a $771 million favorable final adjustment recorded in the first quarter of 2024 to the estimated non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023; and
• $442 million from the one-time contractual delivery of treatment courses to the U.S. SNS in the third quarter of 2024,
partially offset by:
• lower contractual deliveries in most international markets as a result of the transition to traditional commercial market sales; and
• lower demand globally, largely in China due to the non-recurrent surge in COVID-19 infection during the first quarter of 2023 and transition to the out-of-pocket market in the second quarter of 2023.
Int’l. 1,100 2,568 (57) (57)
Worldwide $ 5,716 $ 1,279 * *
Vyndaqel family $5,451
Up 65%
(operationally)
U.S. $ 3,547 $ 1,863 90 Growth largely driven by strong demand with continuing uptake in patient diagnosis, primarily in the U.S. and international developed markets, as well as increased affordability in the U.S.
Int’l. 1,904 1,458 31 32
Worldwide $ 5,451 $ 3,321 64 65Comirnaty$5,353
Down 53%(operationally)U.S. $ 2,004 $ 2,404 (17) Declines largely driven by lower contractual deliveries in international markets as well as a decrease in vaccinations globally.
Int’l. 3,349 8,816 (62) (62)
Worldwide $ 5,353 $ 11,220 (52) (53)
Ibrance $4,367
Down 8%(operationally)U.S. $ 2,849 $ 3,151 (10) Declines primarily driven by lower demand due to competitive pressures mainly in the U.S., price decreases in certain international developed markets and generic penetration in certain emerging markets.
Int’l. 1,518 1,602 (5) (4)
Worldwide $ 4,367 $ 4,753 (8) (8)
Xtandi $2,039
Up 23%(operationally)U.S. $ 2,039 $ 1,659 23 Growth largely driven by strong demand due to uptake of the nmCSPC indication following approval in the fourth quarter of 2023 and increased affordability in the U.S.Int’l. — — — —Worldwide $ 2,039 $ 1,659 23 23Padcev$1,588
Up *(operationally)U.S. $ 1,561 $ 53 * Growth driven by the acquisition of Seagen in the fourth quarter of 2023 as well as strong demand.
Int’l. 27 — * *
Worldwide $ 1,588 $ 53 * *
Nurtec ODT/Vydura $1,263
Up 36%(operationally)U.S. $ 1,193 $ 908 31 Growth primarily driven by strong demand in the U.S. and, to a much lesser extent, recent launches in international markets, partially offset by lower net price in the U.S. due to unfavorable changes in channel mix.
Int’l. 69 20 * *
Worldwide $ 1,263 $ 928 36 36
Xeljanz $1,168
Down 31%
(operationally)
U.S. $ 680 $ 1,154 (41) Declines primarily driven by lower demand globally resulting from ongoing shifts in prescribing patterns related to label changes, as well as lower net price in the U.S. and the impact of regulatory exclusivity expiry in Canada.
Int’l. 488 549 (11) (9)
Worldwide $ 1,168 $ 1,703 (31) (31)
Adcetris $1,089
Up *
(operationally)
U.S. $ 1,059 $ 56 * Growth driven by the acquisition of Seagen in the fourth quarter of 2023.
Int’l. 30 — * *
Worldwide $ 1,089 $ 56 * *
Pfizer Inc. 2024 Form 10-K
36Revenue
(MILLIONS) Year Ended Dec. 31, % ChangeProduct Global Revenues Region 2024 2023 Total Oper. Operational Results Commentary
Inlyta $978
Down 5%(operationally)U.S. $ 588 $ 642 (8) Declines primarily driven by lower demand in the U.S. as well as lower volumes and lower net price in international markets, partially offset by strong growth in China.
Int’l. 391 394 (1) 1
Worldwide $ 978 $ 1,036 (6) (5)
Abrysvo
$755
Down 15%(operationally)U.S. $ 594 $ 888 (33) Decline primarily driven by a significant reduction in vaccination rates in the U.S. for the older adult indication, partially offset by strong demand for the maternal indication in the U.S. (launched in December 2023), and launch uptake for both indications in certain international markets.
Int’l. 160 2 * *
Worldwide $ 755 $ 890 (15) (15)Pfizer CentreOne
Revenue
(MILLIONS) Year Ended Dec. 31, % ChangeOperating Segment Global Revenues Region 2024 2023 Total Oper. Operational Results CommentaryPC1$1,146
Down 10%(operationally)U.S. $ 278 $ 352 (21) Declines primarily driven by lower manufacturing of divested and other third-party products under manufacturing and supply agreements, partially offset by growth in manufacturing-related services.
Int’l. 868 920 (6) (5)
Worldwide $ 1,146 $ 1,272 (10) (10)See the Item 1. Business — Patents and Other Intellectual Property Rights section for information regarding the expiration of various patent rights, Note 16 for a discussion of recent developments concerning patent and product litigation relating to certain of the products discussed above and Note 17C for the primary indications or class of the selected products discussed above.
Costs and Expenses
Costs and expenses follow:
Year Ended December 31, % Change(MILLIONS) 2024 2023 2022 24/23 23/22Cost of sales$ 17,851 $ 24,954 $ 34,344 (28) (27)Percentage of Total revenues28.1 % 41.9 % 33.9 %Selling, informational and administrative expenses14,730 14,771 13,677 — 8Research and development expenses10,822 10,679 11,428 1 (7)Acquired in-process research and development expenses108 194 953 (44) (80)Amortization of intangible assets5,286 4,733 3,609 12 31Restructuring charges and certain acquisition-related
costs2,419 2,943 1,375 (18) *Other (income)/deductions—net4,388 222 1,062 * (79)
2024 v. 2023Cost of SalesCost of sales decreased $7.1 billion, primarily due to:
• the non-recurrence of a non-cash charge of $6.2 billion in 2023 related to Paxlovid and Comirnaty recorded for inventory write-offs and related charges ($5.0 billion for Paxlovid and $1.2 billion for Comirnaty); and
• a favorable change in sales mix of $2.6 billion, primarily driven by lower sales of Comirnaty,partially offset by:• an impact of $1.9 billion from our Seagen acquisition, inclusive of the amortization of the fair value step-up of inventory.
The decrease in Cost of sales as a percentage of revenues reflects the non-recurrence of the aforementioned non-cash charge of $6.2 billion, as well as significantly lower sales of Comirnaty.
Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues and related cost of sales anticipated in the fall and winter seasons. See also Overview of Our Performance, Operating Environment, Strategy and Outlook —The Global Economic Environment––COVID-19 section for information about our COVID-19 products.
Pfizer Inc. 2024 Form 10-K
37Selling, Informational and Administrative ExpensesSelling, informational and administrative expenses decreased $41 million, mostly due to:
• a decrease of $790 million due to lower promotional and marketing spend for various products, including Comirnaty and Paxlovid,partially offset by:• higher compensation-related expenses of $630 million; and
• an increase of $140 million for corporate enabling functions primarily driven by our acquisition of Seagen.Research and Development ExpensesResearch and development expenses increased $143 million, primarily due to:
• a net increase in spending of $1.1 billion mainly to develop certain product candidates acquired from Seagen; and
• an increase of $680 million in compensation-related expenses,
partially offset by:
• lower spending of $1.6 billion as a result of our cost realignment program and on various product candidates, primarily ongoing vaccine programs.Amortization of Intangible AssetsAmortization of intangible assets increased $553 million, primarily due to:
• an increase of $570 million from our December 2023 acquisition of Seagen; and
• an increase of $470 million related to assets reclassified in 2023 from IPR&D to developed technology rights and from indefinite-lived to finite-lived brands,
partially offset by:
• a decrease of $570 million related to changes in asset lives and fully amortized assets.Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity InitiativesRealigning our Cost Base Program –– This program is expected to deliver total net cost savings of approximately $4.5 billion by the end of 2025, most of which was achieved by year-end 2024.
Manufacturing Optimization Program –– We expect to begin to achieve initial savings from Phase 1 of this multi-phased program in the latter part of 2025 and continue to expect approximately $1.5 billion in savings from this first phase by the end of 2027.Certain qualifying costs for these programs in all periods since inception were recorded and reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income. See the Non-GAAP Financial Measure: Adjusted Income section within MD&A.For a description of our programs, as well as the anticipated and actual costs, see Note 3A . The program savings discussed above may be rounded and represent approximations. In addition to these programs, we continuously monitor our operations for cost reduction and/or productivity opportunities in light of patent-based and regulatory exclusivity expiries as well as the expiration of collaborative arrangements for various products. Long-term improvement in gross margin will remain a key focus for the Company over the next few years.
Seagen acquisition –– In connection with our acquisition of Seagen, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to generate approximately $1 billion of annual cost synergies, to be achieved by 2026. The one-time costs to generate these synergies are expected to be approximately $1.7 billion, incurred primarily from 2023 through 2025.Other (Income)/Deductions––Net2024 v. 2023
The unfavorable period-over-period change of $4.2 billion was primarily driven by (i) higher net interest expense of $2.0 billion, (ii) an unfavorable impact of $760 million due to net periodic benefit costs associated with pension and postretirement plans in 2024 versus net periodic benefit credits in 2023, (iii) lower net gains on equity securities of $580 million, (iv) a charge of $420 million in 2024 related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program and (v) lower Haleon equity method income of $400 million, partially offset by (vi) gains of $945 million in 2024 on the partial sales of our investment in Haleon.
2023 v. 2022
The favorable period-over period change of $840 million was mainly driven by a favorable impact of $2.9 billion due to net gains on equity securities in 2023 versus net losses recognized on equity securities in 2022 and lower net interest expense of $400 million, partially offset by higher intangible asset impairment charges of $2.6 billion.
See Note 4 .Provision/(Benefit) for Taxes on Income
Year Ended December 31, % Change(MILLIONS) 2024 2023 2022 24/23 23/22
Provision/(benefit) for taxes on income $ (28) $ (1,115) $ 3,328 (97) *Effective tax rate on continuing operations(0.4) % * 9.6 %
For information about our effective tax rate and the events and circumstances contributing to the changes between periods, as well as details about discrete elements that impacted our tax provisions, and cash paid for income taxes, net of refunds, see Note 5 .
Pfizer Inc. 2024 Form 10-K
38
Changes in Tax Laws–– Many countries outside the U.S. have enacted legislation for global minimum taxation resulting from the Organization for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting “Pillar 2” project. The EU has approved a directive requiring member states to incorporate the OECD provisions into their respective domestic laws, and countries outside the EU are also enacting the provisions into their domestic law. The provisions are generally effective for Pfizer in 2024, though significant details and guidance around the provisions are still pending. Income tax expense could be adversely affected as the legislation becomes effective in countries in which we do business, and such impact could be material to our results of operations. We continue to monitor pending OECD guidance and legislation enactment and implementation by individual countries.PRODUCT DEVELOPMENTSA comprehensive update of Pfizer’s development pipeline was published as of February 4, 2025 and is available at www.pfizer.com/science/drug-product-pipeline. It includes an overview of our research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.This section provides information as of the date of this filing about significant marketing application-related regulatory actions by, and filings pending with, the FDA and regulatory authorities in the EU and Japan.The table below includes filing and approval milestones for products that have occurred in the last twelve months and generally do not include approvals that may have occurred prior to that time. The table includes filings with regulatory decisions pending (even if the filing occurred outside of the last twelve-month period).
Pfizer Inc. 2024 Form 10-K
39
ProductsPRODUCT INDICATION OR PROPOSED INDICATION APPROVED/FILED^
U.S. EU JAPANPrevnar 20/Prevenar 20
(Vaccine)
Active immunization to prevent invasive disease and pneumonia caused by the 20 Streptococcus pneumoniae (pneumococcus) serotypes in the vaccine in adults ages 18 years and older.
Approved
June
2021
ApprovedFebruary2022
Approved
August
2024
Active immunization to prevent invasive pneumococcal disease caused by the 20 Streptococcus pneumoniae (pneumococcal) serotypes contained in the vaccine in infants and children six weeks through 17 years of age, and for the prevention of otitis media in infants six weeks through five years of age caused by the original seven serotypes contained in Prevnar (a) .
Approved
April
2023
Approved
March
2024
Approved
March
2024
TicoVac (Vaccine) Active immunization to prevent tick-borne encephalitis in individuals 1 year of age and older Approved
August
2021
Approved
March
2024
Nurtec ODT/Vydura
(rimegepant)
Acute treatment of migraine with or without aura in adults Approved
February2020
Approved
April
2022Filed November 2024Prevention of episodic migraine in adults Approved
May
2021
Approved
April
2022Filed November 2024
Abrysvo (Vaccine) Active immunization for the prevention of lower respiratory tract disease caused by RSV in individuals 60 years and older Approved
May
2023ApprovedAugust
2023
ApprovedMarch2024
Active immunization for the prevention of lower respiratory tract disease caused by RSV in individuals 18-59 years of age who are at increased risk of lower respiratory tract disease caused by RSVApproved
October2024
Filed
June
2024
Velsipity (etrasimod) Moderately to severely active ulcerative colitis in adults Approved
October2023
Approved
February
2024Filed
June
2024
Braftovi (encorafenib) and Mektovi (binimetinib) (b)
BRAF V600E -mutant metastatic non-small cell lung cancer in adult patientsApprovedOctober
2023
Approved
August
2024Braftovi (encorafenib),Erbitux (cetuximab) (c) and mFOLFOX6First-line BRAF V600E -mutant mCRC
Approved
December 2024Elrexfio (elranatamab) Triple-class relapsed/refractory multiple myeloma in adult patients
Approved
August
2023
Approved
December
2023
Approved
March
2024
Xtandi (enzalutamide) (d)
nmCSPC with biochemical recurrence at high risk for metastasis (high-risk BCR) ApprovedNovember2023ApprovedApril
2024
Hympavzi (marstacimab-hncq) Hemophilia A and B without inhibitors
Approved
October
2024
ApprovedNovember2024
ApprovedDecember2024Emblaveo(aztreonam-avibactam) (e)Treatment of infections in adult patients caused by Gram-negative bacteria with limited or no treatment options Approved February 2025
Approved
April
2024Padcev
(enfortumab vedotin-ejfv) (f)
In combination with Keytruda ®(g) (pembrolizumab) for locally advanced or metastatic urothelial cancer in adultsApprovedDecember
2023ApprovedAugust2024ApprovedSeptember
2024
Tivdak
(tisotumab vedotin-tftv) (h)
Recurrent or metastatic cervical cancer with disease progression on or after chemotherapy
Approved
April
2024FiledFebruary
2024
FiledApril2024
Comirnaty (COVID-19 Vaccine, mRNA) 2024-2025 Formula, Omicron KP.2-adapted (i)
Active immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 12 years of age and older ApprovedAugust2024
Approved September 2024
Comirnaty (COVID-19 Vaccine, mRNA) 2024-2025 Formula, Omicron JN.1-adapted Active immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 6 months of age and older Approved
July
2024ApprovedAugust
2024
Adcetris
(brentuximab vedotin) (j)
Relapsed/refractory diffuse large B-cell lymphoma ApprovedFebruary2025Paxlovid (nirmatrelvir; ritonavir)
COVID-19 infection in high-risk children (6-11 years of age: >88 lbs.)
Filed February 2025
Filed January 2025^ For the U.S., the filing date is the date on which the FDA accepted our submission. For the EU, the filing date is the date on which the EMA validated our submission.(a) Listed indication applies to U.S. only. For the EU, approved indications are pneumococcal invasive disease pneumonia and otitis media. For Japan, approved indication is invasive pneumococcal disease.
Pfizer Inc. 2024 Form 10-K
40
(b) Pierre Fabre is the Marketing Authorization Holder for Braftovi (encorafenib) and Mektovi (binimetinib) in the EU. We have exclusive rights to Braftovi and Mektovi in the U.S., Canada and certain emerging markets, and Ono, Medison Pharma and Pierre Fabre have exclusive rights in all other markets.
(c) Erbitux ® is a registered trademark of ImClone LLC. We have exclusive rights to Braftovi in the U.S., Canada, and certain emerging markets, and Ono. Medison Pharma and Pierre Fabre have exclusive rights in all other markets.
(d) Being jointly developed and commercialized with Astellas.
(e) Being developed in collaboration with AbbVie. AbbVie has the exclusive commercialization rights in the U.S. and Canada; Pfizer leads the joint development program and has commercialization rights in all other countries.
(f) Being jointly developed and commercialized with Astellas.
(g) Keytruda ® is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc.
(h) Being developed in collaboration with Genmab A/S. The April 2024 approval date in the U.S. refers to the conversion of a prior accelerated approval to full approval.
(i) In September 2024, the EC approved the Pfizer/BioNTech Omicron KP.2-adapted monovalent COVID-19 vaccine for active immunization to prevent COVID-19 caused by SARS-CoV-2 in individuals 6 months of age and older. U.S. approval (August 2024) is for individuals 12 years of age and older, with EUA granted for individuals 6 months through 11 years of age.
(j) Being developed in collaboration with Takeda. Takeda has ex-U.S./Canada rights.
Pfizer submitted its intent to withdraw Penbraya from the EU market. The EC has confirmed the withdrawal of the Penbraya EU Marketing Authorisation Application with an effective date of February 20, 2025.
In February 2025, Pfizer decided to terminate development and commercialization of Beqvez (fidanacogene elaparvovec) and elected to terminate the license agreement between Pfizer and Spark Therapeutics, Inc. effective as of August 6, 2025.
In December 2024, Pfizer submitted a withdrawal of the Ngenla (somatrogon) filing for adult human growth hormone deficiency in the EU.The following provides information about additional indications and new drug candidates in late-stage development:
PRODUCT/CANDIDATE PROPOSED DISEASE AREALATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS FOR IN-LINE AND IN-REGISTRATION PRODUCTS Ibrance (palbociclib) (a)
ER+/HER2+ metastatic breast cancer
Talzenna (talazoparib) Combination with Xtandi (enzalutamide) for DNA Damage Repair-deficient mCSPCLitfulo (ritlecitinib) Vitiligo
Elrexfio (elranatamab) Multiple myeloma double-class exposed
Newly diagnosed multiple myeloma post-transplant maintenance
Newly diagnosed multiple myeloma transplant-ineligible2nd line + relapsed refractory multiple myeloma
Eliquis (apixaban) (b)
Venous thromboembolism (pediatric)
Padcev (enfortumab vedotin) (c)
Cisplatin-ineligible/decline muscle-invasive bladder cancerCisplatin-eligible muscle-invasive bladder cancerTukysa (tucatinib) HER2+ adjuvant breast cancer
2nd line/3rd line HER2+ metastatic breast cancer1st line HER2+ maintenance metastatic breast cancer
1st line HER2+ metastatic colorectal cancerHympavzi
(marstacimab-hncq)
Hemophilia (pediatric)
Hemophilia (inhibitor cohort)
NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT PF-06425090 (vaccine) Immunization to prevent primary clostridioides difficile infection
sasanlimab (PF-06801591) Combination with Bacillus Calmette-Guerin for non-muscle-invasive bladder cancer
VLA15 (PF-07307405) vaccine (d)Immunization to prevent Lyme diseasevepdegestrant (PF-07850327) (e)
Breast cancer metastatic - 2nd line ER+/HER2-
inclacumab (PF-07940370) Sickle cell disease
Ibrance + vepdegestrant (e)
ER+/HER2- metastatic breast cancer
dazukibart (PF-06823859) Dermatomyositis, polymyositis
disitamab vedotin (f)1st line HER2 (≥IHC1+) metastatic urothelial cancersigvotatug vedotin (PF-08046047) 2nd line+ metastatic non-small cell lung cancer
osivelotor (PF-07940367) Sickle cell disease
atirmociclib (PF-07220060) 2nd line metastatic breast canceribuzatrelvir (PF-07817883)
COVID-19 infection
mevrometostat (PF-06821497) + enzalutamide
1st line/2nd line metastatic castration resistant prostate cancer post-Abirateronemevrometostat (PF-06821497) + enzalutamide1st line metastatic castration resistant prostate cancer neoadjuvant hormonal therapy naïveatirmociclib (PF-07220060)1st line metastatic breast cancer
(a) Ibrance for ER+/HER2+ metastatic breast cancer is being developed in collaboration with Alliance Foundation Trials, LLC.
(b) Eliquis is being developed in collaboration with BMS.
(c) Padcev is being jointly developed and commercialized with Astellas.
(d) VLA15 is being developed in collaboration with Valneva SE.
(e) Vepdegestrant is being developed in collaboration with Arvinas.
(f) Disitamab vedotin is being developed in collaboration with RemeGen Co., Ltd .
Pfizer Inc. 2024 Form 10-K
41
In December 2024, Pfizer decided to terminate development of giroctocogene fitelparvovec (PF-07055480) and elected to terminate the collaboration and license agreement between Pfizer and Sangamo Therapeutics, Inc. effective as of April 21, 2025.
In August 2024, Pfizer announced Phase 3 top-line results for Pfizer and BioNTech’s combination mRNA vaccine candidate against influenza and COVID-19 in healthy individuals 18-64 years of age. The trial did not meet one of its primary immunogenicity objectives of non-inferiority against the influenza B strain despite obtaining higher influenza A responses and comparable COVID-19 responses versus the comparator vaccines. In November 2024, PF-07926307 (COVID-19/mRNA flu combo vaccine) reverted from Phase 3 to Phase 1 clinical trials and has been removed from the table above.
I n September 2024, Pfizer announced that it was voluntarily withdrawing all lots of Oxbryta (voxelotor) for the treatment of sickle cell disease in all markets where it is approved. Pfizer also discontinued all active voxelotor clinical trials and expanded access programs worldwide. Pfizer’s decision was based on the totality of clinical data that indicated at that time the overall benefit of Oxbryta no longer outweighs the risk in the approved sickle cell patient population. The data suggested an imbalance in vaso-occlusive crises and fatal events, which requires further assessment that remains ongoing. Pfizer has notified regulatory authorities about these findings and its decision to voluntarily withdraw Oxbryta from the market and discontinue distribution and clinical studies while further reviewing the available data and investigating the findings. We are working with the FDA, EMA and other global regulatory authorities and expect the assessment to be completed in the first half of 2025.
In July 2024, the EMA initiated a referral procedure under Article 20 of Regulation (EC) No 726/2004 for Oxbryta (voxelotor) to review the product’s benefits and risks. In October 2024, the EC suspended the Oxbryta marketing authorization while the EMA’s review of data is ongoing. In addition, the FDA has initiated an evaluation of newly identified safety signals. The FDA also has placed the Oxbryta (voxelotor) investigational new drug application on clinical hold following Pfizer’s market withdrawal. Pfizer is working with the EMA, FDA, and other regulators globally in relation to this matter.
The FDA has recently issued a partial clinical hold for osivelotor, which prohibits Pfizer from enrolling new participants into osivelotor clinical studies at this time. Study participants currently enrolled can continue on the study drug. Communication with the FDA is ongoing.
In October 2024, Pfizer stopped two clinical trials with sisunatovir (PF-07923568) following observed drug-drug interactions. Since then Pfizer has decided to terminate development of sisunatovir.
For additional information about our R&D organization, see Note 17 and the Item 1. Business — Research and Development section. For additional information regarding certain collaboration arrangements, see Item 1. Business — Collaboration and Co-Promotion Agreements .NON-GAAP FINANCIAL MEASURE: ADJUSTED INCOME
Adjusted income is an alternative measure of performance used by management to evaluate our overall performance as a supplement to our GAAP Reported performance measures. As such, we believe that investors’ understanding of our performance is enhanced by disclosing this measure. We use Adjusted income, certain components of Adjusted income and Adjusted diluted EPS to present the results of our major operations––the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide––prior to considering certain income statement elements as follows:
Measure Definition Relevance of Metrics to Our Business Performance
Adjusted income Net income attributable to Pfizer Inc. common shareholders (a)
before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items
• Provides investors useful information to:
◦ evaluate the normal recurring operational activities, and their components, on a comparable year-over-year basis
◦ assist in modeling expected future performance on a normalized basis
• Provides investors insight into the way we manage our budgeting and forecasting, how we evaluate and manage our recurring operations and how we reward and compensate our senior management (b)
Adjusted cost of sales, Adjusted selling, informational and administrative expenses, Adjusted research and development expenses and Adjusted other (income)/deductions –– net
Cost of sales, Selling, informational and administrative expenses, Research and development expenses and Other (income)/deductions––net (a) , each before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items, which are components of the Adjusted income measure
Adjusted diluted EPS EPS attributable to Pfizer Inc. common shareholders––diluted (a) before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items
(a) Most directly comparable GAAP measure.(b) The short-term incentive plans for substantially all non-sales-force employees worldwide are funded from a pool based on our performance, measured in significant part versus three budgeted metrics, one of which, for the 2024 performance year, was Adjusted diluted EPS (as defined for annual incentive compensation purposes), which is derived from Adjusted income and accounted for 40% of the bonus pool funding tied to financial performance. Additionally, for the 2024 performance year, the payout for performance share awards was determined in part by Adjusted net income, which is derived from Adjusted income. Since 2022, we no longer exclude any expenses for acquired IPR&D from our non-GAAP Adjusted results but we continue to exclude certain of these expenses for our financial results for annual incentive compensation purposes. The bonus pool funding is largely based on financial performance, as measured by three metrics, modified by performance against certain of our non-financial metrics, and may be further modified by our Compensation Committee’s assessment of other factors.
Pfizer Inc. 2024 Form 10-K
42Adjusted income and its components and Adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, are limited in their usefulness to investors. Because of their non-standardized definitions, they may not be comparable to the calculation of similar measures of other companies and are presented to permit investors to more fully understand how management assesses performance. A limitation of these measures is that they provide a view of our operations without including all events during a period, and do not provide a comparable view of our performance to peers. These measures are not, and should not be viewed as, substitutes for their most directly comparable GAAP measures of Net income attributable to Pfizer Inc. common shareholders , components of Net income attributable to Pfizer Inc. common shareholders and EPS attributable to Pfizer Inc. common shareholders—diluted , respectively.
We also recognize that, as internal measures of performance, these measures have limitations, and we do not restrict our performance-management process solely to these measures. We also use other tools designed to achieve the highest levels of performance. For example, our R&D organization has productivity targets, upon which its effectiveness is measured. In addition, total shareholder return, both on an absolute basis and relative to a publicly traded pharmaceutical index, plays a significant role in determining payouts under certain of our incentive compensation plans.
Adjusted Income and Adjusted Diluted EPS
Amortization of Intangible Assets —Adjusted income excludes all amortization of intangible assets.
Acquisition-Related Items –– Adjusted income excludes certain acquisition-related items, which are composed of transaction, integration, restructuring charges and additional depreciation costs for business combinations because these costs are unique to each transaction and represent costs that were incurred to restructure and integrate businesses as a result of an acquisition. We have made no adjustments for resulting synergies.
The significant costs incurred in connection with a business combination result primarily from the need to eliminate duplicate assets, activities or employees––a natural result of acquiring a fully integrated set of activities. For this reason, we believe that such costs incurred can be viewed differently in the context of an acquisition from those costs incurred in other, more normal, business contexts. The integration and restructuring costs for a business combination may occur over several years, with the more significant impacts typically ending within three years of the relevant transaction. Because of the need for certain external approvals for some actions, the span of time needed to achieve certain restructuring and integration activities can be lengthy.
Acquisition-related items may include purchase accounting impacts such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration.Discontinued Operations –– Adjusted income excludes the results of discontinued operations, as well as any related gains or losses on the disposal of such operations. We believe that this presentation is meaningful to investors because, while we review our product portfolio for strategic fit with our operations, we do not build or run our business with the intent to discontinue parts of our business. Restatements due to discontinued operations do not impact compensation or change the Adjusted income measure for the compensation in respect of the restated periods, but are presented for consistency across all periods.Certain Significant Items –– Adjusted income excludes certain significant items representing substantive and/or unusual items that are evaluated individually on a quantitative and qualitative basis. Certain significant items may be highly variable and difficult to predict. Furthermore, in some cases it is reasonably possible that they could reoccur in future periods. For example, although major non-acquisition-related cost-reduction programs are specific to an event or goal with a defined term, we may have subsequent programs based on reorganizations of the business, cost productivity or in response to generic or biosimilar entry or economic conditions. Legal charges to resolve litigation are also related to specific cases, which are facts and circumstances specific and, in some cases, may also be the result of litigation matters at acquired companies that were inestimable, not probable or unresolved at the date of acquisition, or legal matters related to divested products or businesses. Gains and losses on equity securities and pension and postretirement actuarial remeasurement gains and losses have a very high degree of inherent market volatility, which we do not control and cannot predict with any level of certainty, and we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business. Unusual items represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis; items that would be non-recurring; or items that relate to products we no longer sell. See the Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line Items below for a non-inclusive list of certain significant items.
Pfizer Inc. 2024 Form 10-K
43Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line ItemsYear Ended December 31, 2024
Data presented will not (in all cases) aggregate to totals.
MILLIONS, EXCEPT PER SHARE DATA
Cost of sales (a)
Selling, informational and administrative expenses (a)
Other (income)/deductions––net (a)
Net income attributable to Pfizer Inc. common shareholders (a), (b), (c)
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported $ 17,851 $ 14,730 $ 4,388 $ 8,031 $ 1.41
Amortization of intangible assets — — — 5,286
Acquisition-related items (1,341) (10) (45) 1,938
Discontinued operations
— — — (14)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)
(134) (90) — 2,213
Certain asset impairments (e)
— — (3,295) 3,295
(Gains)/losses on equity securities (e)
— — 1,008 (1,008)
Actuarial valuation and other pension and postretirement plan (gains)/losses — — (579) 579Other 44
(13) (445) (f)430
Income tax provision—non-GAAP items
(3,035)
Non-GAAP Adjusted $ 16,420 $ 14,617 $ 1,031 $ 17,716 $ 3.11
Year Ended December 31, 2023
Data presented will not (in all cases) aggregate to totals.
MILLIONS, EXCEPT PER SHARE DATA
Cost of sales (a)
Selling, informational and administrative expenses (a)
Other (income)/deductions––net (a)
Net income attributable to Pfizer Inc. common shareholders (a), (b), (c)
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported $ 24,954 $ 14,771 $ 222 $ 2,119 $ 0.37
Amortization of intangible assets — — — 4,733
Acquisition-related items (629) (11) (28) 1,874
Discontinued operations
— — — (11)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)
(98) (290) — 2,227
Certain asset impairments (e)
— — (3,024) 3,024
(Gains)/losses on equity securities (e)
— — 1,588 (1,588)
Actuarial valuation and other pension and postretirement plan (gains)/losses — — 265 (265)
Other (238) (g)
(24) (246) (f)
518
Income tax provision—non-GAAP items
(2,131)
Non-GAAP Adjusted $ 23,988 $ 14,446 $ (1,224) $ 10,501 $ 1.84Pfizer Inc. 2024 Form 10-K
44
Year Ended December 31, 2022
Data presented will not (in all cases) aggregate to totals.
MILLIONS, EXCEPT PER SHARE DATA
Cost of sales (a)
Selling, informational and administrative expenses (a)
Other (income)/deductions––net (a)
Net income attributable to Pfizer Inc. common shareholders (a), (b), (c)
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported $ 34,344 $ 13,677 $ 1,062 $ 31,372 $ 5.47
Amortization of intangible assets — — — 3,609
Acquisition-related items (119) (7) (74) 832
Discontinued operations
— — — (21)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)
(88) (562) — 1,396
Certain asset impairments (e)
— — (421) 421
(Gains)/losses on equity securities (e)
— — (1,270) 1,270
Actuarial valuation and other pension and postretirement plan (gains)/losses — — 230 (230)
Other (40) (59) (636) (f)
752
Income tax provision—non-GAAP items
(1,683)
Non-GAAP Adjusted $ 34,096 $ 13,049 $ (1,109) $ 37,717 $ 6.58
(a) Items that reconcile GAAP Reported to non-GAAP Adjusted balances are shown pre-tax. Our effective tax rates for GAAP Reported income from continuing operations were: (0.4)% in 2024, (105.4)% in 2023 and 9.6% in 2022. See Note 5 . Our effective tax rates for non-GAAP Adjusted income were: 14.5% in 2024, 9.0% in 2023 and 11.7% in 2022.(b) Includes reconciling amounts for Research and development expenses that are not material to our non-GAAP consolidated results of operations.(c) For 2024, the total acquisition-related items of $1.9 billion include reconciling amounts for Restructuring charges and certain acquisition-related costs of $514 million, mainly composed of $427 million of integration costs and other charges. For 2023, the total acquisition-related items of $1.9 billion included reconciling amounts for Restructuring charges and certain acquisition-related costs of $1.2 billion , mainly composed of $785 million of integration costs and other charges, $190 million of transaction costs and $125 million of employee termination-related charges. For 2022, the total acquisition-related items of $832 million included reconciling amounts for Restructuring charges and certain acquisition-related costs of $631 million , composed of $348 million of integration costs and other charges, $144 million of transaction costs and $138 million of employee termination-related charges. See Note 3 .(d) Includes employee termination costs, asset impairments and other exit costs related to our cost-reduction and productivity initiatives not associated with acquisitions. See Note 3 .
(e) See Note 4 .(f) For 2024, the total adjustment of $445 million includes (i) net gains of $825 million on the partial sales of our investment in Haleon in March and October 2024, which are comprised of (a) total gains on the sales of $945 million less (b) $120 million recognized in our adjusted income in the fourth quarter representing our pro-rata share of Haleon’s third quarter 2024 adjusted income recorded on a one quarter lag and implicitly included in the gain on the sale of those shares, (ii) charges of $567 million for certain legal matters, primarily representing certain product liability expenses related to products discontinued and/or divested by Pfizer, (iii) a charge of $420 million related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program and (iv) charges of $312 million mostly related to (a) our equity-method accounting pro-rata share of intangible asset amortization, impairments and restructuring costs recorded by Haleon, as well as (b) adjustments to our equity-method basis differences and (c) Pfizer's share of investee capital transactions recognized by Haleon. For 2023, the total adjustments of $246 million included charges of (i) $474 million for certain legal matters, primarily representing certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition matters and (ii) $127 million mostly related to our equity-method accounting pro-rata share of intangible asset amortization and impairments, costs of separating from GSK and restructuring costs recorded by Haleon, partially offset by: (i) a $222 million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion and (ii) dividend income of $211 million from our investment in Nimbus resulting from Takeda’s acquisition of Nimbus’s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary. For 2022, the total adjustments of $636 million included charges of (i) $307 million mostly representing our equity-method accounting pro rata share of restructuring charges and costs of separating from GSK recorded by Haleon/the Consumer Healthcare JV and adjustments to our equity-method basis differences which are also related to the separation of Haleon/the Consumer Healthcare JV from GSK and (ii) $230 million for certain legal matters, primarily representing c ertain product liability and other legal expenses related to products discontinued and/or divested by Pfizer.
(g) For 2023, the total adjustment of $238 million mainly includes $286 million in inventory losses, overhead costs related to the period in which the facility could not operate, and incremental costs resulting from tornado damage to our manufacturing facility in Rocky Mount, NC, partially offset by insurance recoveries.
Pfizer Inc. 2024 Form 10-K
45ANALYSIS OF THE CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,(MILLIONS) 2024 2023 2022 Drivers of change 2024 v. 2023Cash provided by/(used in):
Operating activities$ 12,744 $ 8,700 $ 29,267 The change was driven primarily by an increase in net income adjusted for non-cash items partially offset by the timing of receipts and payments in the ordinary course of business, including a decrease in advance payments for Comirnaty and Paxlovid and net changes in inventory greater than one year (see Note 8A ).Investing activities$ 2,652 $ (32,278) $ (15,783) The change was driven mainly by $43.4 billion cash paid in 2023 for the acquisition of Seagen, net of cash acquired (see Note 2A ) and $7.0 billion of proceeds from the partial sales of our investment in Haleon in 2024, partially offset by $16.3 billion greater net purchases of short-term investments in 2024.Financing activities$ (17,140) $ 26,066 $ (14,834) The change was driven mostly by $30.8 billion of proceeds from the issuance of long-term debt in May of 2023 for the acquisition of Seagen and $12.6 billion greater net repayments of short-term borrowings in 2024.ANALYSIS OF FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES AND MARKET RISKOur historically robust operating cash flows, which we expect to continue over time, is a key strength of our liquidity and capital resources and our primary funding source. We continue to believe that with our ongoing operating cash flows, together with our financial assets, access to capital markets, revolving credit agreement, and available lines of credit, we have and will maintain the ability to meet our liquidity needs to support ongoing operations, our capital allocation objectives, and our contractual and other obligations for the foreseeable future.We focus efforts to optimize operating cash flows through achieving working capital efficiencies that target accounts receivable, inventories, accounts payable, and other working capital. Excess cash from operating cash flows is invested in money market funds and available-for-sale debt securities which consist of primarily high-quality, highly liquid, well-diversified debt securities. We have taken, and will continue to take, a conservative approach to our financial investments and monitoring of our liquidity position in response to market changes. We typically maintain cash and cash equivalent balances and short-term investments which, together with our available revolving credit facilities, are in excess of our commercial paper and other short-term borrowings.
Additionally, we may obtain funding through short-term or long-term sources from our access to the capital markets, banking relationships and relationships with other financial intermediaries to meet our liquidity needs.
Diverse sources of funds: Related disclosure presented in this Form 10-K
Internal sources:
• Operating cash flows
Consolidated Statements of Cash Flows – Operating Activities and the Analysis of the Consolidated Statements of Cash Flows section within MD&A
• Cash and cash equivalents
Consolidated Balance Sheets
• Money market funds
Note 7A
• Available-for-sale debt securities
Note 7A , 7B
• Equity investments
Note 7A , 7B
External sources:
Short-term funding:
• Commercial paper
Note 7C
• Revolving credit facilities
Note 7C
• Lines of credit
Note 7C
Long-term funding:
• Long-term debt
Note 7D
• Equity
Consolidated Statements of Equity and Note 12
For additional information about the sources and uses of our funds and capital resources, see the Analysis of the Consolidated Statements of Cash Flows section within MD&A.
Credit Ratings ––The cost and availability of financing are influenced by credit ratings, and an increase or decrease in our credit rating could have a beneficial or adverse effect on financing. Our long-term debt is rated high-quality by both S&P and Moody’s.As of the date of the filing of this Form 10-K, the following ratings have been assigned to our commercial paper and senior unsecured long-term debt:
NAME OF RATING AGENCY Pfizer Short-Term Rating Pfizer Long-Term Rating Outlook/Watch
Moody’s P-1 A2
Stable Outlook
S&P A-1
A
Stable OutlookThese ratings are not a recommendation to buy, sell or hold securities and the ratings are subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating.
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Capital Allocation Framework ––Our capital allocation framework is primarily devised to enhance shareholder value and is based on three core pillars: maintaining and growing our dividend over time, reinvesting in the business and making share repurchases after de-levering our balance sheet. See the Overview of Our Performance, Operating Environment, Strategy and Outlook — O ur Business and Strategy section within MD&A.
Dividends —Our current and projected dividends provide a return to shareholders while maintaining sufficient capital to invest in growing our business. Our dividends are not restricted by debt covenants. While the dividend level remains a decision of Pfizer’s BOD and will continue to be evaluated in the context of future business performance, we currently believe that we can support future annual dividend increases, barring significant unforeseen events. On December 12, 2024, our BOD declared a first-quarter dividend of $0.43 per share, payable on March 7, 2025, to shareholders of record at the close of business on January 24, 2025. The first-quarter 2025 cash dividend will be our 345th consecutive quarterly dividend.
Common Stock Purchases —As of December 31, 2024, our remaining share-purchase authorization was $3.3 billion with no repurchases in 2024. See Note 12 .
Haleon —After our sales of a portion of our Haleon shares in March and October 2024, we owned approximately 15% of the outstanding voting shares of Haleon as of December 31, 2024. See Note 2C . With the reduction in our Haleon ownership percentage and board representation after the October 2024 sale, we discontinued the application of the equity method to our Haleon investment, and in the fourth quarter of 2024 began to account for the investment as an equity security with a readily determinable fair value, which is carried at fair value, with changes in fair value reported in Other (income)/deductions––net. In the first quarter of 2025, we sold an additional portion of our investment in Haleon for $3.0 billion further reducing our ownership interest to approximately 7%. Pfizer intends to use the proceeds to support its capital allocation priorities. We intend to monetize our remaining Haleon investment in a prudent fashion during 2025.Off-Balance Sheet Arrangements, Contractual, and Other Obligations ––In the ordinary course of business, (i) we enter into off-balance sheet arrangements that may result in contractual and other obligations and (ii) in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities. For more information on guarantees and indemnifications, see Note 16B .Additionally, certain of our co-promotion or license agreements give our licensors or partners the rights to negotiate for, or in some cases to obtain under certain financial conditions, co-promotion or other rights in specified countries with respect to certain of our products. Furthermore, collaboration, licensing or other R&D arrangements may give rise to potential milestone payments. Payments under these agreements generally become due and payable only upon the achievement of certain development, regulatory and/or commercialization milestones, which may span several years and which may never occur.
Our significant contractual and other obligations as of December 31, 2024 consisted of:• Long-term debt, including current portion (see Note 7D ) and related interest payments;• Estimated cash payments related to the TCJA repatriation estimated tax liability (see Note 5 ). Estimated future payments related to the TCJA repatriation tax liability that will occur after December 31, 2024 total $4.7 billion, of which an estimated $2.1 billion is to be paid in the next twelve months and an estimated $2.6 billion is to be paid in periods thereafter. Our obligations may vary as a result of changes in our uncertain tax positions and/or availability of attributes such as foreign tax and other credit carryforwards;
• Certain commitments totaling $4.1 billion, of which an estimated $1.0 billion is to be paid in the next twelve months, and $3.1 billion in periods thereafter (see Note 16C );
• Purchases of PP&E (see Note 9 ). In 2025, we expect to spend approximately $2.8 billion on PP&E; and• Future minimum rental commitments under non-cancelable operating leases (see Note 15 ).
Global Economic Conditions ––We have operations in countries that have hyperinflationary economies. The impact to Pfizer is not considered material. See the Item 1A. Risk Factors––Global Operations section.
Market Risk ––We are subject to foreign exchange risk, interest rate risk, and equity price risk. The objective of our financial risk management program is to minimize the impact of foreign exchange rate and interest rate movements on our earnings. We address such exposures through a combination of operational means and financial instruments. For more information on how we manage our foreign exchange and interest rate risks, see Notes 1F and 7E , as well as the Item 1A. Risk Factors—Global Operations section for key currencies in which we operate. Our sensitivity analyses of such risks are discussed below.Foreign Exchange Risk —The fair values of our financial instrument holdings are analyzed at year-end to determine their sensitivity to foreign exchange rate changes. In this analysis, holding all other assumptions constant and assuming that a change in one currency’s rate relative to the U.S. dollar would not have any effect on another currency’s rates relative to the U.S. dollar, if the dollar were to move against all other currencies by 10%, as of December 31, 2024, the expected impact on our net income would not be significant.
Interest Rate Risk —The fair values of our financial instrument holdings are analyzed at year-end to determine their sensitivity to interest rate changes. In this analysis, holding all other assumptions constant and assuming a parallel shift in the interest rate curve for all maturities and for all instruments, if there were a one hundred basis point change in interest rates as of December 31, 2024, the expected impact on our net income would not be significant.Equity Price Risk ––We hold long-term investments in equity securities with readily determinable fair values in life science companies as a result of certain business development transactions. While we are holding such securities, we are subject to equity price risk, and this may increase the volatility of our income in future periods due to changes in the fair value of equity investments. From time to time, we will sell such equity securities based on our business considerations, which may include limiting our price risk. Our equity securities with readily determinable fair values are analyzed at year-end to determine their sensitivity to equity price rate changes. In this sensitivity analysis, the expected impact on our net income would not be significant.Pfizer Inc. 2024 Form 10-K
47NEW ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
See Note 1B .Recently Issued Accounting Standards, Not Adopted as of December 31, 2024Standard/Description Effective Date Effect on the Financial StatementsIn December 2023, the FASB issued final guidance to improve income tax disclosures . The final guidance requires enhanced disclosures primarily related to existing rate reconciliation and income taxes paid information.
2025 for annual reports. Early adoption is permitted.This new guidance will result in increased disclosures in the notes to our financial statements.In November 2024, the FASB issued final guidance which requires disaggregated disclosures of certain categories of expenses that are included in expense line items on the face of the income statement . The disclosures are required on an annual and interim basis. The guidance also requires the total amount of selling expenses to be disclosed and, on an annual basis, the definition of selling expenses.
2027 for annual reports and 2028 for interim reports. Early adoption is permitted.
This new guidance will result in increased disclosures in the notes to our financial statements.
FY 2025-12-31 (later)
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERALThe following MD&A is intended to assist the reader in understanding our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources, and is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data in this Form 10-K. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found within MD&A in our 2024 Form 10-K.References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates. Although foreign exchange rate changes are part of our business, they are not within our control and because they can mask positive or negative trends in the business, we believe presenting operational variances excluding these foreign exchange changes provides useful information to evaluate our results.OVERVIEW OF OUR PERFORMANCE, OPERATING ENVIRONMENT, STRATEGY AND OUTLOOK
Financial Highlights –– The following is a summary of certain financial performance metrics (in billions, except per share data):2025 Total Revenues––$62.6 billion 2025 Net Cash Flow from Operations––$11.7 billion
A decrease of 2% compared to 2024 A decrease of 8% compared to 2024
2025 Reported Diluted EPS––$1.36 2025 Adjusted Diluted EPS (Non-GAAP)––$3.22**
A decrease of 3% compared to 2024 An increase of 4% compared to 2024** For additional information regarding Adjusted diluted EPS (which is a non-GAAP financial measure), including reconciliations of certain GAAP Reported to non- GAAP Adjusted information, see the Non-GAAP Financial Measure: Adjusted Income section within MD&A.Our Business and Strategy –– Pfizer Inc. is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend and significantly improve their lives. See the Item 1. Business ––About Pfizer section. As a science-driven global biopharmaceutical company, we remain focused on advancing our product pipeline, supporting our marketed brands and deploying capital responsibly, with a focus on initiatives that can help contribute to our long-term revenue and future growth. Most of our revenues come from the manufacture and sale of biopharmaceutical products. We believe that our medicines and vaccines provide significant value for healthcare providers and patients, and we continuously evaluate how we can best collaborate with patients, physicians and payors to support and expand patient access to reliable, affordable healthcare around the world. In addition, we continually seek to expand and broaden our product portfolio offerings through prioritized development of our pipeline and business development opportunities targeted at critical unmet patient needs. As a result, our commercial organizational structure and R&D operations are critical to the successful execution of our business strategy. Our ability to fulfill our purpose, Breakthroughs that change patients’ lives , remains a core focus and underscores our commitment to addressing the needs of society to help sustain long-term value creation for all stakeholders.
Our 2026 key priorities are:
1. Maximize value of key transactions
2. Deliver on critical R&D milestones
3. Invest to maximize post-2028 growth
4. Scale AI across our business.
One way we believe we will be more efficient, effective and able to execute on these strategic priorities is through digital enablement. This includes expanding automation, data‑driven decision making, and enterprise AI solutions that strengthen productivity and accelerate innovation.
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In 2025, we managed our commercial operations through a global structure consisting of three operating segments: Biopharma, PC1 and Pfizer Ignite. Biopharma was the only reportable segment. See Note 17A and the Item 1. Business––Commercial Operations section. As part of our continued focus on commercial execution, at the beginning of 2026, we made changes in our commercial structure, which included the transition of certain off-patent branded and generic sterile injectables and biosimilars from the Specialty Care and Oncology product portfolios to a new Global Hospital and Biosimilars organization within our Biopharma reportable segment that went into effect on January 1, 2026. See the Item 1. Business––Commercial Operations section.
Realigning Our Cost Base Program
• In the fourth quarter of 2023, we announced that we launched a multi-year, enterprise-wide cost realignment program that aims to realign our costs with our longer-term revenue expectations. In the second quarter of 2025, we identified additional productivity opportunities to further reduce costs primarily in SI&A, driven in large part by enhanced digital enablement, including automation and AI, and simplification of business processes.
• In connection with our efforts to simplify the structure and sharpen the focus of our R&D organization, in the first quarter of 2025, we expanded this program after having identified additional opportunities to drive improvements in productivity and operational efficiencies through enhanced digital enablement, including automation and AI, and simplification of business processes.
Manufacturing Optimization Program ––In the second quarter of 2024, we announced that we launched a multi-year, multi-phased program to reduce our costs of goods sold, which includes operational efficiencies, network structure changes, and product portfolio enhancements.
See Note 3 for the anticipated and actual costs of these programs. For a description of anticipated savings related to these programs, see the Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives section within MD&A .
R&D: We believe we have a strong pipeline and are well-positioned for future growth. R&D is at the heart of fulfilling our purpose to deliver breakthroughs that change patients’ lives as we work to translate advanced science and technologies into the medicines and vaccines that may be the most impactful for patients. Innovation, drug discovery and development are critical to our success. In addition to discovering and developing new products, our R&D efforts seek to add value to our existing products by improving their effectiveness, safety profile and ease of dosing and by discovering potential new indications. See the Item 1. Business — Research and Development section for our R&D priorities and strategy.We seek to leverage a strong pipeline, organize around expected operational growth drivers and capitalize on trends creating long-term growth opportunities, including:
• an aging global population that is generating increased demand for innovative medicines and vaccines that address patients’ unmet needs; and
• advances in both biological science and platform technologies that are enhancing the delivery of potential breakthrough new medicines and vaccines.Our Business Development Initiatives and Other Recent Developments –– We are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, but also through various business development activities. We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities. We assess our business, assets and scientific capabilities/portfolio as part of our regular, ongoing portfolio review process and also continue to consider business development activities that will help advance our business strategy. See Note 2 for a discussion of our recent business development initiatives, including the acquisitions of Seagen and Metsera, and the following for significant recent activities.
Agreement with the U.S. Government –– In September 2025, we announced an agreement with the Trump Administration in which we voluntarily agreed to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries and also allow U.S. patients to purchase certain medicines at significant discounts to current retail prices. The September 2025 agreement also provides a three-year grace period during which time our products will not face Section 232 tariffs, provided the Company further invests in manufacturing in the U.S. Pfizer is now in the process of entering into binding final agreements to implement these arrangements. See the Item 1. Business –– Pricing Pressures and Managed Care Organizations and –– G overnment Regulation an d Price Cons traints sections for additional information.
Our 2025 Performance
Total Revenues ––Total revenues decreased $1.0 billion, or 2%, to $62.6 billion in 2025 from $63.6 billion in 2024, reflecting an operational decrease of $1.3 billion, or 2%, partially offset by a favorable impact of foreign exchange of $247 million. The operational decrease was primarily driven by declines in COVID-19 product revenues, partially offset by increases from the Vyndaqel family, Eliquis, Padcev, Lorbrena, Abrysvo and Oncology biosimilars. Excluding contributions from Comirnaty and Paxlovid, Total revenues increased 6% operationally.
Pfizer Inc. 2025 Form 10-K
31The following chart outlines the components of the net change in Total revenues :See the Total Revenues by Geography and Total Revenues––Selected Product Discussion sections within MD&A for more information, including a discussion of key drivers of our revenue performance. Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues anticipated in the fall and winter seasons. Revenues may also vary due to changes in public health recommendations for vaccination. In addition, Paxlovid revenues trend with COVID-19 infection rates. See also The Global Economic Environment––COVID-19 section below for information about our COVID-19 products. For information regarding the primary indications or class of certain products, see Note 17C .
Income from Continuing Operations Before Provision/(Benefit) for Taxes on Income –– The decrease in Income from continuing operations before provision/(benefit) for taxes on income of $503 million, to $7.5 billion in 2025 from $8.0 billion in 2024, was primarily due to (i) higher intangible asset impairment charges in 2025, (ii) an increase in Acquired in-process research and development expenses, (iii) net losses on equity securities in 2025 versus net gains on equity securities in 2024 and (iv) lower revenues, partially offset by (v) decreases in Cost of Sales, SI&A, and Restructuring charges and certain acquisition-related costs , and (vi) net periodic benefit credits associated with pension and other postretirement plans incurred in 2025 versus net periodic benefit costs in 2024.
See the Analysis of the Consolidated Statements of Operations section within MD&A and Notes 3 and 4 . For information on our tax provision and effective tax rate, see the Provision/(Benefit) for Taxes on Income section within MD&A and Note 5 .Our Operating Environment ––We, like other businesses in our industry, are subject to certain industry-specific challenges. These include, among others, the topics listed below. See also the Item 1. Business––Government Regulation and Price Constraints and Item 1A. Risk Factors sections.
Regulatory Environment––Pipeline Productivity –– Our product lines must be replenished over time to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well as to provide for earnings growth, primarily through internal R&D or through collaborations, acquisitions, JVs, licensing or other arrangements. As a result, we devote considerable resources to our R&D activities which, while essential to our growth, incorporate a high degree of risk and cost, including whether a particular product candidate or new indication for an in-line product will achieve the desired clinical endpoint or safety profile, will be approved by regulators or will be successful commercially. Clinical trials are conducted to determine, among other things, whether an investigational drug, vaccine or device is safe and effective for a particular patient population. After a product has been approved or authorized and launched, we continue to monitor its safety as long as it is available to patients, including conducting postmarketing trials, voluntarily or pursuant to a regulatory request. For the entire life of the product, we collect safety data and report safety information to the FDA and other regulators. Regulatory authorities evaluate potential safety concerns and take any regulatory action deemed necessary and appropriate. Such action(s) may include: updating a product’s labeling, restricting its use, communicating new safety information or, in rare cases, seeking to suspend or remove a product from the market.Intellectual Property Rights and Collaboration/Licensing Rights –– The loss, expiration or invalidation of intellectual property rights, patent litigation settlements and judgments, and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues. Certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face new or increased generic competition over the next few years. We anticipate a significant reduction of revenue from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations, with the rate of the reduction of revenues from patent-based or regulatory exclusivity expiries expected to significantly accelerate over the next few years. In 2026, the impact from patent-based or regulatory exclusivity expiries is expected to be $1.5 billion. We continue to vigorously defend our patent rights against infringement, and we will continue to support efforts that strengthen worldwide recognition of patent rights while taking necessary steps to help ensure appropriate patient access.
For additional information on patent rights we consider most significant to our business as a whole, including U.S., major Europe and Japan basic product patent expiration years, see the Item 1. Business––Patents and Other Intellectual Property Rights section. For a discussion of recent developments with respect to patent litigation involving certain of our products, see Note 16A1 .
Regulatory Environment/Pricing and Access––Government and Other Payor Group Pressures –– The pricing of medicines and vaccines by pharmaceutical manufacturers and the cost of healthcare, which includes medicines, vaccines, medical services and hospital services, continues to be important to payors, governments, patients, and other stakeholders. Federal and state governments and private third-party payors in the U.S. continue to take action to manage the utilization and cost of drugs, including increasingly employing formularies to control costs and encourage utilization of certain drugs, including through the use of deductibles, utilization management tools, cost sharing or formulary placement. We consider a number of factors impacting the pricing of our medicines and vaccines. Within the U.S., we often engage with and receive feedback from patients, doctors and healthcare plans. We also often provide significant discounts from the list price to insurers, including PBMs and MCOs. The price that patients pay in the U.S. for prescribed medicines and vaccines is ultimately set by healthcare providers and insurers, including government healthcare programs. Governments globally, as well as private third-party payors in the U.S., may use a variety of measures to control costs, including, among others, legislative or regulatory pricing reforms, drug formularies (including tiering and utilization management tools), cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced
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localization as a condition of market access, “international reference pricing” (i.e., the practice of a country linking its regulated medicine prices to those of other countries), quality consistency evaluation processes, clawbacks and volume-based procurement. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In the U.S., we expect to see continued focus by the U.S. government and states on regulating drug pricing and access to medicine, including but not limited to, international reference pricing, including Most-Favored-Nation (MFN) drug pricing. The drug pricing provisions of the IRA have been and continue to be implemented over the next several years. In August 2023, CMS selected Eliquis for the MDPNP, and its government-set Maximum Fair Price became effective January 1, 2026. CMS has since selected Ibrance and Xtandi for the MDPNP with Maximum Fair Price effective in 2027 and Xeljanz for Maximum Fair Price effective in 2028, and additional future selections could lead to lower revenues. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. The IRA also made significant changes to the Medicare Part D benefit design (IRA Medicare Part D Redesign), which took effect beginning in 2025 and negatively impacted our 2025 revenues by approximately $1 billion. We do not expect a material, incremental impact from the IRA Medicare Part D Redesign in 2026 versus the baseline set in 2025. These changes more acutely impacted our higher-priced medicines as they reached catastrophic coverage earlier in the year. In addition, changes to the Medicaid Drug Rebate Program or the 340B Program, including legal or legislative developments at the federal or state level with respect to the 340B Program, could have a material impact on our business. See the Item 1. Business –– Pricing Pressures and Managed Care Organizations and ––Government Regulation and Price Constraints and the Item 1A. Risk Factors –– Pricing and Reimbursement sections.
Policy/Regulatory Environment –– New and potential policy, regulatory or other changes from the U.S. Presidential administration, Congress and states, including, among others, increased or new regulatory requirements, including heightened requirements for licensure, changes, delays or failure to receive recommendations, reimbursement and regulatory approvals and coverage for our vaccines and medicines could have a material adverse effect on our business, earnings, cash flows, liquidity and financial guidance.Impact of the July 2023 Tornado in Rocky Mount, North Carolina (NC) –– Our manufacturing facility in Rocky Mount, NC was damaged by a tornado in July 2023. The facility is a key producer of sterile injectables and is responsible for manufacturing nearly 25 percent of all our sterile injectables—including anesthesia, analgesia, and micronutrients. Supply of medicines has recovered from the impact of the tornado. We incurred losses in 2023 and 2024 that were partially offset by insurance recoveries received.Product Supply –– We periodically encounter supply delays, disruptions and shortages, including due to voluntary product recalls and natural or man-made disasters. In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines and we are actively engaging with regulatory authorities on this topic. If nitrosamines are detected in products, this may lead to submission of comprehensive data packages to regulatory authorities to support discussions on the relevant intake limit for the product and potential impact on patient supply, and, in some instances, may lead to market action for such products.
We have not seen a significant disruption of our supply chain in 2025 and through the date of filing of this Form 10-K, and all of our manufacturing sites globally have continued to operate at or near normal levels. We do not anticipate the availability of raw materials to have a significant impact on our operations in 2026, but are monitoring potential supply chain disruptions as a result of ongoing geopolitical and trade negotiations, which could, among other things, impact costs. We are continuing to monitor and implement mitigation strategies to reduce any potential risk or impact including active supplier management, qualification of additional suppliers and advanced purchasing to the extent possible. For information on risks related to product manufacturing, see the Item 1A. Risk Factors––Product Manufacturing, Sales and Marketing Risks section.
Withdrawal of Oxbryta –– See the Product Developments section within MD&A.
The Global Economic Environment ––In addition to the industry-specific factors discussed above, we, like other businesses of our size and global extent of activities, are exposed to economic cycles. Certain factors in the global economic environment that may impact our global operations include, among other things, currency and interest rate fluctuations, global trade tensions, capital and exchange controls, local and global economic conditions including inflation, recession, volatility and/or lack of liquidity in capital markets, expropriation and other restrictive government actions, changes in intellectual property, legal protections and remedies, trade regulations, tariffs, tax laws and regulations and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action and their economic consequences, geopolitical instability, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change. Government pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria or other means of cost control. In addition, issued or future executive orders or other new or changes in laws, regulations or policy regarding tariffs or other trade or foreign policy, could have a material adverse effect on our business, earnings, cash flow, liquidity and financial guidance. The actual impact of any new tariffs on our business would be subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs or other retaliatory actions imposed by other countries. We are currently evaluating the impact of the U.S. Supreme Court’s February 2026 decision relating to executive authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). Although we do not believe this decision will have a material impact on our consolidated financial statements, we continue to monitor developments and any potential impacts on our future financial results and business. This decision does not impact the Section 232 investigation of pharmaceuticals, nor executive authority to impose tariffs under other laws, including Section 232. Strategies intended to help mitigate the potential impacts on our business in the short-term have been implemented as well as those outlined in our voluntary agreement with the Trump Administration as discussed above. We are continuing to evaluate opportunities and developing plans which are intended to help mitigate the potential long-term impact of tariffs on our business and operations. For additional information on risks related to our global operations and changes in laws, see the Item 1A. Risk Factors—Global Operations and –– Changes in Laws and Accounting Standards sections.
COVID-19 ––In response to COVID-19, we developed Paxlovid and collaborated with BioNTech to jointly develop Comirnaty. As part of our strategy for COVID-19, we are continuing to make significant investments in breakthrough science. This includes evaluating Comirnaty and Paxlovid, investigating new variants of concern, and developing variant adapted vaccine candidates. In addition, we are exploring combination respiratory vaccines and next generation anti-infectives. See the Product Developments section within MD&A.
In 2023, we principally sold Comirnaty globally under government contracts. In September 2023, Comirnaty transitioned to traditional commercial market sales in the U.S., triggered by the expiration of contracts. Internationally, sales of Comirnaty are under a combination of private channels and government contracts, as we started transitioning to commercial markets in 2024. In 2025, due to seasonality of demand for COVID-19 vaccinations, the majority of our global revenues for Comirnaty were recorded in the fourth quarter. In 2026, we expect market share in commercial markets and revenue phasing similar to 2025, primarily concentrated in the second-half of the year. However, we could see
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continuous decline in vaccination rates due to additional changes in vaccination recommendations, and the expected impact has been incorporated in our 2026 financial guidance. See Item 1A. Risk Factors—U.S. Healthcare Regulati on for a description of certain risks and uncertainties that could impact revenue from our portfolio of vaccines.
In 2023, we principally sold Paxlovid globally to government agencies. On October 13, 2023, we announced an amended agreement with the U.S. government, which facilitated the transition of Paxlovid to traditional commercial markets in the U.S. Internationally, most revenue was generated through commercial channels in 2025. We expect a higher proportion of revenues to be delivered in the second-half of the year and revenues to fluctuate based on the timing, duration and severity of COVID-19 cases. The expected impact of lower demand has been incorporated in our 2026 financial guidance.
For information on risks associated with our COVID-19 products, as well as COVID-19 intellectual property disputes, see the Forward-Looking Information and Factors that May Affect Future Results , Item 1A. Risk Factors — COVID-19 , — Intellectual Property Protection and –– Third-Party Intellectual Property Claims sections as well as Notes 16A1 and 17C . For additional information on revenues, see the Total Revenues by Geograph y and Total Revenues — Selected Product Discussion sections within MD&A.SIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
Following is a discussion about the critical accounting estimates and assumptions impacting our consolidated financial statements. Also, see Note 1C .For a description of our significant accounting policies, see Note 1 . Of these policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of the most subjective and the most complex judgments: Acquisitions ( Note 1D ); Fair Value ( Note 1E ); Revenues ( Note 1G ); Asset Impairments ( Note 1M ); Income Taxes ( Note 1Q ); Pension and Postretirement Benefit Plans ( Note 1R ); and Legal and Environmental Contingencies ( Note 1S ).For a discussion of recently adopted accounting standards, see Note 1B .
Acquisitions
We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair value as of the acquisition date. To estimate fair value, we utilize an exit price approach from the perspective of a market participant. For further detail on acquisition accounting, see Note 1D . For further detail on the techniques and methodologies that we use to estimate fair value, see Note 1E . Historically, intangible assets have been the most significant fair values within our business combinations. We utilize an income approach to estimate the acquisition date fair value of each identifiable intangible asset. Some of the more significant estimates and assumptions inherent in this approach include the amount and timing of projected net cash flows, the discount rate, the tax rate, and, for IPR&D assets, the probability of technical and regulatory success (PTRS). All of these judgments and estimates can materially impact our results of operations. For further information on our process to estimate the fair value of intangible assets, see Asset Impairments below.
We estimate the fair value of acquired inventory, including finished goods and work in process, by determining the estimated selling price when completed, less an estimate of costs to be incurred to complete and sell the inventory, and an estimate of a reasonable profit allowance for those manufacturing and selling efforts. The fair value of inventory is recognized in our results of operations as the inventory is sold. Some of the more significant estimates and assumptions inherent in the estimate of the fair value of inventory include stage of completion, costs to complete, costs to dispose and selling price.We estimate the fair value of acquired PP&E using a combination of the cost and market approaches. Some of the more significant estimates and assumptions inherent in these approaches are the values of asset replacement costs, comparable assets and estimated remaining economic lives of the assets. We estimate the fair value of contingent consideration utilizing an income approach, specifically a discounted cash flow method. Some of the more significant estimates and assumptions inherent in this approach include the PTRS, discount rate and amount and timing of milestone events and projected sales.
For the provisional amounts recognized for the Metsera assets acquired and liabilities assumed as of the acquisition date, see Note 2A . The estimated values are not yet finalized and are subject to change, which could be significant. We will finalize the amounts recognized as we obtain the information necessary to complete the analyses. We expect to finalize the amounts of assets acquired and liabilities assumed as soon as possible but no later than one year from the acquisition date.Revenues
Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate estimates of our future experience, our results could be materially affected. The potential of our estimates to vary (sensitivity) differs by program, product, type of customer and geographic location. However, estimates associated with U.S. Medicare, Medicaid and performance-based contract rebates are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this lag, our recording of adjustments to reflect actual amounts can incorporate revisions of several prior quarters. Rebate accruals are product specific and, therefore for any period, are impacted by the mix of products sold as well as the forecasted channel mix for each individual product. For further information, see the Product Revenue Deductions section within MD&A and Note 1G .
Asset ImpairmentsWe review all of our long-lived assets for impairment indicators throughout the year. We perform impairment testing for indefinite-lived intangible assets and goodwill at least annually and for all other long-lived assets whenever impairment indicators are present. When necessary, we record
Pfizer Inc. 2025 Form 10-K
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charges for impairments of long-lived assets for the amount by which the fair value is less than the carrying value of these assets. Our impairment review processes are described in Note 1M .Examples of events or circumstances that may be indicative of impairment include:
• A significant adverse change in legal factors or in the business climate that could affect the value of the asset. For example, a successful challenge of our patent rights would likely result in generic competition earlier than expected.
• A significant adverse change in the extent or manner in which an asset is used such as a restriction imposed by the FDA or other regulatory authorities, withdrawals or other unusual items that could affect our ability to manufacture or sell a product.
• An expectation of losses or reduced profits associated with an asset. This could result, for example, from a change in development plans or a change in a government reimbursement program that results in an inability to sustain projected product revenues and profitability. This also could result from the introduction of a competitor’s product that impacts projected revenue growth, as well as the lack of acceptance of a product by patients, physicians and payors. For IPR&D projects, this could result from, among other things, a change in outlook based on clinical trial data, a delay in the projected launch date or additional expenditures to commercialize the product.• Changes in development plans and/or de-prioritization of certain assets.
Identifiable Intangible Assets ––We use an income approach, specifically the discounted cash flow method to determine the fair value of intangible assets, other than goodwill. We start with a forecast of all the expected net cash flows associated with the asset, which incorporates the consideration of a terminal value for indefinite-lived assets, and then we apply an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions that impact our fair value estimates include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the projections and the impact of technological advancements and risk associated with IPR&D assets, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the jurisdictional mix of the projected cash flows.While all intangible assets other than goodwill can face events and circumstances that can lead to impairment, those that are most at risk of impairment include IPR&D assets (approximately $21.8 billion as of December 31, 2025) and newly acquired or recently impaired indefinite-lived brand assets. IPR&D assets are high-risk assets, given the uncertain nature of R&D. Newly acquired and recently impaired indefinite-lived assets are more vulnerable to impairment as the assets are recorded at fair value and are then subsequently measured at the lower of fair value or carrying value at the end of each reporting period. As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively impact our ability to recover the carrying value and can result in an impairment charge.
Goodwill ––Our goodwill impairment review work as of December 31, 2025 concluded that none of our goodwill was impaired and we do not believe the risk of impairment is significant at this time.In our review, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors that we consider include, for example, macroeconomic and industry conditions, overall financial performance and other relevant entity-specific events. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then perform a quantitative fair value test.
When we are required to determine the fair value of a reporting unit, we typically use the income approach. The income approach is a forward-looking approach to estimating fair value and relies primarily on internal forecasts. Within the income approach, we use the discounted cash flow method. We start with a forecast of all the expected net cash flows for the reporting unit, which includes the application of a terminal value, and then we apply a reporting unit-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of technological risk and competitive, legal and/or regulatory forces on the projections, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.
For all of our reporting units, there are a number of future events and factors that may impact future results and that could potentially have an impact on the outcome of subsequent goodwill impairment testing. For a list of these factors, see the Forward-Looking Information and Factors That May Affect Future Result s and the Item 1A. Risk Factors sections.
Benefit Plans
For a description of our different benefit plans, see Note 11 .
Our assumptions reflect our historical experiences and our judgment regarding future expectations that have been deemed reasonable by management. The judgments made in determining the costs of our benefit plans can materially impact our results of operations.
The following provides (i) at the end of each year, the expected annual rate of return on plan assets for the following year, (ii) the actual annual rate of return on plan assets achieved in each year, and (iii) the weighted-average discount rate used to measure the benefit obligations at the end of each year for our U.S. pension plans and our international pension plans (a) :2025 2024 2023U.S. Pension PlansExpected annual rate of return on plan assets 7.8 % 7.7 % 8.0 %
Actual annual rate of return on plan assets 9.8 1.3 10.4
Discount rate used to measure the plan obligations 5.6 5.7 5.4International Pension PlansExpected annual rate of return on plan assets 5.1 4.9 5.1
Actual annual rate of return on plan assets 0.8 6.4 (4.6)
Discount rate used to measure the plan obligations 4.7 4.1 4.4(a) For detailed assumptions associated with our benefit plans, see Note 11B .Pfizer Inc. 2025 Form 10-K
35Expected Annual Rate of Return on Plan Assets ––The assumptions for the expected annual rate of return on all of our plan assets reflect our actual historical return experience and our long-term assessment of forward-looking return expectations by asset classes, which is used to develop a weighted-average expected return based on the implementation of our targeted asset allocation in our respective plans.
The expected annual rate of return on plan assets for our U.S. plans and international plans is applied to the fair value of plan assets at each year-end and the resulting amount is reflected in our net periodic benefit costs in the following year. Differences between the actual rate of return on plan assets and the expected annual rate of return on plan assets are immediately recognized through earnings upon remeasurement.The following illustrates the sensitivity of net periodic benefit costs to a 50 basis point decline in our assumption for the expected annual rate of return on plan assets, holding all other assumptions constant (in millions, pre-tax):Assumption Change Increase in 2026Net Periodic
Benefit Costs
Expected annual rate of return on plan assets (a)50 basis point decline $87(a) The estimate excludes any potential mark-to-market adjustments.The actual return on plan assets was $1.1 billion during 2025 .Discount Rate Used to Measure Plan Obligations ––The weighted-average discount rate used to measure the plan obligations for our U.S. defined benefit plans is determined at least annually and evaluated and modified, as required, to reflect the prevailing market rate of a portfolio of high-quality fixed income investments, rated AA/Aa or better, that reflect the rates at which the pension benefits could be effectively settled. The discount rate used to measure the plan obligations for our significant international plans is determined at least annually by reference to investment grade corporate bonds, rated AA/Aa or better, including, when there is sufficient data, a yield-curve approach. These discount rate determinations are made in consideration of local requirements. The measurement of plan obligations at the end of the year will affect (i) the actuarial (gains)/losses recognized in our net periodic benefit cost for that year and (ii) the amount of service cost and interest cost reflected in our net periodic benefit costs in the following year.
The following illustrates the sensitivity of net periodic benefit costs and benefit obligations to a 10 basis point decline in our assumption for the discount rate, holding all other assumptions constant (in millions, pre-tax):Assumption Change Decrease in 2026 Net Periodic Benefit Costs
Increase to 2025 Benefit Obligations
Discount rate 10 basis point decline $5 $201
The change in the discount rates used in measuring our plan obligations as of December 31, 2025 resulted in a decrease in the measurement of our aggregate plan obligations by approximately $446 million.Income Tax Assets and Liabilities
Income tax assets and liabilities include income tax valuation allowances and accruals for uncertain tax positions. See Notes 1Q and 5 , as well as the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A .
Contingencies
We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies, guarantees and indemnifications. See Notes 1Q , 1S , 5D and 16 .
ANALYSIS OF THE CONSOLIDATED STATEMENTS OF OPERATIONS
Total Revenues by Geography
The following presents worldwide Total revenues by geography:
Year Ended December 31, % Change
Worldwide U.S. International Worldwide U.S. International(MILLIONS) 2025 2024 2023 2025 2024 2023 2025 2024 2023 25/24 24/23 25/24 24/23 25/24 24/23Operating segments:
Biopharma$ 61,199 $ 62,400 $ 58,237 $ 36,708 $ 38,332 $ 27,749 $ 24,491 $ 24,068 $ 30,488 (2) 7 (4) 38 2 (21)Pfizer CentreOne1,338 1,146 1,272 329 278 352 1,010 868 920 17 (10) 18 (21) 16 (6)Pfizer Ignite41 82 44 41 82 44 — — — (50) 85 (50) 85 — —
Total revenues $ 62,579 $ 63,627 $ 59,553 $ 37,078 $ 38,691 $ 28,145 $ 25,501 $ 24,936 $ 31,408 (2) 7 (4) 37 2 (21)
Pfizer Inc. 2025 Form 10-K
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2025 v. 2024
The following provides an analysis of the worldwide change in Total revenues by geographic areas from 2024 to 2025:(MILLIONS) Worldwide U.S. International
Operational growth/(decline):Worldwide declines from Paxlovid
$ (3,346) $ (2,725) $ (622)Worldwide declines from Comirnaty(1,051) (341) (710)
Worldwide growth from the Vyndaqel family, Eliquis, Padcev, Lorbrena, Abrysvo, Nurtec ODT/Vydura, Xtandi and the Prevnar family, partially offset by worldwide declines from Ibrance, Adcetris and Xeljanz
2,154 854 1,299
Growth in oncology biosimilars, largely due to favorable net price in the U.S.
266 286 (20)
Other operational factors, net 682 312 371Operational growth/(decline), net(1,295) (1,613) 318
Favorable impact of foreign exchange 247 — 247Total revenues increase/(decrease)$ (1,048) $ (1,613) $ 565See the Total Revenues––Selected Product Discussion section within MD&A for additional analysis and Note 17C .
Product Revenue Deductions –– Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these product revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends.
The following presents information about product revenue deductions:
Year Ended December 31,(MILLIONS) 2025 2024 2023
Medicare rebates $ 4,511 $ 4,145 $ 997
Medicaid and related state program rebates 1,803 2,252 1,655
Performance-based contract rebates 7,034 6,497 5,159
Chargebacks 13,973 12,698 9,828
Sales allowances 7,288 6,444 6,790
Sales returns and cash discounts 1,766 1,852 5,619
Total
$ 36,374 $ 33,888 $ 30,048Product revenue deductions are primarily a function of product sales volume, mix of products sold, contractual or legislative discounts and rebates.
For information on our accruals for product revenue deductions, including the balance sheet classification of these accruals, see Note 1G .Pfizer Inc. 2025 Form 10-K
37Total Revenues—Selected Product Discussion
Biopharma
Revenue
(MILLIONS) Year Ended Dec. 31, % ChangeProduct Global Revenues Region 2025 2024 Total Oper. Operational Results Commentary
Eliquis $7,961
Up 7%(operationally)U.S. $ 5,148 $ 4,803 7 Growth driven by higher demand globally, partially offset by lower net price in the U.S., as well as generic entry and price erosion in certain international markets.
Int’l. 2,813 2,563 10 7
Worldwide $ 7,961 $ 7,366 8 7
Prevnar family $6,494
Up 1%(operationally)U.S. $ 4,151 $ 4,233 (2) Growth primarily driven by strong uptake of the adult indication in certain international markets, new launches of the pediatric indication in certain emerging markets, as well as strong uptake of the adult indication in the U.S. as a result of strong demand following the CDC’s recommendation for ages 50-64, partially offset by worldwide lower pediatric indication sales mostly due to timing of CDC shipments in the U.S., as well as lower shipments and competitive pressure in certain international markets.
Int’l. 2,342 2,178 8 7
Worldwide $ 6,494 $ 6,411 1 1
Vyndaqel family
$6,380
Up 16%(operationally)U.S. $ 3,834 $ 3,547 8 Growth primarily driven by strong demand with continuing uptake in patient diagnosis primarily in the U.S. and certain international developed markets, as well as improved patient affordability in the U.S., partially offset by lower net price in the U.S. mostly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign as well as new payer contracts with reduced pricing.
Int’l. 2,546 1,904 34 30
Worldwide $ 6,380 $ 5,451 17 16Comirnaty$4,367
Down 20%(operationally)U.S. $ 1,663 $ 2,004 (17) Declines primarily driven by lower contractual deliveries and lower vaccination rates in certain international markets, as well as lower utilization in the U.S. resulting from narrower recommendation for vaccination, partially offset by lower returns and higher market share in the U.S.
Int’l. 2,705 3,349 (19) (21)
Worldwide $ 4,367 $ 5,353 (18) (20)
Ibrance $4,122
Down 6%(operationally)U.S. $ 2,710 $ 2,849 (5) Declines primarily driven by lower net price in the U.S. largely due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign, as well as generic entry in certain international markets, partially offset by improved patient affordability and improved market share supported by new clinical data, both in the U.S., as well as a favorable adjustment of rebate accruals for international markets related to prior periods recorded in 2025.
Int’l. 1,412 1,518 (7) (9)
Worldwide $ 4,122 $ 4,367 (6) (6)
Paxlovid $2,362
Down 59%(operationally)U.S. $ 1,891 $ 4,616 (59) Declines primarily driven by:
• lower COVID-19 infections across U.S. and international markets and lower international government purchases;
• the non-recurrence of a $771 million favorable final adjustment recorded in the first quarter of 2024 to the estimated non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023; and
• the non-recurrence of a $442 million favorable U.S. government stockpile purchase in the third quarter of 2024,
partially offset by:
• favorable adjustments of rebate accruals related to prior periods, as well as higher net price in the U.S. following transition from the U.S. government agreement.
Int’l. 470 1,100 (57) (57)
Worldwide $ 2,362 $ 5,716 (59) (59)
Xtandi $2,194
Up 8%
(operationally)
U.S. $ 2,194 $ 2,039 8 Growth mainly driven by strong demand, in part due to improved patient affordability in the U.S., partially offset by unfavorable buying patterns and lower net price partly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign.Int’l. — — — —Worldwide $ 2,194 $ 2,039 8 8Padcev$1,940
Up 22%(operationally)U.S. $ 1,902 $ 1,561 22 Growth primarily driven by increased market share in first line locally advanced or metastatic urothelial cancer (la/mUC), as well as by a one-time favorable impact associated with transition to a wholesaler distribution model in the U.S.
Int’l. 38 27 42 43
Worldwide $ 1,940 $ 1,588 22 22
Nurtec ODT/Vydura $1,424
Up 13%(operationally)U.S. $ 1,322 $ 1,193 11 Growth primarily driven by strong demand in the U.S. and recent launches in certain international markets, partially offset by lower net price in the U.S. mainly due to unfavorable changes in channel mix.
Int’l. 102 69 46 44
Worldwide $ 1,424 $ 1,263 13 13
Pfizer Inc. 2025 Form 10-K
38Revenue
(MILLIONS) Year Ended Dec. 31, % ChangeProduct Global Revenues Region 2025 2024 Total Oper. Operational Results Commentary
Xeljanz $1,087
Down 7%(operationally)U.S. $ 625 $ 680 (8) Declines primarily driven by lower net price in the U.S. due to unfavorable changes in channel mix and the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign, as well as lower demand and price erosion across international developed markets.
Int’l. 462 488 (5) (6)
Worldwide $ 1,087 $ 1,168 (7) (7)
Abrysvo $1,033
Up 36%(operationally)U.S. $ 542 $ 594 (9) Growth primarily driven by launch uptake for both the adult and maternal indications in certain international markets, as well as increased market share in the adult indication and higher demand in the maternal indication—both in the U.S., partially offset by lower vaccination rates for the older adult indication following an updated ACIP recommendation in the U.S.
Int’l. 491 160 * *
Worldwide $ 1,033 $ 755 37 36
Lorbrena
$1,023
Up 40%
(operationally)
U.S. $ 407 $ 306 33 Growth primarily driven by increased patient share in the first-line ALK+ metastatic NSCLC treatment setting in the U.S., China and certain other international markets, partially offset by lower net price in the U.S. mainly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign.
Int’l. 616 424 45 44
Worldwide $ 1,023 $ 731 40 40
Adcetris $907
Down 17%
(operationally)
U.S. $ 885 $ 1,059 (16) Declines primarily driven by lower volume due to competitive pressures in the U.S. as a result of changes of guidelines in 2024, partially offset by a one-time favorable impact associated with transition to a wholesaler distribution model in the U.S.
Int’l. 23 30 (25) (23)
Worldwide $ 907 $ 1,089 (17) (17)Pfizer CentreOne
Revenue
(MILLIONS) Year Ended Dec. 31, % ChangeOperating Segment Global Revenues Region 2025 2024 Total Oper. Operational Results CommentaryPC1$1,338
Up 15%(operationally)U.S. $ 329 $ 278 18 Growth driven by higher manufacturing of third-party products under manufacturing and supply agreements, higher manufacturing-related services and higher active pharmaceutical ingredient sales.
Int’l. 1,010 868 16 15
Worldwide $ 1,338 $ 1,146 17 15See the Item 1. Business — Patents and Other Intellectual Property Rights section for information regarding the expiration of various patent rights, Note 16 for a discussion of recent developments concerning patent and product litigation relating to certain of the products discussed above and Note 17C for the primary indications or class of the selected products discussed above.
Costs and Expenses
Costs and expenses follow:
Year Ended December 31, % Change(MILLIONS) 2025 2024 2023 25/24 24/23Cost of sales$ 16,067 $ 17,851 $ 24,954 (10) (28)Percentage of Total revenues25.7 % 28.1 % 41.9 %Selling, informational and administrative expenses13,794 14,730 14,771 (6) —Research and development expenses10,437 10,822 10,679 (4) 1Acquired in-process research and development expenses1,613 108 194 * (44)Amortization of intangible assets4,874 5,286 4,733 (8) 12Restructuring charges and certain acquisition-related
costs1,550 2,419 2,943 (36) (18)Other (income)/deductions—net6,724 4,388 222 53 *
2025 v. 2024Cost of SalesCost of sales decreased $1.8 billion, primarily due to:
• a favorable change in sales mix of $1.4 billion driven by lower sales of Comirnaty and Paxlovid, including the non-recurrence of charges recorded in 2024 that were included in the 50% gross profit split with BioNTech and applicable royalty expenses;
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• a decrease of $633 million due to lower amortization from the step-up of acquired inventory; and
• net favorable revisions to our estimate of accrued royalties,partially offset by:• a $288 million unfavorable impact of foreign exchange.
The decrease in Cost of sales as a percentage of revenues was primarily due to the factors mentioned above, and also partially offset by the non-recurrence of the Paxlovid favorable final adjustment of $771 million recorded in the first quarter of 2024 to the estimated non-cash Paxlovid revenue reversal recorded in the fourth quarter of 2023.
Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues and related cost of sales anticipated in the fall and winter seasons.
See also the Overview of Our Performance, Operating Environment, Strategy and Outlook —The Global Economic Environment––COVID-19 section for information about our COVID-19 products.Selling, Informational and Administrative ExpensesSelling, informational and administrative expenses decreased $936 million, primarily reflecting focused investments and ongoing productivity improvements as part of our cost realignment program that drove:
• a decrease of $930 million in marketing and promotional spend on various products; and
• lower spending of $395 million in corporate enabling functions,partially offset by:• an increase of $230 million due to a favorable adjustment of U.S. healthcare reform fees recorded in 2024 primarily related to Paxlovid and Comirnaty.Research and Development ExpensesResearch and development expenses decreased $385 million, primarily driven by a net decrease in spending of $490 million due to pipeline focus and optimization initiatives including the expansion of our digital capabilities, as well as lower compensation-related expenses.
Acquired In-Process Research and Development Expenses
Acquired in-process research and development expenses increased $1.5 billion, primarily driven by a $1.35 billion charge related to an in-licensing agreement with 3SBio and a $150 million charge related to an in-licensing agreement with YaoPharma.Amortization of Intangible AssetsAmortization of intangible assets decreased $413 million, primarily due to lower amortization related to Prevnar, fully amortized assets and asset impairments.Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity InitiativesRealigning Our Cost Base Program –– This program is expected to deliver total net cost savings of approximately $5.7 billion through 2026. The total net cost savings are composed of net cost savings of $5.1 billion achieved through 2025, and the remaining anticipated savings of $600 million, primarily in SI&A, expected to be achieved by the end of 2026. In addition, we achieved cost savings of approximately $500 million from our pipeline focus and optimization initiatives including the expansion of our digital capabilities, with the savings expected to be reinvested in R&D programs by the end of 2026.
Manufacturing Optimization Program –– The first phase of this multi-phased program is on track to deliver approximately $1.5 billion in net cost savings by the end of 2027, with approximately $600 million of net cost savings realized by year-end 2025.Certain qualifying costs for these programs in all periods since inception were recorded and reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income. See the Non-GAAP Financial Measure: Adjusted Income section within MD&A.For a description of our programs, as well as the anticipated and actual costs, see Note 3A . The program savings discussed above may be rounded and represent approximations. In addition to these programs, we continuously monitor our operations for cost reduction and/or productivity opportunities, especially in light of patent-based and regulatory exclusivity expiries as well as the expiration of collaborative arrangements for various products. Long-term improvement in gross margin will remain a key focus for the Company over the next few years.
Seagen acquisition –– In connection with our acquisition of Seagen, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to generate approximately $1 billion of annual cost synergies, to be achieved by the end of 2026, with approximately $800 million of annual cost synergies achieved by year-end 2025. The one-time costs to generate these synergies are expected to be approximately $1.7 billion, the majority of which has been incurred through 2025.
Metsera acquisition –– In connection with our acquisition of Metsera, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to generate approximately $600 million of annual cost synergies, to be achieved by the end of 2026. The one-time costs to generate these synergies are expected to be approximately $700 million, incurred primarily from 2025 through 2027.Other (Income)/Deductions––NetThe unfavorable period-over-period change of $2.3 billion was primarily driven by (i) higher intangible asset impairments of $1.6 billion, (ii) an unfavorable impact of $1.1 billion due to net losses on equity securities in 2025 versus net gains on equity securities in 2024, (iii) the non-recurrence of realized gains of $945 million on the partial sale of our previous investment in Haleon in 2024, and (iv) higher charges for certain legal matters of $490 million, partially offset by (v) a favorable impact of $832 million due to net periodic benefit credits associated with pension and postretirement plans in 2025 versus net periodic benefit costs in 2024, (vi) lower net interest expense of $478 million primarily driven by a reduction in commercial paper outstanding, compared to 2024, and (vii) the non-recurrence of a charge of $420 million in 2024 related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program. See Note 4 .
Pfizer Inc. 2025 Form 10-K
40Provision/(Benefit) for Taxes on Income
Year Ended December 31, % Change(MILLIONS) 2025 2024 2023 25/24 24/23
Provision/(benefit) for taxes on income $ (266) $ (28) $ (1,115) * (97)Effective tax rate on continuing operations(3.5) % (0.4) % *
For information about our effective tax rate and the events and circumstances contributing to the changes between periods, as well as details about discrete elements that impacted our tax provisions, and income taxes paid (net of refunds received), see Note 5 .
Changes in Tax Laws–– Many countries outside the U.S. have enacted legislation for global minimum taxation resulting from the Organization for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting “Pillar 2” project. The EU approved a directive requiring member states to incorporate the OECD provisions into their respective domestic laws, and countries outside the EU have also been enacting the provisions into their domestic law. The provisions are generally effective for Pfizer since 2024, though significant details and guidance around the provisions are still pending. Income tax expense could be impacted as Pillar 2 legislation becomes effective or is amended in countries in which we do business, and such impact could be material to our results of operations. We continue to monitor pending OECD guidance and legislation enactment and implementation by individual countries.
On July 4, 2025, the OBBBA was enacted into law in the U.S. The OBBBA includes significant tax provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and modifications to the U.S. international tax framework. Among the favorable business provisions are the permanent expensing for domestic R&D costs, permanent bonus depreciation and full expensing of qualified production property. The legislation includes various effective dates, with certain provisions effective in 2025. We expect further guidance may be issued by the U.S. government with respect to certain OBBBA tax provisions.
The OBBBA also renamed the provision for taxes on foreign earnings from GILTI to NCTI and established a 12.6% tax rate on such foreign earnings effective in the fiscal year 2026 (down from 13.125% in 2026 before the enactment of the OBBBA). We have elected to recognize deferred taxes for temporary differences expected to reverse as GILTI, now NCTI, in future years. As a result of the enactment of the OBBBA, in the third quarter of 2025, we remeasured our deferred tax balances related to NCTI for the changes in the tax rate and recorded a one-time tax benefit that was not material to our results of operations. See N ote 5B .PRODUCT DEVELOPMENTSA comprehensive update of Pfizer’s development pipeline was published as of February 3, 2026 and is available at www.pfizer.com/science/drug-product-pipeline . It includes an overview of our research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.This section provides information as of the date of this filing about significant marketing application-related regulatory actions by, and filings pending with, the FDA and regulatory authorities in the EU and Japan.The table below generally includes filing and approval milestones for products that have occurred in the last twelve months and does not include approvals that may have occurred prior to that time. The table includes filings with regulatory decisions pending (even if the filing occurred outside of the last twelve-month period).
Pfizer Inc. 2025 Form 10-K
41PRODUCT INDICATION OR PROPOSED INDICATION APPROVED/FILED^
U.S. EU JAPANNurtec ODT/Vydura (rimegepant) Acute treatment of migraine with or without aura in adults ApprovedFebruary2020
Approved
April
2022Approved
September 2025Prevention of episodic migraine in adults Approved
May
2021
Approved
April
2022Approved September 2025
Abrysvo (Vaccine) Active immunization for the prevention of lower respiratory tract disease caused by RSV in individuals 18-59 years of age who are at increased risk of lower respiratory tract disease caused by RSV Approved
October
2024ApprovedMarch2025
Velsipity (etrasimod) Moderately to severely active UC in adultsApproved
October2023
Approved
February
2024ApprovedJune
2025Braftovi (encorafenib),Erbitux ® (cetuximab) and mFOLFOX6 (a)First-line BRAF V600E -mutant mCRC
Approved
December 2024FiledNovember2025ApprovedNovember2025
Hympavzi (marstacimab-hncq) Adults and pediatric patients 12 years of age and older with hemophilia A with FVIII inhibitors or hemophilia B with FIX inhibitors
Filed
February
2026
Filed
October
2025
FiledDecember2025
Pediatric patients ≥6 to <12 years of age with hemophilia A with or without FVIII inhibitors, or hemophilia B with or without FIX inhibitors
Filed
February
2026Emblaveo(aztreonam-avibactam) (b)Treatment of infections in adult patients caused by Gram-negative bacteria with limited or no treatment options Approved February 2025
Approved
April
2024Tivdak
(tisotumab vedotin-tftv) (c)
Recurrent or mCC with disease progression on or after chemotherapy Approved
April
2024ApprovedMarch
2025ApprovedMarch
2025
Comirnaty (COVID-19 Vaccine, mRNA) 2025-2026 Formula, LP.8.1 (d)
Active immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 65 years of age and older Approved August
2025
Active immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 5 years through 64 years of age with at least one underlying condition that puts them at high risk for severe outcomes from COVID-19 ApprovedAugust2025
Active immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 6 months of age and older Approved
July
2025
Approved August
2025
Adcetris
(brentuximab vedotin) (e)
Relapsed/refractory diffuse large B-cell lymphoma Approved
February
2025
Hodgkin’s lymphoma Approved March
2018
Approved June
2025
Paxlovid (nirmatrelvir; ritonavir) (f)
COVID-19 infection in high-risk childrenApprovedNovember
2025FiledApril2025
vepdegestrant (PF-07850327) (g)
Breast cancer metastatic - 2nd line ER+/HER2- ESR1mu FiledAugust2025
Tukysa (tucatinib) Treatment of adult patients with advanced or metastatic HER2+ breast cancerApprovedApril
2020
Approved
April
2020
ApprovedFebruary2026
Ibrance (palbociclib) (h)
ER+/HER2+ metastatic breast cancer
Filed November 2025
Filed
December2025Filed
November
2025
Padcev
(enfortumab vedotin-ejfv) (i)
Combination with pembrolizumab as perioperative treatment of adult patients with cisplatin ineligible muscle invasive bladder cancer (MIBC)
Approved November 2025
Filed
November
2025
Filed
January
2026^ For the U.S., the filing date is the date on which the FDA accepted our submission. For the EU, the filing date is the date on which the EMA validated our submission.(a) Erbitux ® is a registered trademark of ImClone LLC. We have exclusive rights to Braftovi in the U.S., Canada and certain emerging markets. Pierre Fabre has exclusive rights to commercialize Braftovi in Europe and Ono has exclusive rights to commercialize Braftovi in Japan. The December 2024 U.S. approval date reflects accelerated approval. The U.S. accelerated approval was converted to a regular approval for Braftovi in combination with cetuximab and fluorouracil-based chemotherapy in February 2026.
(b) Emblaveo is being developed in collaboration with AbbVie. AbbVie has the exclusive commercialization rights in the U.S. and Canada; Pfizer leads the joint development program and has commercialization rights in all other countries.
(c) Tivdak is commercialized in collaboration with Genmab A/S.
(d) Comirnaty is being developed and commercialized with BioNTech. On August 27, 2025, the FDA approved the 2025-2026 formulation (i) for individuals 65 years of age and older and (ii) for individuals aged 5 to 64 years of age with at least one underlying condition that puts them at high risk for severe COVID-19. Effective as of the same date, outstanding EUAs for the COVID-19 vaccine were revoked, including those for individuals 6 months through 4 years of age.
(e) Adcetris is being developed and commercialized in collaboration with Takeda. Pfizer has commercialization rights for Adcetris in the U.S. and its territories and in Canada. Takeda has commercialization rights in the rest of the world.
(f) Pfizer withdrew the U.S. filing for the Paxlovid pediatric supplement in January 2026.
(g) Vepdegestrant is being developed in collaboration with Arvinas. In September 2025, Arvinas and Pfizer jointly agreed to out-license the commercialization rights to vepdegestrant to a third party. Together, the companies have begun seeking a partner with the capabilities and expertise to maximize the commercial potential of
Pfizer Inc. 2025 Form 10-K
42
vepdegestrant, if approved, for patients with ESR1-mutant, ER+/HER2- advanced or metastatic breast cancer and potentially develop vepdegestrant in new settings.
(h) Ibrance for ER+/HER2+ metastatic breast cancer is being developed in collaboration with Alliance Foundation Trials, LLC.
(i) Padcev is being jointly developed and commercialized with Astellas in the U.S. Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas has commercialization rights in the rest of the world.The following provides information about additional indications and new drug candidates in late-stage development:
PRODUCT/CANDIDATE PROPOSED DISEASE AREALATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS FOR IN-LINE AND IN-REGISTRATION PRODUCTS Talzenna (talazoparib) Combination with Xtandi (enzalutamide) for DNA Damage Repair-deficient mCSPCLitfulo (ritlecitinib) Vitiligo
Elrexfio (elranatamab) Multiple myeloma double-class exposed
Newly diagnosed multiple myeloma post-transplant maintenance
Newly diagnosed multiple myeloma transplant-ineligible2nd line+ relapsed refractory multiple myeloma
Padcev (enfortumab vedotin-ejfv) (a)Cisplatin-eligible muscle-invasive bladder cancerTukysa (tucatinib) (b)
HER2+ adjuvant breast cancer1st line HER2+ maintenance metastatic breast cancer
1st line HER2+ metastatic colorectal cancerNurtec (rimegepant) Menstrually-related migraine
NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT VLA15 (PF-07307405) vaccine (c)Immunization to prevent Lyme diseasedazukibart (PF-06823859)
Dermatomyositis, polymyositis
disitamab vedotin (d)1st line HER2 (≥IHC1+) metastatic urothelial cancersigvotatug vedotin (PF-08046047)
2nd line+ metastatic NSCLC
1st line metastatic NSCLC (tumor proportion score high)
osivelotor (PF-07940367)
SCDibuzatrelvir (PF-07817883)
COVID-19 infection
mevrometostat (PF-06821497) + enzalutamide
1st line/2nd line metastatic castration resistant prostate cancer post-Abiraterone1st line metastatic castration resistant prostate cancer neoadjuvant hormonal therapy naïve1st line metastatic castration sensitive prostate cancer neoadjuvant hormonal therapy naïveatirmociclib (PF-07220060)1st line HR+/HER2- metastatic breast cancer
PF-08046054
2nd line+ NSCLC
prifetrastat (PF-07248144)
2nd line/3rd line HR+/HER2- metastatic breast cancer
MET-097i (PF-08653944)
Chronic weight management
PF-08634404
1st line metastatic colorectal cancer
1st line NSCLC (squamous)
1st line NSCLC (non-squamous)
PF-07831694 vaccine
Immunization to prevent Clostridioides difficile ( C. difficile ) - updated formulation
PF-06760805 vaccine Immunization to prevent invasive group B streptococcus infection (maternal)
sasanlimab (PF-06801591) (e)
Combination with Bacillus Calmette-Guerin for high-risk non-muscle invasive bladder cancer
(a) Padcev is being jointly developed and commercialized with Astellas in the U.S. Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas has commercialization rights in the rest of the world.
(b) Tukysa for 2nd line/3rd line HER2+ metastatic breast cancer row has been removed from the table above.
(c) VLA15 is being developed in collaboration with Valneva SE.
(d) Disitamab vedotin is being developed in collaboration with RemeGen Co., Ltd.
(e) Pfizer withdrew the sasanlimab filing for patients with high-risk non-muscle invasive bladder cancer in the U.S. in December 2025 and in the EU in February 2026 to allow more time for additional data collection and analyses.
In September 2024, Pfizer announced a voluntary withdrawal of all lots of Oxbryta (voxelotor) for the treatment of SCD in all markets where it was approved. Pfizer also discontinued all active voxelotor clinical trials and expanded access programs worldwide. Pfizer’s decision was based on the totality of clinical data available at that time that indicated the overall benefit of Oxbryta no longer outweighed the risk in the approved sickle cell patient population. The data suggested an imbalance in vaso-occlusive crises and fatal events, which required further assessment. Pfizer notified regulatory authorities about these findings and its decision to voluntarily withdraw Oxbryta from the market and discontinue distribution and clinical studies while further reviewing the available data and investigating the findings. In July 2024, the EMA initiated a referral procedure under Article 20 of EC Regulation No 726/2004 for Oxbryta to review the product’s benefits and risks. In October 2024, the EC suspended the Oxbryta marketing authorization while the EMA’s review of data was ongoing. In addition, the FDA initiated an evaluation of newly identified safety signals. The FDA also placed the Oxbryta investigational new drug application on clinical hold following Pfizer’s market withdrawal.
Following comprehensive review and analysis of the final data, Pfizer submitted updated data and risk management proposals to the EMA, FDA and other regulators. In the EU, the EMA’s referral procedure concluded in October 2025, with the EMA adopting a negative opinion on benefit-risk for Oxbryta for the treatment of hemolytic anemia due to SCD, recommending that the marketing authorization for the product remain suspended. In the U.S., Pfizer’s engagement with the FDA is ongoing.
In December 2024, the FDA issued a partial clinical hold for osivelotor, which prohibited Pfizer from enrolling new participants into osivelotor clinical studies. In 2025, the FDA concluded that initiation of osivelotor studies and enrollment may proceed outside of sub-Saharan Africa and for participants who have not relocated from sub-Saharan Africa. Enrollment of new participants is expected to begin in the first quarter of 2026.
Pfizer Inc. 2025 Form 10-K
43
For additional information about our R&D organization, see Note 17 and the Item 1. Business — Research and Development section. For additional information regarding certain collaboration arrangements, see the Item 1. Business — Collaboration and Co-Promotion Agreements section.NON-GAAP FINANCIAL MEASURE: ADJUSTED INCOME
Adjusted income is an alternative measure of performance used by management to evaluate our overall performance as a supplement to our GAAP Reported performance measures. As such, we believe that investors’ understanding of our performance is enhanced by disclosing this measure. We use Adjusted income, certain components of Adjusted income and Adjusted diluted EPS to present the results of our major operations––the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide––prior to considering certain income statement elements as follows:
Measure Definition Relevance of Metrics to Our Business Performance
Adjusted income Net income attributable to Pfizer Inc. common shareholders (a)
before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items
• Provides investors useful information to:
◦ evaluate the normal recurring operational activities, and their components, on a comparable year-over-year basis
◦ assist in modeling expected future performance on a normalized basis
• Provides investors insight into the way we manage our budgeting and forecasting, how we evaluate and manage our recurring operations and how we reward and compensate our senior management (b)
Adjusted cost of sales, Adjusted selling, informational and administrative expenses, Adjusted research and development expenses and Adjusted other (income)/deductions –– net
Cost of sales, Selling, informational and administrative expenses, Research and development expenses and Other (income)/deductions––net (a) , each before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items, which are components of the Adjusted income measure
Adjusted diluted EPS EPS attributable to Pfizer Inc. common shareholders––diluted (a) before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items
(a) Most directly comparable GAAP measure.(b) The short-term incentive plans for substantially all non-sales-force employees worldwide are funded from a pool based on our performance, measured in significant part versus three budgeted financial metrics, as well as performance against certain of our non-financial pipeline metrics, and may be further modified by our Compensation Committee’s assessment of other factors. One of the three financial metrics, beginning with the 2025 performance year, is Adjusted income (as defined for annual incentive compensation purposes), which accounts for 40% of the bonus pool funding tied to financial performance. Any expenses for acquired IPR&D are included in our non-GAAP Adjusted results but we exclude certain of these expenses for our financial results for annual incentive compensation purposes. Additionally, beginning with the 2025 performance year, the payout for performance share awards is determined in part by Adjusted diluted EPS, which is derived from Adjusted income.Adjusted income and its components and Adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, are limited in their usefulness to investors. Because of their non-standardized definitions, they may not be comparable to the calculation of similar measures of other companies and are presented to permit investors to more fully understand how management assesses performance. A limitation of these measures is that they provide a view of our operations without including all events during a period, and do not provide a comparable view of our performance to peers. These measures are not, and should not be viewed as, substitutes for their most directly comparable GAAP measures of Net income attributable to Pfizer Inc. common shareholders , components of Net income attributable to Pfizer Inc. common shareholders and EPS attributable to Pfizer Inc. common shareholders—diluted , respectively.
We also recognize that, as internal measures of performance, these measures have limitations, and we do not restrict our performance-management process solely to these measures. We also use other tools designed to achieve the highest levels of performance. For example, our R&D organization has productivity targets, upon which its effectiveness is measured. In addition, total shareholder return, both on an absolute basis and relative to a publicly traded pharmaceutical index, plays a significant role in determining payouts under certain of our incentive compensation plans.
Adjusted Income and Adjusted Diluted EPS
Amortization of Intangible Assets —Adjusted income excludes all amortization of intangible assets.
Acquisition-Related Items –– Adjusted income excludes certain acquisition-related items, which are composed of transaction, integration, restructuring charges and additional depreciation costs for business combinations because these costs are unique to each transaction and represent costs that were incurred to restructure and integrate businesses as a result of an acquisition. We have made no adjustments for resulting synergies.
The significant costs incurred in connection with a business combination result primarily from the need to eliminate duplicate assets, activities or employees––a natural result of acquiring a fully integrated set of activities. For this reason, we believe that such costs incurred can be viewed differently in the context of an acquisition from those costs incurred in other, more normal, business contexts. The integration and restructuring costs for a business combination may occur over several years, with the more significant impacts typically ending within three years of the relevant transaction. Because of the need for certain external approvals for some actions, the span of time needed to achieve certain restructuring and integration activities can be lengthy.
Acquisition-related items may include purchase accounting impacts such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration.Pfizer Inc. 2025 Form 10-K
44Discontinued Operations –– Adjusted income excludes the results of discontinued operations, as well as any related gains or losses on the disposal of such operations. We believe that this presentation is meaningful to investors because, while we review our product portfolio for strategic fit with our operations, we do not build or run our business with the intent to discontinue parts of our business. Restatements due to discontinued operations do not impact compensation or change the Adjusted income measure for the compensation in respect of the restated periods, but are presented for consistency across all periods.Certain Significant Items –– Adjusted income excludes certain significant items representing substantive and/or unusual items that are evaluated individually on a quantitative and qualitative basis. Certain significant items may be highly variable and difficult to predict. Furthermore, in some cases it is reasonably possible that they could reoccur in future periods. For example, although major non-acquisition-related cost-reduction programs are specific to an event or goal with a defined term, we may have subsequent programs based on reorganizations of the business, cost productivity or in response to generic or biosimilar entry or economic conditions. Legal charges to resolve litigation are also related to specific cases, which are facts and circumstances specific and, in some cases, may also be the result of litigation matters at acquired companies that were inestimable, not probable or unresolved at the date of acquisition, or legal matters generally related to divested products or businesses. Gains and losses on equity securities and pension and postretirement actuarial remeasurement gains and losses have a very high degree of inherent market volatility, which we do not control and cannot predict with any level of certainty, and we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business. Unusual items represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis; items that would be non-recurring; or items that relate to products we no longer sell. See the Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line Items below for a non-inclusive list of certain significant items.Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line ItemsYear Ended December 31, 2025
Data presented will not (in all cases) aggregate to totals.
MILLIONS, EXCEPT PER SHARE DATA
Cost of sales (a)
Selling, informational and administrative expenses (a)
Other (income)/deductions––net (a)
Net income attributable to Pfizer Inc. common shareholders (a), (b), (c)
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported $ 16,067 $ 13,794 $ 6,724 $ 7,771 $ 1.36
Amortization of intangible assets — — — 4,874
Acquisition-related items (708) (4) (61) 1,285
Discontinued operations
— — — (25)
Certain significant items:
Restructuring charges/(credits), inventory write-offs, implementation costs and additional depreciation—asset restructuring (d)
(187) (116) — 1,554
Certain asset impairments (e)
— — (4,940) 4,940
(Gains)/losses on equity securities
— — (67) 67
Actuarial valuation and other pension and postretirement plan (gains)/losses — — 320 (320)
Other (32)
(32) (1,150) (f)
1,223
Income tax provision—non-GAAP items
(2,962)
Non-GAAP Adjusted $ 15,141 $ 13,642 $ 827 $ 18,406 $ 3.22
Pfizer Inc. 2025 Form 10-K
45Year Ended December 31, 2024
Data presented will not (in all cases) aggregate to totals.
MILLIONS, EXCEPT PER SHARE DATA
Cost of sales (a)
Selling, informational and administrative expenses (a)
Other (income)/deductions––net (a)
Net income attributable to Pfizer Inc. common shareholders (a), (b), (c)
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported $ 17,851 $ 14,730 $ 4,388 $ 8,031 $ 1.41
Amortization of intangible assets — — — 5,286
Acquisition-related items (1,341) (10) (45) 1,938
Discontinued operations
— — — (14)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)
(134) (90) — 2,213
Certain asset impairments (e)
— — (3,295) 3,295
(Gains)/losses on equity securities (e)
— — 1,008 (1,008)
Actuarial valuation and other pension and postretirement plan (gains)/losses — — (579) 579Other 44 (13) (445) (f)430
Income tax provision—non-GAAP items
(3,035)
Non-GAAP Adjusted $ 16,420 $ 14,617 $ 1,031 $ 17,716 $ 3.11
Year Ended December 31, 2023
Data presented will not (in all cases) aggregate to totals.
MILLIONS, EXCEPT PER SHARE DATA
Cost of sales (a)
Selling, informational and administrative expenses (a)
Other (income)/deductions––net (a)
Net income attributable to Pfizer Inc. common shareholders (a), (b), (c)
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported $ 24,954 $ 14,771 $ 222 $ 2,119 $ 0.37
Amortization of intangible assets — — — 4,733
Acquisition-related items (629) (11) (28) 1,874
Discontinued operations
— — — (11)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)
(98) (290) — 2,227
Certain asset impairments (e)
— — (3,024) 3,024
(Gains)/losses on equity securities (e)
— — 1,588 (1,588)
Actuarial valuation and other pension and postretirement plan (gains)/losses — — 265 (265)
Other (238) (g)
(24) (246) (f)
518
Income tax provision—non-GAAP items
(2,131)
Non-GAAP Adjusted $ 23,988 $ 14,446 $ (1,224) $ 10,501 $ 1.84(a) Items that reconcile GAAP Reported to non-GAAP Adjusted balances are shown pre-tax. Our effective tax rates for GAAP Reported income from continuing operations were: (3.5)% in 2025, (0.4)% in 2024 and (105.4)% in 2023. See Note 5 . Our effective tax rates for non-GAAP Adjusted income were: 12.7% in 2025, 14.5% in 2024 and 9.0% in 2023.(b) Includes reconciling amounts for Research and development expenses that are not material to our non-GAAP consolidated results of operations.(c) For 2025, the total acquisition-related items of $1.3 billion include reconciling amounts for Restructuring charges and certain acquisition-related costs of $488 million, mainly composed of $340 million of integration costs and other charges. For 2024, the total acquisition-related items of $1.9 billion included reconciling amounts for Restructuring charges and certain acquisition-related costs of $514 million , mainly composed of $427 million of integration costs and other charges. For 2023, the total acquisition-related items of $1.9 billion included reconciling amounts for Restructuring charges and certain acquisition-related costs of $1.2 billion , mainly composed of $785 million of integration costs and other charges, $190 million of transaction costs and $125 million of employee termination-related charges. See Note 3 .(d) Includes employee termination costs, asset impairments and other exit costs related to our cost-reduction and productivity initiatives not associated with acquisitions. See Note 3 .
(e) See Note 4 .(f) For 2025, the total adjustment of $1.1 billion primarily includes charges of $1.1 billion for certain legal matters, primarily representing certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer. For 2024, the total adjustment of $445 million included (i) net gains of $825 million on the partial sales of our previous investment in Haleon in March and October 2024, which are comprised of (a) total gains on the sales of $945 million less (b) $120 million recognized in our adjusted income in the fourth quarter representing our pro-rata share of Haleon’s third quarter 2024 adjusted income recorded on a one quarter lag and implicitly included in the gain on the sale of those shares, (ii) charges of $567 million for certain legal matters, primarily representing certain product liability expenses related to products discontinued and/or divested by Pfizer, (iii) a charge of $420 million related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program and (iv) charges of $312 million mostly related to (a) our equity-method accounting pro-rata share of intangible asset amortization, impairments and restructuring costs recorded by Haleon, as well as (b) adjustments to our equity-method basis differences and (c)
Pfizer Inc. 2025 Form 10-K
46
Pfizer’s share of investee capital transactions recognized by Haleon. For 2023, the total adjustments of $246 million included charges of (i) $474 million for certain legal matters, primarily representing certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition matters and (ii) $127 million mostly related to our equity-method accounting pro-rata share of intangible asset amortization and impairments, costs of separating from GSK and restructuring costs recorded by Haleon, partially offset by: (i) a $222 million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion and (ii) dividend income of $211 million from our investment in Nimbus resulting from Takeda’s acquisition of Nimbus’s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary.
(g) For 2023, the total adjustment of $238 million mainly included $286 million in inventory losses, overhead costs related to the period in which the facility could not operate, and incremental costs resulting from tornado damage to our manufacturing facility in Rocky Mount, NC, partially offset by insurance recoveries.ANALYSIS OF THE CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,(MILLIONS) 2025 2024 2023 Drivers of change 2025 v. 2024Cash provided by/(used in):
Operating activities$ 11,704 $ 12,744 $ 8,700 The change was driven mainly by the timing of receipts and payments in the ordinary course of business, partially offset by a decrease in net income, which includes a $1.35 billion cash outflow in connection with the in-license arrangement with 3SBio, adjusted for non-cash items.Investing activities$ (1,351) $ 2,652 $ (32,278) The change was driven mainly by $6.9 billion cash paid for the acquisition of Metsera, net of cash acquired, and $0.7 billion lower proceeds from the remaining sale of our investment in Haleon in 2025 compared with the portion sold in 2024, partially offset by a $3.8 billion increase in net proceeds from short-term investments.Financing activities$ (10,304) $ (17,140) $ 26,066 The change was driven mainly by $9.7 billion proceeds received from the issuance of long-term debt and a $1.9 billion decrease in net repayments of short term borrowings, partially offset by a $4.5 billion increase in repayments of long-term debt.ANALYSIS OF FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES AND MARKET RISKWe believe that with our ongoing operating cash flows, together with our financial assets, access to capital markets, revolving credit agreement, and available lines of credit, we have and will maintain the ability to meet our liquidity needs to support ongoing operations, our capital allocation objectives, and our contractual and other obligations for the foreseeable future.We focus efforts to optimize operating cash flows through achieving working capital efficiencies that target accounts receivable, inventories, accounts payable, and other working capital. Excess cash from operating cash flows is invested in money market funds and available-for-sale debt securities which consist of primarily high-quality, highly liquid, well-diversified debt securities. We have taken, and will continue to take, a conservative approach to our financial investments and monitoring of our liquidity position in response to market changes. We typically maintain cash and cash equivalent balances and short-term investments which, together with our available revolving credit facilities, are in excess of our commercial paper and other short-term borrowings.
Additionally, we may obtain funding through short-term or long-term sources from our access to the capital markets, banking relationships and relationships with other financial intermediaries to meet our liquidity needs.
Diverse sources of funds: Related disclosure presented in this Form 10-K
Internal sources:
• Operating cash flows
Consolidated Statements of Cash Flows – Operating Activities and the Analysis of the Consolidated Statements of Cash Flows section within MD&A
• Cash and cash equivalents
Consolidated Balance Sheets
• Money market funds
Note 7A
• Available-for-sale debt securities
Note 7A , 7B
• Equity investments
Note 7A , 7B
External sources:
Short-term funding:
• Commercial paper
Note 7C
• Revolving credit facilities
Note 7C
• Lines of credit
Note 7C
Long-term funding:
• Long-term debt
Note 7D
• Equity
Consolidated Statements of Equity and Note 12
For additional information about the sources and uses of our funds and capital resources, see the Analysis of the Consolidated Statements of Cash Flows section within MD&A.
Credit Ratings ––The cost and availability of financing are influenced by credit ratings, and an increase or decrease in our credit rating could have a beneficial or adverse effect on financing. Our long-term debt is rated high-quality by both S&P and Moody’s.Pfizer Inc. 2025 Form 10-K
47As of the date of the filing of this Form 10-K, the following ratings have been assigned to our commercial paper and senior unsecured long-term debt:
NAME OF RATING AGENCY Pfizer Short-Term Rating Pfizer Long-Term Rating Outlook/Watch
Moody’s P-1 A2
Stable Outlook
S&P A-1
A
Stable OutlookThese ratings are not recommendations to buy, sell or hold securities and the ratings are subject to revision or withdrawal at any time by the rating organizations. Each rating should be evaluated independently of any other rating.
Capital Allocation Framework ––Our capital allocation framework is designed to enhance long-term shareholder value and is based on three core pillars: maintaining and, over the long term, growing our dividend, reinvesting in the business and the potential to make share repurchases after de-levering our balance sheet. Over time, we expect to continue to de-lever in a prudent manner in order to maintain a balanced capital allocation strategy. See the Overview of Our Performance, Operating Environment, Strategy and Outlook — O ur Business and Strategy section within MD&A.
Dividends —Our current and projected dividends provide a return to shareholders while maintaining sufficient capital to invest in growing our business. Our dividends are not restricted by debt covenants. While the dividend level remains a decision of Pfizer’s BOD and will continue to be evaluated in the context of future business performance, we currently believe that we can maintain and, over the long term, grow our dividend, barring significant unforeseen events. On December 12, 2025, our BOD declared a first-quarter dividend of $0.43 per share, payable on March 6, 2026, to shareholders of record at the close of business on January 23, 2026. The first-quarter 2026 cash dividend will be our 349th consecutive quarterly dividend.
Common Stock Purchases —As of December 31, 2025, our remaining share-purchase authorization was $3.3 billion with no repurchases in 2025. See Note 12 .
Sales of Investments —After our sales of a portion of our Haleon shares in March and October 2024, we owned approximately 15% of the outstanding voting shares of Haleon as of December 31, 2024. See Note 2C . With the reduction in our Haleon ownership percentage and board representation after the October 2024 sale, we discontinued the application of the equity method to our Haleon investment, and in the fourth quarter of 2024 began to account for the investment as an equity security with a readily determinable fair value, which was carried at fair value at December 31, 2024, with changes in fair value reported in Other (income)/deductions––net. In the first quarter of 2025, we sold the remaining portion of our investment in Haleon for $6.3 billion. In January 2026, we announced an agreement to sell our investment in ViiV for $1.9 billion, subject to certain regulatory clearances in relevant markets. The proceeds from both of these sales are being used, and will be used respectively, to support capital allocation priorities.Off-Balance Sheet Arrangements, Contractual, and Other Obligations ––In the ordinary course of business, (i) we enter into off-balance sheet arrangements that may result in contractual and other obligations and (ii) in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities. For more information on guarantees and indemnifications, see Note 16B .Additionally, certain of our co-promotion or license agreements give our licensors or partners the rights to negotiate for, or in some cases to obtain under certain financial conditions, co-promotion or other rights in specified countries with respect to certain of our products. Furthermore, collaboration, licensing or other R&D arrangements may give rise to potential milestone payments. In addition, we may be required to make contingent consideration payments for certain prior business combinations that are contingent on future events or outcomes (see Note 16D ). Payments under these agreements generally become due and payable only upon the achievement of certain development, regulatory and/or commercialization milestones, which may span several years and which may never occur.
Our significant contractual and other obligations as of December 31, 2025 consisted of:• Long-term debt, including current portion (see Note 7D ) and related interest payments;• Estimated cash payment s related to the TCJA repatriation estimated tax liability (see Note 5 ). The eighth and final estimated future payment related to the TCJA repatriation tax liability totaling $2.6 billion is due April 15, 2026 and is reported in current Income taxes payable as of December 31, 2025. Our obligations may vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks;
• Certain commitments totaling $5.0 billion, of which an estimated $1.6 billion is to be paid in the next twelve months, and $3.4 billion in periods thereafter (see Note 16C );
• Purchases of PP&E (see Note 9 ). In 2026, we expect to spend approximately $2.5 billion on PP&E; and• Future minimum rental commitments under non-cancelable operating leases (see Note 15 ).
Global Economic Conditions ––We have operations in countries that have hyperinflationary economies. The impact to Pfizer is not considered material. See the Item 1A. Risk Factors––Global Operations section.
Market Risk ––We are subject to foreign exchange risk, interest rate risk, and equity price risk. The objective of our financial risk management program is to minimize the impact of foreign exchange rate and interest rate movements on our earnings. We address such exposures through a combination of operational means and financial instruments. For more information on how we manage our foreign exchange and interest rate risks, see Notes 1F and 7E , as well as the Item 1A. Risk Factors—Global Operations section for key currencies in which we operate. Our sensitivity analyses of such risks are discussed below.Foreign Exchange Risk —The fair values of our financial instrument holdings are analyzed at year-end to determine their sensitivity to foreign exchange rate changes. In this analysis, holding all other assumptions constant and assuming that a change in one currency’s rate relative to the U.S. dollar would not have any effect on another currency’s rates relative to the U.S. dollar, if the dollar were to move against all other currencies by 10%, as of December 31, 2025, the expected impact on our net income would not be significant.
Interest Rate Risk —The fair values of our financial instrument holdings are analyzed at year-end to determine their sensitivity to interest rate changes. In this analysis, holding all other assumptions constant and assuming a parallel shift in the interest rate curve for all maturities and for
Pfizer Inc. 2025 Form 10-K
48
all instruments, if there were a one hundred basis point change in interest rates as of December 31, 2025, the expected impact on our net income would not be significant.Equity Price Risk ––We hold long-term investments in equity securities with readily determinable fair values in life science companies as a result of certain business development transactions. While we are holding such securities, we are subject to equity price risk, and this may increase the volatility of our income in future periods due to changes in the fair value of equity investments. From time to time, we will sell such equity securities based on our business considerations, which may include limiting our price risk. Our equity securities with readily determinable fair values are analyzed at year-end to determine their sensitivity to equity price rate changes. In this sensitivity analysis, the expected impact on our net income would not be significant.NEW ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
See Note 1B .Recently Issued Accounting Standards, Not Adopted as of December 31, 2025Standard/Description Effective Date Effect on the Financial StatementsIn November 2024, the FASB issued final guidance which requires disaggregated disclosures of certain categories of expenses that are included in expense line items on the face of the income statement. The disclosures are required on an annual and interim basis. The guidance also requires the total amount of selling expenses to be disclosed and, on an annual basis, the definition of selling expenses. The guidance may be applied on a prospective or a retrospective basis. 2027 for annual reports and 2028 for interim reports. Early adoption is permitted.This new guidance will result in increased disclosures in the notes to our financial statements.In September 2025, the FASB issued final guidance to modernize the accounting for internal use software costs. The guidance requires entities to start capitalizing eligible costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. January 1, 2028, with early adoption permitted.
We are assessing the impact but currently do not expect this new guidance to have a material impact on our consolidated financial statements.