12 unchanged sentences
The Company may also experience operational and financial risk in connection with acquisitions if we are unable to fully identify potential risks and liabilities associated with acquired businesses or products, successfully integrate operations and employees, and successfully identify and realize synergies with existing businesses while containing acquisition-related strain on our management, operations and financial resources.
−Removed: For the Company’s Innovative Medicine businesses, loss of patent exclusivity for a product often is followed by a substantial reduction in sales as competitors gain regulatory approval for generic and other competing products and enter the market.
−Removed: Similar competition can be triggered by the loss of exclusivity for a biological product.
+Added: For the Company’s Innovative Medicine businesses, loss of patent exclusivity for a product often is followed by a substantial reduction in sales as competitors gain regulatory approval for generic, biosimilar and other competing products and enter the market.
For the Company’s MedTech businesses, technological innovation, product quality, reputation and customer service are especially important to competitiveness.
5 unchanged sentences
The Company has in the past, and may in the future, face unanticipated interruptions and delays in manufacturing through its internal or external supply chain.
−Removed: Manufacturing disruptions can occur for many reasons including regulatory action, production quality deviations or safety issues, labor disputes, labor shortages, site-specific incidents (such as fires), natural disasters such as hurricanes and other severe weather events, raw material shortages, political unrest, terrorist attacks and epidemics or pandemics.
+Added: Manufacturing disruptions can occur for many reasons including regulatory action, production quality deviations or safety issues, labor disputes, labor shortages, site-specific incidents (such as fires), natural disasters such as hurricanes and other severe weather events, raw material shortages, lack of available inspectors, political unrest, terrorist attacks and epidemics or pandemics.
Such delays and difficulties in manufacturing can result in product shortages, declines in sales and reputational impact as well as significant remediation and related costs associated with addressing the shortage.
17 unchanged sentences
We are subject to risks associated with global health crises, epidemics, pandemics and other outbreaks (such incident(s), a health crisis or health crises).
−Removed: For example, the COVID-19 pandemic adversely impacted certain aspects of the Company’s business, results of operations and financial condition, including lower sales and reduced customer demand and usage of certain of our products.
−Removed: The spread of any health crises may cause the Company to modify its business practices, and take further actions as may be required by government authorities or as the Company determines are in the best interests of our patients, customers, employees and business partners under such circumstances.
+Added: The spread of health crises have caused and may cause the Company to modify its business practices, and take further actions as may be required by government authorities or as the Company determines are in the best interests of our patients, customers, employees and business partners under such circumstances.
+Added: Impacts to the Company have included and may include adverse impacts to results of operations and financial condition, including lower sales and reduced customer demand and usage of certain of our products.
While the Company has robust business continuity plans in place across our global supply chain network designed to help mitigate the impact of health crises, these efforts may not completely prevent our business from being adversely affected in the event of a health crisis.
7 unchanged sentences
In addition, recent legislation and ongoing political scrutiny on pricing, coverage and reimbursement could result in additional pricing pressures.
−Removed: Specifically, the Inflation Reduction Act of 2022 (IRA) may subject certain products to government-established pricing, potentially impose rebates, and subject manufacturers who fail to adhere to the government's interpretations of the law to penalties.
−Removed: Further, increased third-party utilization of the 340B Federal Drug Discount Program from expanded interpretations of the statute may have a negative impact on the Company's financial performance.
+Added: Specifically, the Inflation Reduction Act of 2022 (IRA) has changed Medicare Part D benefit design and has subjected certain of the Company's products to government-established pricing beginning in 2026 and may subject additional products in the future.
+Added: Failure to adhere to the government's interpretations of the law pending ongoing litigation may expose the Company to penalties.
+Added: In addition, change to Medicare Part D could have a negative impact on U.S.
+Added: Innovative Medicine sales.
+Added: Further, increased third-party utilization of the 340B Federal Drug Discount Program from expanded interpretations of the statute and program abuse may have a negative impact on the Company's financial performance.
Outside the U.S., numerous major markets, including the EU, United Kingdom, Japan and China, have pervasive government involvement in funding healthcare and, in that regard, directly or indirectly impose price controls, limit access to, or reimbursement for, the Company’s products, or reduce the value of its intellectual property protection.
5 unchanged sentences
FDA’s timing or requirements for approval or clearance of our products may have a negative impact on our ability to bring new products to market.
−Removed: New laws and regulations may also impose deadlines on the Company, or its third-party suppliers, manufacturers or other partners and providers, for which there may be insufficient time to implement changes to comply with such new regulations and may result in manufacturing delays or other supply chain constraints.
+Added: New and changing laws, regulations, executive orders and other directives may also impose deadlines on the Company, or its third-party suppliers, manufacturers or other partners and providers, for which there may be insufficient time to implement changes to comply with such new regulations and may result in manufacturing delays or other supply chain constraints.
If the Company is unable to identify ways to mitigate these delays or constraints, there may be an adverse effect on sales and access to our products.
4 unchanged sentences
Some of these matters may include thousands of plaintiffs, may involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years.
−Removed: For example, the Company is a defendant in numerous lawsuits arising out of the use of body powders containing talc, primarily JOHNSON’S Baby Powder, and the Company’s sale, manufacturing and marketing of opioids.
+Added: For example, the Company is a defendant in numerous lawsuits arising out of the use of body powders containing talc, primarily JOHNSON’S Baby Powder.
While the Company believes it has substantial defenses in these matters, it is not feasible to predict the ultimate outcome of litigation.
−Removed: The Company could in the future be required to pay significant amounts as a result of settlements or judgments in these matters, potentially in excess of accruals, including matters where the Company could be held jointly and severally liable among other defendants.
+Added: The Company has been and could in the future be required to pay significant amounts as a result of settlements or judgments in these matters, potentially in excess of accruals, including matters where the Company could be held jointly and severally liable among other defendants.
The resolution of, or increase in accruals for, one or more of these matters in any reporting period could have a material adverse effect on the Company’s results of operations and cash flows for that period.
2 unchanged sentences
Product reliability, safety and effectiveness concerns can have significant negative impacts on sales and results of operations, lead to litigation and cause reputational damage.
−Removed: Concerns about product safety, whether raised internally or by litigants, regulators or consumer advocates, and whether or not based on scientific evidence, can result in safety alerts, product recalls, governmental investigations, regulatory action on the part of the U.S.
+Added: Product concerns, whether raised internally or by litigants, regulators or consumer advocates, and whether or not based on scientific evidence, can result in safety alerts, product recalls, governmental investigations, regulatory action on the part of the U.S.
FDA (or its counterpart in other countries), private claims and lawsuits, payment of fines and settlements, declining sales and reputational damage.
11 unchanged sentences
Changes in tax laws or regulations around the world, including in the U.S.
−Removed: and as led by the Organization for Economic Cooperation and Development, such as the recent enactment by certain EU and non-EU countries, and the anticipated enactment by additional countries, of a global minimum tax, could negatively impact the Company’s effective tax rate and results of operations.
+Added: and as led by the Organization for Economic Cooperation and Development, such as the enactment by certain EU and non-EU countries, and the anticipated enactment by additional countries, of a global minimum tax, could negatively impact the Company’s effective tax rate and results of operations.
A change in statutory tax rate or certain international tax provisions in any country would result in the revaluation of the Company’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted.
10 unchanged sentences
The Company owns or licenses a significant number of patents and other proprietary rights relating to its products and manufacturing processes.
−Removed: These rights are essential to the Company’s businesses and materially important to the Company’s results of operations.
+Added: These rights are essential to the Company’s businesses and the inability of the Company to secure and maintain these rights may have a detrimental impact on the Company’s financial results.
Public policy, both within and outside the U.S., has become increasingly unfavorable toward intellectual property rights.
−Removed: The Company cannot be certain that it will obtain adequate patent protection for new products and technologies in the United States and other important markets or that such protections, once granted, will last as long as originally anticipated.
+Added: The Company cannot be certain that it will secure and maintain adequate patent protection for new products and technologies in the United States and other important markets.
Competitors routinely challenge the validity or extent of the Company’s owned or licensed patents and proprietary rights through litigation, interferences, oppositions and other proceedings, such as inter partes review (IPR) proceedings before the United States Patent & Trademark Office (USPTO).
These proceedings absorb resources and can be protracted as well as unpredictable.
−Removed: In addition, challenges that the Company’s products infringe the patents of third parties could result in an injunction and/or the need to pay past damages and future royalties and adversely affect the competitive position and sales of the products in question.
+Added: In addition, others may claim the Company has infringed their intellectual property rights, including copyrights, patents, or trademarks, and/or has misappropriated their trade secrets, any of which could result in an injunction and/or the need to pay past damages and future royalties and adversely affect the competitive position and sales of our products.
The Company has faced increasing patent challenges from third parties seeking to manufacture and market generic and biosimilar versions of the Company’s key pharmaceutical products prior to expiration of the applicable patents covering those products.
−Removed: In the U.S., manufacturers of generic versions of innovative human pharmaceutical products may challenge the validity, or claim non-infringement, of innovator products through the Abbreviated New Drug Application, or ANDA, process with the U.S.
−Removed: FDA and related ANDA litigation.
−Removed: The Biologics Price Competition and Innovation Act (BPCIA), enacted in 2010, which created a new regulatory pathway for the approval by the U.S.
−Removed: FDA of biosimilar alternatives to innovator-developed biological products, also created mechanisms for biosimilar applicants to challenge the patents on the innovator biologics.
−Removed: The IPR process with the USPTO is also being used by competitors to challenge patents asserted in litigation.
In the event the Company is not successful in defending its patents against such challenges, or upon the “at-risk” launch by the generic or biosimilar firm of its product, the Company can lose a major portion of revenues for the referenced product in a very short period of time.
16 unchanged sentences
and, if and when they reach the market, successfully differentiate the Company’s products from competing products and approaches to treatment.
−Removed: New products or enhancements to existing products may not be accepted quickly or significantly in the marketplace due to product and price competition, changes in customer preferences or healthcare purchasing patterns, resistance by healthcare providers or uncertainty over third-party reimbursement.
+Added: Moreover, the development and regulatory approval of new products may be delayed due to limits on federal agency budgets or personnel, including reductions to the U.S.
+Added: FDA’s budget, employees, and operations, which may lead to slower response times and longer review periods.
+Added: After approval, new products or enhancements to existing products may not be accepted quickly or significantly in the marketplace due to product and price competition, changes in customer preferences or healthcare purchasing patterns, resistance by healthcare providers or uncertainty over third-party reimbursement.
Even following initial regulatory approval, the success of a product can be adversely impacted by safety and efficacy findings in larger real-world patient populations, as well as market entry of competitive products.
2 unchanged sentences
Our investments in these technologies may not result in the benefits we anticipate or enable us to obtain or maintain a competitive advantage.
−Removed: The application of machine learning and AI in our business is emerging and evolving alongside new laws and regulations that may entail significant costs or ultimately limit our ability to continue the use of these technologies.
+Added: The application of AI in our business is emerging and evolving alongside new laws and regulations that may entail significant costs or ultimately limit our ability to continue the use of these technologies.
These technologies also carry inherent risks related to data privacy and security further described below.
13 unchanged sentences
The Company faces challenges in maintaining profitability of operations in economies experiencing high inflation rates.
−Removed: Specifically, the Company has accounted for operations in Argentina, Turkey and Venezuela as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%.
+Added: Specifically, the Company has accounted for operations in Argentina, Turkey, Venezuela and Egypt (beginning in the fiscal fourth quarter of 2024) as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%.
While the Company strives to maintain profit margins in these areas through cost reduction programs, productivity improvements and periodic price increases, it might experience operating losses as a result of continued inflation.
−Removed: In addition, the impact of currency devaluations in
2024 Annual Report
−Removed: countries experiencing high inflation rates or significant currency exchange fluctuations could negatively impact the Company’s operating results.
+Added: In addition, the impact of currency devaluations in countries experiencing high inflation rates or significant currency exchange fluctuations could negatively impact the Company’s operating results.
Illegal importation of pharmaceutical products :
29 unchanged sentences
In response to heightened conflict, such as the Russia-Ukraine war, governments may impose export controls and broad financial and economic sanctions.
−Removed: Our business and operations may be further impacted by the imposition of trade protection measures or other policies adopted by any country that favor domestic companies and technologies over foreign competitors.
+Added: Our business and operations may be further impacted by the imposition of tariffs, trade protection measures or other policies adopted by any country that favor domestic companies and technologies over foreign competitors.
Additional sanctions or other measures may be imposed by the global community, including but not limited to limitations on our ability to file, prosecute and maintain patents, trademarks and other intellectual property rights.
Furthermore, in some countries, such as in Russia, action may be taken that allows companies and individuals to exploit inventions owned by patent holders from the United States and many other countries without consent or compensation and we may not be able to prevent third parties from practicing the Company's inventions in Russia or from selling or importing products in and into Russia.
+Added: In addition, the U.S.
+Added: government recently announced tariffs on products manufactured in several jurisdictions, including China, Mexico and Canada, and has
+Added: made announcements regarding the potential imposition of tariffs on other jurisdictions.
+Added: While certain of the announced tariffs have been delayed, the U.S.
+Added: government may in the future pause, reimpose or increase tariffs, and countries subject to such tariffs have and in the future may impose reciprocal tariffs or other restrictive trade measures in response.
+Added: Any of these actions could increase uncertainties and associated risks relating to the Company’s global operations.
Weak financial performance, failure to maintain a satisfactory credit rating or disruptions in the financial markets could adversely affect our liquidity, capital position, borrowing costs and access to capital markets.
3 unchanged sentences
There can be no assurance that we will be able to maintain our credit ratings, and any additional actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, may have a negative impact on our liquidity, capital position and access to capital markets.
−Removed: Our business depends on our ability to recruit and retain talented, highly skilled employees and a diverse workforce.
−Removed: Our continued growth requires us to recruit and retain talented employees representing diverse backgrounds, experiences, and skill sets.
+Added: Our business depends on our ability to recruit and retain talented and highly skilled employees.
+Added: Our continued growth requires us to recruit and retain talented employees representing many different backgrounds, experiences, and skill sets.
The market for highly skilled workers and leaders in our industry is extremely competitive and our ability to compete depends on our ability to hire, develop and motivate highly skilled personnel in all areas of our organization.
−Removed: Maintaining our brand and reputation, as well as a diverse, equitable and inclusive work environment enables us to attract top talent.
+Added: Maintaining our brand and reputation, as well as a credo-based work environment enables us to attract top talent.
If we are less successful in our recruiting efforts, or if we cannot retain highly skilled workers and key leaders, our ability to develop and deliver successful products and services may be adversely affected.
9 unchanged sentences
An information security incident, including a cybersecurity breach, could have a negative impact on the Company’s business or reputation.
−Removed: To meet business objectives, the Company relies on both internal information technology (IT) systems and networks, and those of third parties and their vendors, to process and store sensitive data, including confidential research, business plans, financial information, intellectual property, and personal data that may be subject to legal protection, and ensure the continuity of the Company’s supply chain and operations.
−Removed: The extensive information security and cybersecurity threats, which affect companies globally, pose a risk to the security and availability of these systems and networks, including customer products that are connected to or rely on such systems and networks, and the confidentiality, integrity, and availability of the Company’s sensitive data.
−Removed: The Company assesses these threats and makes investments to increase internal protection, detection, and response capabilities, as well as ensure the Company’s third-party providers have required capabilities and controls, to address this risk.
+Added: To meet business objectives, the Company relies on both internal information technology (IT) systems and networks, and those of third parties and their vendors, to process and store sensitive data (including confidential research, business plans, financial information, intellectual property, and personal data that may be subject to legal protection) to ensure the continuity of the Company’s supply chain and operations, and as part of many of the products we deliver to customers.
+Added: The extensive range of information security and cybersecurity threats, which affect companies globally, pose a persistent risk to the security and availability of these systems and networks, including to customer products that are connected to or rely on such systems and networks, and the confidentiality, integrity, and availability of the Company’s sensitive data.
+Added: The Company assesses these threats, responds to attacks and breaches that it has experienced, and makes investments to increase internal protection, detection, and response capabilities, as well as ensure the Company’s third-party providers have required capabilities and
+Added: 2024 Annual Report
+Added: controls, to address this risk.
Because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there is the potential for the Company to be adversely impacted.
3 unchanged sentences
however, the coverage may not be sufficient to cover all financial, legal, business or reputational losses.
−Removed: 2023 Annual Report
As a result of increased global tensions, the Company expects there will continue to be, an increased risk of information security or cybersecurity incidents, including cyberattacks perpetrated by adversaries of countries where the Company maintains operations.
−Removed: Given the potential sophistication of these attacks, the Company may not be able to address the threat of information security or cybersecurity incidents proactively or implement adequate preventative measures and we may not be able to detect and address any such disruption or security breach promptly, or at all, which could adversely affect our business, results of operations or financial condition.
+Added: Given the potential sophistication of these attacks, the Company may not be able to address the threat of information security or cybersecurity incidents proactively or implement adequate preventative measures and we may not be able to detect and address any such disruption or security breach promptly, or at all, which could adversely affect customers that use our products, our business, results of operations or financial condition.
Moreover, these threats could also impact our third-party partners resulting in compromise of the Company's IT systems, networks and data which could negatively affect the Company.
A breach of privacy laws or unauthorized access, loss or misuse of personal data could have a negative impact on the Company’s business or reputation.
−Removed: The Company is subject to privacy and data protection laws across the globe that impose broad compliance obligations on the collection, use, storage, access, transfer and protection of personal data.
−Removed: Breach of such requirements could result in substantial fines, penalties, private right of actions, claims and damage to our reputation and business.
−Removed: New privacy laws are expected in other territories, together with greater privacy enforcement by governmental authorities globally, particularly on data localization requirements and international data flows.
−Removed: The Company has established privacy compliance programs and controls that our businesses worldwide are required to comply with, but with many technology and data-driven initiatives being prioritized across the Company and involving multiple vendors and third parties, there are potential risks of controls imposed on cross border data flows, unauthorized access, and loss of personal data through internal and external threats that could impact our business operations and research activities.
−Removed: The Company may be unable to achieve some or all of the anticipated strategic and financial benefits following the separation of Kenvue Inc.
−Removed: (Kenvue), including with respect to the Company’s remaining ownership interest.
−Removed: The Company incurred significant expenses in connection with the Kenvue separation (the Separation).
−Removed: In addition, the Company may not be able to achieve the full strategic and financial benefits that are expected to result from the Separation.
−Removed: The anticipated benefits of the Separation were based on a number of assumptions, some of which may prove incorrect.
−Removed: The Company holds a 9.5% ownership interest in Kenvue.
−Removed: The Company cannot predict the trading price of shares of Kenvue’s common stock and the market value of the Kenvue shares are subject to market volatility and other factors outside of the Company’s control.
−Removed: The Company intends to divest its ownership interest in Kenvue, but there can be no assurance regarding the ultimate timing of such divestiture.
−Removed: Unanticipated developments could delay, prevent or otherwise adversely affect the divestiture, including but not limited to financial market conditions.
−Removed: The Separation could result in substantial tax liability.
−Removed: The Company received a private letter ruling from the IRS as to the tax-free nature of the Separation under the U.S.
−Removed: Internal Revenue Code of 1986, as amended.
−Removed: Notwithstanding the private letter ruling and opinions of tax advisors, if the IRS determines that certain steps of the transaction did not qualify for tax-free treatment for U.S.
−Removed: federal income tax purposes, the resulting tax liability to the Company and its shareholders could be substantial.
−Removed: The Separation may also not qualify for tax-free treatment in other countries around the world, and as a result may trigger substantial tax liability to the Company.
+Added: The Company is subject to privacy and data protection laws and regulations across the globe that impose broad compliance obligations on the collection, possession, use, storage, access, disclosure, transfer, deletion and protection of personal data.
+Added: Breach of the requirements of these laws and regulations could result in substantial fines, penalties, governmental actions, private right of actions, including class actions, and damage to our reputation and business.
+Added: New privacy laws are expected globally, together with greater privacy enforcement by governmental authorities globally, particularly on data localization requirements and data transfers including international data flows.
+Added: The Company has established privacy compliance programs and controls with which our businesses worldwide are required to comply.
+Added: However, with many technology and data-driven initiatives evolving across the Company, involving multiple vendors and third parties, there are threats that could impact our business operations and research activities, including potential risks of unauthorized access and loss of personal data as well as legislative actions imposing limitations and controls on the use and sharing of personal data as well as on cross border data flows.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.