What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-02-23 compared with 2022-02-24 · 832 added, 971 removed, 2033 unchanged (47% of the section changed)

8 unchanged sentences

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 23, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1C to the consolidated financial statements, the Company has elected to change its method of accounting for pension and postretirement plans in 2021 to immediately recognize actuarial gains and losses in the consolidated statements of income.

Basis for Opinion

15 unchanged sentences

Medicare, Medicaid, and performance-based contract rebates accrual

As discussed in Note 1H to the consolidated financial statements, the Company records estimated deductions for Medicare, Medicaid, and performance-based contract rebates (collectively, U.S.

As discussed in Note 1 G to the consolidated financial statements, the Company records estimated deductions for Medicare, Medicaid, and performance-based contract rebates (collectively, U.S.

rebates) as a reduction to gross product revenues.

18 unchanged sentences

As of December 31, 2022, the Company has recorded gross unrecognized tax benefits, excluding associated interest, of $4.5 billion.

We identified the evaluation of certain of the Company’s gross unrecognized tax benefits as a critical audit matter because a high degree of audit effort, including specialized skills and knowledge, and complex auditor judgment was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of its tax positions.

2022 Form 10-K 45

Report of Independent Registered Public Accounting Firm

We identified the evaluation of the Company’s gross unrecognized tax benefits as a critical audit matter because a high degree of audit effort, including specialized skills and knowledge, and complex auditor judgment was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of its tax positions.

The following are the primary procedures we performed to address this critical audit matter.

3 unchanged sentences

We tested the calculation of the liability for uncertain tax positions, including an evaluation of the Company’s assessment of the technical merits of tax positions and estimates of the amount of tax benefits expected to be sustained.

Evaluation of product and other product-related litigation

As discussed in Notes 1S and 16 to the consolidated financial statements, the Company is involved in product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others.

Evaluation of product liability and other product-related litigation

As discussed in Notes 1 S .

and 16 to the consolidated financial statements, the Company is involved in product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others.

Certain of these pending product and other product-related legal proceedings could result in losses that could be substantial.

The accrued liability and/or disclosure for the pending product and other product-related legal proceedings requires a complex series of judgments by the Company about future events, which involves a number of uncertainties.

We identified the evaluation of product and other product-related litigation as a critical audit matter.

The accrued liability and/or disclosure for the pending product liability and other product-related legal proceedings requires a complex series of judgments by the Company about future events, which involves a number of uncertainties.

We identified the evaluation of product liability and other product-related litigation as a critical audit matter.

Challenging auditor judgment was required to evaluate the Company’s judgments about future events and uncertainties.

1 unchanged sentence

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s product liability and other product-related litigation processes, including controls related to (1) the evaluation of information from external and internal legal counsel, (2) forward-looking expectations, and (3) new legal proceedings, or other legal proceedings not currently reserved or disclosed.

We read letters received directly from the Company’s external and internal legal counsel that described the Company’s probable or reasonably possible legal contingency to pending product and other product-related legal proceedings.

We inspected the Company’s minutes from meetings of the Audit Committee, which included the status of key litigation matters.

8 unchanged sentences

Year Ended December 31,

(MILLIONS, EXCEPT PER COMMON SHARE DATA) 2021 2020 2019

(MILLIONS, EXCEPT PER SHARE DATA) 2022 2021 2020

Revenues $ 100,330 $ 81,288 $ 41,651

6 unchanged sentences

11,428 10,360 8,709

Acquired in-process research and development expenses (b)

953 3,469 684

Amortization of intangible assets 3,609 3,700 3,348

Restructuring charges and certain acquisition-related costs

(Gain) on completion of Consumer Healthcare JV transaction — ( 6 ) ( 8,107 )

1,375 802 579

Other (income)/deductions––net 217 ( 4,878 ) 1,213

23 unchanged sentences

Weighted-average shares––diluted 5,733 5,708 5,632

(a) Exclusive of amortization of intangible assets, except as disclosed in Note 1M.

(a) Exclusive of amortization of intangible assets.

(b) See Note 1L .

See Accompanying Notes.

20 unchanged sentences

Reclassification adjustments related to curtailments of prior service costs and other, net ( 12 ) ( 75 ) —

Other ( 2 ) — 1

( 166 ) ( 113 ) ( 124 )

7 unchanged sentences

(a) Reclassified into Other (income)/deductions—net and Cost of sales .

See Note 7E .

(b) Reclassified into Other (income)/deductions—net .

4 unchanged sentences

As of December 31,

(MILLIONS, EXCEPT PER COMMON SHARE DATA) 2021 2020

(MILLIONS, EXCEPT PER SHARE DATA) 2022 2021

Cash and cash equivalents $ 416 $ 1,944

1 unchanged sentence

Trade accounts receivable, less allowance for doubtful accounts:

10,952 11,479

Inventories 8,981 9,059

22 unchanged sentences

Long-term debt 32,884 36,195

Pension benefit obligations 3,489 4,766

Postretirement benefit obligations 235 645

Pension and postretirement benefit obligations 2,250 3,724

Noncurrent deferred tax liabilities 1,023 349

25 unchanged sentences

Preferred Stock Common Stock Treasury Stock

(MILLIONS, EXCEPT PREFERRED SHARES) Shares Stated Value Shares Par Value Add’l

(MILLIONS, EXCEPT PREFERRED SHARES AND PER SHARE AMOUNTS) Shares Stated Value Shares Par Value Add’l

Capital Shares Cost Retained Earnings Accum.

1 unchanged sentence

Balance, January 1, 2020

431 $ 17 9,369 $ 468 $ 87,428 ( 3,835 ) $ ( 110,801 ) $ 91,397 $ ( 5,367 ) $ 63,143 $ 303 $ 63,447

Net income 9,159 9,159 36 9,195

4 unchanged sentences

Preferred stock

( 1 ) ( 1 ) ( 1 )

Noncontrolling interests

1 unchanged sentence

Share-based payment transactions 37 2 1,261 ( 6 ) ( 218 ) — 1,044 1,044

Purchases of common stock

Preferred stock conversions and redemptions (a)

( 431 ) ( 17 ) ( 15 ) 1 31 ( 1 ) ( 1 )

Preferred stock conversions and redemptions

Distribution of Upjohn Business (b)

( 1,592 ) ( 423 ) ( 2,015 ) ( 3 ) ( 2,018 )

1 unchanged sentence

Balance, December 31, 2020

— — 9,407 470 88,674 ( 3,840 ) ( 110,988 ) 90,392 ( 5,310 ) 63,238 235 63,473

Net income 21,979 21,979 45 22,025

3 unchanged sentences

( 8,816 ) ( 8,816 ) ( 8,816 )

Preferred stock

Noncontrolling interests

2 unchanged sentences

64 3 1,917 ( 11 ) ( 373 ) ( 77 ) 1,470 1,470

Preferred stock conversions and redemptions (a)

( 431 ) ( 17 ) ( 15 ) 1 31 ( 1 ) ( 1 )

Distribution of Upjohn Business (b)

( 1,592 ) ( 423 ) ( 2,015 ) ( 3 ) ( 2,018 )

Other — — — — ( 85 ) ( 85 ) ( 7 ) ( 92 )

Balance, December 31, 2021

— — 9,471 473 90,591 ( 3,851 ) ( 111,361 ) 103,394 ( 5,897 ) 77,201 262 77,462

Net income 31,372 31,372 35 31,407

3 unchanged sentences

( 9,037 ) ( 9,037 ) ( 9,037 )

Preferred stock

Noncontrolling interests

2 unchanged sentences

48 2 1,192 ( 13 ) ( 608 ) ( 73 ) 513 513

Purchases of common stock ( 39 ) ( 2,000 ) ( 2,000 ) ( 2,000 )

Other 19 — — — 19 ( 13 ) 6

Balance, December 31, 2022

— $ — 9,519 $ 476 $ 91,802 ( 3,903 ) $ ( 113,969 ) $ 125,656 $ ( 8,304 ) $ 95,661 $ 256 $ 95,916

(a) See Note 12 .

13 unchanged sentences

Asset write-offs and impairments 550 276 2,049

TCJA impact — — ( 323 )

Gain on completion of Consumer Healthcare JV transaction, net of cash conveyed (a)

— ( 6 ) ( 8,254 )

Deferred taxes from continuing operations ( 3,764 ) ( 4,293 ) ( 1,575 )

5 unchanged sentences

Inventories 592 ( 1,125 ) ( 778 )

Other assets ( 1,057 ) ( 137 ) 847

Other assets (a)

( 4,506 ) ( 1,057 ) ( 137 )

Trade accounts payable 1,191 1,242 355

12 unchanged sentences

Acquisitions of businesses, net of cash acquired ( 22,997 ) — —

Other investing activities, net (a)

( 305 ) ( 265 ) ( 223 )

Dividend received from the Consumer Healthcare JV (b)

Other investing activities, net ( 192 ) ( 305 ) ( 265 )

Net cash provided by/(used in) investing activities from continuing operations ( 15,783 ) ( 22,534 ) ( 4,162 )

4 unchanged sentences

Proceeds from short-term borrowings 3,891 — 12,352

Principal payments on short-term borrowings — ( 22,197 ) ( 8,378 )

Payments on short-term borrowings ( 3,887 ) — ( 22,197 )

Net (payments on)/proceeds from short-term borrowings with original maturities of three months or less ( 222 ) ( 96 ) ( 4,129 )

Proceeds from issuance of long-term debt 997 5,222 4,942

Principal payments on long-term debt ( 2,004 ) ( 4,003 ) ( 6,806 )

Proceeds from issuances of long-term debt — 997 5,222

Payments on long-term debt ( 3,298 ) ( 2,004 ) ( 4,003 )

Purchases of common stock ( 2,000 ) — —

8 unchanged sentences

Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents

( 1,515 ) 159 475

Cash and cash equivalents and restricted cash and cash equivalents, at beginning of period 1,983 1,825 1,350

11 unchanged sentences

Interest rate hedges 54 ( 2 ) ( 20 )

Non-cash transactions:

Non-cash transaction:

Right-of-use assets obtained in exchange for lease liabilities $ 752 $ 1,943 $ 410

32 % equity-method investment in the Consumer Healthcare JV received in exchange for contributing Pfizer’s Consumer Healthcare business (a)

(a) The $ 8.3 billion Gain on completion of Consumer Healthcare JV transaction, net of cash conveyed reflects the receipt of a 32 % equity-method investment in the new company initially valued at $ 15.7 billion in exchange for net assets contributed of $ 7.6 billion and is presented in operating activities net of $ 146 million cash conveyed that is reflected in Other investing activities, net .

(a) See Note 8A .

(b) See Note 2C .

See Accompanying Notes.

12 unchanged sentences

All significant transactions among our subsidiaries have been eliminated.

At the beginning of our fiscal fourth quarter of 2021, we reorganized our commercial operations and began to manage our commercial operations through a new global structure consisting of two operating segments, each led by a single manager:

Beginning in the fourth quarter of 2021, we reorganized our commercial operations and began to manage our commercial operations through a global structure consisting of two operating segments, each led by a single manager:

Biopharma, our innovative science-based biopharmaceutical business, and PC1, our global contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients.

Beginning in the third quarter of 2022, we made several additional organizational changes to further transform our operations to better leverage our expertise in certain areas and in anticipation of potential future new product or indication launches.

These changes include establishing a new commercial structure within Biopharma, optimizing our end-to-end R&D operations and further prioritizing our internal R&D portfolio, as well as realigning certain enabling and platform functions across the organization to ensure alignment with this new operating structure.

Biopharma is the only reportable segment.

See Note 17 .

On December 31, 2021, we completed the sale of our Meridian subsidiary, the manufacturer of EpiPen and other auto-injector products.

Prior to its sale, Meridian was managed within the Hospital therapeutic area.

Beginning in the fourth quarter of 2021, the financial results of Meridian are reflected as discontinued operations for all periods presented.

Prior to its sale, Meridian was managed within the former Hospital product portfolio.

Beginning in the fourth quarter of 2021, the financial results of Meridian were reflected as discontinued operations for all periods presented.

On December 21, 2020, Pfizer and Viatris completed the termination of a pre-existing strategic collaboration between Pfizer and Mylan for generic drugs in Japan (the Mylan-Japan collaboration) pursuant to an agreement dated November 13, 2020, and we transferred related inventories and operations that were part of the Mylan-Japan collaboration to Viatris.

1 unchanged sentence

Beginning in the fourth quarter of 2020, the financial results of the Upjohn Business and the Mylan-Japan collaboration were reflected as discontinued operations for all periods presented.

The assets and liabilities associated with Meridian and the Mylan-Japan collaboration are classified as assets and liabilities of discontinued operations as of December 31, 2020.

Upon completion of the spin-off of the Upjohn Business on November 16, 2020, the Upjohn assets and liabilities were derecognized from our consolidated balance sheet and are reflected in Retained Earnings – Distribution of Upjohn Business in the consolidated statement of equity.

1 unchanged sentence

With the separation of the Upjohn Business, the Mylan-Japan collaboration and Meridian, as well as the formation of the Consumer Healthcare JV in 2019, Pfizer transformed into a more focused, global leader in science-based innovative medicines and vaccines.

Certain prior year amounts have been reclassified to conform with the current year presentation.

In addition, other acquisitions and business development activities completed in 2022, 2021 and 2020 impacted financial results in the periods presented.

We have made certain reclassification adjustments to conform prior-period amounts to the current presentation, mainly for acquired IPR&D expenses (see Note 1L ).

Certain amounts in the consolidated financial statements and associated notes may not add due to rounding.

1 unchanged sentence

New Accounting Standard Adopted in 2022

On January 1, 2021, we adopted a new accounting standard for income tax that eliminates certain exceptions to the guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

The adoption of this guidance did not have a material impact on our consolidated financial statements.

Change in Accounting Principle

In the first quarter of 2021, we adopted a change in accounting principle to a more preferable policy under U.S.

GAAP to immediately recognize actuarial gains and losses arising from the remeasurement of our pension and postretirement plans (MTM Accounting).

Under the prior policy, we deferred recognition of these gains and losses in Accumulated other comprehensive loss .

The accumulated actuarial gains/losses outside of a “corridor” were then amortized into net periodic benefit costs over the average remaining service period or the average life expectancy of participants.

This change has been applied to all pension and postretirement plans on a retrospective basis for all prior periods presented, and as of January 1, 2019, resulted in a cumulative effect decrease to Retained earnings of $ 6.0 billion, with a corresponding offset to Accumulated other comprehensive loss .

Each time a pension or postretirement plan is remeasured, the actuarial gain or loss is recognized immediately and classified as Other (income)/deductions––net .

We believe that MTM Accounting is a more preferable policy as it provides improved transparency of results and performance, better alignment with fair value accounting principles and a better reflection of current economic and interest rate trends on plan investments and assumptions and the actuarial impact of plan remeasurements.

2021 Form 10-K 57

Notes to Consolidated Financial Statements

and Subsidiary Companies

The impacts of the adjustments on our consolidated financial statements are summarized as follows:

Year Ended December 31,

2021 2020 2019

(MILLIONS, EXCEPT PER COMMON SHARE DATA) Previous

Principle Impact of Change As Reported Previous Accounting Principle Impact of Change As Adjusted Previous Accounting Principle Impact of Change As Adjusted

Consolidated Statements of Income:

(Gain) on completion of Consumer Healthcare JV transaction $ — $ — $ — $ ( 6 ) $ — $ ( 6 ) $ ( 8,086 ) $ ( 21 ) $ ( 8,107 )

Other (income)/deductions––net ( 2,820 ) ( 2,058 ) ( 4,878 ) 672 547 1,219 3,264 233 3,497

Income from continuing operations before provision/(benefit) for taxes on income 22,253 2,058 24,311 7,584 ( 547 ) 7,036 11,533 ( 212 ) 11,321

Provision/(benefit) for taxes on income 1,399 453 1,852 496 ( 125 ) 370 631 ( 48 ) 583

Discontinued operations––net of tax ( 434 ) — ( 434 ) 2,564 ( 35 ) 2,529 5,400 ( 82 ) 5,318

Net income before allocation to noncontrolling interests 20,420 1,605 22,025 9,652 ( 457 ) 9,195 16,302 ( 246 ) 16,056

Net income attributable to Pfizer Inc.

common shareholders 20,374 1,605 21,979 9,616 ( 457 ) 9,159 16,273 ( 246 ) 16,026

Earnings per common share––basic :

Income from continuing operations attributable to Pfizer Inc.

common shareholders $ 3.71 $ 0.29 $ 4.00 $ 1.27 $ ( 0.08 ) $ 1.19 $ 1.95 $ ( 0.03 ) $ 1.92

Discontinued operations––net of tax ( 0.08 ) — ( 0.08 ) 0.46 ( 0.01 ) 0.46 0.97 ( 0.01 ) 0.95

Net income attributable to Pfizer Inc.

common shareholders 3.63 0.29 3.92 1.73 ( 0.08 ) 1.65 2.92 ( 0.04 ) 2.88

Earnings per common share––diluted :

Income from continuing operations attributable to Pfizer Inc.

common shareholders $ 3.65 $ 0.28 $ 3.93 $ 1.25 $ ( 0.07 ) $ 1.18 $ 1.92 $ ( 0.03 ) $ 1.89

Discontinued operations––net of tax ( 0.08 ) — ( 0.08 ) 0.46 ( 0.01 ) 0.45 0.95 ( 0.01 ) 0.94

Net income attributable to Pfizer Inc.

common shareholders 3.57 0.28 3.85 1.71 ( 0.08 ) 1.63 2.87 ( 0.04 ) 2.82

Year Ended December 31,

2021 2020 2019

(MILLIONS) Previous

Principle Impact of Change As Reported Previous Accounting Principle Impact of Change As Adjusted Previous Accounting Principle Impact of Change As Adjusted

Consolidated Statements of Comprehensive Income:

Foreign currency translation adjustments, net $ ( 731 ) $ 49 $ ( 682 ) $ 957 $ ( 185 ) $ 772 $ 654 $ 21 $ 675

Benefit plans:

actuarial gains/(losses), net 1,565 ( 1,565 ) — ( 1,128 ) 1,128 — ( 826 ) 826 —

Reclassification adjustments related to amortization 285 ( 285 ) — 276 ( 276 ) — 241 ( 241 ) —

Reclassification adjustments related to settlements, net 209 ( 209 ) — 278 ( 278 ) — 274 ( 274 ) —

Other 49 ( 49 ) — ( 189 ) 189 — 22 ( 22 ) —

Tax provision/(benefit) on other comprehensive income/(loss) 545 ( 475 ) 71 ( 349 ) 122 ( 227 ) 115 63 178

Consolidated Statements of Cash Flows:

Deferred taxes from continuing operations $ ( 4,746 ) $ 453 $ ( 4,293 ) $ ( 1,449 ) $ ( 125 ) $ ( 1,575 ) $ 609 $ ( 48 ) $ 561

Benefit plan contributions in excess of expense/income ( 1,065 ) ( 2,058 ) ( 3,123 ) ( 1,790 ) 547 ( 1,242 ) ( 288 ) 233 ( 55 )

Year Ended December 31,

(MILLIONS) Previous

Principle Impact of Change As Reported Previous Accounting Principle Impact of Change As Adjusted

Consolidated Balance Sheets:

Noncurrent deferred tax assets and other noncurrent tax assets $ 3,320 $ 22 $ 3,341 $ 2,383 $ — $ 2,383

Other noncurrent assets 7,679 — 7,679 4,879 — 4,879

Pension benefit obligations 3,489 — 3,489 4,766 — 4,766

Retained earnings 101,789 1,605 103,394 96,770 ( 6,378 ) 90,392

Accumulated other comprehensive loss ( 4,313 ) ( 1,583 ) ( 5,897 ) ( 11,688 ) 6,378 ( 5,310 )

2021 Form 10-K 58

Notes to Consolidated Financial Statements

and Subsidiary Companies

On January 1, 2022, we early adopted a new accounting standard for contract assets and contract liabilities acquired in a business combination.

Under the new standard, acquired contract assets and contract liabilities are required to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification 606.

This new guidance generally results in the acquirer recognizing contract assets and contract liabilities at the same amounts that were recorded by the acquiree.

Previously, these amounts were recognized by the acquirer at fair value as of the acquisition date.

We adopted this new standard on a prospective basis and there was no impact to our consolidated financial statements.

Estimates and Assumptions

10 unchanged sentences

We adjust our estimates and assumptions when facts and circumstances indicate the need for change.

2022 Form 10-K 53

Notes to Consolidated Financial Statements

and Subsidiary Companies

Our consolidated financial statements include the operations of acquired businesses after the completion of the acquisitions.

3 unchanged sentences

When we acquire net assets that do not constitute a business, as defined in U.S.

GAAP, no goodwill is recognized and acquired IPR&D is expensed in Research and development expenses .

GAAP, no goodwill is recognized and acquired IPR&D is expensed in Acquired in-process research and development expenses .

Contingent consideration in a business combination is included as part of the acquisition cost and is recognized at fair value as of the acquisition date.

23 unchanged sentences

Our procedures can include, for example, referencing other third-party pricing models, monitoring key observable inputs (like benchmark interest rates) and selectively performing test-comparisons of values with actual sales of financial instruments.

2021 Form 10-K 59

Notes to Consolidated Financial Statements

and Subsidiary Companies

Foreign Currency Translation

8 unchanged sentences

We typically determine transfer of control based on when the product is shipped or delivered and title passes to the customer.

For certain contracts, the finished product may temporarily be stored at our or our third-party subcontractors’ locations under a bill-and-hold arrangement.

Revenue is recognized on bill-and-hold arrangements at the point in time when the customer obtains control of the product and all of the following criteria have been met:

the arrangement is substantive;

the product is identified separately as belonging to the customer;

the product is ready for physical transfer to the customer;

and we do not have the ability to use the product or direct it to another customer.

In determining when the customer obtains control of the product, we consider certain indicators, including whether we have a present right to payment from

2022 Form 10-K 54

Notes to Consolidated Financial Statements

and Subsidiary Companies

the customer, whether title and/or significant risks and rewards of ownership have transferred to the customer and whether customer acceptance has been received.

Our Sales Contracts ––Sales on credit are typically under short-term contracts.

16 unchanged sentences

The following outlines our common sales arrangements:

• Customers ––Our prescription pharmaceutical products are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies.

In the U.S., we primarily sell our vaccines products directly to the federal government, CDC, wholesalers, individual provider offices, retail pharmacies, and integrated delivery networks.

• Customers ––Our prescription biopharmaceutical products, with the exception of Paxlovid, are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies.

In 2022, we principally sold Paxlovid to government agencies.

In the U.S., we primarily sell our vaccines directly to the federal government, CDC, wholesalers, individual provider offices, retail pharmacies and integrated delivery systems.

Outside the U.S., we primarily sell our vaccines to government and non-government institutions.

15 unchanged sentences

wholesalers for honoring contracted prices and legislated discounts to third parties) closely approximate actual amounts incurred, as we settle these deductions generally within two to five weeks of incurring the liability.

We recorded direct product sales and/or Alliance revenues of more than $ 1 billion for each of nine products in 2021, for each of seven products in 2020 and for each of six products in 2019.

In the aggregate, these direct products sales and/or alliance product revenues represented 75 % of our revenues in 2021, 54 % of our revenues in 2020 and 49 % of our revenues in 2019.

See Note 17B for additional information.

We recorded direct product sales and/or Alliance revenues of more than $ 1 billion for each of ten products in 2022, for each of nine products in 2021 and for each of seven products in 2020.

In the aggregate, these direct product sales and/or alliance product revenues represented 82 % of our revenues in 2022, 75 % of our revenues in 2021 and 54 % of our revenues in 2020.

See Note 17 C for additional information.

The loss or expiration of intellectual property rights can have a significant adverse effect on our revenues as our contracts with customers will generally be at lower selling prices and lower volumes due to added generic competition.

We generally provide for higher sales returns during the period in which individual markets begin to near the loss or expiration of intellectual property rights.

2021 Form 10-K 60

Notes to Consolidated Financial Statements

and Subsidiary Companies

Our accruals for Medicare, Medicaid and related state program and performance-based contract rebates, chargebacks, sales allowances and sales returns and cash discounts are as follows:

8 unchanged sentences

Total accrued rebates and other sales-related accruals $ 6,722 $ 5,850

2022 Form 10-K 55

Notes to Consolidated Financial Statements

and Subsidiary Companies

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenues .

18 unchanged sentences

Reimbursements to or from our collaboration partners for development costs are typically recorded in Research and development expenses .

Upfront payments and pre-approval milestone payments due from us to our collaboration partners in development stage collaborations are recorded as Research and development expenses .

Upfront payments and pre-approval milestone payments due from us to our collaboration partners in development stage collaborations are recorded as Acquired in-process r esearch and development expenses .

Milestone payments due from us to our collaboration partners after regulatory approval has been attained for a medicine are recorded in Identifiable intangible assets—Developed technology rights.

7 unchanged sentences

We regularly review our inventories for impairment and reserves are established when necessary.

Inventories that are not expected to be sold within 12 months are classified as Other noncurrent assets .

See Note 8 A .

Selling, Informational and Administrative Expenses

Selling, informational and administrative costs are expensed as incurred.

Among other things, these expenses include the internal and external costs of marketing, advertising, shipping and handling, information technology and legal defense.

Among other things, these expenses include the internal and external costs of marketing, advertising, shipping and handling, IT and legal defense.

Advertising expenses totaled approximately $ 2.8 billion in 2022, $ 2.0 billion in 2021 and $ 1.8 billion in 2020.

Production costs are expensed as incurred and the costs of TV, radio, and other electronic media and publications are expensed when the related advertising occurs.

2021 Form 10-K 61

Notes to Consolidated Financial Statements

and Subsidiary Companies

Research and Development Expenses

R&D costs are expensed as incurred.

These expenses include the costs of our proprietary R&D efforts, as well as costs incurred in connection with certain licensing arrangements.

Before a compound receives regulatory approval, we record upfront and milestone payments we make to third parties under licensing arrangements as expense.

These expenses include the costs of our proprietary R&D efforts, as well as R&D activities performed in connection with certain licensing arrangements.

Acquired In-Process Research and Development Expenses

Before a compound receives regulatory approval, we record upfront and milestone payments we make to third parties under licensing and collaboration arrangements as expense.

Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved.

Once a compound receives regulatory approval, we record any milestone payments in Identifiable intangible assets, less accumulated amortization and, unless the asset is determined to have an indefinite life, we typically amortize the payments on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.

In the first quarter of 2022, we began reporting acquired IPR&D expense as a separate line item in our consolidated statements of income.

Acquired in-process research and development expenses includes costs incurred in connection with (a) all upfront and milestone payments on

2022 Form 10-K 56

Notes to Consolidated Financial Statements

and Subsidiary Companies

collaboration and in-license agreements, including premiums on equity securities and (b) asset acquisitions of acquired IPR&D.

These costs were previously recorded in Research and development expenses .

Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets

9 unchanged sentences

Goodwill is not amortized.

Amortization of finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as these intangible assets benefit multiple business functions.

Amortization of intangible assets that are for a single function and depreciation of property, plant and equipment are included in Cost of sales, Selling, informational and administrative expenses and/or Research and development expenses, as appropriate.

Amortization of finite-lived acquired intangible assets is included in Amortization of intangible assets.

We review our long-lived assets for impairment indicators throughout the year.

20 unchanged sentences

If items meeting this definition are part of a larger investment pool, we classify them as Short-term investments .

2021 Form 10-K 62

Notes to Consolidated Financial Statements

and Subsidiary Companies

Cash flows for financial instruments designated as fair value or cash flow hedges may be included in operating, investing or financing activities, depending on the classification of the items being hedged.

1 unchanged sentence

Cash flows for financial instruments that do not qualify for hedge accounting treatment are classified according to their purpose and accounting nature.

2022 Form 10-K 57

Notes to Consolidated Financial Statements

and Subsidiary Companies

Investments and Derivative Financial Instruments

4 unchanged sentences

• Held-to-maturity debt securities, which are carried at amortized cost.

• Private equity securities without readily determinable fair values and where we have no significant influence are measured at cost minus any impairment and plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

• Private equity securities without readily determinable fair values and where we have no significant influence are measured at cost minus any impairment and plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

• For equity investments in common stock or in-substance common stock where we have significant influence over the financial and operating policies of the investee, we use the equity-method of accounting.

4 unchanged sentences

We regularly evaluate all of our financial assets for impairment.

For investments in debt and equity, when a decline in fair value, if any, is determined, an impairment charge is recorded and a new cost basis in the investment is established.

Derivative financial instruments are carried at fair value in various balance sheet categories (see Note 7A ), with changes in fair value reported in Net income or, for derivative financial instruments in certain qualifying hedging relationships, in Other comprehensive income/(loss) (see Note 7E ).

For investments in debt and equity, if and when a decline in fair value is determined, an impairment charge is recorded and a new cost basis in the investment is established.

For equity-method investments, an impairment charge is recorded only if and when a decline in fair value is determined to be other-than-temporary.

Derivative financial instruments are carried at fair value in certain balance sheet categories (see Note 7A ), with changes in fair value reported in net income or, for certain qualifying hedging relationships, in Other comprehensive income/(loss) (see Note 7E ).

Tax Assets and Liabilities and Income Tax Contingencies

Tax Assets and Liabilities

Current tax assets primarily include (i) tax effects for intercompany transfers of inventory within our combined group, which are recognized in the consolidated statements of income when the inventory is sold to a third party and (ii) income tax receivables that are expected to be recovered either via refunds from taxing authorities or reductions to future tax obligations.

Tax Assets and Liabilities –– Current tax assets primarily include (i) tax effects for intercompany transfers of inventory within our combined group, which are recognized in the consolidated statements of income when the inventory is sold to a third party and (ii) income tax receivables that are expected to be recovered either via refunds from taxing authorities or reductions to future tax obligations.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws.

12 unchanged sentences

For additional information, see Note 5D for uncertain tax positions and Note 5A for the repatriation tax liability and other estimates and assumptions in connection with the TCJA.

Income Tax Contingencies

We account for income tax contingencies using a benefit recognition model.

Income Tax Contingencies ––We account for income tax contingencies using a benefit recognition model.

If we consider that a tax position is more likely than not to be sustained upon audit, based solely on the technical merits of the position, we recognize all or a portion of the benefit.

We measure the benefit by determining the amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the taxing authority with full knowledge of all relevant information.

2021 Form 10-K 63

Notes to Consolidated Financial Statements

and Subsidiary Companies

We regularly monitor our position and subsequently recognize the unrecognized tax benefit:

4 unchanged sentences

Interest and penalties, if any, are recorded in Provision/(benefit) for taxes on income and are classified on our consolidated balance sheet with the related tax liability.

Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution.

2022 Form 10-K 58

Notes to Consolidated Financial Statements

and Subsidiary Companies

materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution.

Pension and Postretirement Benefit Plans

1 unchanged sentence

In the U.S., we have both IRC-qualified and supplemental (non-qualified) defined benefit plans and defined contribution plans, as well as other postretirement benefit plans consisting primarily of medical insurance for retirees and their eligible dependents.

Net periodic pension and postretirement benefit costs other than the service costs are recognized in Other (income)/deductions—net .

We immediately recognize actuarial gains and losses arising from the remeasurement of our pension and postretirement plans (MTM Accounting).

Each time a pension or postretirement plan is remeasured, the actuarial gain or loss is recognized immediately and classified as Other (income)/deductions––net .

We recognize the overfunded or underfunded status of each of our defined benefit plans as an asset or liability.

4 unchanged sentences

Plan assets are measured at fair value.

Net periodic pension and postretirement benefit costs other than the service costs are recognized in Other (income)/deductions—net .

Legal and Environmental Contingencies

We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, such as patent litigation, product liability and other product-related litigation, commercial litigation, environmental claims and proceedings, government investigations and guarantees and indemnifications.

We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, such as patent litigation, product liability and other product-related litigation, commercial and other asserted or unasserted matters, environmental claims and proceedings, government investigations and guarantees and indemnifications.

In assessing contingencies related to legal and environmental proceedings that are pending against the Company, or unasserted claims that are probable of being asserted, we record accruals for these contingencies to the extent that we conclude that a loss is both probable and reasonably estimable.

4 unchanged sentences

Our compensation programs can include share-based payments.

Generally, grants under share-based payment programs are accounted for at fair value and these fair values are generally amortized on a straight-line basis over the vesting terms with the related costs recorded in Cost of sales, Selling, informational and administrative expenses and/or Research and development expenses , as appropriate.

Generally, grants under share-based payment programs are accounted for at fair value and these fair values are generally amortized on a straight-line basis or on an accelerated attribution approach over the vesting terms with the related costs recorded in Cost of sales, Selling, informational and administrative expenses and/or Research and development expenses , as appropriate.

Acquisitions, Divestitures, Equity-Method Investments, Licensing Arrangements and Collaborative Arrangements

On November 17, 2021, we acquired all of the issued and outstanding common stock not already owned by Pfizer of Trillium, a clinical stage immuno-oncology company developing therapies targeting cancer immune evasion pathways and specific cell targeting approaches, for a price of $ 18.50 per share in cash, for total consideration of $ 2.0 billion, net of cash acquired.

GBT–– On October 5, 2022, we acquired GBT, a biopharmaceutical company dedicated to the discovery, development and delivery of life-changing treatments that provide hope to underserved patient communities, starting with sickle cell disease, for $ 68.50 per share in cash.

The total fair value of the consideration transferred was $ 5.7 billion ($ 5.2 billion, net of cash acquired).

In addition, $ 136 million in payments to GBT employees for the fair value of previously unvested long-term incentive awards was recognized as post-closing compensation expense and recorded in Restructuring charges and certain acquisition-related costs (see Note 3 ).

In connection with this business combination, we provisionally recorded:

(i) $ 4.4 billion in Identifiable intangible assets , consisting of $ 3.0 billion of IPR&D and $ 1.4 billion of developed technology rights with a useful life of six years , (ii) $ 1.1 billion of Goodwill, (iii) $ 681 million of inventories to be sold over approximately three years , (iv) $ 570 million of net deferred tax liabilities and (v) $ 331 million of assumed long-term debt that was paid in full in the fourth quarter of 2022.

The allocation of the consideration transferred to the assets acquired and liabilities assumed has not yet been finalized.

Biohaven–– On October 3, 2022, we acquired Biohaven, the maker of Nurtec ODT/Vydura (rimegepant), an innovative therapy approved for both acute treatment of migraine and prevention of episodic migraine in adults.

The transaction includes the acquisition of Biohaven’s CGRP programs, including rimegepant, zavegepant and a portfolio of five pre-clinical CGRP assets.

Under the terms of the agreement, we acquired all outstanding common shares of Biohaven not already owned by us for $ 148.50 per share, in cash, for payments of approximately $ 11.5 billion, plus repayment of third-party debt of $ 863 million and redemption of Biohaven’s redeemable preferred stock for $ 495 million.

Effective immediately prior to the closing of the acquisition, Biohaven completed the spin-off of Biohaven Ltd.

BHVN), distributing Biohaven Ltd.’s shares to Biohaven shareholders.

Biohaven Ltd.

is a new publicly traded company that retained Biohaven’s non-CGRP development stage pipeline compounds.

Pfizer, a Biohaven shareholder, received a pro rata portion of Biohaven Ltd.’s shares in the distribution and owns approximately 1.5 % of Biohaven Ltd.

as of December 31, 2022.

This acquisition follows on the November 2021 collaboration for the commercialization of rimegepant and zavegepant outside the U.S., in connection with which Pfizer acquired 2.6 % of Biohaven’s common stock (see Note 2 E ).

Biohaven Ltd.

will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the U.S.

in excess of $ 5.25 billion.

This contingent consideration was determined to have no fair value as of the acquisition date.

After the acquisition, we remain responsible for payment of high single digit to mid-teen percentage tiered royalties on world-wide net sales excluding China and low to high single digit royalties on net sales in China of rimegepant and zavegepant as well as certain regulatory approval and commercial milestone payments associated with rimegepant and zavegepant of up to $ 1.1 billion under pre-existing third-party license and other agreements.

2022 Form 10-K 59

Notes to Consolidated Financial Statements

and Subsidiary Companies

The total fair value of the consideration transferred was $ 11.8 billion, which includes the fair value of Pfizer’s previous investment in Biohaven on the acquisition date of approximately $ 300 million.

In connection with this business combination, we provisionally recorded:

(i) $ 12.1 billion in Identifiable intangible assets , consisting of $ 11.6 billion of developed technology rights with a useful life of 11 years and $ 450 million of IPR&D, (ii) $ 817 million of inventories to be sold over approximately two years , (iii) $ 797 million of Goodwill , (iv) $ 398 million of trade accounts receivable, (v) $ 1.4 billion of assumed long-term debt that was paid in full in the fourth quarter of 2022, (vi) $ 566 million of net deferred tax liabilities and (vii) $ 477 million of Other current liabilities .

The allocation of the consideration transferred to the assets acquired and liabilities assumed has not yet been finalized.

ReViral–– On June 9, 2022, we acquired ReViral, a privately held, clinical-stage biopharmaceutical company focused on discovering, developing and commercializing novel antiviral therapeutics that target respiratory syncytial virus, for a total consideration of up to $ 536 million, including upfront payments of $ 436 million upon closing (including a base payment of $ 425 million plus working capital adjustments) and an additional $ 100 million contingent upon a future development milestone.

It was subsequently determined the applicable milestone was not achieved.

We accounted for the transaction as an asset acquisition since the lead asset, sisunatovir, represented substantially all of the fair value of the gross assets acquired.

At the acquisition date, we recorded a $ 426 million charge representing an acquired IPR&D asset with no alternative use in Acquired in-process research and development expenses , which is presented as a cash outflow from operating activities.

Other assets acquired and liabilities assumed were not significant.

Arena–– On March 11, 2022, we acquired Arena, a clinical stage company, for $ 100 per share in cash.

The total fair value of the consideration transferred was $ 6.6 billion ($ 6.2 billion, net of cash acquired).

In addition, $ 138 million in payments to Arena employees for the fair value of previously unvested long-term incentive awards was recognized as post-closing compensation expense and recorded in Restructuring charges and certain acquisition-related costs (see Note 3 ).

Arena’s portfolio includes development-stage therapeutic candidates in gastroenterology, dermatology, and cardiology, including etrasimod, an oral, selective sphingosine 1-phosphate (S1P) receptor modulator currently in development for a range of immuno-inflammatory diseases including UC, Crohn’s disease, atopic dermatitis, eosinophilic esophagitis, and alopecia areata.

In connection with this business combination, we provisionally recorded:

(i) $ 5.5 billion in Identifiable intangible assets , consisting of $ 5.0 billion of IPR&D and $ 460 million of indefinite-lived licensing agreements and other, (ii) $ 1.0 billion of Goodwill and (iii) $ 506 million of net deferred tax liabilities.

The allocation of the consideration transferred to the assets acquired and the liabilities assumed has not yet been finalized.

Trillium–– On November 17, 2021, we acquired all of the issued and outstanding common stock not already owned by Pfizer of Trillium, a clinical stage immuno-oncology company developing therapies targeting cancer immune evasion pathways and specific cell targeting approaches, for $ 18.50 per share in cash, for total consideration of $ 2.0 billion, net of cash acquired.

As a result, Trillium became our wholly owned subsidiary.

2 unchanged sentences

We accounted for the transaction as an asset acquisition since the lead asset, TTI-622, represented substantially all of the fair value of the gross assets acquired, which exclude cash acquired.

At the acquisition date, we recorded a $ 2.1 billion charge representing an acquired IPR&D asset with no alternative future use in Research and development expenses , of which the $ 2.0 billion net cash consideration is presented as a cash outflow from operating activities.

At the acquisition date, we recorded a $ 2.1 billion charge representing an acquired IPR&D asset with no alternative future use in Acquired in-process research and development expenses , of which the $ 2.0 billion net cash consideration is presented as a cash outflow from operating activities.

In connection with this acquisition, we recorded $ 256 million of assets acquired primarily consisting of cash and investments.

Liabilities assumed were approximately $ 81 million.

On July 30, 2019, we acquired Array, a commercial stage biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule medicines to treat cancer and other diseases of high unmet need, for $ 48 per share in cash.

Array–– On July 30, 2019, we acquired Array, a commercial stage biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule medicines to treat cancer and other diseases of high unmet need, for $ 48 per share in cash.

The total fair value of the consideration transferred was $ 11.2 billion ($ 10.9 billion, net of cash acquired).

1 unchanged sentence

We financed the majority of the transaction with debt and the balance with existing cash.

2021 Form 10-K 64

Notes to Consolidated Financial Statements

and Subsidiary Companies

Array’s portfolio includes Braftovi (encorafenib) and Mektovi (binimetinib), a broad pipeline of targeted cancer medicines in different stages of R&D, as well as a portfolio of out-licensed medicines, which may generate milestones and royalties over time.

The final allocation of the consideration transferred to the assets acquired and the liabilities assumed was completed in 2020.

In connection with this acquisition, we recorded:

In connection with this business combination, we recorded:

(i) $ 6.3 billion in Identifiable intangible assets , consisting of $ 2.0 billion of developed technology rights with a useful life of 16 years , $ 2.8 billion of IPR&D and $ 1.5 billion of licensing agreements and other ($ 1.2 billion for technology in development –– indefinite-lived licensing agreements and $ 360 million for developed technology –– finite-lived licensing agreements with a useful life of 10 years), (ii) $ 6.1 billion of Goodwill , (iii) $ 1.1 billion of net deferred tax liabilities and (iv) $ 451 million of assumed long-term debt, which was paid in full in 2019.

1 unchanged sentence

The measurement period adjustments were recorded to better reflect market participant assumptions about facts and circumstances existing as of the acquisition date and did not have a material impact on our consolidated statement of income for the year ended December 31, 2020.

On July 1, 2019, we acquired all the remaining shares of Therachon, a privately-held clinical-stage biotechnology company focused on rare diseases, with assets in development for the treatment of achondroplasia, a genetic condition and the most common form of short-limb dwarfism, for $ 340 million upfront, plus potential milestone payments of up to $ 470 million contingent on the achievement of key milestones in the development and commercialization of the lead asset.

We accounted for the transaction as an asset acquisition since the lead asset represented substantially all the fair value of the gross assets acquired.

The total fair value of the consideration transferred for Therachon was $ 322 million, which consisted of $ 317 million of cash and our previous $ 5 million investment in Therachon.

In connection with this asset acquisition, we recorded a charge of $ 337 million in Research and development expenses.

On December 31, 2021, we completed the sale of our Meridian subsidiary for approximately $ 51 million in cash and recognized a loss of approximately $ 167 million, net of tax, in Discontinued operations––net of tax .

In connection with the sale, Pfizer and the purchaser of Meridian entered into various agreements to provide a framework for our relationship after the sale, including interim TSAs and a manufacturing supply agreement (MSA).

The TSAs primarily involve Pfizer providing services related to information technology, among other activities, and are generally expected to be for terms of no more than 12 to 18 months post sale.

Pro forma information for the aforementioned acquisitions has not been presented because these acquisitions were not material to our consolidated financial statements.

Meridian–– On December 31, 2021, we completed the sale of our Meridian subsidiary for approximately $ 51 million in cash and recognized a loss of approximately $ 167 million, net of tax, in Discontinued operations––net of tax .

In connection with the sale, Pfizer and the purchaser of Meridian entered into various agreements to provide a framework for our relationship after the sale, including interim TSAs and an MSA.

The TSAs primarily involve Pfizer providing services related to IT, among other activities, and are generally expected to be for terms of no more

2022 Form 10-K 60

Notes to Consolidated Financial Statements

and Subsidiary Companies

than 12 to 18 months post sale.

The MSA is for a term of three years post sale with a two year extension period.

No amounts were recorded under the above arrangements in 2021.

Upjohn Separation and Combination with Mylan

On November 16, 2020, we completed the spin-off and the combination of the Upjohn Business with Mylan (the Transactions) to form Viatris.

In 2022, the amounts recorded under the interim TSAs and MSA were not material to our consolidated results of operations.

No amounts were recorded under these arrangements in 2021.

Upjohn Separation and Combination with Mylan–– On November 16, 2020, we completed the spin-off and the combination of the Upjohn Business with Mylan (the Transactions) to form Viatris.

The Transactions were structured as an all-stock, Reverse Morris Trust transaction.

13 unchanged sentences

Following the Separation and Combination of the Upjohn Business with Mylan, we are no longer the obligor or guarantor of any Upjohn debt or Upjohn financing arrangements.

As a result of the spin-off of the Upjohn Business, we distributed net assets of $ 1.6 billion as of November 16, 2020, which was reflected as a reduction to Retained earnings and reflects the change in accounting principle in the first quarter of 2021 to MTM Accounting.

Of this amount, $ 412 million represents cash transferred to the Upjohn Business, with the remainder considered a non-cash activity in the consolidated statement of cash flows for the year ended December 31, 2020.

The spin-off also resulted in a net increase to Accumulated other comprehensive loss of $ 423 million for the derecognition of net gains on foreign currency translation adjustments of $ 397 million and prior service net credits associated with benefit plans of $ 26 million, which were reclassified to Retained earnings .

As a result of the separation of Upjohn, we incurred separation-related costs of $ 434 million in 2020 and $ 83 million in 2019, which are included in Discontinued operations––net of tax .

As a result of the separation of Upjohn, we incurred separation-related costs of $ 434 million in 2020, which are included in Discontinued operations––net of tax .

These costs primarily relate to professional fees for regulatory filings and separation activities within finance, tax, legal and information system functions as well as investment banking fees.

2021 Form 10-K 65

Notes to Consolidated Financial Statements

and Subsidiary Companies

In connection with the Transactions, Pfizer and Viatris entered into various agreements to effect the Separation and Combination to provide a framework for our relationship after the Combination, including a separation and distribution agreement, interim operating models, including agency arrangements, MSAs, TSAs, a tax matters agreement, and an employee matters agreement, among others.

In connection with the Transactions, Pfizer and Viatris entered into various agreements to effect the Separation and Combination and to provide a framework for our relationship after the Combination, including a separation and distribution agreement, interim operating models, including agency arrangements, MSAs, TSAs, a tax matters agreement, and an employee matters agreement, among others.

The interim agency operating model arrangements primarily include billings, collections and remittance of rebates that we are performing on a transitional basis on behalf of Viatris.

1 unchanged sentence

The terms of the MSAs range in initial duration from four to seven years post-Separation.

The TSAs primarily involve Pfizer providing services to Viatris related to finance, information technology and human resource infrastructure and are generally expected to be for terms of no more than three years post-Separation.

The TSAs primarily involve Pfizer providing services to Viatris related to finance, IT and human resource infrastructure and are generally expected to be for terms of no more than three years post-Separation.

The amounts recorded under the above agreements were not material to our consolidated results of operations in 2022, 2021 and 2020.

In addition, Pfizer and Mylan had a pre-existing arms-length commercial agreement, which is continuing with Viatris and is not material to Pfizer’s consolidated financial statements.

Net amounts due from Viatris under the above agreements were $ 53 million as of December 31, 2021 and $ 401 million as of December 31, 2020.

The cash flows associated with the above agreements are included in Net cash provided by operating activities from continuing operations, except for a $ 277 million payment to Viatris made in 2021 pursuant to terms of the separation agreement, which is reported in Other financing activities, net, and was recorded as a payable to Viatris in Other current liabilities as of December 31, 2020.

Net amounts due to Viatris under the above agreements were $ 94 million as of December 31, 2022 and net amounts due from Viatris under the above arrangements were $ 53 million as of December 31, 2021.

2022 Form 10-K 61

Notes to Consolidated Financial Statements

and Subsidiary Companies

Components of Discontinued operations––net of tax:

6 unchanged sentences

Research and development expenses — 9 224

Acquired in-process research and development expenses — — —

Amortization of intangible assets — 45 224

4 unchanged sentences

Income/(loss) from discontinued operations––net of tax ( 1 ) ( 268 ) 2,529

Pre-tax loss on sale of discontinued operations ( 211 ) — —

Benefit for taxes on income ( 44 ) — —

Loss on sale of discontinued operations––net of tax ( 167 ) — —

Pre-tax gain/(loss) on sale of discontinued operations 10 ( 211 ) —

Provision/(benefit) for taxes on income 2 ( 44 ) —

Gain/(loss) on sale of discontinued operations––net of tax 7 ( 167 ) —

Discontinued operations––net of tax $ 6 $ ( 434 ) $ 2,529

(a) In 2021, Discontinued operations—net of tax primarily includes (i) the operations of Meridian prior to its sale on December 31, 2021 recognized in Income/(loss) from discontinued operations—net of tax, which includes a pre-tax amount for a Multi-District Litigation relating to EpiPen against the Company in the U.S.

(a) In 2022, Discontinued operations—net of tax relates to post-close adjustments.

In 2021, Discontinued operations—net of tax primarily includes (i) the operations of Meridian prior to its sale on December 31, 2021 recognized in Income/(loss) from discontinued operations—net of tax, which includes a pre-tax amount to resolve a MDL relating to EpiPen against the Company in the U.S.

District Court for the District of Kansas for $ 345 million;

and (ii) the after tax loss of $ 167 million related to the sale of Meridian recognized in Loss on sale of discontinued operations––net of tax.

To a much lesser extent, Discontinued operations—net of tax in 2021 also includes the operations of the Mylan-Japan collaboration prior to its termination on December 21, 2020 and post-closing adjustments directly related to our former Upjohn and Nutrition discontinued businesses, including adjustments for tax, benefits and legal-related matters recognized in Income/(loss) from discontinued operations—net of tax.

In 2020 and 2019, Discontinued operations—net of tax relates to the operations of the Upjohn Business, Meridian and the Mylan-Japan collaboration and includes the change in accounting principle in the first quarter of 2021 to MTM Accounting.

See Note 1C .

In 2020, Discontinued operations—net of tax includes pre-tax interest expense of $ 116 million associated with the U.S.

and (ii) the after tax loss of $ 167 million related to the sale of Meridian recognized in Gain/(loss) on sale of discontinued operations––net of tax.

To a much lesser extent, Discontinued operations—net of tax in 2021 also includes the operations of the Mylan-Japan collaboration prior to its termination on December 21, 2020 and post-close adjustments directly related to our former Upjohn and Nutrition discontinued businesses, including adjustments for tax, benefits and legal-related matters recognized in Income/(loss) from discontinued operations—net of tax.

In 2020, Discontinued operations—net of tax relates to the operations of the Upjohn Business, Meridian and the Mylan-Japan collaboration and includes the impact of the 2021 MTM change in accounting principle, pre-tax interest expense of $ 116 million associated with the U.S.

dollar and Euro denominated senior unsecured notes issued by Upjohn Inc.

2 unchanged sentences

in the second quarter of 2020.

Components of assets and liabilities of discontinued operations and other assets held for sale:

As of December 31, (a)

(MILLIONS) 2021 2020

Current assets of discontinued operations and other assets held for sale–– Other current assets

Property, plant and equipment $ — $ 155

Identifiable intangible assets — 134

Other noncurrent assets — 29

Noncurrent assets of discontinued operations–– Other noncurrent assets

Current liabilities of discontinued operations–– Other current liabilities

Noncurrent liabilities of discontinued operations–– Other noncurrent liabilities

(a) Amounts as of December 31, 2021 represent property, plant and equipment held for sale.

Amounts as of December 31, 2020 primarily relate to discontinued operations of our former Meridian subsidiary and the Mylan-Japan collaboration.

2021 Form 10-K 66

Notes to Consolidated Financial Statements

and Subsidiary Companies

Equity-Method Investments

Formation of Consumer Healthcare JV

On July 31, 2019, we completed a transaction in which we and GSK combined our respective consumer healthcare businesses into a new JV that operates globally under the GSK Consumer Healthcare name.

In exchange, we received a 32 % equity stake in the new company and GSK owns the remaining 68 %.

Upon closing, we deconsolidated our Consumer Healthcare business and recognized a pre-tax gain of $ 8.1 billion ($ 5.4 billion, net of tax) in the third quarter of 2019 in (Gain) on completion of Consumer Healthcare JV transaction for the difference in the fair value of our 32 % equity stake and the carrying value of our Consumer Healthcare business.

Our financial results and our Consumer Healthcare segment’s operating results for 2019 reflect seven months of Consumer Healthcare segment domestic operations and eight months of Consumer Healthcare segment international operations.

The financial results for 2021 and 2020 do not reflect any contribution from the Consumer Healthcare business.

In valuing our investment in the Consumer Healthcare JV, we used discounted cash flow techniques.

Some of the more significant estimates and assumptions inherent in this approach include:

the amount and timing of the projected net cash flows, which include the expected impact of competitive, legal or regulatory forces on the products;

the long-term growth rate, which seeks to project the sustainable growth rate over the long term;

the discount rate, which seeks to reflect our best estimate of 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.

We are accounting for our interest in the Consumer Healthcare JV as an equity-method investment.

The carrying value of our investment in the Consumer Healthcare JV is $ 16.3 billion as of December 31, 2021 and $ 16.7 billion as of December 31, 2020 and is reported as a private equity investment in Equity-method investments as of December 31, 2021 and 2020.

The Consumer Healthcare JV is a foreign investee whose reporting currency is the U.K.

Haleon/Consumer Healthcare JV–– On July 31, 2019, we completed a transaction in which we and GSK combined our respective consumer healthcare businesses into a new JV that operated globally under the GSK Consumer Healthcare name.

In exchange for the contribution of our consumer healthcare business to the JV, we received a 32 % equity stake in the new company and GSK owned the remaining 68 %.

On July 18, 2022, GSK completed a demerger of the Consumer Healthcare JV which became Haleon, an independent, publicly traded company listed on the London Stock Exchange that holds the joint Consumer Healthcare business of GSK and Pfizer following the demerger.

We continue to own 32 % of the ordinary shares of Haleon after the demerger, and we account for our interest in Haleon/the Consumer Healthcare JV as an equity-method investment.

The carrying value of our investment in Haleon as of December 31, 2022 and in the Consumer Healthcare JV as of December 31, 2021 is $ 10.8 billion and $ 16.3 billion, respectively, and is reported in Equity-method investments .

The fair value of our investment in Haleon as of December 31, 2022, based on quoted market prices of Haleon stock, was $ 11.7 billion.

Haleon/the Consumer Healthcare JV is a foreign investee whose reporting currency is the U.K.

pound, and therefore we translate its financial statements into U.S.

dollars and recognize the impact of foreign currency translation adjustments in the carrying value of our investment and in other comprehensive income.

The decrease in the value of our investment from December 31, 2020 to December 31, 2021 is primarily due to dividends totaling $ 499 million, as well as $ 384 million in pre-tax foreign currency translation adjustments (see Note 6 ), partially offset by our share of the JV’s earnings.

We record our share of earnings from the Consumer Healthcare JV on a quarterly basis on a one-quarter lag in Other (income)/deductions––net commencing from August 1, 2019.

The decrease in the value of our investment from December 31, 2021 to December 31, 2022 is primarily due to dividends totaling approximately $ 4.5 billion, of which cash flows of $ 4.0 billion are included in Net cash provided by/(used in) investing activities and $ 584 million are included in Net cash provided by operating activities, as well as $ 1.4 billion in pre-tax foreign currency translation adjustments (see Note 6 ), partially offset by our share of Haleon/the Consumer Healthcare JV’s earnings.

We record our share of earnings from Haleon/the Consumer Healthcare JV on a quarterly basis on a one-quarter lag in Other (income)/deductions––net .

Our total share of Haleon/the Consumer Healthcare JV’s earnings generated in the fourth quarter of 2021 and the first nine months of 2022, which we recorded in our operating results in 2022, was $ 536 million.

Our total share of the JV’s earnings generated in the fourth quarter of 2020 and the first nine months of 2021, which we recorded in our operating results in 2021, was $ 495 million.

Our total share of the JV’s earnings generated in the fourth quarter of 2019 and the first nine months of 2020, which we recorded in our operating results in 2020, was $ 417 million.

Our total share of two months of the JV’s earnings generated in the third quarter of 2019, which we recorded in our operating results in the fourth quarter of 2019, was $ 47 million.

As of the July 31, 2019 closing date, we estimated that the fair value of our investment in the Consumer Healthcare JV was $ 15.7 billion and that 32 % of the underlying equity in the carrying value of the net assets of the Consumer Healthcare JV was $ 11.2 billion, resulting in an initial basis difference of approximately $ 4.5 billion.

In the fourth quarter of 2019, we preliminarily completed the allocation of the basis difference, which resulted from the excess of the initial fair value of our investment over the underlying equity in the carrying value of the net assets of the JV, primarily to inventory, definite-lived intangible assets, indefinite-lived intangible assets, related deferred tax liabilities and equity method goodwill within the investment account.

During the fourth quarter of 2019, the Consumer Healthcare JV revised the initial carrying value of the net assets of the JV and our 32 % share of the underlying equity in the carrying value of the net assets of the Consumer Healthcare JV was reduced to $ 11.0 billion and our initial basis difference was increased to $ 4.8 billion.

The adjustment was allocated to equity method goodwill within the investment account.

We began recording the amortization of basis differences allocated to inventory, definite-lived intangible assets and related deferred tax liabilities in Other (income)/deductions––net commencing August 1, 2019.

The total amortization and adjustment of basis differences resulting from the excess of the initial fair value of our investment over the underlying equity in the carrying value of the net assets of the JV is included in Other (income)/deductions––net and was not material to our results of operations in the periods presented.

As part of the initial accounting for our investment in the Consumer Healthcare JV in 2019, we determined that the difference between the initial fair value of our investment less our underlying equity in the carrying value of the net assets of the JV resulted in an initial excess basis difference of $ 4.8 billion.

We allocated the difference primarily to inventory, definite-lived intangible assets, indefinite-lived intangible assets, related deferred tax liabilities, and equity-method goodwill.

We recognize amortization of these basis differences in Other (income)/deductions––net .

Amortization of basis differences on inventory and related deferred tax liabilities was completely recognized by the second quarter of 2020.

Basis differences on definite-lived intangible assets and related deferred tax liabilities are being amortized over the lives of the underlying assets, which range from 8 to 20 years.

As a part of Pfizer in 2019, pre-tax income on a management basis for the Consumer Healthcare business was $ 654 million through July 31, 2019.

Summarized financial information for our equity method investee, the Consumer Healthcare JV, as of September 30, 2021, the most recent period available, and as of September 30, 2020 and for the periods ending September 30, 2021, 2020, and 2019 is as follows:

In 2022, our equity-method income included in Other (income)/ deductions––net also includes charges of $ 100 million, primarily for adjustments to our equity-method basis differences related to the separation of Haleon/the Consumer Healthcare JV from GSK.

The total amortization and adjustment of basis differences was not material to our results of operations in 2021 and 2020.

2022 Form 10-K 62

Notes to Consolidated Financial Statements

and Subsidiary Companies

Summarized financial information for our equity-method investee, Haleon/the Consumer Healthcare JV, as of September 30, 2022, the most recent period available, and as of September 30, 2021 and for the periods ending September 30, 2022, 2021, and 2020 is as follows:

(MILLIONS) September 30, 2022 September 30, 2021

9 unchanged sentences

Total net equity $ 18,682 $ 35,984

2021 Form 10-K 67

Notes to Consolidated Financial Statements

and Subsidiary Companies

For the Twelve Months Ending For the Two Months Ending

For the Twelve Months Ending

(MILLIONS) September 30, 2022 September 30, 2021 September 30, 2020

5 unchanged sentences

Income attributable to shareholders 1,675 1,547 1,307

Investment in ViiV

In 2009, we and GSK created ViiV, which is focused on research, development and commercialization of human immunodeficiency virus (HIV) medicines.

In connection with GSK’s previously announced planned demerger of at least 80 % of GSK’s 68 % equity interest in the Consumer Healthcare JV, in March 2022 the Consumer Healthcare JV completed its offering of a total aggregate principal amount of $ 8.75 billion in U.S.

dollar-denominated senior notes of various maturities, € 2.35 billion in euro-denominated senior notes of various maturities and £ 700 million in U.K.

pound-denominated senior notes of various maturities (collectively, the “notes”).

The notes were guaranteed by GSK generally up to and excluding the date of the demerger (the “Guarantee Assumption Date”).

We agreed to indemnify GSK for 32 % (representing our pro rata equity interest in the Consumer Healthcare JV) of any amount payable by GSK pursuant to its guarantee of the notes.

Our indemnity was provided solely for the benefit of GSK.

Neither we nor any of our subsidiaries were an issuer or guarantor of any of the notes.

Following its issuance of the notes in March 2022, which fell in our international second quarter of 2022, the Consumer Healthcare JV loaned to us and GSK the net proceeds received from the notes on a pro rata equity ownership basis, for which we received a loan of £ 2.9 billion ($ 3.7 billion as of the end of our second quarter of 2022), at an interest rate of 1.365 % per annum payable semi-annually in arrears.

In conjunction with the demerger, we received £ 3.5 billion ($ 4.2 billion) in dividends from the JV in July 2022, of which $ 4.0 billion related to a one-time pre-separation dividend, which decreased the carrying value of our investment (as discussed above).

Simultaneous with the receipt of the dividends, we repaid the £ 2.9 billion loan from the JV.

GSK similarly received pro rata dividends and simultaneously repaid its pro rata loan from the JV.

In conjunction with these transactions, our indemnification of GSK’s guarantee discussed above was terminated.

Investment in ViiV–– In 2009, we and GSK created ViiV, which is focused on research, development and commercialization of human immunodeficiency virus (HIV) medicines.

We own approximately 11.7 % of ViiV, and prior to 2016 we accounted for our investment under the equity method due to the significant influence that we have over the operations of ViiV through our board representation and minority veto rights.

We suspended application of the equity method to our investment in ViiV in 2016 when the carrying value of our investment was reduced to zero due to the recognition of cumulative equity-method losses and dividends, and therefore we no longer record our proportionate share of ViiV’s net income (loss) in our results of operations.

Since 2016, we have recognized dividends from ViiV as income in Other (income)/deductions––net when earned, including dividends of $ 314 million in 2022, $ 166 million in 2021 and $ 278 million in 2020 (see Note 4 ).

10 unchanged sentences

Total net equity/(deficit) attributable to shareholders $ ( 2,720 ) $ ( 2,862 )

2022 Form 10-K 63

Notes to Consolidated Financial Statements

and Subsidiary Companies

Year Ended December 31,

7 unchanged sentences

Licensing Arrangements

Agreement with Valneva

On April 30, 2020, we signed an agreement to co-develop and commercialize Valneva’s Lyme disease vaccine candidate, VLA15, which covers six serotypes that are prevalent in North America and Europe.

Agreement with Valneva–– On April 30, 2020, we signed an agreement to co-develop and commercialize Valneva’s Lyme disease vaccine candidate, VLA15, which covers six serotypes that are prevalent in North America and Europe.

Valneva and Pfizer will work closely together throughout the development of VLA15.

Valneva is eligible to receive a total of up to $ 308 million in cash payments from us consisting of a $ 130 million upfront payment, which was paid and recorded in Research and development expenses in our second quarter of 2020, as well as $ 35 million in development milestones and $ 143 million in early commercialization milestones.

Under the terms of the agreement, Valneva will fund 30 % of all development costs through completion of the development program, and in return we will pay Valneva tiered royalties.

Valneva is eligible to receive a total of up to $ 308 million in cash payments from us consisting of a $ 130 million upfront payment, which was paid and recorded in Acquired in-process research and development expenses in our second quarter of 2020, as well as $ 35 million in development milestones which were paid and recorded in Acquired in-process research and development expenses in 2021 and 2022, and $ 143 million in early commercialization milestones which remain unpaid.

Under the terms of the agreement, Valneva was to fund 30 % of all development costs through completion of the development program, and in return we were to pay Valneva tiered royalties.

We will lead late-stage development and have sole control over commercialization.

Agreement with Akcea

On October 4, 2019, we entered into a worldwide exclusive licensing agreement for AKCEA-ANGPTL3-LRx, an investigational antisense therapy being developed to treat patients with certain cardiovascular and metabolic diseases, with Akcea, a wholly-owned subsidiary of Ionis.

The transaction closed in November 2019 and we made an upfront payment of $ 250 million to Akcea, which was recorded in Research and development expenses in our fourth quarter of 2019.

On January 31, 2022, we and Ionis announced the discontinuation of the Pfizer-led clinical development program for the licensed product and that we would be returning the rights to the licensed product to Ionis.

2021 Form 10-K 68

Notes to Consolidated Financial Statements

and Subsidiary Companies

In June 2022, we entered into an Equity Subscription Agreement, under which we invested € 90.5 million ($ 95 million) in Valneva to further support our strategic Lyme arrangement.

In addition, we updated the terms of our existing agreement for VLA15.

Valneva will now fund 40 % of the remaining shared development costs, and we will pay Valneva tiered royalties ranging from 14 % to 22 %, compared to royalties starting at 19 % in the initial agreement.

In addition, the royalties will be complemented by up to $ 100 million in milestones payable to Valneva based on cumulative sales.

Other early commercialization milestones are unchanged.

As of December 31, 2022, we held a 6.9 % equity stake of Valneva.

Collaborative Arrangements

3 unchanged sentences

For example, we have agreements to co-promote pharmaceutical products discovered by us or other companies, and we have agreements where we partner to co-develop and/or participate together in commercializing, marketing, promoting, manufacturing and/or distributing a drug product.

Collaboration with Beam

On December 24, 2021, we entered into a multi-year research collaboration with Beam to utilize Beam’s in vivo base editing programs, which use mRNA and lipid nanoparticles, for three targets for rare genetic diseases of the liver, muscle and central nervous system.

Collaboration with Biohaven–– In November 2021, we entered into a collaboration and license agreement and related sublicense agreement with Biohaven and certain of its subsidiaries to commercialize rimegepant and zavegepant for the treatment and prevention of migraines outside of the U.S., subject to regulatory approval.

Under the terms of the agreement, Biohaven would lead R&D globally and we would have the exclusive right to commercialization globally, outside of the U.S.

Upon the closing of the transaction on January 4, 2022, we paid Biohaven $ 500 million, including an upfront payment of $ 150 million and an equity investment of $ 350 million.

We recognized $ 263 million for the upfront payment and premium paid on our equity investment in Acquired in-process research and development expenses .

In October 2022, we acquired all outstanding common shares of Biohaven not already owned by us for $ 148.50 per share, in cash, for payments of approximately $ 11.5 billion.

See Note 2A .

This acquisition represented a settlement of the pre-existing relationship, and we determined that no gain or loss was required to be recognized.

Collaborations with BioNTech–– On December 30, 2021, we entered into a research, development and commercialization agreement to develop a potential first mRNA-based vaccine for the prevention of shingles (herpes zoster virus) based on BioNTech’s proprietary mRNA technology and our antigen technology.

Under the terms of the agreement, we agreed to pay BioNTech $ 225 million, including an upfront cash payment of $ 75 million and an equity investment of $ 150 million.

BioNTech is eligible to receive future regulatory and sales milestone payments of up to $ 200 million.

In return, BioNTech agreed to pay us $ 25 million for our proprietary antigen technology.

The net upfront payment to BioNTech was recorded to Acquired in-process research and development expenses in our fourth quarter of 2021.

We and BioNTech share development costs.

We will have commercialization rights to the potential vaccine worldwide, excluding Germany, Turkey and certain developing countries where BioNTech will have commercialization rights.

We and BioNTech will share gross profits from commercialization of any product.

On April 9, 2020, we signed a global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection, which resulted in the development of Comirnaty.

In connection with the April 2020 agreement, we made an upfront cash payment of $ 72 million and an equity investment in the common stock of BioNTech of $ 113 million.

We recognized $ 98 million for the upfront payment and a premium paid on the equity investment in Acquired in-process research and development expenses in our second quarter of 2020.

BioNTech became eligible to receive potential milestone payments of up to $ 563 million for a total consideration of $ 748 million.

Under the terms of this agreement, we and BioNTech share gross profits and development costs equally after approval and successful commercialization of the vaccine, and we were responsible for all of the development costs until commercialization of the vaccine.

Thereafter, BioNTech was to repay us its 50 percent share of these development costs through reductions in gross profit sharing and milestone payments to BioNTech over time.

On January 29, 2021, we and BioNTech signed an amended version of the April 2020 agreement.

Under the January 2021 agreement, BioNTech paid us their 50 percent share of prior development costs in a lump sum payment during the first quarter of 2021.

Further R&D costs are being shared equally.

We have commercialization rights to the vaccine worldwide, excluding Germany and Turkey where BioNTech markets and distributes the vaccine under the agreement with us, and excluding China, Hong Kong, Macau and Taiwan, which are subject to a separate collaboration between BioNTech and Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

2022 Form 10-K 64

Notes to Consolidated Financial Statements

and Subsidiary Companies

Revenues and Cost of sales on a gross basis in markets where we are commercializing the vaccine and we record our share of gross profits related to sales of the vaccine by BioNTech in Germany and Turkey in Alliance revenues.

We made an additional investment of $ 50 million in common stock of BioNTech as part of an underwritten equity offering by BioNTech, which closed in July 2020.

As of December 31, 2022, we held an equity stake of 2.7 % of BioNTech.

Collaboration with Beam–– On December 24, 2021, we entered into a multi-year research collaboration with Beam to utilize Beam’s in vivo base editing programs, which use mRNA and lipid nanoparticles, for three targets for rare genetic diseases of the liver, muscle and central nervous system.

Under the terms of the agreement, Beam conducts all research activities through development candidate selection for three undisclosed targets, which are not included in Beam’s existing programs, and we may opt in to obtain exclusive licenses to each development candidate.

Beam has a right to opt in, at the end of phase 1/2 studies, upon the payment by Beam of an option exercise fee, to a global co-development and co-commercialization agreement with respect to one program licensed under the collaboration pursuant to which we and Beam would share net profits as well as development and commercialization costs in a 65 %/ 35 % ratio (Pfizer/Beam).

Upon entering into the agreement, we recorded $ 300 million in Research and development expenses in the fourth quarter of 2021 for an upfront payment due to Beam, and if we exercise our opt in to licenses for all three targets, Beam would be eligible for up to an additional $ 1.05 billion in development, regulatory and commercial milestone payments for a potential total deal consideration of up to $ 1.35 billion.

Upon entering into the agreement, we recorded $ 300 million in Acquired in-process research and development expenses in the fourth quarter of 2021 for an upfront payment due to Beam, and if we exercise our opt in to licenses for all three targets, Beam will be eligible for up to an additional $ 1.05 billion in development, regulatory and commercial milestone payments for a potential total deal consideration of up to $ 1.35 billion.

Beam is also eligible to receive royalties on global net sales for each licensed program.

Collaboration with Arvinas

On July 21, 2021, we entered into a global collaboration with Arvinas to develop and commercialize ARV-471, an investigational oral PROTAC ® (PROteolysis TArgeting Chimera) estrogen receptor protein degrader.

Collaboration with Arvinas–– On July 21, 2021, we entered into a global collaboration with Arvinas to develop and commercialize ARV-471, an investigational oral PROTAC ® (PROteolysis TArgeting Chimera) estrogen receptor protein degrader.

The estrogen receptor is a well-known disease driver in most breast cancers.

In connection with the agreement, we made an upfront cash payment of $ 650 million to Arvinas and we made a $ 350 million equity investment in the common stock of Arvinas.

We recognized $ 706 million for the upfront payment and a premium paid on our equity investment in Research and development expenses in our third quarter of 2021.

We recognized $ 706 million for the upfront payment and a premium paid on our equity investment in Acquired in-process research and development expenses in our third quarter of 2021.

Arvinas is also eligible to receive up to $ 400 million in approval milestones and up to $ 1 billion in commercial milestones.

1 unchanged sentence

As of December 31, 2022, we held a 6.5 % equity stake of Arvinas.

Collaboration with Myovant

On December 26, 2020, we entered into a collaboration with Myovant to jointly develop and commercialize Orgovyx (relugolix) in advanced prostate cancer and Myfembree (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg) in women’s health in the U.S.

Collaboration with Myovant–– On December 26, 2020, we entered into a collaboration with Myovant to jointly develop and commercialize Orgovyx (relugolix) in advanced prostate cancer and Myfembree (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg) in women’s health in the U.S.

We also received an exclusive option to commercialize relugolix in oncology outside the U.S.

and Canada, excluding certain Asian countries, which we declined to exercise.

Under the terms of the agreement, the companies will equally share profits and allowable expenses for Orgovyx and Myfembree in the U.S.

and Canada, with Myovant bearing our share of allowable expenses up to a maximum of $ 100 million in 2021 and up to a maximum of $ 50 million in 2022.

Under the terms of the agreement, the companies equally share profits and allowable expenses in the U.S.

for Orgovyx, and in the U.S.

and Canada for Myfembree, with Myovant bearing our share of allowable expenses up to a maximum of $ 100 million in 2021 and up to a maximum of $ 50 million in 2022.

Pfizer does not have rights outside of these markets.

We record our share of gross profits as Alliance revenue.

Myovant remains responsible for regulatory interactions and drug supply and continues to lead clinical development for Myfembree.

Myovant is entitled to receive up to $ 4.35 billion, including an upfront payment of $ 650 million, which was made in December 2020, $ 200 million in potential regulatory milestones for FDA approvals for Myfembree in women’s health, of which $ 100 million was paid to Myovant in July 2021 and recognized as Identifiable intangible assets—Developed technology rights , and tiered sales milestones of up to $ 3.5 billion in total for prostate cancer and for the combined women’s health indications.

In connection with this transaction, in 2020 we recognized $ 499 million in Identifiable intangible assets––Developed technology rights and $ 151 million in Research and development expenses representing the relative fair value of the portion of the upfront payment allocated to the approved indication and unapproved indications of the product, respectively.

Collaboration with CStone

On September 29, 2020, we entered into a strategic collaboration with CStone to address oncological needs in China.

Myovant is entitled to receive up to $ 4.35 billion, including an upfront payment of $ 650 million, which was made in December 2020, $ 200 million in potential regulatory milestones for FDA approvals for Myfembree in women’s health, all of which has been paid to Myovant as of December 31, 2022 and recognized as Identifiable intangible assets—Developed technology rights, and tiered sales milestones of up to $ 3.5 billion in total for prostate cancer and for the combined women’s health indications for which commercial sales have commenced.

In connection with this transaction, in 2020 we recognized $ 499 million in Identifiable intangible assets––Developed technology rights and $ 151 million in Acquired in-process research and development expenses representing the relative fair value of the portion of the upfront payment allocated to the approved indication and unapproved indications of the product, respectively.

Collaboration with CStone–– On September 29, 2020, we entered into a strategic collaboration with CStone to address oncological needs in China.

The collaboration encompasses our $ 200 million upfront equity investment in CStone, the development and commercialization of CStone’s sugemalimab (CS1001, PD-L1 antibody) in mainland China, and a framework between the companies to bring additional oncology assets to the Greater China market.

1 unchanged sentence

As of December 31, 2022, we held a 9.7 % equity stake of CStone.

Collaborations with BioNTech

On December 30, 2021, we entered into a new research, development and commercialization agreement to develop a potential first mRNA-based vaccine for the prevention of shingles (herpes zoster virus) based on BioNTech’s proprietary mRNA technology and our antigen technology.

Under the terms of the agreement, we agreed to pay BioNTech $ 225 million, including an upfront cash payment of $ 75 million and an equity investment of $ 150 million.

BioNTech is eligible to receive future regulatory and sales milestone payments of up to $ 200 million.

In return, BioNTech agreed to pay us $ 25 million for our proprietary antigen technology.

The net upfront payment to BioNTech was recorded to Research and development expenses in our fourth quarter of 2021.

We and BioNTech will share development costs.

We will have commercialization rights to the potential vaccine worldwide, excluding Germany, Turkey and certain developing countries where BioNTech will have commercialization rights.

We and BioNTech will share gross profits from commercialization of any product.

On April 9, 2020, we signed a global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program, BNT162b2, aimed at preventing COVID-19 infection.

In connection with the April 2020 agreement, we made an upfront cash payment of $ 72 million and an equity investment in the common stock of BioNTech of $ 113 million.

We recognized $ 98 million for the upfront payment and a premium paid on the equity investment in Research and development expenses in our second quarter of 2020.

BioNTech became eligible to receive potential milestone payments of up to $ 563 million for a total consideration of $ 748 million.

Under the terms of this agreement, we and BioNTech share gross profits and development costs equally after approval and successful commercialization of the vaccine, and we were responsible for all of

2021 Form 10-K 69

Notes to Consolidated Financial Statements

and Subsidiary Companies

the development costs until commercialization of the vaccine.

Thereafter, BioNTech was to repay us its 50 percent share of these development costs through reductions in gross profit sharing and milestone payments to BioNTech over time.

On January 29, 2021, we and BioNTech signed an amended version of the April 2020 agreement.

Under the January 2021 agreement, BioNTech paid us their 50 percent share of prior development costs in a lump sum payment during the first quarter of 2021.

Further R&D costs are being shared equally.

We recognize Revenues and Cost of sales on a gross basis in markets where we are commercializing the vaccine and we record our share of gross profits related to sales of the vaccine by BioNTech in Germany and Turkey in Alliance revenues.

We made an additional investment of $ 50 million in common stock of BioNTech as part of an underwritten equity offering by BioNTech, which closed in July 2020.

As of December 31, 2021, we held an equity stake of 2.5 % of BioNTech.

Summarized Financial Information for Collaborative Arrangements

13 unchanged sentences

272 314 ( 14 )

Other income/(deductions)—net (f)

Acquired in-process research and development expenses (f)

( 339 ) ( 1,056 ) ( 179 )

Other income/(deductions)—net (g)

(a) Represents sales to our partners of products manufactured by us.

(b) Substantially all relates to amounts earned from our partners under co-promotion agreements.

The increase in 2021 reflects increases in alliance revenues from Comirnaty, Eliquis and Xtandi, while the increase in 2020 reflects increases in alliance revenues from Eliquis and Xtandi.

The increase in 2022 reflects increases in Alliance revenues from Eliquis, Comirnaty and Bavencio, while the increase in 2021 reflects increases in Alliance revenues from Comirnaty, Eliquis and Xtandi.

(c) Primarily relates to amounts paid to collaboration partners for their share of net sales or profits earned in collaboration arrangements where we are the principal in the transaction, and cost of sales for inventory purchased from our partners.

The increase in 2021 is primarily related to Comirnaty.

The decrease in 2022, as well as the increase in 2021, primarily relate to Comirnaty.

(d) Represents net reimbursements to our partners for selling, informational and administrative expenses incurred.

(e) Primarily relates to upfront payments and pre-approval milestone payments earned by our partners as well as net reimbursements.

(f) Primarily relates to royalties from our collaboration partners.

The amounts outlined in the above table do not include transactions with third parties other than our collaboration partners, or other costs for the products under the collaborative arrangements.

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

In 2019, we substantially completed several multi-year initiatives focused on positioning us for future growth and creating a simpler, more efficient operating structure within each business.

Transforming to a More Focused Company Program

With the formation of the Consumer Healthcare JV in 2019 and the spin-off of our Upjohn Business in the fourth quarter of 2020, Pfizer has transformed into a more focused, global leader in science-based innovative medicines and vaccines.

We have undertaken efforts to ensure our cost base and support model align appropriately with our new operating structure.

While certain direct costs transferred to the Consumer Healthcare JV and to the Upjohn Business in connection with the spin-off, there are indirect costs which did not transfer.

This program is primarily composed of the following three initiatives:

• We are taking steps to restructure our corporate enabling functions to appropriately support our business, R&D and PGS platform functions.

We expect costs, primarily related to restructuring our corporate enabling functions, to total $ 1.6 billion, with substantially all costs to be cash expenditures.

Actions include, among others, changes in location of certain activities, expanded use and co-location of centers of excellence and shared services, and increased use of digital technologies.

The associated actions and the specific costs will primarily include severance and benefit plan impacts, exit costs as well as associated implementation costs.

• In addition, we are transforming our commercial go-to market model in the way we engage patients and physicians.

We expect costs of $ 1.1 billion, with substantially all costs to be cash expenditures.

Actions include, among others, centralization of certain activities and enhanced use of digital technologies.

The costs for this effort primarily include severance and associated implementation costs.

• We are also optimizing our manufacturing network under this program and incurring one-time costs for cost-reduction initiatives related to our manufacturing operations.

We expect to incur costs of $ 800 million, with approximately 25 % of the costs to be non-cash.

The costs for this effort include, among other things, severance costs, implementation costs, product transfer costs, site exit costs, as well as accelerated depreciation.

The program costs discussed above are expected to be incurred primarily from 2020 through 2022, and may be rounded and represent approximations.

From the start of this program in the fourth quarter of 2019 through December 31, 2021, we incurred costs of $ 2.2 billion, of which $ 856 million is associated with Biopharma ($ 712 million in 2021, $ 79 million in 2020 and $ 64 million in 2019).

(e) Represents net reimbursements (to)/from our partners for research and development expenses incurred.

2022 Form 10-K 65

1 unchanged sentence

and Subsidiary Companies

(f) Primarily relates to upfront payments to our partners as well as premiums paid on our equity investments in the common stock of our partners.

(g) Primarily relates to royalties from our collaboration partners.

The amounts outlined in the above table do not include transactions with third parties other than our collaboration partners, or other costs for the products under the collaborative arrangements.

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

Transforming to a More Focused Company Program

With the formation of the Consumer Healthcare JV in 2019 and the spin-off of our former Upjohn Business in the fourth quarter of 2020, Pfizer transformed into a more focused, global leader in science-based innovative medicines and vaccines.

We took efforts to ensure our cost base and support model aligned appropriately with our operating structure.

While certain direct costs transferred to the Consumer Healthcare JV in 2019, and to the Upjohn Business in connection with the spin-off, there are indirect costs which did not transfer.

This program is primarily composed of the following initiatives:

• We took steps to restructure our corporate enabling functions to appropriately support our business, R&D and PGS platform functions.

Actions included, among others, changes in location of certain activities, expanded use and co-location of centers of excellence and shared services, and increased use of digital technologies.

The associated actions and the specific costs primarily included severance and benefit plan impacts, exit costs as well as associated implementation costs.

• In addition, we transformed our commercial go-to market model in the way we engage patients and physicians.

We also made several organizational changes in the third quarter of 2022 to further transform our operations to better leverage our expertise in certain areas and in anticipation of potential future new product or indication launches (see Note 1A ).

Actions included, among others, centralization of certain activities and enhanced use of digital technologies.

The costs for this effort primarily included severance and associated implementation costs.

• We also optimized our manufacturing network under this program and incurred one-time costs for cost-reduction initiatives related to our manufacturing operations.

The costs for this effort included, among other things, severance costs, implementation costs, product transfer costs, site exit costs, as well as accelerated depreciation.

• In the fourth quarter of 2022, we began taking steps to optimize our end-to-end R&D operations to reduce costs and cycle times as well as to further prioritize our internal R&D portfolio in areas where our capabilities are differentiated while increasing external innovation efforts to leverage an expanding and productive biotech sector.

Actions include leveraging automation and digital capabilities, novel clinical development approaches and capabilities, and externalization of select assets and R&D units.

We expect costs for this effort of $ 500 million to be incurred primarily through 2023, with costs to primarily represent cash expenditures.

The costs for this effort primarily include severance costs and associated implementation costs.

From the start of this program in the fourth quarter of 2019 through December 31, 2022, we incurred costs of $ 3.5 billion, of which $ 1.4 billion ($ 1.0 billion of restructuring charges) is associated with Biopharma.

We have incurred approximately 85 % of total expected costs to date, and we expect the remaining costs to be substantially incurred through 2023.

Key Activities

In 2021 and 2020, we incurred costs of $ 1.3 billion and $ 838 million, respectively, composed primarily of the Transforming to a More Focused Company program.

In 2019, we incurred costs of $ 820 million composed of $ 548 million for the 2017-2019 and Organizing for Growth initiatives, $ 288 million for the integration of Array, $ 94 million for the integration of Hospira, and $ 87 million for the Transforming to a More Focused Company program, partially offset by income of $ 197 million, primarily due to the reversal of certain accruals upon the effective favorable settlement of an IRS audit for multiple tax years and other acquisition-related initiatives.

The following summarizes acquisitions and cost-reduction/productivity initiatives costs and credits:

9 unchanged sentences

Restructuring charges and certain acquisition-related costs

Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net (d)

Additional depreciation––asset restructuring recorded in our consolidated statements of income as follows (e) :

1,375 802 579

Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net

( 9 ) ( 63 ) 3

Additional depreciation––asset restructuring recorded in our consolidated statements of income as follows (d) :

Cost of sales 34 63 21

2 unchanged sentences

Total additional depreciation––asset restructuring

Implementation costs recorded in our consolidated statements of income as follows (f) :

Implementation costs recorded in our consolidated statements of income as follows (e) :

Cost of sales 54 45 40

3 unchanged sentences

Total costs associated with acquisitions and cost-reduction/productivity initiatives $ 2,018 $ 1,298 $ 838

(a) Represents acquisition-related costs ($ 9 million credit in 2021 and $ 192 million credit in 2019) and cost reduction initiatives ($ 750 million charge in 2021, $ 535 million charge in 2020, and $ 418 million charge in 2019).

2021 and 2020 charges mainly represent employee termination costs for our Transforming to a More Focused Company cost-reduction program.

2019 restructuring charges mainly represent employee termination costs for cost-reduction and productivity initiatives, partially offset by the reversal of certain accruals related to our acquisition of Wyeth upon the effective favorable settlement of an IRS audit for multiple tax years (see Note 5B ).

The employee termination costs for 2019 were primarily for our improvements to operational effectiveness as part of the realignment of our business structure, and also included employee termination costs for the Transforming to a More Focused Company cost-reduction program.

2022 Form 10-K 66

Notes to Consolidated Financial Statements

and Subsidiary Companies

(a) Primarily represents cost reduction initiatives.

Restructuring charges/(credits) associated with Biopharma:

($ 354 million charge in 2022, $ 610 million charge in 2021, and $ 71 million charge in 2020).

(b) Represents external costs for banking, legal, accounting and other similar services.

(c) Represents external, incremental costs directly related to integrating acquired businesses, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs.

2022 costs mostly related to our acquisitions of Arena and GBT, including $ 138 million in payments to Arena employees in the first quarter of 2022 and $ 136 million in payments to GBT employees in the fourth quarter of 2022 for the fair value of previously unvested long-term incentive awards that was recognized as post-closing compensation expense.

See Note 2A .

2021 costs primarily related to our acquisition of Trillium.

2020 costs primarily related to our acquisition of Array.

2019 costs mainly related to our acquisitions of Array, including $ 157 million in payments to Array employees for the fair value of previously unvested stock options that was recognized as post-closing compensation expense (see Note 2A ), and Hospira.

(d) Amounts include the impact of a change in accounting principle.

(e) Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

(f) Represents external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.

(d) Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

(e) Represents external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.

The following summarizes the components and changes in restructuring accruals:

7 unchanged sentences

Balance, December 31, 2021 (b)

1,014 — 57 1,071

Provision 776 52 54 882

6 unchanged sentences

2021 Form 10-K 71

Notes to Consolidated Financial Statements

and Subsidiary Companies

Other (Income)/Deductions—Net

13 unchanged sentences

( 188 ) ( 396 ) ( 326 )

Net periodic benefit costs/(credits) other than service costs (d)

( 2,547 ) 311 305

Certain legal matters, net (e)

Certain asset impairments (f)

86 1,691 2,792

Business and legal entity alignment costs (g)

Consumer Healthcare JV equity method (income)/loss (h)

Net periodic benefit costs/(credits) other than service costs ( 849 ) ( 2,547 ) 311

Certain legal matters, net (d)

Certain asset impairments (e)

Haleon/Consumer Healthcare JV equity method (income)/loss (f)

( 436 ) ( 471 ) ( 298 )

Other, net (i)

Other, net (g)

( 378 ) ( 687 ) ( 497 )

2 unchanged sentences

(a) Capitalized interest totaled $ 124 million in 2022, $ 108 million in 2021 and $ 96 million in 2020.

(b) 2021 gains include, among other things, unrealized gains of $ 1.6 billion related to investments in BioNTech and Cerevel.

(b) 2022 losses include, among other things, unrealized losses of $ 986 million related to investments in BioNTech, Allogene Therapeutics, Inc.

2021 gains included, among other things, unrealized gains of $ 1.6 billion related to investments in BioNTech and Cerevel Therapeutics Holdings, Inc.

2020 gains included, among other things, unrealized gains of $ 405 million related to investments in BioNTech and SpringWorks Therapeutics, Inc.

(SpringWorks).

2019 gains included, among other things, unrealized gains of $ 295 million related to investments in Cortexyme, Inc.

and SpringWorks.

2020 included, among other things, (i) a $ 75 million upfront payment received from our sale of our CK1 assets to Biogen, (ii) $ 40 million of milestone income from Puma Biotechnology, Inc.

related to Neratinib regulatory approvals in the EU, (iii) $ 30 million of milestone income from Lilly related to the first commercial sale in the U.S.

of LOXO-292 for the treatment of RET fusion-positive NSCLC and (iv) $ 108 million in milestone income from multiple licensees.

2019 included, among other things, $ 78 million in milestone income from Mylan Pharmaceuticals Inc.

related to the FDA’s approval and launch of Wixela Inhub ® , a generic of Advair Diskus ® (fluticasone propionate and salmeterol inhalation powder) and $ 52 million in milestone income from multiple licensees.

(d) Amounts include the impact of a change in accounting principle.

See Notes 1C and 11 .

In 2019, other non-service cost components’ activity related to the Consumer Healthcare JV transaction, such as gain on settlements, were recorded in (Gain) on completion of Consumer Healthcare JV transaction.

(e) Includes legal reserves for certain pending legal matters.

(f) 2020 represents intangible asset impairment charges associated with our Biopharma segment:

(i) $ 900 million related to IPR&D assets for unapproved indications of certain cancer medicines, acquired in our Array acquisition, and reflected, among other things, updated commercial forecasts;

(ii) $ 528 million related to Eucrisa, a finite-lived developed technology right acquired in our Anacor acquisition, and reflected updated commercial forecasts mainly reflecting competitive pressures;

and (iii) $ 263 million related to finite-lived developed technology rights for certain generic sterile injectables acquired in our Hospira acquisition, and reflected updated commercial forecasts mainly reflecting competitive pressures.

2019 primarily included intangible asset impairment charges of $ 2.8 billion, mainly composed of $ 2.6 billion, related to Eucrisa, and reflected updated commercial forecasts mainly reflecting competitive pressures.

(g) Mainly represents incremental costs for the design, planning and implementation of our then new business structure, effective in the beginning of 2019, and primarily includes consulting, legal, tax and other advisory services.

(h) See Note 2C .

(i) 2021 includes, among other things, (i) income net of costs associated with TSAs of $ 288 million;

(ii) dividend income of $ 166 million from our investment in ViiV and (iii) charges of $ 142 million, reflecting the change in the fair value of contingent consideration.

2020 included, among other things, (i) dividend income of $ 278 million from our investment in ViiV;

(ii) income net of costs associated with TSAs of $ 114 million and (iii) charges of $ 105 million, reflecting the change in the fair value of contingent consideration.

2019 included, among other things, (i) dividend income of $ 220 million from our investment in ViiV;

(ii) charges of $ 152 million for external incremental costs, such as transaction costs and costs to separate our Consumer Healthcare business into a separate legal entity, associated with the formation of the Consumer Healthcare JV;

and (iii) net losses on early retirement of debt of $ 138 million.

2021 included, among other things, $ 188 million of net collaboration income from BioNTech related to Comirnaty and $ 97 million of milestone income from multiple licensees.

2020 included, among other things, (i) $ 178 million in milestone income from multiple licensees and (ii) a $ 75 million upfront payment received from our sale of our CK1 assets to Biogen Inc.

(d) 2022 primarily includes certain product liability and other expenses related to products discontinued and/or divested by Pfizer.

2021 primarily includes certain product liability expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition commitments.

(e) 2022 primarily includes intangible asset impairment charges of:

(i) $ 200 million associated with our Biopharma segment, representing an IPR&D asset for the unapproved indication of symptomatic dilated cardiomyopathy due to a mutation of the gene encoding the lamin A/C protein, acquired in our Array acquisition, and was a result of the Phase 3 trial reaching futility at a pre-planned interim analysis, (ii) $ 171 million associated with our Biopharma segment, related to developed technology rights acquired in our Hospira acquisition, and reflect updated commercial forecasts mainly reflecting competitive pressures, and (iii) $ 50 million associated with PC1, related to finite-lived licensing agreements acquired in our Hospira acquisition, and reflects updated contract manufacturing forecasts reflecting changes to market dynamics.

2020 included intangible asset impairment charges associated with our Biopharma segment that reflected, among other things, updated commercial forecasts mainly reflecting competitive pressures:

(i) $ 900 million related to IPR&D assets for unapproved indications of certain cancer medicines, acquired in our Array acquisition;

(ii) $ 528 million related to Eucrisa, a finite-lived developed technology right acquired in our Anacor Pharmaceuticals, LLC acquisition;

and (iii) $ 263 million related to finite-lived developed technology rights for certain generic sterile injectables acquired in our Hospira acquisition.

2022 Form 10-K 67

Notes to Consolidated Financial Statements

and Subsidiary Companies

(f) See Note 2C .

(g) 2022 includes, among other things, (i) dividend income of $ 314 million from our investment in ViiV, (ii) income net of costs associated with TSAs of $ 142 million and (iii) charges of $ 77 million, reflecting the change in the fair value of contingent consideration.

2021 included, among other things, (i) income net of costs associated with TSAs of $ 288 million, (ii) dividend income of $ 166 million from our investment in ViiV and (iii) charges of $ 142 million, reflecting the change in the fair value of contingent consideration.

2020 included, among other things, (i) dividend income of $ 278 million from our investment in ViiV, (ii) income net of costs associated with TSAs of $ 114 million and (iii) charges of $ 105 million, reflecting the change in the fair value of contingent consideration.

The asset impairment charges included in Other (income)/deductions––net are based on estimates of fair value.

Additional information about the intangible assets that were impaired during 2022 (impairment recorded in Other (income)/deductions–net ) follows:

Fair Value (a)

December 31, 2022

(MILLIONS) Amount Level 1 Level 2 Level 3 Impairment

Intangible assets –– IPR&D (b)

$ — $ — $ — $ — $ 200

Intangible assets––Developed technology rights (b)

60 — — 60 171

Intangible assets––Licensing agreements and other (b)

Total $ 90 $ — $ — $ 90 $ 421

(a) The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis.

See also Note 5A .

Status of Tax Audits and Potential Impact on Accruals for Uncertain Tax Positions

Status of Tax Matters and Potential Impact on Accruals for Uncertain Tax Positions

is one of our major tax jurisdictions, and we are regularly audited by the IRS.

With respect to Pfizer, the IRS has issued Revenue Agent’s Reports (RARs) for tax years 2011-2013 and 2014-2015.

We are not in agreement with the RARs and are currently appealing certain disputed issues.

Tax years 2016-2018 are currently under audit.

During the third quarter of 2022, Pfizer reached resolution of disputed issues at the IRS Independent Office of Appeals, thereby settling all issues related to U.S.

tax returns of Pfizer for the years 2011-2015.

With respect to Pfizer, tax years 2016-2018 are under audit.

Tax years 2019-2022 are open but not under audit.

All other tax years are closed.

In addition to the open audit years in the U.S., we have open audit years in certain major international tax jurisdictions such as Canada (2013-2021), Europe (2011-2021, primarily reflecting Ireland, the U.K., France, Italy, Spain and Germany), Asia Pacific (2011-2021, primarily reflecting China, Japan and Singapore) and Latin America (1998-2021, primarily reflecting Brazil).

In addition to the open audit years in the U.S., we have open audit years and certain related audits, appeals and investigations in certain major international tax jurisdictions such as Canada (2017-2022), Europe (2012-2022, primarily in Ireland, the U.K., France, Italy, Spain and Germany), Asia Pacific (2012-2022, primarily in China, Japan and Singapore) and Latin America (1998-2022, primarily in Brazil).

Any settlements or statutes of limitations expirations could result in a significant decrease in our uncertain tax positions.

2 unchanged sentences

Finalizing audits with the relevant taxing authorities can include formal administrative and legal proceedings, and, as a result, it is difficult to estimate the timing and range of possible changes related to our uncertain tax positions, and such changes could be significant.

2022 Form 10-K 71

Notes to Consolidated Financial Statements

and Subsidiary Companies

Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)

13 unchanged sentences

Reclassification adjustments related to curtailments of prior service costs and other, net ( 3 ) ( 18 ) 1

Other ( 1 ) 1 —

( 37 ) ( 38 ) ( 17 )

2 unchanged sentences

Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests

The following summarizes the changes, net of tax, in Accumulated other comprehensive loss (a) :

The following summarizes the changes, net of tax, in Accumulated other comprehensive loss :

Net Unrealized Gains/(Losses) Benefit Plans

(MILLIONS) Foreign Currency Translation Adjustments Derivative Financial Instruments Available-For-Sale Securities Prior Service (Costs)/ Credits and Other Accumulated Other Comprehensive Income/(Loss)

(MILLIONS) Foreign Currency Translation Adjustments (a)

Derivative Financial Instruments Available-For-Sale Securities Prior Service (Costs)/ Credits and Other Accumulated Other Comprehensive Income/(Loss)

Balance, January 1, 2020 $ ( 5,936 ) $ 20 $ ( 35 ) $ 584 $ ( 5,367 )

Other comprehensive income/(loss) (b)

Other comprehensive income/(loss) 883 ( 448 ) 151 ( 106 ) 480

Distribution of Upjohn Business (b)

( 397 ) — — ( 26 ) ( 423 )

Balance, December 31, 2020 ( 5,450 ) ( 428 ) 116 452 ( 5,310 )

Other comprehensive income/(loss) (b)

883 ( 448 ) 151 ( 106 ) 480

Distribution of Upjohn Business (c)

( 397 ) — — ( 26 ) ( 423 )

Other comprehensive income/(loss) ( 722 ) 547 ( 336 ) ( 75 ) ( 587 )

Balance, December 31, 2021 ( 6,172 ) 119 ( 220 ) 377 ( 5,897 )

Other comprehensive income/(loss) (b)

( 722 ) 547 ( 336 ) ( 75 ) ( 587 )

Other comprehensive income/(loss) ( 2,188 ) ( 531 ) 440 ( 129 ) ( 2,407 )

Balance, December 31, 2022 $ ( 8,360 ) $ ( 412 ) $ 220 $ 248 $ ( 8,304 )

(a) Amounts include the impact of a change in accounting principle.

(b) Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests.

Foreign currency translation adjustments include net losses in 2021 and net gains in 2020 and 2019 related to our equity-method investment in the Consumer Healthcare JV (see Note 2C ) , and the impact of our net investment hedging program.

(a) Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests.

Foreign currency translation adjustments include net losses in 2022 and 2021 and net gains in 2020 related to our equity-method investment in Haleon/the Consumer Healthcare JV (see Note 2C ) , and the impact of our net investment hedging program.

(b) For more information, see Note 2B .

2022 Form 10-K 72

8 unchanged sentences

Short-term investments

Classified as equity securities with readily determinable fair values:

Equity securities with readily determinable fair values:

Money market funds $ 1,588 $ — $ 1,588 $ 5,365 $ — $ 5,365

Classified as available-for-sale debt securities:

Available-for-sale debt securities:

Government and agency—non-U.S.

11 unchanged sentences

Long-term investments

Classified as equity securities with readily determinable fair values (a)

Equity securities with readily determinable fair values (a)

2,836 2,823 13 3,876 3,849 27

Classified as available-for-sale debt securities:

Available-for-sale debt securities:

Government and agency—non-U.S.

1 unchanged sentence

Government and agency—U.S.

6 — 6 121 — 121

Corporate and other 72 — 72 50 — 50

13 unchanged sentences

Derivative liabilities:

Interest rate contracts $ 10 $ — $ 10 $ — $ — $ —

Foreign exchange contracts 694 — 694 476 — 476

2 unchanged sentences

Derivative liabilities:

Interest rate contracts 321 — 321 — — —

Foreign exchange contracts 864 — 864 405 — 405

6 unchanged sentences

The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net (see Note 4 ) .

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

The carrying value of Long-term debt, excluding the current portion was $ 36 billion as of December 31, 2021 and $ 37 billion as of December 31, 2020.

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis–– The carrying value of Long-term debt, excluding the current portion was $ 33 billion as of December 31, 2022 and $ 36 billion as of December 31, 2021.

The estimated fair value of such debt, using a market approach and Level 2 inputs, was $ 30 billion as of December 31, 2022 and $ 42 billion as of December 31, 2021.

16 unchanged sentences

Long-term investments

Equity securities with readily determinable fair values $ 3,876 $ 2,809

Equity securities with readily determinable fair values (b)

$ 2,836 $ 3,876

Available-for-sale debt securities 352 521

7 unchanged sentences

Held-to-maturity cash equivalents $ 679 $ 268

(a) As of December 31, 2021 and 2020, includes money market funds primarily invested in U.S.

(a) Includes money market funds primarily invested in U.S.

Treasury and government debt.

30 unchanged sentences

(a) Reported in Other (income)/deductions –– net .

(b) Included in net unrealized gains are observable price changes on equity securities without readily determinable fair values.

(b) Included in net unrealized (gains)/losses are observable price changes on equity securities without readily determinable fair values.

As of December 31, 2022, there were cumulative impairments and downward adjustments of $ 193 million and upward adjustments of $ 203 million.

7 unchanged sentences

(MILLIONS) 2022 2021

Commercial paper $ — $ 556

Current portion of long-term debt, principal amount $ 2,550 $ 1,636

1 unchanged sentence

Total short-term borrowings, principal amount

Net unamortized discounts, premiums and debt issuance costs — ( 2 )

Net fair value adjustments 10 —

Total Short-term borrowings, including current portion of long-term debt , carried at historical proceeds, as adjusted

2 unchanged sentences

See Note 7F .

The weighted-average effective interest rate on commercial paper outstanding was approximately 0.13 % as of December 31, 2020.

As of December 31, 2022, we had access to a $ 7 billion committed U.S.

revolving credit facility expiring in 2026, which may be used for general corporate purposes including to support our commercial paper borrowings.

revolving credit facility, which may be used for general corporate purposes including to support our commercial paper borrowings.

Lenders under this facility have approximately $ 700 million of commitments maturing in November 2026 and $ 6.3 billion of commitments maturing in November 2027.

In addition to the U.S.

10 unchanged sentences

Notes due 2027 ( 2.1 % for 2022 and 2021)

Notes due 2027 ( 2.1 % for 2021 and 2.0 % for 2020)

Notes due 2028-2032 ( 3.1 % for 2021 and 3.4 % for 2020)

Notes due 2028 ( 4.8 % for 2022 and 2021)

1 unchanged sentence

Notes due 2034-2038 ( 5.5 % for 2022 and 2021)

Notes due 2039-2043 ( 4.8 % for 2022 and 4.7 % for 2021)

Notes due 2044-2048 ( 4.2 % for 2022 and 2021)

Notes due 2049-2053 ( 3.4 % for 2022 and 2021)

Total long-term debt, principal amount 32,080 34,948

5 unchanged sentences

$ 2,560 $ 1,636

* Our long-term debt is generally redeemable by us at any time at varying redemption prices plus accrued and unpaid interest.

(a) Reclassified to the current portion of long-term debt.

Our long-term debt outlined in the above table is generally redeemable by us at any time at varying redemption prices plus accrued and unpaid interest.

In August 2021, we issued the following senior unsecured notes at an effective interest rate of 1.79 %:

(MILLIONS) Principal

Interest Rate Maturity Date As of

December 31, 2021

August 18, 2031

(a) The notes may be redeemed by us at any time, in whole, or in part, at a redemption price plus accrued and unpaid interest.

Issuances— In August 2021, we completed a public offering of $ 1.0 billion principal amount of senior unsecured notes due 2031 at an effective interest rate of 1.79 %.

In May 2020, we completed a public offering of $ 4.0 billion aggregate principal amount of senior unsecured notes with a weighted-average effective interest rate of 2.11 % and in March 2020, we completed a public offering of $ 1.25 billion aggregate principal amount of senior unsecured notes with a weighted-average effective interest rate of 2.67 %.

In March 2019, we completed a public offering of $ 5.0 billion aggregate principal amount of senior unsecured notes with a weighted-average effective interest rate of 3.57 %.

2021 Form 10-K 79

Notes to Consolidated Financial Statements

and Subsidiary Companies

In November 2020, we repurchased all $ 1.15 billion and $ 342 million principal amount outstanding of the 1.95 % senior unsecured notes due June 2021 and 5.80 % senior unsecured notes due August 2023 and recorded a total net loss of $ 36 million, in Other (income)/deductions––net.

Retirements— In November 2020, we repurchased all $ 1.15 billion and $ 342 million principal amount outstanding of the 1.95 % senior unsecured notes that were due in June 2021 and 5.80 % senior unsecured notes that were due in August 2023 and recorded a total net loss of $ 36 million in Other (income)/deductions––net .

See Note 2 B .

In March 2020, we repurchased at par all $ 1.065 billion principal amount outstanding of our senior unsecured notes due in 2047.

In January 2019, we repurchased all € 1.1 billion ($ 1.3 billion) principal amount outstanding of the 5.75 % euro-denominated debt due June 2021 at a redemption value of € 1.3 billion ($ 1.5 billion).

We recorded a net loss of $ 138 million in Other (income)/deductions––net , which included the related termination of cross currency swaps .

Derivative Financial Instruments and Hedging Activities

Foreign Exchange Risk

A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates.

Foreign Exchange Risk–– A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates.

Where foreign exchange risk is not offset by other exposures, we manage our foreign exchange risk principally through the use of derivative financial instruments and foreign currency debt.

2 unchanged sentences

The derivative financial instruments primarily hedge or offset exposures in the euro, U.K.

pound, Japanese yen and Canadian dollar.

• We hedge a portion of our forecasted intercompany inventory sales denominated in euro, Japanese yen, Canadian dollar, Chinese renminbi, U.K.

pound and Australian dollar for up to two years .

• Under certain market conditions, we may seek to protect against possible declines in the reported net investments of our foreign business entities.

pound, Japanese yen, and Canadian dollar, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to two years .

We may seek to protect against possible declines in the reported net investments of our foreign business entities.

2022 Form 10-K 75

Notes to Consolidated Financial Statements

and Subsidiary Companies

Changes in fair value are reported in earnings or in Other comprehensive income/(loss) , depending on the nature and purpose of the financial instrument (hedge or offset relationship).

7 unchanged sentences

These contracts take the opposite currency position of that reflected on the balance sheet to counterbalance the effect of any currency movement.

Interest Rate Risk

Our interest-bearing investments and borrowings are subject to interest rate risk.

Interest Rate Risk–– Our interest-bearing investments and borrowings are subject to interest rate risk.

Depending on market conditions, we may change the profile of our outstanding debt or investments by entering into derivative financial instruments like interest rate swaps, either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates, or to convert variable rate debt or investments to fixed rates.

2 unchanged sentences

We recognize the change in fair value on interest rate contracts that are designated as fair value hedges in earnings, as well as the offsetting earnings impact of the hedged risk attributable to the hedged item.

The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):

(MILLIONS) As of December 31, 2021 As of December 31, 2020

The following summarizes the fair value of the derivative financial instruments and notional amounts:

(MILLIONS) As of December 31, 2022

As of December 31, 2021

Fair Value Fair Value

14 unchanged sentences

and Subsidiary Companies

The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures (including those reported as part of discontinued operations):

The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures:

Gains/(Losses)

27 unchanged sentences

$ ( 1,153 ) $ ( 192 ) $ 2,409 $ 1,210 $ 2,190 $ ( 25 )

$ ( 192 ) $ 178 $ 1,210 $ ( 1,077 ) $ ( 25 ) $ 133

(a) OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the consolidated statements of income .

1 unchanged sentence

OCI = Other comprehensive income/(loss), included in the consolidated statements of comprehensive income .

(b) The amounts reclassified from OCI into COS were:

• a net loss of $ 89 million in 2021;

• a net gain of $ 172 million in 2020 (including a gain of $ 22 million reported in Discontinued operations––net of tax ).

(b) The amounts reclassified from OCI into COS were a net gain of $ 375 million in 2022 and a net loss of $ 89 million in 2021.

The remaining amounts were reclassified from OCI into OID.

Based on year-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax gain of $ 362 million within the next 12 months into income .

Based on year-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $ 107 million within the next 12 months into income .

The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 20 years and relates to foreign currency debt.

2 unchanged sentences

The short-term borrowings’ carrying value as of December 31, 2021 was $ 1.1 billion.

The long-term debt carrying values as of December 31, 2021 and December 31, 2020 were $ 844 million and $ 2.1 billion, respectively.

The long-term debt carrying values as of December 31, 2022 and December 31, 2021 were $ 795 million and $ 844 million, respectively.

The following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:

As of December 31, 2021 As of December 31, 2020

As of December 31, 2022

As of December 31, 2021

Cumulative Amount of Fair

7 unchanged sentences

Active Hedging Relationships Discontinued Hedging Relationships

Short-term borrowings, including current portion of long-term debt $ — $ — $ 10 $ — $ — $ —

Long-term debt $ 2,235 $ ( 321 ) $ 1,042 $ 2,233 $ 16 $ 1,154

7 unchanged sentences

and Subsidiary Companies

allowance for credit losses, see Note 1H .

allowance for credit losses, see Note 1 G .

A significant portion of our trade accounts receivable balances are due from wholesalers and governments.

3 unchanged sentences

Exposure limits are established to limit a concentration with any single credit counterparty.

As of December 31, 2021, the largest investment exposures in our portfolio represent primarily sovereign debt instruments issued by the U.S., Canada, Japan, U.K., Germany, France, Australia, and Switzerland.

As of December 31, 2022, the largest investment exposures in our portfolio represent primarily sovereign debt instruments issued by the Netherlands, Canada, Germany, Japan, the U.K., the U.S., and France.

With respect to our derivative financial instrument agreements with financial institutions, we do not expect to incur a significant loss from failure of any counterparty.

Derivative financial instruments are executed under International Swaps and Derivatives Association (ISDA) master agreements with credit-support annexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure.

Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements with credit-support annexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure.

As a result, there are no significant concentrations of credit risk with any individual financial institution.

11 unchanged sentences

Noncurrent inventories not included above (b)

(a) The change from December 31, 2020 reflects increases for certain products, including inventory build for new product launches (primarily Comirnaty), network strategy and supply recovery, partially offset by decreases due to market demand.

$ 5,827 $ 939

(a) The decrease from December 31, 2021 reflects lower levels of Comirnaty, partially offset by new products acquired through recent acquisitions and higher Paxlovid inventory levels.

(b) Included in Other noncurrent assets .

There are no recoverability issues for these amounts.

The increase from December 31, 2021 is primarily due to strategic inventory build related to Paxlovid.

Based on our current estimates and assumptions, there are no recoverability issues for these amounts.

Other Current Liabilities

Other current liabilities includes, among other things, amounts payable to BioNTech for the gross profit split for Comirnaty, which totaled $ 9.7 billion as of December 31, 2021 and $ 25 million as of December 31, 2020.

Other current liabilities includes, among other things, amounts payable to BioNTech for the gross profit split for Comirnaty, which totaled $ 5.2 billion as of December 31, 2022 and $ 9.7 billion as of December 31, 2021.

Property, Plant and Equipment (PP&E)

14 unchanged sentences

(MILLIONS) 2022 2021

Property, plant and equipment

United States $ 9,179 $ 8,385

24 unchanged sentences

Brands 827 827 827 827

IPR&D 3,092 3,092 3,175 3,175

Licensing agreements and other 513 513 573 573

11,357 11,357 3,092 3,092

Identifiable intangible assets (b)

Licensing agreements and other (b)

971 971 513 513

(a) The increase in the gross carrying amount primarily reflects $ 500 million of capitalized Comirnaty sales milestones to BioNTech, partially offset by net losses from foreign currency translation adjustments.

(b) The decrease is primarily due to amortization, partially offset by the capitalization of the Comirnaty milestones described above.

Developed Technology Rights

Developed technology rights represent the cost for developed technology acquired from third parties and can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed.

13,155 13,155 4,432 4,432

Identifiable intangible assets (c)

$ 101,919 $ ( 58,548 ) $ 43,370 $ 80,984 $ ( 55,838 ) $ 25,146

(a) The increase in the gross carrying amounts mainly reflect the impact of the acquisitions of Biohaven and GBT (see Note 2A ).

(b) The increase in the gross carrying amounts mainly reflect the impact of the acquisitions of Arena, GBT and Biohaven (see Note 2A ) , and for IPR&D, is partially offset by an impairment (see Note 4 ).

Developed Technology Rights–– Developed technology rights represent the cost for developed technology acquired from third parties and can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed.

We possess a well-diversified portfolio of hundreds of developed technology rights across therapeutic categories, representing our commercialized products.

The significant components of developed technology rights are the following:

Xtandi, Prevnar 13/Prevenar 13 Infant, Braftovi/Mektovi, Premarin, Prevnar 13/Prevenar 13 Adult, Eucrisa, Orgovyx, Zavicefta, Tygacil, Bavencio, Merrem/Meronem and Comirnaty.

Nurtec ODT/Vydura, Xtandi, Prevnar family, Braftovi/Mektovi, Oxbryta, Premarin, Eucrisa, Orgovyx, Zavicefta, Bavencio and Merrem/Meronem.

Also included in this category are the post-approval milestone payments made under our alliance agreements for certain prescription pharmaceutical products.

Brands represent the cost for tradenames and know-how, as the products themselves do not receive patent protection.

Brands–– Brands represent the cost for tradenames and know-how, as the products themselves do not receive patent protection.

Indefinite-lived brands include Medrol and Depo-Medrol, while finite-lived brands include Zavedos and Depo-Provera.

IPR&D assets represent R&D assets that have not yet received regulatory approval in a major market.

The significant components of IPR&D are the following:

the program for the oral poly adenosine diphosphate (ADP) ribose polymerase inhibitor for the treatment of patients with germline BRCA-mutated advanced breast cancer acquired as part of the Medivation acquisition and assets acquired in connection with the Array acquisition.

IPR&D–– IPR&D assets represent R&D assets acquired through business combinations that have not yet received regulatory approval in a major market.

The significant components of IPR&D are etrasimod, GBT601, talazoparib, Braftovi/Mektovi and zavegepant.

IPR&D assets are required to be classified as indefinite-lived assets until the successful completion or the abandonment of the associated R&D effort.

2 unchanged sentences

At that time, we will determine the useful life of the asset, reclassify it out of IPR&D and begin amortization.

If the associated R&D effort is abandoned, the related IPR&D assets will likely be written-off, and we will record an impairment charge.

If the associated R&D effort is abandoned, the related IPR&D assets will be written-off, and we will record an impairment charge.

IPR&D assets are high-risk assets, given the uncertain nature of R&D.

Accordingly, we expect that many of these IPR&D assets will become impaired and be written-off at some time in the future.

Licensing Agreements

Licensing agreements for developed technology and for technology in development primarily relate to out-licensing arrangements acquired from third parties, including the Array acquisition.

Accordingly, IPR&D assets may become impaired and/or be written-off in the future.

Licensing Agreements–– Licensing agreements for developed technology and for technology in development primarily relate to out-licensing arrangements acquired from third parties, including the Array and Arena acquisition.

These assets represent the cost for the license, where we acquired the right to future royalties and/or milestones upon development or commercialization by the licensing partner.

2 unchanged sentences

At that time we will determine the useful life of the asset, reclassify the respective licensing arrangement asset to finite-lived intangible asset and begin amortization.

If the development effort is abandoned, the related licensing asset will likely be written-off, and we will record an impairment charge.

2021 Form 10-K 83

Notes to Consolidated Financial Statements

and Subsidiary Companies

The weighted-average life for each of our total finite-lived intangible assets is approximately 8 years, and for the largest component, developed technology rights, is approximately 7 years.

If the development effort is abandoned, the related licensing asset will be written-off, and we will record an impairment charge.

Amortization–– The weighted-average life for each of our total finite-lived intangible assets is approximately 9 years, and for the largest component, developed technology rights, is approximately 8 years.

Total amortization expense for finite-lived intangible assets was $ 3.6 billion in 2022, $ 3.7 billion in 2021 and $ 3.4 billion in 2020.

2 unchanged sentences

Amortization expense $ 4,223 $ 3,981 $ 3,780 $ 3,714 $ 3,503

The following summarizes the components and changes in the carrying amount of Goodwill :

2022 Form 10-K 79

Notes to Consolidated Financial Statements

and Subsidiary Companies

The following summarizes the changes in the carrying amount of Goodwill :

(MILLIONS) Total (a)

Balance, January 1, 2021

Additions (b)

Impact of foreign exchange ( 348 )

Balance, December 31, 2021

Additions (b)

Impact of foreign exchange ( 750 )

Balance, December 31, 2022

(a) As a result of the reorganization of our commercial operations during the fourth quarter of 2021 (see Note 17 ), we were required to estimate the relative fair values of our PC1 and Hospital organizations to determine any reallocation of goodwill.

We completed this analysis and determined that no goodwill was required to be reallocated.

As a result, our entire goodwill balance continues to be assigned within the Biopharma reportable segment.

(b) Additions primarily represent the impact of measurement period adjustments related to our Array acquisition (see Note 2A ).

(a) As a result of the organizational changes to the commercial structure within the Biopharma operating segment effective in the third quarter of 2022 (see Note 1A ), our goodwill was required to be reallocated amongst impacted reporting units.

The allocation of goodwill is a complex process that requires, among other things, that we determine the fair value of each reporting unit under our old and new organizational structure and the portions being transferred.

We completed this re-allocation during the fourth quarter 2022 and concluded that none of our goodwill was impaired.

Our goodwill balance continues to be assigned within the Biopharma reportable segment.

(b) Additions relate to our acquisitions of GBT, Arena and Biohaven.

See Note 2A .

Pension and Postretirement Benefit Plans and Defined Contribution Plans

5 unchanged sentences

In addition, we provide medical insurance benefits to certain retirees and their eligible dependents through our postretirement plans.

As discussed in Note 1C , we adopted a change in accounting principle to a more preferable policy under U.S.

GAAP to immediately recognize actuarial gains and losses arising from the remeasurement of pension and postretirement plans.

This change has been applied to all pension and postretirement plans on a retrospective basis for all prior periods presented.

Components of Net Periodic Benefit Costs and Changes in Other Comprehensive Income/(Loss)

The following summarizes the components of net periodic benefit cost/(credit), including those reported as part of discontinued operations for 2020 and 2019, and the changes in Other comprehensive income/(loss) for our benefit plans:

The following summarizes the components of net periodic benefit cost/(credit), including those reported as part of discontinued operations for 2020, and the changes in Other comprehensive income/(loss) for our benefit plans:

Pension Plans Postretirement Plans

17 unchanged sentences

$ ( 86 ) $ ( 1,264 ) $ 674 $ ( 46 ) $ ( 742 ) $ 145 $ ( 410 ) $ ( 265 ) $ ( 168 )

(a) Reflects actuarial remeasurement gains in 2021, primarily due to favorable plan asset performance and increases in discount rates, and actuarial remeasurement losses in 2020 and 2019, primarily due to decreases in discount rates partially offset by favorable plan asset performance.

(a) Reflects:

(i) actuarial remeasurement net gains in 2022, primarily due to increases in discount rates, partially offset by unfavorable plan asset performance, (ii) actuarial remeasurement gains in 2021, primarily due to favorable plan asset performance and increases in discount rates, and (iii) actuarial remeasurement net losses in 2020, primarily due to decreases in discount rates partially offset by favorable plan asset performance.

The components of net periodic benefit cost/(credit) other than the service cost component are primarily included in Other (income)/deductions––net (see Note 4 ).

2022 Form 10-K 80

1 unchanged sentence

and Subsidiary Companies

The components of net periodic benefit cost/(credit) other than the service cost component are included in Other (income)/deductions––net (see Note 4 ).

Actuarial Assumptions

17 unchanged sentences

pension plans as these plans are frozen.

All of the assumptions are reviewed on at least an annual basis.

All of the assumptions are reviewed at least annually.

We revise these assumptions based on an annual evaluation of long-term trends as well as market conditions that may have an impact on the cost of providing retirement benefits.

The weighted-average discount rate for our U.S.

defined benefit plans is determined annually and evaluated and modified to reflect at year-end 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.

defined benefit plans is set with reference to 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.

For our international plans, the discount rates are set by benchmarking against investment grade corporate bonds rated AA/Aa or better, including, when there is sufficient data, a yield curve approach.

These rate determinations are made consistent with local requirements.

Overall, the yield curves used to measure the benefit obligations at year-end 2021 resulted in higher discount rates as compared to the prior year.

Overall, the yield curves used to measure the benefit obligations at year-end 2022 resulted in substantially higher discount rates as compared to the prior year.

The following provides the healthcare cost trend rate assumptions for our U.S.

9 unchanged sentences

The following provides:

(i) an analysis of the changes in our benefit obligations, plan assets and funded status of our benefit plans, including those reported as part of discontinued operations for 2020, (ii) the funded status recognized in our consolidated balance sheets and (iii) the pre-tax components of cumulative amounts recognized in Accumulated other comprehensive loss :

(i) an analysis of the changes in our benefit obligations, plan assets and funded status of our benefit plans, (ii) the funded status recognized in our consolidated balance sheets and (iii) the pre-tax components of cumulative amounts recognized in Accumulated other comprehensive loss :

Pension Plans Postretirement Plans

12 unchanged sentences

Upjohn spin-off (c)

— ( 1,016 ) 3 ( 320 ) — ( 218 )

Acquisitions/divestitures/other, net — — — — — —

Acquisitions/divestitures, net 61 — ( 50 ) — — —

Curtailments and special termination benefits 18 17 ( 10 ) ( 2 ) ( 3 ) ( 8 )

Settlements ( 785 ) ( 767 ) ( 47 ) ( 34 ) — —

Settlements (d)

( 1,698 ) ( 785 ) ( 64 ) ( 47 ) ( 39 ) —

Benefits paid ( 457 ) ( 512 ) ( 359 ) ( 374 ) ( 101 ) ( 147 )

9 unchanged sentences

Upjohn spin-off (c)

— ( 687 ) 2 ( 270 ) — —

Acquisitions/divestitures, net 1 — 9 — — —

Settlements ( 785 ) ( 767 ) ( 47 ) ( 34 ) — —

Settlements (d)

( 1,698 ) ( 785 ) ( 64 ) ( 47 ) ( 39 ) —

Benefits paid ( 457 ) ( 512 ) ( 359 ) ( 374 ) ( 101 ) ( 147 )

Fair value of plan assets, ending 10,871 16,346 6,865 10,729 647 753

Funded status—Plan assets less than benefit obligation

$ ( 805 ) $ ( 2,211 ) $ ( 928 ) $ ( 2,191 ) $ ( 241 ) $ ( 651 )

Funded status $ ( 549 ) $ ( 805 ) $ ( 632 ) $ ( 928 ) $ 238 $ ( 241 )

Amounts recorded in our consolidated balance sheet:

5 unchanged sentences

Prior service (costs)/credits $ ( 4 ) $ ( 6 ) $ ( 34 ) $ ( 35 ) $ 413 $ 581

Information related to the funded status of pension plans with an ABO in excess of plan assets (d) :

Information related to the funded status of pension plans with an ABO in excess of plan assets (e) :

Fair value of plan assets

1 unchanged sentence

ABO 981 1,371 1,600 3,344

Information related to the funded status of pension plans with a PBO in excess of plan assets (d) :

Information related to the funded status of pension plans with a PBO in excess of plan assets (e) :

Fair value of plan assets $ 86 $ 120 $ 1,081 $ 1,381

5 unchanged sentences

For the postretirement plans, the benefit obligation is the ABO.

(b) Primarily includes actuarial gains resulting from increases i n discount rates in 2021, offset by increases in inflation assumptions in 2021 for the international plans, and actuarial losses resulting from decreases in discount rates in 2020 .

(b) For both 2022 and 2021, primarily includes actuarial gains resulting from increases in discount rates, offset by increases in inflation assumptions for the international plan.

(d) Our main U.S.

qualified plan and many of our international plans were overfunded as of December 31, 2021.

(d) As a result of a group annuity contract entered into between Pfizer and a third party insurance company in July 2022, the third party insurance company assumed future benefit obligations and responsibility for the annuity payments of certain retirees in the Pfizer Consolidated Pension Plan.

As of December 31, 2022, $ 586 million of benefit obligations and $ 588 million of plan assets are associated with this contract.

We expect to finalize the remaining regulatory approvals for this transaction in due course.

(e) Our main U.S.

qualified plan, U.S.

postretirement plan and many of our international plans were overfunded as of December 31, 2022.

2022 Form 10-K 82

1 unchanged sentence

and Subsidiary Companies

The following provides the components of plan assets, including those reported as part of discontinued operations for 2020:

The following provides the components of plan assets:

As of December 31, 2022 As of December 31, 2021

47 unchanged sentences

retiree medical plans.

The following provides an analysis of the changes in our more significant investments valued using significant unobservable inputs, including those reported as part of discontinued operations for 2020:

The following provides an analysis of the changes in our more significant investments valued using significant unobservable inputs:

International Pension Plans

4 unchanged sentences

Assets held, ending ( 177 ) 23

Assets sold during the period 4 —

Purchases, sales, and settlements, net

45 unchanged sentences

2028–2032 4,218 2,069 192

(a) For the U.S.

postretirement plan, the IRC 401(h) and voluntary employees’ beneficiary association reimbursements totaling $ 95 million are expected to exceed expected employer contributions.

The above table reflects the total U.S.

13 unchanged sentences

We purchase our common stock through privately negotiated transactions or in the open market as circumstances and prices warrant.

Purchased shares under each of the share-purchase plans, which are authorized by our BOD, are available for general corporate purposes.

In December 2017, the BOD authorized a $ 10 billion share repurchase program, which was exhausted in the first quarter of 2019.

In December 2018, the BOD authorized another $ 10 billion share repurchase program to be utilized over time and share repurchases commenced thereunder in the first quarter of 2019.

In February 2019, we entered into an ASR with Goldman Sachs & Co.

LLC to repurchase $ 6.8 billion of our common stock pursuant to our previously announced share repurchase authorization.

We paid $ 6.8 billion and received an initial delivery of 130 million shares of common stock, which represented approximately 80 % of the notional amount of the ASR.

In August 2019, the ASR with Goldman Sachs & Co.

LLC was completed resulting in Goldman Sachs & Co.

LLC owing us an additional 33.5 million shares of our common stock.

The average price paid for all of the shares delivered under the ASR was $ 41.42 per share.

The common stock received is included in Treasury stock .

The following provides the number of shares of our common stock purchased and the cost of purchases under our publicly announced share purchase plans, including our ASR:

Year Ended December 31,

(SHARES IN MILLIONS, DOLLARS IN BILLIONS) 2021

Shares of common stock purchased — — 213

Cost of purchase $ — $ — $ 8.9

(a) Represents shares purchased pursuant to the ASR with Goldman Sachs & Co.

LLC entered into in February 2019, as well as open market share repurchases of $ 2.1 billion .

Purchased shares under a share-purchase plan, which is authorized by our BOD, are available for general corporate purposes.

In December 2018, the BOD authorized a $ 10 billion share repurchase program to be utilized over time and share repurchases commenced thereunder in the first quarter of 2019.

In the first quarter of 2022, we purchased 39 million shares of our common stock at a cost of $ 2 billion under our publicly announced share purchase plan.

Our remaining share-purchase authorization was approximately $ 3.3 billion at December 31, 2022.

3 unchanged sentences

The Trust received an aggregate of 1,070,369 shares of our common stock upon conversion, with zero shares of Series A Preferred Stock remaining outstanding as a result of the conversion.

In December 2020, we filed a certificate of elimination and a restated certificate of incorporation with the Delaware Secretary of State, which eliminated the Series A Preferred Stock.

Since May 4, 2020, we have one ESOP that holds common stock of the Company (Common ESOP).

In December 2020, we filed a certificate of elimination to our restated certificate of incorporation, as amended and a restated certificate of incorporation with the Delaware Secretary of State, which eliminated the Series A Preferred Stock.

We have one ESOP that holds common stock of the Company (Common ESOP).

As of December 31, 2022, all shares of common stock held by the Common ESOP have been allocated to the Pfizer U.S.

defined contribution plan participants.

The compensation cost related to the Common ESOP was $ 19 million in 2021, $ 19 million in 2020 and $ 20 million in 2019.

The compensation cost related to the Common ESOP was $ 19 million for each of 2022, 2021 and 2020.

Share-Based Payments

Our compensation programs can include share-based payment awards with value that is determined by reference to the fair value of our shares and that provide for the grant of shares or options to acquire shares or similar arrangements.

Our share-based awards are designed based on competitive survey data or industry peer groups used for compensation purposes, and are allocated between different long-term incentive awards, generally in the form of Total Shareholder Return Units (TSRUs), Restricted Stock Units (RSUs), Portfolio Performance Shares (PPSs), Performance Share Awards (PSAs), Breakthrough Performance Awards (BPAs) and Stock Options, as determined by the Compensation Committee.

Our share-based awards are designed based on competitive survey data or industry peer groups used for compensation purposes, and are allocated between different long-term incentive awards, generally in the form of Total Shareholder Return Units (TSRUs), Restricted Stock Units (RSUs), Portfolio Performance Shares (PPSs), Performance Share Awards (PSAs), Breakthrough Performance Awards (BPAs) and stock options, as determined by the Compensation Committee of our BOD.

The 2019 Stock Plan (2019 Plan) replaced and superseded the 2014 Plan.

It provides for 400 million shares, in addition to shares remaining under the 2014 Plan, to be authorized for grants.

As of December 31, 2022, no shares remain under the 2014 Plan.

The 2019 Plan provides that the number of stock options, TSRUs, RSUs, or performance-based awards that may be granted to any one individual during any 36-month period is limited to 20 million shares, and that RSUs count as three shares, PPSs, PSAs and BPAs count as three shares times the maximum potential payout, while TSRUs and stock options count as one share, toward the maximum shares available under the 2019 Plan.

As of December 31, 2021, 315 million shares were available for award.

As of December 31, 2022, 270 million shares were available for award, including 27 million shares that we assumed from the remaining shares available from the stock plans of GBT, Arena and Biohaven which can be issued to legacy employees of the acquired companies and newly hired employees after the dates of the respective acquisitions.

Although not required to do so, we have used authorized and unissued shares and, to a lesser extent, treasury stock to satisfy our obligations under these programs.

12 unchanged sentences

Select employees • Entitle the holder to receive a specified number of shares of our common stock, including dividend equivalents that are reinvested into additional RSUs.

• For RSUs granted, in virtually all instances, the units vest on the third anniversary of the grant date assuming continuous service from the grant date.

As of the grant date using the closing price of our common stock Amortized on a straight-line basis over the vesting term into Cost of sales , Selling, informational and administrative expenses , and/or Research and development expenses , as appropriate.

• For RSUs granted before 2022, generally in all instances, the units vest on the third anniversary of the grant date assuming continuous service from the grant date.

Beginning in 2022, generally in all instances, the units vest and distribute one-third per year for three years on each of the three annual anniversaries from the date of grant assuming continuous service from the grant date.

As of the grant date using the closing price of our common stock Amortized on a straight-line basis for RSUs granted before 2022, and on an accelerated attribution approach for RSUs granted in 2022, over the vesting term into Cost of sales , Selling, informational and administrative expenses , and/or Research and development expenses , as appropriate.

Portfolio Performance Shares (PPSs)

32 unchanged sentences

In addition to having the same characteristics and valuation methodology of TSRUs, PTSRU grants require special service and performance conditions.

These awards were settled in December 2022 in accordance with the grant provisions.

The following provides data related to all TSRU, RSU, PPS, PSA and stock option activity:

11 unchanged sentences

(a) Weighted-average GDFV per TSRUs and stock options.

(b) TSRU includes expense for PTSRUs, which is not significant for all years presented .

Total share-based payment expense was $ 1.2 billion, $ 780 million and $ 718 million in 2021, 2020 and 2019, respectively, which includes pre-tax share-based payment expense included in Discontinued operations –– net of tax of $ 2 million, $ 25 million and $ 32 million in 2021, 2020 and 2019, respectively.

(b) In 2020, TSRU includes expense for PTSRUs, which is not significant .

Total share-based payment expense was $ 872 million, $ 1.2 billion and $ 780 million in 2022, 2021 and 2020, respectively, which includes pre-tax share-based payment expense included in Discontinued operations –– net of tax of $ 0 million , $ 2 million and $ 25 million in 2022, 2021 and 2020, respectively.

Tax benefit for share-based compensation expense was $ 160 million, $ 227 million and $ 141 million in 2022, 2021 and 2020, respectively.

42 unchanged sentences

99,060 $ 35.14 3.0 1,856

TSRUs exercised and converted to PTUs — 3,074 $ — 0.8 $ 182

Outstanding PTUs converted from TSRUs exercised 2,621 0.6 $ 134

(a) In 2022, we settled 42,938,701 TSRUs with a weighted-average grant price of $ 27.32 per unit.

31 unchanged sentences

Income from continuing operations attributable to Pfizer Inc.

$ 22,414 $ 6,630 $ 10,708

Preferred stock dividends––net of tax — — 1

Income from continuing operations attributable to Pfizer Inc.

common shareholders

16 unchanged sentences

Common-share equivalents:

stock options, stock issuable under employee compensation plans convertible preferred stock and accelerated share repurchase agreements 107 77 106

stock options and stock issuable under employee compensation plans 125 107 77

Weighted-average number of common shares outstanding––Diluted

58 unchanged sentences

Contingencies and Certain Commitments

We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies.

The following outlines our legal contingencies.

For a discussion of our tax contingencies, see Note 5B.

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.

The following outlines our legal contingencies, guarantees and indemnifications.

For a discussion of our tax contingencies, see Note 5 D .

Legal Proceedings

1 unchanged sentence

• Patent litigation, which typically involves challenges to the coverage and/or validity of patents on various products, processes or dosage forms.

An adverse outcome could result in loss of patent protection for a product, a significant loss of revenues from that product or impairment of the value of associated assets.

An adverse outcome could result in loss of patent protection for a product, a significant loss of revenues from a product or impairment of the value of associated assets.

We are the plaintiff in the majority of these actions.

• Product liability and other product-related litigation related to current or former products, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others, and often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.

• Commercial and other asserted or unasserted matters, which can include acquisition-, licensing-, intellectual property-, collaboration- or co-promotion-related and product-pricing claims and environmental claims and proceedings, can involve complexities that will vary from matter to matter.

• Commercial and other asserted or unasserted matters, which can include acquisition-, licensing-, intellectual property-, collaboration- or co-promotion-related and product-pricing claims and environmental claims and proceedings, and can involve complexities that will vary from matter to matter.

• Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S.

7 unchanged sentences

Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued.

Our assessments, which result from a complex series of judgments about future events and uncertainties, are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

Our assessments, which result from a complex series of judgments about future events and uncertainties, are based on estimates and assumptions that have been deemed reasonable by

2022 Form 10-K 90

1 unchanged sentence

and Subsidiary Companies

management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

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.

13 unchanged sentences

Legal Proceedings––Patent Litigation

We are involved in suits relating to our patents, including but not limited to, those discussed below.

Most involve claims by generic drug manufacturers that patents covering our products (or those of our collaboration/licensing partners to which we have licenses or co-promotion rights and to which we may or may not be a party), processes or dosage forms are invalid and/or do not cover the product of the generic drug manufacturer.

We are involved in suits relating to our patents (or those of our collaboration/licensing partners to which we have licenses or co-promotion rights), including but not limited to, those discussed below.

We face claims by generic drug manufacturers that patents covering our products (or those of our collaboration/licensing partners to which we have licenses or co-promotion rights and to which we may or may not be a party), processes or dosage forms are invalid and/or do not cover the product of the generic drug manufacturer.

Also, counterclaims, as well as various 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.

1 unchanged sentence

patents that are discussed below, patent rights to certain of our products or those of our collaboration/licensing partners are being challenged in various other jurisdictions.

For example, some of our collaboration or licensing partners face challenges to the validity of their patent rights in non-U.S.

Some of our collaboration or licensing partners face challenges to the validity of their patent rights in non-U.S.

jurisdictions.

For example, in April 2022, the U.K.

High Court issued a judgment finding invalid a BMS patent related to Eliquis due to expire in 2026.

In November 2022, BMS received permission to appeal the High Court’s decision.

Additional challenges are pending in other jurisdictions.

Also, in July 2022, CureVac AG (CureVac) brought a patent infringement action against BioNTech and certain of its subsidiaries in the German Regional Court alleging that Comirnaty infringes certain German utility model patents and certain expired and unexpired European patents.

Additional challenges involving Comirnaty patents may be filed against us and/or BioNTech in other jurisdictions in the future.

Adverse decisions in these matters could have a material adverse effect on our results of operations.

We are also party to patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payers, governments or other parties are seeking damages from us for allegedly causing delay of generic entry.

1 unchanged sentence

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 is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products.

For example, several of the patents in our pneumococcal vaccine portfolio were challenged in inter partes review and post-grant review proceedings in the U.S.

In 2017, the Patent Trial and Appeal Board (PTAB) initiated proceedings with respect to two of our pneumococcal vaccine patents.

However, the PTAB declined to initiate proceedings as to two other pneumococcal vaccine patents;

those two patents, and one other patent, were challenged in federal court in Delaware.

In September 2021, Pfizer and a challenger entered into a settlement and license agreement, resolving all worldwide legal proceedings involving that challenger, related to our pneumococcal vaccine patents.

Other challenges to pneumococcal vaccine patents remain pending at the PTAB and outside the U.S.

The invalidation of any of the patents in our pneumococcal portfolio could potentially allow additional competitor vaccines into the marketplace.

In the event that any of the patents are found valid and infringed, a competitor’s vaccine might be prohibited from entering the market or a competitor might be required to pay us a royalty.

Also, if one of our patents (or one of our collaboration/licensing partners patents) is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products.

For example, several of the patents in our pneumococcal vaccine portfolio have been challenged in inter partes review and post-grant review proceedings in the U.S.

Patent and Trademark Office, as well as outside the U.S.

The invalidation of any of the patents in our pneumococcal portfolio could potentially allow additional competitor vaccines, if approved, to enter the marketplace earlier than anticipated.

In the event that any of the patents are found valid and infringed, a competitor’s vaccine, if approved, might be prohibited from entering the market or a competitor might be required to pay us a royalty.

We are also subject to patent litigation pursuant to which one or more third parties seek damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities.

For example, our Hospira subsidiaries are involved in patent and patent-related disputes over their attempts to bring generic pharmaceutical and biosimilar products to market.

If one of our marketed products 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.

If one of our marketed products (or a product of our collaboration/licensing partners) 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.

Actions In Which We Are The Plaintiff

In 2010, King, which we acquired in 2011 and is a wholly-owned subsidiary, brought a patent-infringement action against Sandoz in the U.S.

District Court for the District of New Jersey in connection with Sandoz’s abbreviated new drug application (ANDA) filed with the FDA seeking approval to market an epinephrine injectable product.

Sandoz is challenging patents, which expire in 2025, covering the next-generation autoinjector for use with epinephrine that is sold under the EpiPen brand name.

Xeljanz (tofacitinib)

Beginning in 2017, we brought patent-infringement actions against several generic manufacturers that filed separate ANDAs with the FDA seeking approval to market their generic versions of tofacitinib tablets in one or both of 5 mg and 10 mg dosage strengths, and in both immediate and extended release forms.

Beginning in 2017, we brought patent-infringement actions against several generic manufacturers that filed separate abbreviated new drug applications (ANDAs) with the FDA seeking approval to market their generic versions of tofacitinib tablets in one or both of 5 mg and 10 mg dosage strengths, and in both immediate and extended release forms.

To date, we have settled actions with several manufacturers on terms not material to us.

The remaining actions continue in the U.S.

The remaining action continues in the U.S.

District Court for the District of Delaware as described below.

In January 2021, we brought a separate patent-infringement action against Aurobindo Pharma Limited (Aurobindo) asserting the infringement and validity of the patent covering the active ingredient expiring in December 2025 and the patent covering a polymorphic form of tofacitinib expiring in 2023, which Aurobindo challenged in its ANDA seeking approval to market a generic version of tofacitinib 5 mg and 10 mg tablets.

In October 2021, we brought a separate patent-infringement action against Sinotherapeutics Inc.

(Sinotherapeutics) asserting the infringement and validity of our patent covering extended release formulations of tofacitinib that was challenged by Sinotherapeutics in its ANDA seeking approval to market a generic version of tofacitinib 11 mg extended release tablets.

In February 2022, we brought a separate patent-infringement action against Teva Pharmaceuticals USA, Inc.

(Teva) asserting the infringement and validity of our patent covering extended release formulations of tofacitinib that was challenged by Teva in its ANDA seeking approval to market a generic version of tofacitinib 22 mg extended release tablets.

In November 2022, we filed an additional patent-infringement action against Sinotherapeutics relating to its challenge of our extended release formulation and method of treatment patents in its ANDA seeking approval to market a generic version of tofacitinib 22 mg extended release tablets.

In November 2022, we brought a separate patent-infringement action against Sun Pharmaceutical Industries Limited and Sun Pharmaceutical Industries, Inc.

(collectively, Sun) asserting the infringement and validity of our compound patent covering the active ingredient that was challenged by Sun in its ANDAs seeking approval to market generic versions of tofacitinib extended release (11 mg, 22 mg) tablets.

In January 2023, we settled our action against Sun on terms not material to us.

2022 Form 10-K 91

1 unchanged sentence

and Subsidiary Companies

In February 2022, we brought a separate patent-infringement action against Slayback Pharma LLC (Slayback) asserting the infringement and validity of our compound patent covering the active ingredient that was challenged by Slayback in its ANDA seeking approval to market a generic version of tofacitinib oral solution 1 mg/mL.

Inlyta (axitinib)

4 unchanged sentences

District Court for the District of Delaware, asserting the validity and infringement of the crystalline form patent for Inlyta.

In November 2022, we settled our action against Glenmark on terms not material to us.

Ibrance (palbociclib)

Beginning in September 2020, we received correspondence from several generic companies notifying us that they would seek approval to market generic versions of Ibrance capsules.

The generic companies assert the invalidity and non-infringement of our crystalline form patent which expires in 2034.

Beginning in October 2020, we brought patent infringement actions against each of these generic companies in various federal courts, asserting the validity and infringement of the crystalline form patent.

We have settled with one of these generic companies on terms not material to the company.

Beginning in January 2021, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Ibrance tablets.

5 unchanged sentences

and (v) a tablet formulation patent expiring in 2036.

We brought patent infringement actions against each of the generic filers in various federal courts, asserting the validity and infringement of the patents challenged by the generic companies.

We brought patent infringement actions against each of the generic filers in various U.S.

federal courts, asserting the validity and infringement of the patents challenged by the generic companies.

We have settled with one of these generic companies on terms not material to us, and we dismissed the patent infringement actions relating to the crystalline form of patent, the composition of matter patent expiring in 2023, the method of use patent, and the tablet formulation patent against the generic companies that had challenged these patents.

The composition of matter patent expiring in 2027 remains in suit.

Beginning in September 2021, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Eucrisa.

2 unchanged sentences

District Court for the District of Delaware, asserting the validity and infringement of the patents challenged by the generic companies.

Matter Involving Our Collaboration/Licensing Partners

In 2017, twenty-five generic companies sent BMS Paragraph-IV certification letters informing BMS that they had filed ANDAs seeking approval of generic versions of Eliquis, challenging the validity and infringement of one or more of the three patents listed in the Orange Book for Eliquis.

One of the patents expired in December 2019 and the remaining patents currently are set to expire in 2026 and 2031.

Eliquis has been jointly developed and is being commercialized by BMS and Pfizer.

BMS and Pfizer filed patent-infringement actions against all generic filers in the U.S.

District Court for the District of Delaware and the U.S.

District Court for the District of West Virginia, asserting that each of the generic companies’ proposed products would infringe each of the patent(s) that each generic filer challenged.

Some generic filers challenged only the 2031 patent, some challenged both the 2031 and 2026 patent, and one generic company challenged all three patents.

In August 2020, the U.S.

District Court for the District of Delaware ruled that both the 2026 patent and the 2031 patent are valid and infringed by the proposed generic products.

In August and September 2020, the generic filers appealed the District Court’s decision to the U.S.

Court of Appeals for the Federal Circuit.

Prior to the August 2020 ruling, we and BMS settled with certain of the companies on terms not material to us, and we and BMS may settle with other generic companies in the future.

In September 2021, the U.S.

Court of Appeals for the Federal Circuit affirmed the District Court’s decision.

Braftovi (encorafenib)

In August 2022, a generic company notified us that it had filed an ANDA with the FDA seeking approval to market a generic version of Braftovi.

The company asserted the invalidity and non-infringement of, among others, a method of use patent expiring in 2033.

In September 2022, we brought a patent infringement action against the generic company in the U.S.

District Court for the District of Delaware, asserting the validity and infringement of the method of use patent expiring in 2033.

In January 2023, the case was dismissed.

Mektovi (binimetinib)

Beginning in August 2022, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Mektovi.

The companies assert the invalidity and non-infringement of two method of use patents expiring in 2030, a method of use patent expiring in 2031, two method of use patents expiring in 2033, and a product by process patent expiring in 2033.

Beginning in September 2022, we brought patent infringement actions against the generic filers in the U.S.

District Court for the District of Delaware, asserting the validity and infringement of all six patents.

Actions in Which We are the Defendant

In March 2022, Alnylam Pharmaceuticals, Inc.

(Alnylam) filed a complaint in the U.S.

District Court for the District of Delaware against Pfizer and Pharmacia & Upjohn Co.

LLC, our wholly owned subsidiary, alleging that Comirnaty infringes U.S.

11,246,933, which was issued in February 2022, and seeking unspecified monetary damages.

In July 2022, Alnylam filed a second complaint in the U.S.

District Court for the District of Delaware against Pfizer, Pharmacia & Upjohn Co.

LLC, BioNTech and BioNTech Manufacturing GmbH, alleging that Comirnaty infringes U.S.

11,382,979, which was issued in July 2022, and seeking unspecified monetary damages.

In August 2022, ModernaTX, Inc.

(ModernaTX) and Moderna US, Inc.

(Moderna) sued Pfizer, BioNTech, BioNTech Manufacturing GmbH and BioNTech US Inc.

District Court for the District of Massachusetts, alleging that Comirnaty infringes three U.S.

In its complaint, Moderna stated that it is seeking damages for alleged infringement occurring after March 7, 2022.

In August 2022, ModernaTX filed a patent infringement action in Germany against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, alleging that Comirnaty infringes two European patents.

In September 2022, ModernaTX filed patent infringement actions in the U.K and in the Netherlands against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, on the same two patents.

In its complaints, ModernaTX stated that it is seeking damages for alleged infringement occurring after March 7, 2022.

In the U.K., Pfizer and BioNTech have brought an action against ModernaTX seeking to revoke these European patents, which was consolidated with the September 2022 action filed by ModernaTX.

In June 2022, Enanta Pharmaceuticals, Inc.

filed a complaint in the U.S.

District Court for the District of Massachusetts against Pfizer alleging that the active ingredient in Paxlovid, nirmatrelvir, infringes U.S.

11,358,953, which was issued in June 2022, and seeking unspecified monetary damages.

Matters Involving Pfizer and its Collaboration/Licensing Partners

In July 2022, Pfizer, BioNTech and BioNTech Manufacturing GmbH filed a declaratory judgment complaint against CureVac in the U.S.

District Court for the District of Massachusetts seeking a judgment of non-infringement for the following three patents relating to Comirnaty:

11,135,312, 11,149,278, and 11,241,493.

Outside of the U.S., in the U.K., Pfizer and BioNTech have sued CureVac seeking a judgment of invalidity of several patents and CureVac has made certain infringement counterclaims.

Xtandi (enzalutamide)

In July 2022, Medivation and Medivation Prostate Therapeutics, Inc.;

Astellas Pharma Inc., Astellas US LLC and Astellas Pharma US, Inc.;

and The Regents of the University of California filed a patent-infringement suit in the U.S.

District Court for the District of New Jersey against Zydus Pharmaceuticals (USA) Inc.

and Zydus Lifesciences Ltd.;

and in December 2022, the same entities filed a patent-infringement suit in the U.S.

District Court for the District of New Jersey against Sun in connection with those companies’ respective ANDAs seeking approval to market

2022 Form 10-K 92

Notes to Consolidated Financial Statements

and Subsidiary Companies

generic versions of enzalutamide.

The generic manufacturers are challenging the composition of matter patent, which expires in 2027, covering enzalutamide and pharmaceutical compositions thereof, for treating prostate cancer.

Legal Proceedings––Product Litigation

12 unchanged sentences

and its territories, in violation of federal antitrust laws and, in certain of the actions, the antitrust, consumer protection and various other laws of certain states, as the result of Wyeth fraudulently obtaining and improperly listing certain patents for Effexor XR in the Orange Book, enforcing certain patents for Effexor XR and entering into a litigation settlement agreement with a generic drug manufacturer with respect to Effexor XR.

Each of the plaintiffs seeks treble damages (for itself in the individual actions or on behalf of the putative class in the

2021 Form 10-K 96

Notes to Consolidated Financial Statements

and Subsidiary Companies

purported class actions) for alleged price overcharges for Effexor XR or generic Effexor XR in the U.S.

Each of the plaintiffs seeks treble damages (for itself in the individual actions or on behalf of the putative class in the purported class actions) for alleged price overcharges for Effexor XR or generic Effexor XR in the U.S.

and its territories since June 14, 2008.

12 unchanged sentences

In addition, individual actions have been filed against Pfizer, Ranbaxy and certain of their affiliates, among others, that assert claims and seek relief for the plaintiffs that are substantially similar to the claims asserted and the relief sought in the purported class actions described above.

These various actions have been consolidated for pre-trial proceedings in a Multi-District Litigation in the U.S.

These various actions have been consolidated for pre-trial proceedings in a MDL in the U.S.

District Court for the District of New Jersey.

In September 2013 and 2014, the District Court dismissed with prejudice the claims of the direct purchasers.

In October and November 2014, the District Court dismissed with prejudice the claims of all other Multi-District Litigation plaintiffs.

All plaintiffs have appealed the District Court’s orders dismissing their claims with prejudice to the U.S.

In October and November 2014, the District Court dismissed with prejudice the claims of all other MDL plaintiffs.

All plaintiffs appealed the District Court’s orders dismissing their claims with prejudice to the U.S.

Court of Appeals for the Third Circuit.

4 unchanged sentences

In February 2020, a lawsuit was filed in the U.S.

District Court for the District of Kansas against Pfizer, its affiliates King and Meridian, and various Mylan entities, on behalf of a purported U.S.

District Court for the District of Kansas against Pfizer, its current and former affiliates King and Meridian, and various Mylan entities, on behalf of a purported U.S.

nationwide class of direct purchaser plaintiffs who purchased EpiPen devices directly from the defendants.

3 unchanged sentences

In September 2021, plaintiffs filed an amended complaint.

In August 2022, the District Court granted Pfizer’s motion to dismiss the complaint, and plaintiffs have appealed to the U.S.

Court of Appeals for the Tenth Circuit.

2022 Form 10-K 93

Notes to Consolidated Financial Statements

and Subsidiary Companies

Nexium 24HR and Protonix

1 unchanged sentence

The cases against Pfizer involve Protonix and/or Nexium 24HR and seek compensatory and punitive damages and, in some cases, treble damages, restitution or disgorgement.

In 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S.

In 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to a MDL in the U.S.

District Court for the District of New Jersey.

As part of our Consumer Healthcare JV transaction with GSK, the JV has agreed to assume, and to indemnify Pfizer for, liabilities arising out of such litigation to the extent related to Nexium 24HR.

As part of the combination of our and GSK’s consumer healthcare businesses to form Haleon, Haleon assumed, and agreed to indemnify Pfizer for, liabilities arising out of such litigation to the extent related to Nexium 24HR.

• Personal Injury Actions

2 unchanged sentences

Plaintiffs seek compensatory and punitive damages.

In 2016, the federal cases were transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S.

Additional lawsuits have been filed in which plaintiffs allege they developed blocked tear ducts following their treatment with Docetaxel.

In 2016, the federal cases were transferred for coordinated pre-trial proceedings to a MDL in the U.S.

District Court for the Eastern District of Louisiana.

In 2022, the eye injury cases were transferred for coordinated pre-trial proceedings to a MDL in the U.S.

District Court for the Eastern District of Louisiana.

• Mississippi Attorney General Government Action

4 unchanged sentences

Pfizer has not sold Zantac since 2006, and only sold an OTC version of the product.

Plaintiffs seek compensatory and punitive damages.

In February 2020, the federal actions were transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S.

District Court for the Southern District of Florida.

Plaintiffs in the Multi-District Litigation have filed against Pfizer and many other defendants a master personal injury complaint, a consolidated consumer class action complaint alleging, among other things, claims under consumer protection

2021 Form 10-K 97

Notes to Consolidated Financial Statements

and Subsidiary Companies

statutes of all 50 states, and a medical monitoring complaint seeking to certify medical monitoring classes under the laws of 13 states.

Plaintiffs previously had filed a consolidated third-party payor class action complaint alleging violation of the federal Racketeer Influenced and Corrupt Organizations Act (RICO) statute and seeking reimbursement for payments made for the prescription version of Zantac, but the Multi-District Litigation court dismissed that complaint;

Plaintiffs have appealed the dismissal to the U.S.

Court of Appeals for the Eleventh Circuit.

In 2006, Pfizer sold the consumer business that included its Zantac OTC rights to Johnson & Johnson and transferred the assets and liabilities related to Zantac OTC to Johnson & Johnson in connection with the sale.

Plaintiffs in these cases seek compensatory and punitive damages.

In February 2020, the federal actions were transferred for coordinated pre-trial proceedings to a MDL in the U.S.

District Court for the Southern District of Florida (the Federal MDL Court).

Plaintiffs in the MDL have filed against Pfizer and many other defendants a master personal injury complaint, asserting a consolidated consumer class action alleging, among other things, claims under consumer protection statutes of all 50 states, and a medical monitoring complaint seeking to certify medical monitoring classes under the laws of 13 states.

In addition, (i) Pfizer has received service of Canadian class action complaints naming Pfizer and other defendants, and seeking compensatory and punitive damages for personal injury and economic loss, allegedly arising from the defendants’ sale of Zantac in Canada;

and (ii) the State of New Mexico and the Mayor and City Council of Baltimore separately filed civil actions against Pfizer and many other defendants in state court, alleging various state statutory and common law claims in connection with the defendants’ alleged sale of Zantac in those jurisdictions.

and (ii) the State of New Mexico and the Mayor and City Council of Baltimore separately filed civil actions against Pfizer and many other defendants in state courts, alleging various state statutory and common law claims in connection with the defendants’ alleged sale of Zantac in those jurisdictions.

In April 2021, a Judicial Council Coordinated Proceeding was created in the Superior Court of California in Alameda County to coordinate personal injury actions against Pfizer and other defendants filed in California state court.

Coordinated proceedings have also been created in other state courts.

In December 2022, the Federal MDL Court granted defendants’ Daubert motions to exclude plaintiffs’ expert testimony and motion for summary judgment on general causation, and dismissed the litigation.

Beginning in August 2021, a number of putative class actions have been filed against Pfizer in various U.S.

2 unchanged sentences

Plaintiffs seek to represent nationwide and state-specific classes and seek various remedies, including damages and medical monitoring.

In December 2022, the federal actions were transferred for coordinated pre-trial proceedings to a MDL in the U.S.

District Court for the Southern District of New York.

Similar putative class actions have been filed in Canada and Israel, where the product brand is Champix.

12 unchanged sentences

In addition, in connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities primarily related to Former Monsanto’s chemical businesses, including, but not limited to, any such liabilities that Solutia assumed.

Solutia’s and New Monsanto’s assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls.

Solutia’s and New Monsanto’s

2022 Form 10-K 94

Notes to Consolidated Financial Statements

and Subsidiary Companies

assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls.

Solutia and/or New Monsanto are defending Pharmacia in connection with various claims and litigation arising out of, or related to, Former Monsanto’s chemical businesses, and have been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.

Environmental Matters

In 2009, we submitted a revised site-wide feasibility study with regard to the Wyeth Holdings Corporation (formerly, American Cyanamid Company) discontinued industrial chemical facility in Bound Brook, New Jersey.

In 2011, Wyeth Holdings Corporation executed an Administrative Settlement Agreement and Order on Consent for Removal Action (the 2011 Administrative Settlement Agreement) with the U.S.

Environmental Protection Agency (EPA) with regard to the Bound Brook facility.

In accordance with the 2011 Administrative Settlement Agreement, we completed construction of an interim remedy.

In 2012, the EPA issued a final remediation plan for the Bound Brook facility’s main plant area.

In 2013, Wyeth Holdings Corporation (now Wyeth Holdings LLC) entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the main plant area and to perform a focused feasibility study for two adjacent lagoons.

In 2015, the U.S., on behalf of the EPA, filed a complaint and consent decree with the federal District Court for the District of New Jersey that allows Wyeth Holdings LLC to complete the design and to implement the remedy for the main plant area.

The consent decree (which supersedes the 2011 Administrative Settlement Agreement) was entered by the District Court in 2015.

In 2018, the EPA issued a final remediation plan for the two adjacent lagoons.

In 2019, Wyeth Holdings LLC entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the lagoons.

In September 2021, the U.S., on behalf of the EPA, filed a complaint and consent decree with the federal District Court for the District of New Jersey, which the court approved in November 2021, that will allow Wyeth Holdings LLC to complete the design and implement the remedy for the two adjacent lagoons.

We have accrued for the estimated costs of the site remedies for the Bound Brook facility.

In 2009, as part of our acquisition of Wyeth, we assumed responsibility for environmental remediation at the Wyeth Holdings LLC (formerly known as, Wyeth Holdings Corporation and American Cyanamid Company) discontinued industrial chemical facility in Bound Brook, New Jersey.

Since that time, we have executed or have become a party to a number of administrative settlement agreements, orders on consent, and/or judicial consent decrees, with the U.S.

Environmental Protection Agency and/or New Jersey Department of Environmental Protection to perform remedial design, removal and remedial actions, and related environmental remediation activities at the Bound Brook facility.

We have accrued for the currently estimated costs of these activities.

We are a party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and other state, local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.

8 unchanged sentences

In February 2023, the defendants filed for en banc review of the Court of Appeals’ decision.

2021 Form 10-K 98

Notes to Consolidated Financial Statements

and Subsidiary Companies

In February 2023, the Court of Appeals denied defendants’ en banc petitions.

Allergan Complaint for Indemnity

1 unchanged sentence

This suit was voluntarily discontinued without prejudice in January 2021.

Breach of Contract––Xalkori/Lorbrena

We are a defendant in a breach of contract action brought by New York University (NYU) in the Supreme Court of the State of New York (Supreme Court).

NYU alleges that it is entitled to royalties on Pfizer’s sales of Xalkori under the terms of a Research and License Agreement between NYU and Sugen, Inc.

was acquired by Pharmacia in August 1999, and Pharmacia was acquired by Pfizer in 2003 and is a wholly owned subsidiary of Pfizer.

The action was originally filed in 2013.

In 2015, the Supreme Court dismissed the action and, in 2017, the New York State Appellate Division reversed the decision and remanded the proceedings to the Supreme Court.

In January 2020, the Supreme Court denied both parties’ summary judgment motions.

In October 2020, NYU filed a separate breach of contract action against Pfizer alleging that it is entitled to royalties on sales of Lorbrena under the terms of the same NYU-Sugen, Inc.

Research and Licensing Agreement.

In February 2022, the parties reached an agreement to settle both breach of contract actions on terms not material to Pfizer.

Viatris Securities Litigation

2 unchanged sentences

Viatris, Pfizer, and certain of each company’s current and former officers, directors and employees are named as defendants.

The complaint alleges that the defendants violated certain provisions of the Securities Act of 1933 in connection with certain disclosures made in or omitted from the registration statement and related prospectus issued in connection with the Transactions.

An amended complaint was filed in January 2023, and alleges that the defendants violated certain provisions of the Securities Act of 1933 in connection with certain disclosures made in or omitted from the registration statement and related prospectus issued in connection with the Transactions, as well as related communications.

Plaintiff seeks damages, costs and expenses and other equitable and injunctive relief.

3 unchanged sentences

and other jurisdictions in which we do business.

These matters often involve government requests for information on a voluntary basis or through subpoenas after which the government may seek additional information through follow-up requests or additional subpoenas.

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.

9 unchanged sentences

In May 2019, Attorneys General of more than 40 states plus the District of Columbia and Puerto Rico filed a complaint against a number of pharmaceutical companies, including Greenstone and Pfizer.

The matter has been consolidated with a Multi-District Litigation in the Eastern District of Pennsylvania.

The matter has been consolidated with a MDL in the Eastern District of Pennsylvania.

As to Greenstone and Pfizer, the complaint alleges anticompetitive conduct in violation of federal and state antitrust laws and state consumer protection laws.

In June 2020, the State Attorneys General filed a new complaint against a large number of companies, including Greenstone and Pfizer, making similar allegations, but concerning a new set of drugs.

This complaint was transferred to the Multi-District Litigation in July 2020.

The Multi-District Litigation also includes civil complaints filed by private plaintiffs and state counties against Pfizer, Greenstone and a significant number of other defendants asserting allegations that generally overlap with those asserted by the State Attorneys General.

Subpoena relating to Manufacturing of Quillivant XR

This complaint was transferred to the MDL in July 2020.

The MDL also includes civil complaints filed by private plaintiffs and state counties against Pfizer, Greenstone and a significant number of other defendants asserting allegations that generally overlap with those asserted by the State Attorneys General.

Subpoena & Civil Investigative Demand relating to Tris Pharma/Quillivant XR

In October 2018, we received a subpoena from the U.S.

Attorney’s Office for the Southern District of New York (SDNY) seeking records relating to our relationship with another drug manufacturer and its production and manufacturing of drugs including, but not limited to, Quillivant XR.

We have produced records pursuant to the subpoena.

We responded to that subpoena in full and have had no communication with the SDNY in connection with the subpoena since June 2019.

2022 Form 10-K 95

Notes to Consolidated Financial Statements

and Subsidiary Companies

Additionally, in September 2020, we received a Civil Investigative Demand (CID) from the Texas Attorney General’s office seeking records of a similar nature to those requested by the SDNY.

We are producing records in response to this request.

Government Inquiries relating to Meridian Medical Technologies

In February 2019, we received a civil investigative demand from the U.S.

In February 2019, we received a CID from the U.S.

Attorney’s Office for the SDNY.

The civil investigative demand seeks records and information related to alleged quality issues involving the manufacture of auto-injectors at the Meridian site.

In August 2019, we received a HIPAA subpoena from the U.S.

Attorney’s Office for the Eastern District of Missouri seeking similar records and information.

We are producing records in response to these requests.

The CID seeks records and information related to alleged quality issues involving the manufacture of auto-injectors at the Meridian site.

In August 2019, we received a HIPAA subpoena issued by the U.S.

Attorney’s Office for the Eastern District of Missouri, in coordination with the Department of Justice’s Consumer Protection Branch, seeking similar records and information.

We are producing records in response to these and subsequent requests.

Department of Justice/SEC Inquiry relating to Russian Operations

In June 2019, we received an informal request from the U.S.

Department of Justice’s FCPA Unit seeking documents relating to our operations in Russia.

Department of Justice’s Foreign Corrupt Practices Act (FCPA) Unit seeking documents relating to our operations in Russia.

In September 2019, we received a similar request from the SEC’s FCPA Unit.

2 unchanged sentences

See Legal Proceedings –– Product Litigation –– Docetaxel –– Mississippi Attorney General Government Investigation above for information regarding a government investigation related to Docetaxel marketing practices.

2021 Form 10-K 99

Notes to Consolidated Financial Statements

and Subsidiary Companies

Department of Justice Inquiries relating to India Operations

8 unchanged sentences

In August 2020, we received a similar request from the SEC’s FCPA Unit.

We are producing records pursuant to these requests.

We have produced records pursuant to these requests.

Zantac –– State of New Mexico and Mayor and City Council of Baltimore Civil Actions

See Legal Proceedings––Product Litigation––Zantac above for information regarding civil actions separately filed by the State of New Mexico and the Mayor and City Council of Baltimore alleging various state statutory and common law claims in connection with the defendants’ alleged sale of Zantac in those jurisdictions.

Legal Proceedings––Matters Resolved During 2021

During 2021, certain matters, including the matter discussed below, were resolved or became the subject of definitive settlement agreements or settlement agreements-in-principle.

Beginning in 2017, purported class actions were filed in various federal courts by indirect purchasers of EpiPen against Pfizer, and/or its current and former affiliates King and Meridian, and/or various entities affiliated with Mylan, and Mylan former Chief Executive Officer, Heather Bresch.

The plaintiffs in these actions represent U.S.

nationwide classes comprising persons or entities who paid for any portion of the end-user purchase price of an EpiPen between 2009 until the cessation of the defendants’ allegedly unlawful conduct.

Against Pfizer and/or its affiliates, plaintiffs in these actions generally allege that Pfizer’s and/or its affiliates’ settlement of patent litigation regarding EpiPen delayed market entry of generic EpiPen in violation of federal and various state antitrust laws.

At least one lawsuit also alleges that Pfizer and/or Mylan violated RICO.

Plaintiffs also filed various federal antitrust, state consumer protection and unjust enrichment claims against, and relating to conduct attributable solely to, Mylan and/or its affiliates regarding EpiPen.

Plaintiffs seek treble damages for alleged overcharges for EpiPen since 2011.

In 2017, all of these indirect purchase actions were consolidated for coordinated pre-trial proceedings in a Multi-District Litigation in the U.S.

District Court for the District of Kansas with other EpiPen-related actions against Mylan and/or its affiliates to which Pfizer, King and Meridian are not parties.

In July 2021, Pfizer and plaintiffs filed a stipulation of settlement to resolve the Multi-District Litigation for $ 345 million.

The District Court approved the settlement in November 2021, and the payment was made in accordance with the terms of the settlement agreement.

Government Inquiries relating to Biohaven

In June 2022, the U.S.

Department of Justice's Commercial Litigation Branch and the U.S.

Attorney’s Office for the Western District of New York issued a CID relating to Biohaven.

The CID seeks records and information related to, among other things, engagements with health care professionals and co-pay coupons cards.

Biohaven is a wholly-owned subsidiary that we acquired in October 2022.

We are producing records in response to these requests.

Guarantees and Indemnifications

2 unchanged sentences

These indemnifications are generally subject to various restrictions and limitations.

Historically, we have not paid significant amounts under these provisions and, as of December 31, 2021, the estimated fair value of these indemnification obligations has been included in our financial statements and is not material to Pfizer.

In addition, in connection with our entry into certain agreements and other transactions, our counterparties may agree to indemnify us.

Historically, we have not paid significant amounts under these provisions and, as of December 31, 2022, the estimated fair value of these indemnification obligations is not material to Pfizer.

See Note 2C for a description of the March 2022 indemnity provided by Pfizer to GSK in connection with the issuance of notes by the Consumer Healthcare JV.

In conjunction with the completion of GSK’s demerger transactions in July 2022, GSK’s guarantee and our related indemnification of GSK’s guarantee were terminated.

In addition, in connection with our entry into certain agreements and other transactions, our counterparties may be obligated to indemnify us.

For example, in November 2020, we and Mylan completed the transaction to spin-off our Upjohn Business and combine it with Mylan to form Viatris.

As part of the transaction and as previously disclosed, Viatris has agreed to assume, and to indemnify Pfizer for, liabilities arising out of certain matters.

As part of the transaction and as previously disclosed, each of Viatris and Pfizer has agreed to assume, and to indemnify the other for, liabilities arising out of certain matters.

Also, our global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection, includes certain indemnity provisions pursuant to which each of BioNTech and Pfizer has agreed to indemnify the other for certain liabilities that may arise in connection with certain third-party claims relating to Comirnaty.

We have also guaranteed the long-term debt of certain companies that we acquired and that now are subsidiaries of Pfizer.

6 unchanged sentences

We may be required to make payments to sellers for certain prior business combinations that are contingent upon future events or outcomes.

See Note 1E .

The estimated fair value of contingent consideration as of December 31, 2021 is $ 697 million, of which $ 135 million is recorded in Other current liabilities and $ 563 million in Other noncurrent liabilities, and as of December 31, 2020 is $ 689 million, of which $ 123 million is recorded in Other current liabilities and $ 566 million in Other noncurrent liabilities .

The increase in the contingent consideration balance from December 31, 2020 is primarily due to fair value adjustments, partially offset by payments made upon the achievement of certain sales-based milestones.

Our insurance coverage reflects market conditions (including cost and availability) existing at the time it is written, and our decision to obtain insurance coverage or to self-insure varies accordingly.

Depending upon the cost and availability of insurance and the nature of the risk involved, the amount of self-insurance may be significant.

The cost and availability of coverage have resulted in self-insuring certain exposures, including product liability.

If we incur substantial liabilities that are not covered by insurance or substantially exceed insurance

See Note 1 D .

The estimated fair value of contingent consideration as of December 31, 2022 is $ 645 million, of which $ 42 million is recorded in Other current liabilities and $ 603 million in Other noncurrent liabilities, and as of December 31, 2021 was $ 697 million, of which $ 135 million was recorded in Other current liabilities and $ 563 million in Other noncurrent liabilities .

The decrease in the contingent consideration balance

2022 Form 10-K 96

1 unchanged sentence

and Subsidiary Companies

coverage and that are in excess of existing accruals, there could be a material adverse effect on our cash flows or results of operations in the period in which the amounts are paid and/or accrued.

from December 31, 2021 is primarily due to payments made upon the achievement of certain sales-based milestones partially offset by fair value adjustments.

Depending upon the cost and availability of insurance and the nature of the risk involved, the amount of self-insurance may be significant.

The cost and availability of coverage have resulted in self-insuring certain exposures, including product liability.

If we incur substantial liabilities that are not covered by insurance or substantially exceed insurance coverage and that are in excess of existing accruals, there could be a material adverse effect on our cash flows or results of operations in the period in which the amounts are paid and/or accrued.

Segment, Geographic and Other Revenue Information

1 unchanged sentence

We regularly review our operating segments and the approach used by management to evaluate performance and allocate resources.

With the formation of the Consumer Healthcare JV in 2019 and the completion of the spin-off of our Upjohn Business in the fourth quarter of 2020, Pfizer transformed into a more focused, global leader in science-based innovative medicines and vaccines and beginning in the fourth quarter of 2020 operated as a single operating segment engaged in the discovery, development, manufacturing, marketing, sale and distribution of biopharmaceutical products worldwide.

Biopharma, our innovative science-based biopharmaceutical business and PC1, our global contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients.

Biopharma is a science-based medicines business that includes six therapeutic areas – Oncology, Inflammation & Immunology, Rare Disease, Hospital, Vaccines and Internal Medicine.

The Hospital therapeutic area commercializes our global portfolio of sterile injectable and anti-infective medicines.

We manage our commercial operations through two operating segments, Biopharma and PC1, which are each led by a single manager.

Biopharma is the only reportable segment.

Each operating segment has responsibility for its commercial activities.

Regional commercial organizations market, distribute and sell our products and are supported by global platform functions that are responsible for the research, development, manufacturing and supply of our products and global corporate enabling functions.

Biopharma receives its R&D services from GPD and WRDM.

Biopharma receives its R&D services from WRDM and GPD.

These services include IPR&D projects for new investigational products and additional indications for in-line products.

Each business has a geographic footprint across developed and emerging markets.

Each operating segment has a geographic footprint across developed and emerging markets.

Our chief operating decision maker uses the revenues and earnings of the operating segments, among other factors, for performance evaluation and resource allocation.

Biopharma is the only reportable segment.

We have revised prior-period information (Revenues and Earnings, as defined by management) to conform to the current management structure.

Other Costs and Business Activities

Certain pre-tax costs are not allocated to our operating segment results, such as costs associated with the following:

After the organizational changes in the third quarter of 2022 (see Note 1A ), the new commercial structure within Biopharma is designed to better support and optimize performance across three broad customer groups:

• Primary Care consists of the former Internal Medicine and Vaccines product portfolios, products for COVID-19 prevention and treatment, and potential future mRNA and antiviral products.

• Specialty Care consists of the former Inflammation & Immunology, Rare Disease and Hospital (excluding Paxlovid) product portfolios.

• Oncology consists of the former Oncology product portfolio.

Other Business Activities–– Includes the operating results of PC1 as well as certain pre-tax costs not allocated to our operating segment results, such as costs associated with:

• WRDM––the R&D and Medical expenses managed by our WRDM organization, which is generally responsible for research projects for our Biopharma portfolio until proof-of-concept is achieved and then for transitioning those projects to the GPD organization for possible clinical and commercial development.

1 unchanged sentence

The WRDM organization also has responsibility for certain science-based and other platform-services organizations, which provide end-to-end technical expertise and other services to the various R&D projects, as well as the Worldwide Medical and Safety group, which ensures that Pfizer provides all stakeholders––including patients, healthcare providers, pharmacists, payers and health authorities––with complete and up-to-date information on the risks and benefits associated with Pfizer products so that they can make appropriate decisions on how and when to use Pfizer’s medicines.

• GPD––the costs associated with our GPD organization, which is generally responsible for clinical trials from WRDM in the Biopharma portfolio, including late-stage portfolio spend.

• GPD––the costs associated with our GPD organization, which is generally responsible for clinical trials from WRDM in the Biopharma portfolio, including both early- and late-stage portfolio spend.

GPD also provides technical support and other services to Pfizer R&D projects.

GPD is responsible for facilitating all regulatory submissions and interactions with regulatory agencies.

• Corporate and Other Unallocated––the costs associated with (i) corporate enabling functions (such as digital, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement, among others), all strategy, business development, portfolio management and valuation capabilities, patient advocacy activities and certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments;

(ii) overhead expenses primarily associated with our manufacturing (which include manufacturing variances associated with production) operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs;

and (iii) our share of earnings from the Consumer Healthcare JV.

• Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and PP&E;

• Corporate and other unallocated––the costs associated with (i) corporate enabling functions (such as digital, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement, among others) and other corporate costs, including, but not limited to, all strategy, business development, portfolio management and valuation capabilities and certain compensation, as well as interest income and expense, and gains and losses on investments;

(ii) overhead costs primarily associated with our manufacturing operations (which include manufacturing variances associated with production) that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs;

and (iii) our share of earnings from Haleon/the Consumer Healthcare JV.

Reconciling Items–– The following items, transactions and events are not allocated to our operating segment results:

(i) all amortization of intangible assets;

(ii) acquisition-related items, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company;

and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items (such as pension and postretirement actuarial remeasurement gains and losses, gains on the completion of joint venture transactions, restructuring charges, legal charges or net gains and losses on investments in equity securities) that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

Such items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

The operating results of PC1, our global contract development and manufacturing organization, and through July 31, 2019 our former Consumer Healthcare business are included in Other business activities.

Segment Assets

We manage our assets on a total company basis, not by operating segment, as our operating assets are shared or commingled.

and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

Such certain significant items can include, but are not limited to, pension and postretirement actuarial remeasurement gains and losses, non-acquisition-related restructuring costs, net gains and losses on investments in equity securities, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

Beginning in the first quarter of 2022, acquisition-related items may now include purchase accounting impacts that previously were included as part of a reconciling item entitled “Purchase accounting adjustments” that we no longer separately present, 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.

Segment Assets–– We manage our assets on a total company basis, not by operating segment, as our operating assets are shared or commingled.

Therefore, our chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment.

14 unchanged sentences

Reconciling Items:

Purchase accounting adjustments — — — ( 3,175 ) ( 3,117 ) ( 4,153 ) 3,067 3,047 4,145

Acquisition-related costs — — — ( 52 ) ( 44 ) ( 185 ) — — 3

Amortization of intangible assets ( 3,609 ) ( 3,746 ) ( 3,395 ) 3,609 3,746 3,395

Acquisition-related items ( 832 ) ( 139 ) ( 98 ) ( 20 ) ( 21 ) ( 17 )

Certain significant items (d)

3 unchanged sentences

Biopharma’s earnings include dividend income from our investment in ViiV of $ 314 million in 2022, $ 166 million in 2021 and $ 278 million in 2020.

In connection with the organizational changes effective in the third quarter of 2022, certain functions transferred between Biopharma and corporate enabling functions and certain activities were realigned within the GPD organization.

We have reclassified $ 231 million of costs in 2021 and $ 222 million of costs in 2020 from corporate enabling functions, which are included in Other business activities, to Biopharma to conform to the current period presentation.

Amortization of intangible assets is not allocated to our operating segments for all periods presented.

(b) Certain production facilities are shared.

Depreciation is allocated based on estimates of physical production.

Amounts here relate solely to the depreciation and amortization associated with continuing operations.

(c) Other business activities include revenues and costs associated with PC1, as well as costs associated with global WRDM and GPD platform functions, global corporate enabling functions and other corporate items, as noted above, that we do not allocate to our operating segments.

In 2019, Other business activities also include revenues and costs associated with our former Consumer Healthcare business through July 31, 2019.

(d) Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

For Earnings in 2021, includes, among other items:

(i) a $ 2.1 billion charge for IPR&D related to our acquisition of Trillium, which was accounted for as an asset acquisition and recorded in Research and development expenses , (ii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ 1.3 billion ($ 450 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related costs ) and (iii) upfront and milestone payments on collaborative and licensing arrangements of $ 1.1 billion recorded in Research and development expenses , partially offset by (iv) actuarial valuation and other pension and postretirement plan gains of $ 1.6 billion recorded in Other (income)/deductions––net and (v) gains on equity securities of $ 1.3 billion recorded in Other (income)/deductions––net .

For Earnings in 2020, includes, among other items;

(c) Other business activities include revenues and costs associated with PC1 and costs that we do not allocate to our operating segments, per above, including acquired IPR&D expenses in the periods presented (see Notes 2A , 2D and 2E ) .

In 2022, earnings include (i) write-offs of $ 1.3 billion to Cost of sales of inventory related to COVID-19 products that have exceeded or are expected to exceed their approved shelf-lives prior to being used and (ii) charges to Cost of sales of approximately $ 430 million related to excess raw materials for Paxlovid.

(d) Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above).

Earnings in 2022 includes, among other items:

(i) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ 1.4 billion ($ 562 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related co sts) and (ii) net losses on equity securities of $ 1.3 billion recorded in Other (income)/deductions––net .

Earnings in 2021 included, among other items:

(i) actuarial valuation and other pension and postretirement plan gains of $ 1.6 billion recorded in Other (income)/deductions––net and (ii) net gains on equity securities of $ 1.3 billion recorded in Other (income)/deductions––net , partially offset by (iii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ 1.3 billion ($ 450 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related co sts).

Earnings in 2020 included, among other items:

(i) charges of $ 1.7 billion related to certain asset impairments recorded in Other (income)/deductions––net , (ii) actuarial valuation and other pension and postretirement plan losses of $ 1.1 billion recorded in Other (income)/deductions––net and (iii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ 791 million ($ 197 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related costs ).

For Earnings in 2019, includes, among other items:

(i) a pre-tax gain of $ 8.1 billion recorded in (Gain) on completion of Consumer Healthcare JV transaction associated with the completion of the Consumer Healthcare JV transaction, partially offset by (ii) charges of $ 2.8 billion related to certain asset impairments recorded in Other (income)/deductions––net and (iii) actuarial valuation and other pension and postretirement plan losses of $ 750 million recorded in Other (income)/deductions––net.

For additional information, see Notes 2A, 2C, 3 and 4 .

For additional information, see Notes 3 and 4 .

Geographic Information

10 unchanged sentences

is the only country to contribute more than 10 % of total revenue in 2022, 2021 and 2020.

As a percentage of revenues, our largest national market outside the U.S.

was Japan, which contributed 9 % of total revenue in 2021 and 6 % in each of 2020 and 2019.

We and our collaboration partner, BioNTech, have entered into agreements to supply pre-specified doses of Comirnaty with multiple developed and emerging nations around the world and are continuing to deliver doses of Comirnaty under such agreements.

We currently sell the Comirnaty vaccine directly to government and government sponsored customers.

This includes supply agreements entered into in November 2020 and February and May 2021 with the EC on behalf of the different EU member states and certain other countries.

As a percentage of revenues, our largest country outside the U.S.

was Japan, which contributed 8 % of total revenue in 2022, 9 % of total revenue in 2021 and 6 % of total revenue in 2020.

We and our collaboration partner, BioNTech, have entered into agreements to supply pre-specified doses of Comirnaty and we have entered into agreements to supply pre-specified treatment courses of Paxlovid with multiple developed and emerging nations around the world and are continuing to deliver doses of Comirnaty and treatment courses of Paxlovid under such agreements.

In 2021 and 2022, we principally sold the Comirnaty vaccine and the Paxlovid product directly to government and government sponsored customers.

This includes supply agreements entered into in November 2020 and February and May 2021 with the EC for Comirnaty on behalf of the different EU member states and certain other countries.

Each EU member state submits its own Comirnaty vaccine order to us and is responsible for payment pursuant to terms of the supply agreements negotiated by the EC.

Other Revenue Information

Significant Customers

Our prescription pharmaceutical products are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies.

In the U.S., we primarily sell our vaccine products directly to the federal government, CDC, wholesalers, individual provider offices, retail pharmacies and integrated delivery networks.

Outside the U.S., we primarily sell our vaccines to government and non-government institutions.

2022 Form 10-K 98

1 unchanged sentence

and Subsidiary Companies

Other Revenue Information

Significant Customers

The following summarizes revenue, as a percentage of total revenues, for our three largest U.S.

3 unchanged sentences

McKesson, Inc.

9 % 16 % 15 %

AmerisourceBergen Corporation

7 % 14 % 11 %

Cardinal Health, Inc.

2 unchanged sentences

Additionally, revenues from the U.S.

government represented 13 % of total revenues for 2021, and primarily represent sales of Comirnaty.

government represented 23 % and 13 % of total revenues for 2022 and 2021, respectively, and was not significant for 2020.

Accounts receivable from the U.S.

government represented 12 % of total trade accounts receivable as of December 31, 2021, and primarily relate to sales of Comirnaty.

government represented 4 % and 12 % of total trade accounts receivable as of December 31, 2022 and December 31, 2021, respectively.

Revenues and accounts receivable from the U.S.

government primarily represent sales of Paxlovid and Comirnaty in 2022, and sales of Comirnaty in 2021.

Significant Product Revenues

2 unchanged sentences

PRODUCT PRIMARY INDICATION OR CLASS 2022 2021 2020

TOTAL REVENUES (a)

$ 81,288 $ 41,651 $ 40,905

PFIZER BIOPHARMACEUTICALS GROUP (BIOPHARMA) (a), (b)

TOTAL REVENUES $ 100,330 $ 81,288 $ 41,651

GLOBAL BIOPHARMACEUTICALS BUSINESS (BIOPHARMA) (a)

$ 98,988 $ 79,557 $ 40,724

Vaccines $ 42,625 $ 6,575 $ 6,504

Comirnaty direct sales and alliance revenues

Primary Care $ 73,023 $ 52,029 $ 15,577

Comirnaty direct sales and alliance revenues (b)

Active immunization to prevent COVID-19

Prevnar family (c)

Pneumococcal disease 5,272 5,850 5,847

Meningococcal ACWY disease 193 221 230

FSME-IMMUN/TicoVac Tick-borne encephalitis disease

Trumenba Meningococcal B disease 118 112 135

All other Vaccines

Various 74 42 73

Oncology $ 12,333 $ 10,867 $ 9,014

Ibrance HR-positive/HER2-negative metastatic breast cancer 5,437 5,392 4,961

Xtandi alliance revenues mCRPC, nmCRPC, mCSPC 1,185 1,024 838

Advanced RCC 1,002 787 477

Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor

Philadelphia chromosome–positive chronic myelogenous leukemia 540 450 365

ALK-positive and ROS1-positive advanced NSCLC 493 544 530

Non-hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (Wegener’s Granulomatosis) and microscopic polyangiitis 491 170 ( 1 )

Anemia 444 386 225

Treatment of mCRC;

unresectable, locally advanced, recurrent or metastatic NSCLC;

recurrent glioblastoma;

metastatic RCC;

and persistent, recurrent or metastatic cervical cancer 444 143 1

Lorbrena ALK-positive metastatic NSCLC

Aromasin Post-menopausal early and advanced breast cancer 211 148 136

Trazimera (d)

HER-positive breast cancer and metastatic stomach cancers

Besponsa Relapsed or refractory B-cell acute lymphoblastic leukemia 192 182 157

In combination with Mektovi for metastatic melanoma in patients with a BRAF V600E/K mutation and, in combination with Erbitux ® (cetuximab), for the treatment of BRAF V600E -mutant mCRC after prior therapy

Bavencio alliance revenues Locally advanced or metastatic urothelial carcinoma;

metastatic Merkel cell carcinoma;

immunotherapy and tyrosine kinase inhibitor combination for patients with advanced RCC 178 80 49

In combination with Braftovi for metastatic melanoma in patients with a BRAF V600E/K mutation

All other Oncology

Various 238 137 122

Internal Medicine $ 9,329 $ 9,003 $ 8,790

37,806 36,781 154

Paxlovid COVID-19 in certain high-risk patients

Eliquis alliance revenues and direct sales

Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism 6,480 5,970 4,949

Prevnar family Active immunization to prevent invasive disease caused by Streptococcus pneumoniae serotypes 6,337 5,272 5,850

Premarin family

Symptoms of menopause 455 563 680

Chantix/Champix

An aid to smoking cessation treatment in adults 18 years of age or older

398 919 1,107

Development of bone and cartilage 277 266 274

Active immunization against invasive meningococcal ACWY disease 268 193 221

Nurtec ODT/Vydura Acute treatment of migraine and prevention of episodic migraine 213 — —

FSME-IMMUN/TicoVac Active immunization to prevent tick-borne encephalitis disease 200 185 196

Overactive bladder 146 238 252

Pristiq Depression 187 171 176

All other Internal Medicine

Various 1,706 1,758 2,016

2021 Form 10-K 103

Notes to Consolidated Financial Statements

and Subsidiary Companies

(MILLIONS) Year Ended December 31,

PRODUCT PRIMARY INDICATION OR CLASS 2021 2020 2019

$ 7,301 $ 6,777 $ 6,695

Bacterial infections 683 618 684

Medrol Anti-inflammatory glucocorticoid 432 402 469

Zavicefta Bacterial infections 413 212 108

Treatment/prevention of venous thromboembolism 305 252 253

Zithromax Bacterial infections 278 276 336

Fungal infections 267 270 346

Tygacil Bacterial infections 200 160 197

Precedex Sedation agent in surgery or intensive care 177 260 155

Bacterial infections 173 222 251

Paxlovid COVID-19 Infection ( high risk population)

IVIg Products (e)

Various 430 376 275

All other Anti-infectives

Various 1,453 1,294 1,396

All other Hospital Various 2,412 2,435 2,225

Inflammation & Immunology (I&I) $ 4,431 $ 4,567 $ 4,733

Trumenba Active immunization to prevent invasive disease caused by Neisseria meningitidis group B 123 118 112

Chantix/Champix

An aid to smoking cessation treatment in adults 18 years of age or older

All other Primary Care Various 1,778 1,967 1,972

Specialty Care $ 13,833 $ 15,194 $ 14,280

Vyndaqel family ATTR-CM and polyneuropathy 2,447 2,015 1,288

RA, PsA, UC, active polyarticular course juvenile idiopathic arthritis, ankylosing spondylitis 1,796 2,455 2,437

2 unchanged sentences

1,003 1,185 1,350

Inflectra/Remsima (d)

Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis

All other I&I

Bacterial infections 786 683 618

Inflectra/Remsima Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis

Ig Portfolio (c)

Various 491 430 376

$ 3,538 $ 2,936 $ 2,278

Vyndaqel/Vyndamax ATTR-cardiomyopathy and polyneuropathy 2,015 1,288 473

BeneFIX Hemophilia B 425 438 454

Zavicefta Bacterial infections 412 413 212

Replacement of human growth hormone 360 389 427

Zithromax Bacterial infections 331 278 276

Medrol Anti-inflammatory glucocorticoid 328 432 402

Treatment/prevention of venous thromboembolism 269 305 252

Acromegaly 268 277 277

Refacto AF/Xyntha

Hemophilia A 239 304 370

Acromegaly 277 277 264

All other Rare Disease

Various 115 120 129

PFIZER CENTREONE (b)

$ 1,731 $ 926 $ 810

CONSUMER HEALTHCARE BUSINESS (f)

$ — $ — $ 2,082

Total Alliance revenues $ 7,652 $ 5,418 $ 4,648

Total Biosimilars (d)

$ 2,343 $ 1,527 $ 911

Total Sterile Injectable Pharmaceuticals (g)

$ 5,746 $ 5,315 $ 5,013

(a) On December 31, 2021, we completed the sale of our Meridian subsidiary.

Prior to its sale, Meridian was managed as part of the Hospital therapeutic area.

On November 16, 2020, we completed the spin-off and the combination of our Upjohn Business with Mylan to form Viatris.

On December 21, 2020, Pfizer and Viatris completed the termination of the Mylan-Japan collaboration.

Beginning in the fourth quarter of 2021, the financial results of Meridian are reflected as discontinued operations for all periods presented.

Beginning in the fourth quarter of 2020, the financial results of the Upjohn Business and Mylan-Japan collaboration were reflected as discontinued operations for all periods presented.

Prior-period financial information has been restated, as appropriate.

See Note 1A .

(b) At the beginning of our fiscal fourth quarter of 2021, we reorganized our commercial operations and began to manage our commercial operations through a new global structure consisting of two operating segments, each led by a single manager:

Biopharma, our innovative science-based biopharmaceutical business and PC1.

PC1, which previously had been managed within the Hospital therapeutic area, includes revenues from our contract manufacturing, including certain Comirnaty-related manufacturing activities performed on behalf of BioNTech ($ 320 million for 2021 and $ 0 million for 2020 and 2019), and active pharmaceutical ingredient sales operation, as well as revenues related to our manufacturing and supply agreements with former legacy Pfizer businesses/partnerships, including but not limited to, transitional manufacturing and supply agreements with Viatris following the spin-off of the Upjohn Business.

We have revised prior period information to conform to the current management structure.

(d) Biosimilars are highly similar versions of approved and authorized biological medicines and primarily include revenues from Inflectra/Remsima, Ruxience, Retacrit, Zirabev and Trazimera.

(e) Intravenous immunoglobulin (IVIg) products include the revenues from Panzyga, Octagam and Cutaquig.

(f) On July 31, 2019, our Consumer Healthcare business, an OTC medicines business, was combined with GSK’s consumer healthcare business to form a new consumer healthcare JV.

See Note 2C .

(g) Total Sterile Injectable Pharmaceuticals represents the total of all branded and generic injectable products in the Hospital therapeutic area, including anti-infective sterile injectable pharmaceuticals.

Remaining Performance Obligations

Contracted revenue expected to be recognized from remaining performance obligations for firm orders in long-term contracts to supply Comirnaty to our customers totals $ 34.4 billion as of December 31, 2021, which includes amounts received in advance and deferred and amounts that will be invoiced as we deliver the product to our customers in future periods.

Of this amount, we expect to recognize revenue of

Fungal infections 225 267 270

Oxbryta Sickle cell disease 73 — —

2022 Form 10-K 99

1 unchanged sentence

and Subsidiary Companies

$ 22.3 billion in 2022, $ 11.8 billion in 2023 and $ 265 million in 2024.

Remaining performance obligations exclude arrangements with an original expected contract duration of less than one year.

Deferred Revenues

Our deferred revenues primarily relate to advance payments received or receivable in connection with contracts that we entered into during 2021 and 2020 with various government or government sponsored customers in international markets for supply of Comirnaty.

The deferred revenues associated with the advance payments related to Comirnaty total $ 3.3 billion as of December 31, 2021 and $ 957 million as of December 31, 2020, with $ 3.0 billion and $ 249 million recorded in current liabilities and noncurrent liabilities, respectively as of December 31, 2021, and $ 957 million recorded in current liabilities as of December 31, 2020.

The increase in the Comirnaty deferred revenues during 2021 was the result of additional advance payments received as we entered into new or amended contracts or as we invoiced customers in advance of vaccine deliveries less amounts recognized in Revenues as we delivered doses to our customers.

During 2021, we recognized in revenue substantially all of the balance of Comirnaty deferred revenues as of December 31, 2020.

The Comirnaty deferred revenues as of December 31, 2021 will be recognized in Revenues proportionately as we deliver doses of the vaccine to our customers and satisfy our performance obligation under the contracts, with the amounts included in current liabilities expected to be recognized in Revenues within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in Revenues in 2023 and in the first quarter of 2024.

Deferred revenues associated with contracts for other products were not significant as of December 31, 2021 or 2020.

2021 Form 10-K 105

Selected Quarterly Financial Data (Unaudited)

and Subsidiary Companies

(MILLIONS, EXCEPT PER COMMON SHARE DATA) First Second Third Fourth

Revenues $ 14,516 $ 18,899 $ 24,035 $ 23,838

Costs and expenses (b)

8,802 11,951 15,546 19,876

Restructuring charges and certain acquisition-related costs (c)

22 (1) 646 135

Income/(loss) from continuing operations before provision/(benefit) for taxes on income/(loss)

5,692 6,949 7,843 3,827

Provision/(benefit) for taxes on income/(loss) (d)

808 1,123 (328) 249

Income/(loss) from continuing operations 4,885 5,825 8,171 3,578

Discontinued operations––net of tax (e)

1 (236) (13) (187)

Net income/(loss) before allocation to noncontrolling interests 4,886 5,589 8,159 3,391

Net income attributable to noncontrolling interests 9 26 12 (2)

Net income/(loss) attributable to Pfizer Inc.

common shareholders $ 4,877 $ 5,563 $ 8,146 $ 3,393

Earnings/(loss) per common share—basic:

Income/(loss) from continuing operations attributable to Pfizer Inc.

common shareholders

$ 0.87 $ 1.04 $ 1.45 $ 0.64

Discontinued operations––net of tax — (0.04) — (0.03)

Net income/(loss) attributable to Pfizer Inc.

common shareholders $ 0.87 $ 0.99 $ 1.45 $ 0.60

Earnings/(loss) per common share—diluted:

Income/(loss) from continuing operations attributable to Pfizer Inc.

common shareholders

$ 0.86 $ 1.02 $ 1.43 $ 0.62

Discontinued operations––net of tax — (0.04) — (0.03)

Net income/(loss) attributable to Pfizer Inc.

common shareholders

(MILLIONS) Year Ended December 31,

PRODUCT PRIMARY INDICATION OR CLASS 2022 2021 2020

All other Anti-infectives

Various 1,471 1,835 1,679

All other Specialty Care Various 2,377 2,830 2,934

Oncology $ 12,132 $ 12,333 $ 10,867

Ibrance HR-positive/HER2-negative metastatic breast cancer 5,120 5,437 5,392

Xtandi alliance revenues mCRPC, nmCRPC, mCSPC 1,198 1,185 1,024

Advanced RCC 1,003 1,002 787

Philadelphia chromosome–positive chronic myelogenous leukemia 575 540 450

Zirabev Treatment of mCRC;

unresectable, locally advanced, recurrent or metastatic NSCLC;

recurrent glioblastoma;

metastatic RCC;

and persistent, recurrent or metastatic cervical cancer 562 444 143

ALK-positive and Proto-Oncogene 1, Receptor Tyrosine Kinase-positive advanced NSCLC 465 493 544

Ruxience Non-hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (Wegener’s Granulomatosis) and microscopic polyangiitis 458 491 170

Retacrit Anemia 394 444 386

Advanced and/or metastatic RCC, adjuvant RCC, refractory gastrointestinal stromal tumors (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor

Lorbrena ALK-positive metastatic NSCLC

Bavencio alliance revenues Locally advanced or metastatic urothelial carcinoma;

metastatic Merkel cell carcinoma;

immunotherapy and tyrosine kinase inhibitor combination for patients with advanced RCC 271 178 80

Aromasin Post-menopausal early and advanced breast cancer 248 211 148

Besponsa Relapsed or refractory B-cell acute lymphoblastic leukemia 219 192 182

Trazimera HER2-positive breast cancer and metastatic stomach cancers

In combination with Mektovi for metastatic melanoma in patients with a BRAF V600E/K mutation and, in combination with Erbitux ® (cetuximab) (d) , for the treatment of BRAF V600E -mutant mCRC after prior therapy

In combination with Braftovi for metastatic melanoma in patients with a BRAF V600E/K mutation

All other Oncology Various 357 238 137

PFIZER CENTREONE (a)

$ 1,342 $ 1,731 $ 926

(a) Business development activities impacted our results of operations in 2021 .

(b) The fourth quarter historically reflects higher costs in Cost of sales, Selling, informational and administrative expenses and Research and development expenses.

Cost of sales for all quarters reflects higher costs for Comirnaty.

The fourth quarter includes a $2.1 billion charge for IPR&D expense associated with the acquisition of Trillium, as well as other upfront and milestone payments on collaboration and licensing arrangements.

See Notes 2A, D and E.

(c) The third and fourth quarters of 2021 primarily include employee termination costs associated with our Transforming to a More Focused Company program.

(d) All periods reflect a change in the jurisdictional mix of earnings primarily related to Comirnaty.

The third quarter of 2021 reflects benefits resulting from certain initiatives executed in the third quarter of 2021 associated with our investment in the Consumer Healthcare JV with GSK.

(e) All periods include the operating results of Meridian prior to its sale on December 31, 2021 and to a lesser extent post-closing adjustments directly related to prior discontinued businesses.

The second quarter of 2021 includes a pre-tax charge of $345 million to resolve a legal matter related to Meridian and the fourth quarter of 2021 includes an after tax loss of $167 million related to the sale of Meridian.

Basic and diluted EPS are computed independently for each of the periods presented.

Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year.

Total Alliance revenues included above $ 8,537 $ 7,652 $ 5,418

(a) See Note 1A for information about our recent organizational changes.

PC1 includes revenues from our contract manufacturing, including certain Comirnaty-related manufacturing activities performed on behalf of BioNTech ($ 188 million for 2022, $ 320 million for 2021, and $ 0 million for 2020), and revenues from our active pharmaceutical ingredient sales operation, as well as revenues related to our manufacturing and supply agreements with former legacy Pfizer businesses/partnerships, including but not limited to, transitional manufacturing and supply agreements with Viatris following the spin-off of the Upjohn Business.

(b) Excludes revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the PC1 contract development and manufacturing organization.

(d) Erbitux ® is a registered trademark of ImClone LLC.

Remaining Performance Obligations–– Contracted revenue expected to be recognized from remaining performance obligations for firm orders in long-term contracts to supply Comirnaty to our customers totaled approximately $ 15 billion as of December 31, 2022, which includes amounts received in advance and deferred, as well as amounts that will be invoiced as we deliver these products to our customers in future periods.

Of this amount, current contract terms provide for expected delivery of product with contracted revenue in 2023 and 2024, the timing and terms of which may be renegotiated.

Remaining performance obligations are based on foreign exchange rates as of the end of our fiscal fourth quarter of 2022 and exclude arrangements with an original expected contract duration of less than one year.

Deferred Revenues–– Our deferred revenues primarily relate to advance payments received or receivable from various government or government sponsored customers in international markets for supply of Comirnaty.

The deferred revenues related to Comirnaty total $ 2.5 billion as of December 31, 2022, with $ 2.4 billion and $ 77 million recorded in current liabilities and noncurrent liabilities, respectively.

The deferred revenues related to Comirnaty totaled $ 3.3 billion as of December 31, 2021, with $ 3.0 billion and $ 249 million recorded in current liabilities and noncurrent liabilities, respectively.

The decrease in Comirnaty deferred revenues during 2022 was primarily the result of amounts recognized in Revenues as we delivered the product to our customers and the impact of foreign exchange, partially offset by additional advance payments received as we entered into new or amended contracts.

During 2022, we recognized revenue of $ 3.1 billion that was included in the balance of Comirnaty deferred revenues as of December 31, 2021.

The Comirnaty deferred revenues as of December 31, 2022 will be recognized in Revenues proportionately as we transfer control of the product to our customers and satisfy our performance obligation under the contracts, with the amounts included in current liabilities expected to be recognized in Revenues within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in Revenues in 2024.

Deferred revenues associated with contracts for other products were not significant as of December 31, 2022 or 2021.

2022 Form 10-K 100

Selected Quarterly Financial Data (Unaudited)

and Subsidiary Companies

(MILLIONS, EXCEPT PER COMMON SHARE DATA) First Second Third Fourth

Revenues $ 10,007 $ 9,795 $ 10,215 $ 11,634

Costs and expenses (b)

7,100 6,389 9,635 10,917

Restructuring charges and certain acquisition-related costs 54 360 2 163

(Gain) on completion of Consumer Healthcare JV transaction (6) — — —

Income/(loss) from continuing operations before provision/(benefit) for taxes on income/(loss)

2,859 3,046 577 554

Provision/(benefit) for taxes on income/(loss) 358 425 (334) (80)

Income/(loss) from continuing operations 2,501 2,621 911 634

Discontinued operations––net of tax (c)

863 876 566 224

Net income/(loss) before allocation to noncontrolling interests 3,364 3,497 1,477 857

Net income attributable to noncontrolling interests 9 8 8 11

Net income/(loss) attributable to Pfizer Inc.

common shareholders $ 3,355 $ 3,489 $ 1,469 $ 847

Earnings/(loss) per common share—basic:

Income/(loss) from continuing operations attributable to Pfizer Inc.

common shareholders

$ 0.45 $ 0.47 $ 0.16 $ 0.11

Discontinued operations––net of tax 0.16 0.16 0.10 0.04

Net income/(loss) attributable to Pfizer Inc.

common shareholders $ 0.60 $ 0.63 $ 0.26 $ 0.15

Earnings/(loss) per common share—diluted:

Income/(loss) from continuing operations attributable to Pfizer Inc.

common shareholders

$ 0.44 $ 0.47 $ 0.16 $ 0.11

Discontinued operations––net of tax 0.15 0.16 0.10 0.04

Net income/(loss) attributable to Pfizer Inc.

common shareholders

$ 0.60 $ 0.62 $ 0.26 $ 0.15

(a) Business development activities impacted our results of operations in 2020 .

(b) The fourth quarter historically reflects higher costs in Cost of sales, Selling, informational and administrative expenses and Research and development expenses.

Certain asset impairments totaled $900 million in the third quarter of 2020 and $791 million in the fourth quarter of 2020 recorded in Other (income)/deductions—net .

(c) Operating results of the Upjohn Business through November 16, 2020, the date of the spin-off and combination with Mylan, the Mylan-Japan collaboration and Meridian are presented as discontinued operations in all periods presented.

Basic and diluted EPS are computed independently for each of the periods presented.

Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data