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Item 1. Business

2022-02-28 compared with 2021-03-01 · 138 added, 97 removed, 231 unchanged (50% of the section changed)

About Viatris

Viatris is a global healthcare company formed in November 2020 through the combination of Mylan and the Upjohn Business whose mission is to empower people worldwide to live healthier at every stage of life.

By integrating the strengths of these two businesses, including our global workforce of approximately 45,000 employees and contractors, Viatris aims to deliver increased access to affordable, quality medicines for patients worldwide regardless of geography or circumstance.

Viatris brings together industry leading commercial, R&D, regulatory, manufacturing, legal and medical expertise complemented by a strong commitment to quality and unparalleled geographic footprint to deliver high-quality medicines to patients in more than 165 countries and territories.

Viatris’ portfolio comprises more than 1,400 approved molecules across a wide range of key therapeutic areas, including globally recognized iconic and key brands, generic, complex generic and biosimilars.

Viatris operates approximately 50 manufacturing sites worldwide that produce oral solid doses, injectables, complex dosage forms and APIs.

Viatris is a global healthcare company formed in November 2020 whose mission is to empower people worldwide to live healthier at every stage of life, regardless of geography or circumstance.

Improving the ability of patients to gain access to sustainable and high-quality healthcare is our relentless pursuit.

One that rests on visionary thinking, determination and best-in-class capabilities that were strategically built to remove barriers across the health spectrum and advance access globally.

Viatris’ seasoned management team is focused on ensuring that the Company is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers and other stakeholders.

With a global workforce of approximately 37,000, the Company has industry leading commercial, R&D, regulatory, manufacturing, legal and medical expertise complemented by a strong commitment to quality and unparalleled geographic footprint to deliver high-quality medicines to patients in more than 165 countries and territories.

Viatris’ portfolio comprises more than 1,400 approved molecules across a wide range of key therapeutic areas, including globally recognized iconic and key brands, generics, complex generics, and biosimilars.

The Company operates approximately 40 manufacturing sites worldwide that produce oral solid doses, injectables, complex dosage forms and APIs.

Viatris is headquartered in the U.S., with global centers in Pittsburgh, Pennsylvania, Shanghai, China and Hyderabad, India.

On November 16, 2020, Viatris, formerly known as Upjohn, Mylan and Pfizer consummated the combination of Mylan with the Upjohn Business through a Reverse Morris Trust transaction.

In accordance with the terms and conditions of the BCA and SDA, (1) Pfizer contributed the Upjohn Business to Viatris (the “Contribution”), so that the Upjohn Business was separated from the remainder of Pfizer’s businesses (the “Separation”), (2) following the Separation, Pfizer distributed, on a pro rata basis (based on the number of shares of Pfizer common stock held by holders of Pfizer common stock as of the record date of November 13, 2020 (the “Record Date”)), all of the shares of Viatris common stock held by Pfizer to Pfizer stockholders as of the Record Date (the “Distribution”), and (3) immediately following the Distribution, Viatris and Mylan engaged in a strategic business combination transaction (the “Combination” or the “Upjohn Combination”).

In addition, pursuant to the SDA and immediately prior to the Distribution, Viatris made a cash payment to Pfizer equal to $12 billion as partial consideration for the Contribution.

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In connection with the Separation and Combination, Viatris entered into several agreements with Pfizer or its subsidiaries, including among others, transition services and the manufacturing and supply agreements, which in general provide for the performance of certain services or obligations by each of Pfizer and Viatris for the benefit of each other for initial transitional periods following the Combination.

Following the transitional periods or upon Viatris’ exit of the services prior to expiry of such periods, Viatris will need to absorb, replicate or outsource from other providers certain facilities, systems, infrastructure, and personnel to which it no longer has access under the transitional agreements.

For additional information, see “Risk Factors – Viatris could incur operational difficulties or losses if we are unable to obtain the same types and level of services and resources that historically have been provided to the legacy Upjohn Business by Pfizer, if Pfizer is unable to perform under the agreements entered into as part of the Combination or if we are required to make payments to Pfizer pursuant to indemnities agreed to as part of the Combination.

The Company began the process of transitioning certain capabilities in 2021, but expects significant changes to occur in 2022 as a result of further transitioning of services and information and other systems.

For additional information, see “Risk Factors – Viatris could incur operational difficulties or losses if Pfizer is unable to perform under the agreements entered into as part of the Combination, if we are unable to obtain the same types and level of services and resources that historically have been provided to the legacy Upjohn Business by Pfizer, or if we are required to make payments to Pfizer pursuant to indemnities agreed to as part of the Combination.

Unless otherwise indicated, industry data included in this Item 1 are sourced from IQVIA Holdings Inc.

and are for the twelve months ended November 2021.

Viatris product and other company data included in this Item 1 are from internal sources and are as of November 30, 2020 and do not reflect the impact of the global restructuring program.

Viatris product and other company data included in this Item 1 are from internal sources and are as of November 30, 2021.

Upjohn was incorporated in Delaware on February 14, 2019 as a wholly-owned subsidiary of Pfizer to operate the Upjohn Business.

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Since the consummation of the Combination, the Viatris management team has been focused on ensuring that the Company is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers and other stakeholders.

This includes embarking on our previously disclosed significant global restructuring program, additional details were announced on December 11, 2020 and February 25, 2020.

This includes our previously disclosed significant global restructuring program, which is described further in Note 17 included in Part II.

Item 8 of this Form 10-K.

Business Model and Operations

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Viatris empowers people worldwide to live healthier at every stage of life.

We do so via:

Providing high-quality, trusted medicines, regardless of geography or circumstance.

We do so via Access , Leadership and Partnership .

Viatris provides high-quality, trusted medicines, regardless of geography or circumstance.

We are committed to improving access to high-quality medicines while working to ensure a reliable supply so patients can get the treatments they need, when and where they need them.

Our global portfolio, supported by our science, medical and manufacturing expertise, delivers global iconic and key brands, complex generics, biosimilars, and generics.

Advancing sustainable operations and innovative solutions to improve patient health.

Our global portfolio, supported by our science, medical and manufacturing expertise, delivers global iconic and key brands, complex generics, biosimilars, generics - including complex and branded generics - and over-the-counter products.

As a company, Viatris:

• Covers a broad range of therapeutic areas .

We produce medicines for patients across a broad range of major therapeutic areas.

From cardiovascular health to oncology, Viatris offers quality treatment options across more than 10 major therapeutic areas covering a wide variety of noncommunicable and infectious diseases.

We also offer support services such as diagnostic clinics, educational seminars and digital tools to help patients better manage their health.

• Helps ease the burden of noncommunicable diseases.

According to the WHO, NCDs, such as ischemic heart disease, stroke, diabetes, certain cancers and chronic obstructive pulmonary disease, were among the leading causes of death globally as of 2016.

NCDs affect people of every age, gender and socioeconomic status in every corner of the world, and pose a heavy burden on individuals, families and communities.

To overcome this global public health threat, patients worldwide need a partner they can trust – one that not only believes everyone deserves good health, but also has the portfolio, experience and expertise to make this belief a reality.

• Helps hearts stay healthier.

According to the WHO, coronary heart disease is the number one cause of death globally.

Viatris collaborates with many organizations to help prevent, diagnose, and treat many cardiovascular illnesses.

Our deep experience in emerging and developed markets affords a tried-and-true method of achieving high impact across the patient experience, from awareness to adherence.

In close collaboration with governments, healthcare providers, technology partners and patients, we at Viatris work to nurture healthcare systems that can adapt and respond to patients’ ever-changing needs.

We continue to collaborate with medical associations, patient advocacy groups and academia to develop innovative, integrated solutions and programs to help strengthen both the delivery and quality of healthcare.

• Fights infectious disease .

We are also a global leader in treating infectious diseases such as HIV/AIDS, hepatitis, and tuberculosis, and offer an extensive portfolio across these disease states.

While many important strides have been made to treat these illnesses, there is still more to be done in countries where lack of access to therapeutics, preventative treatment and diagnostics often result in patients not receiving proper care, and those where HIV transmission continues thirty years into the epidemic.

From manufacturing a pediatric-friendly antiretroviral used to treat HIV-positive infants to providing HIV self-tests in some low- and middle-income countries, we are innovating to help patients.

An Increasingly Innovative and Differentiated Pipeline

Our confidence in the future delivery of our pipeline is rooted in our strong historic development programs and list of firsts, including the recent approval of the generic version of Allergan's Restasis® and Semglee® (insulin glargine-yfgn), the first interchangeable biosimilar ever approved in the U.S., and the launch of the first biosimilar to Humira® (adalimumab) in Japan.

In addition, we are working on many other programs, including the potential to be first to market for our BOTOX® (onabotulinumtoxinA) and Eylea® (aflibercept) biosimilars.

While we will continue to diligently pursue important generics opportunities, we will increasingly focus on limited-competition complex and novel products targeting gaps in care, all with a first-to-market emphasis and serving our mission of patient access.

Complex products categories are critical to patient health and are growing at a rapid pace.

We believe that Viatris’ early vision and continued commitment has given us one of the deepest complex product pipelines in the industry, and that we are well positioned to capitalize on these growth opportunities in the future.

Viatris is advancing sustainable operations and innovative solutions to improve patient health.

Viatris is committed to providing steady leadership in a world that is constantly evolving.

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• Powerful global operating platform , which combines what we believe to be best-in-class manufacturing and supply chain capabilities.

We have more than 50 manufacturing facilities producing oral solid doses, injectables, complex dosage forms and APIs in 15 countries on five different continents, which mitigates risk of disruption in any given part of the world.

Through our commitment to advancing sustainable operations, we work to systematically and diligently minimize our environmental footprint across the Viatris network.

Our integrated, comprehensive approach focuses on managing our water, air emissions, waste, climate change and energy impact.

• Robust global technical resources , including more than 2,500 scientists, more than 1,000 regulatory experts and more than 600 medical and product safety professionals working around the world on innovative therapies and solutions for patients everywhere.

• Strong global commercial team , including more than 13,000 sales team members and more than 1,100 marketing professionals whose goal is to ensure that products are shipped globally to more than 60,000 customers.

• Diverse and differentiated global portfolio includes products in more than 10 major therapeutic areas, including both infectious diseases and non-communicable diseases and medicines that treat 9 out of 10 of the World Health Organization’s leading causes of death.

Viatris operates approximately 40 manufacturing sites worldwide that produce oral solid doses, injectables, complex dosage forms and APIs on five different continents.

Together with a global, flexible and diverse supply chain, our platform strives to mitigate risks of disruption and ensure supply reliability.

Our efforts to build a responsive global network have helped us maintain a reliable supply of much needed medicines as the fight against the COVID-19 pandemic continues.

We are committed to advancing responsible and sustainable operations and work diligently to minimize our environmental footprint across the Viatris network while safeguarding access to medicine.

Our integrated, comprehensive approach focuses on water, air emissions, waste, climate change and energy.

• Robust global technical resources , including thousands of scientists, regulatory experts and medical and product safety professionals working around the world on innovative therapies and solutions for patients everywhere.

• Strong global commercial team , including sales team members and marketing professionals whose goal is to ensure that products are shipped to customers around the globe.

• Diverse and differentiated global portfolio includes products in more than 10 major therapeutic areas, including both infectious diseases and NCDs and medicines that treat 9 out of 10 of the WHO’s leading causes of death.

We are a leading supplier of medicines to the HIV/AIDS community around the world, with a legacy of providing access to high-quality and affordable ARVs in more than 100 countries.

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Together, with our commitment to provide access to a sustainable, affordable, and diverse portfolio of high-quality medicines and our goal to be a Partner of Choice® for companies big and small, Viatris works to improve access and meet evolving healthcare needs around the world.

Leveraging our collective expertise to connect people to products and services.

We have a strong history of partnering with other pharmaceutical companies, nonprofit organizations, government agencies, policymakers, trade associations and alliances, industry researchers and patient advocacy groups.

In fact, in 2019, we collaborated with more than 60 associations worldwide on global public health issues.

We engage with around 100 trade associations and not-for-profit organizations across more than 40 countries, as well as patient and industry groups and other partners.

Our key collaborations focus on access to medicine;

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and healthcare provider education and support.

Collaboration and Licensing Agreements

We periodically enter into commercial collaboration and licensing agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products.

Doing so helps us share risks and costs, leverage strengths and scale up commercialization.

Our Global Healthcare Gateway® Built to Fuel Growth and Partnerships

Our Global Healthcare Gateway ® is open for business.

We are actively engaging with potential partners to help them accelerate possibilities of using their own healthcare assets to reach more patients by leveraging our unique global platform – our R&D, supply chain, manufacturing, regulatory, commercial and legal expertise.

Although the global platforms and infrastructure supporting our innovative Global Healthcare Gateway are not entirely new, what is new is how we are enhancing our capital allocation approach to business development, and our organic and inorganic R&D investments through a focused governance structure to ensure the highest level of strategic decision-making.

Licensing and Other Partner Agreements

We periodically enter into commercial licensing and other partner agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products.

Doing so helps us share risks and costs, leverage strengths and scale up commercialization, but usually requires us to also share future profits.

The result often is that medicines become available sooner and to a significantly larger group of patients.

Our significant collaboration agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple, high-value generic biosimilar compounds, insulin analog products and respiratory products, among other complex products.

Refer to Note 18 Collaboration and Licensing Agreements included in Part II.

Our significant licensing and other partner agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple, high-value generic biosimilar compounds, insulin analog products and respiratory products, among other complex products.

Refer to Note 18 Licensing and Other Partner Agreements included in Part II.

Item 8 of this Form 10-K for more information.

Global Healthcare Gateway ™

As the world’s healthcare needs evolve, our Global Healthcare Gateway™ offers partners ready access to expanded markets through an innovative global infrastructure that connects people around the world to the high quality medicines and services they need.

Powered by our best-in-class manufacturing, scientific and legal expertise and proven commercial capabilities with unparalleled reach, the Global Healthcare Gateway™ paves the way for Viatris to be the Partner of Choice™ for those looking to expand access to their assets, empowering more people worldwide to live healthier at every stage of life.

We have developed end-to-end experience across the total product life cycle, which includes global regulatory licensing, launch, growth and post-approval lifecycle management.

Our research, development and medical platform seeks to maximize the impact of our existing product portfolio by examining whether there is an opportunity for new indications, label extensions, product formulations, and market registrations for our products.

Viatris has developed an end-to-end experience across the total product life cycle, which includes global regulatory licensing, launch, growth and post-approval lifecycle management.

Our research, development and medical platform seeks to maximize the impact of our existing portfolio by examining whether there is an opportunity for new indications, label extensions, formulations, and market registrations for our products.

We also use our platform to determine whether there is an opportunity to integrate new products into our portfolio.

The manufacturing of APIs and finished dosage forms is performed by a combination of internal and external manufacturing operations, with much of our manufacturing being vertically integrated;

this means we produce many of our own APIs and finished dosage forms.

The manufacturing of APIs and finished dosage forms is performed by a combination of internal and external manufacturing operations.

Internally, many of the products we produce are vertically integrated;

meaning we manufacture both the APIs and finished dosage forms related to those products.

Occasionally, however, resources we need are available from only a single supplier.

Like many pharmaceutical companies, we supplement our production footprint through arrangements with other manufacturers.

The Company’s significant manufacturing, warehousing and distribution activities are located primarily in the U.S., Puerto Rico, Singapore, certain E.U.

countries, including Ireland, India, Japan and China.

As a result, we supplement our production footprint through arrangements with other manufacturers.

The Company’s significant manufacturing, warehousing and distribution activities are located primarily in the U.S., Puerto Rico, Singapore, India, Japan, China, and certain E.U.

countries, including Ireland.

In addition, we maintain administrative facilities around the world.

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The Company remains committed to maintaining the highest quality manufacturing standards at its facilities around the world and to continuous assessment and improvement in a time of evolving industry dynamics and regulatory expectations.

We are committed to environmentally responsible conduct and have policies and procedures to support our work to systematically and diligently minimize our environmental footprint.

Our integrated, comprehensive approach focuses on managing our water, air emissions, waste, climate change and energy impact.

We are committed to advancing sustainable operations and innovative solutions to improve patient health.

This means we focus on responsible conduct and have global policies and procedures to support our work.

We work systematically and diligently to minimize our environmental footprint.

Environmental and human health are interconnected, a relationship underscored by climate change and water stress.

Our integrated, comprehensive approach focuses on water, air emissions, waste, climate change and energy.

Looking ahead, to help ensure we identify and manage risks and opportunities appropriately, we are conducting a climate scenario analysis and intend to establish science-based greenhouse gas reduction targets and strategies, acknowledging the context of the Paris Agreement, as well as goals for water and waste.

While it is impossible to predict accurately the future costs associated with environmental compliance and potential remediation activities, compliance with environmental laws is not expected to require significant capital expenditures and has not had, and is not expected to have, a material adverse effect on our operations or competitive position.

Customers and Marketing

Numbering more than 60,000, our customers include retail and pharmacy establishments, wholesalers and distributors, payers, insurers and governments, and institutions such as hospitals;

Our customers include retail and pharmacy establishments, wholesalers and distributors, payers, insurers and governments, and institutions such as hospitals;

among others.

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Cardinal Health, Inc.

As a result of the Combination, we estimate that the percentages to our significant customers could change in future periods.

We serve our customers through a team of approximately 14,000 sales and marketing professionals, all of whom are focused on establishing Viatris as our customers’ partner of choice.

We serve our customers through a team of highly-skilled sales and marketing professionals, all of whom are focused on establishing Viatris as our customers’ partner of choice.

To best meet customers’ needs, the Company manages its business on a geographic basis.

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Certain parts of our business also are affected by seasonality, e.g., due to the timing and severity of peak cough, cold and flu incidence, which can cause variability in sales trends for some of our products.

While seasonality may affect quarterly comparisons within a fiscal year;

it generally is not material to our annual consolidated results.

While seasonality may affect quarterly comparisons within a fiscal year, it generally is not material to our annual consolidated results.

For these and other reasons, the Company’s sales and marketing efforts vary accordingly by product, market and channel type, each of which is described below.

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We offer a broad and diverse range of treatment options across all our therapeutic areas, with many categories containing several products in a range of dosage forms, formulations and delivery systems that allow physicians to tailor care for optimal treatment.

Viatris markets prescription brand drugs, generic drugs, complex generics, biosimilars and APIs.

Viatris markets prescription brand drugs, generic drugs, complex generic drugs, biosimilars and APIs.

Brand drugs typically are prescription pharmaceuticals that are sufficiently novel as to be protected by patents or other forms of exclusivity.

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Branded generic products are common in many countries outside the U.S., including emerging markets.

Brand product and branded generic products are more sensitive to promotion than are unbranded generic products.

Brand and branded generic products are more sensitive to promotion than are unbranded generic products.

They therefore represent the primary focus of most of our sales representatives and product-level marketing activity.

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The generics business is generally characterized by lower margins on higher volumes of a relatively large number of products.

Our generic medicines, which include complex and branded generics, work in the same way and provide the same clinical benefits as their as their brand-name counterparts and may cost less, providing patients and the healthcare system important savings and medicine options which we believe are essential to making healthcare accessible.

Our generic medicines work in the same way and provide the same clinical benefits as their as their brand-name counterparts and may cost less, providing patients and the healthcare system important savings and medicine options which we believe are essential to making healthcare accessible.

The manufacturing of generic medicines is held to the same standards of GMP by health authorities as the manufacturing of branded medicines.

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Viatris offers a number of these important medicines to patients, including our Wixela® Inhub®, the first generic of ADVAIR DISKUS® and glatiramer acetate injection, a generic version of Copaxone®, for example.

Biosimilars are approved by regulatory authorities as highly similar to the originally approved brand version with no clinically meaningful differences in safety or efficacy.

Biosimilars are approved by regulatory authorities as highly similar to the originally approved biologic brand version with no clinically meaningful differences in safety or efficacy.

Biosimilar versions are increasingly available as therapeutic alternatives for patients facing many serious diseases, including diabetes, autoimmune disorders and multiple cancers.

We offer one of the industry’s largest and most diverse global biosimilars franchises with approximately 150 marketing authorizations in over 85 countries focused on the areas of oncology, immunology, endocrinology, ophthalmology and dermatology.

We offer one of the industry’s largest and most diverse global biosimilars franchises with more than 300 marketing authorizations globally focused on the areas of oncology, immunology, endocrinology, ophthalmology and dermatology.

These vital products can help increase access for current and future patients while supporting the sustainability of healthcare systems, and we continue to invest in bringing more to market, as we believe more than two-thirds of the products we will launch in the coming years will be either complex generics or biosimilars.

Biosimilars often are marketed under a brand-name.

Viatris offers one of the industry’s largest and most diverse global biosimilars franchises, including Fulphila®, Ogivri®, and Hulio™.

Viatris offers one of the industry’s largest and most diverse global biosimilars franchises, including Fulphila®, Ogivri®, Hulio®, and SEMGLEE®.

APIs are responsible for the therapeutic effects of medicines.

We are one of the world’s largest producers of APIs, providing them to customers in more than 100 countries.

We are the leading producer of API used in generic antiretrovirals, which treat HIV/AIDS.

We are the leading producer of API used in generic ARVs, which treat HIV/AIDS.

We also produce API for products in the following areas:

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Viatris invests significant sums in R&D and in manufacturing capacity.

We also often incur substantial litigation expense as a result of defending or challenging brand patents or exclusivities.

We also often incur substantial litigation expense as a result of defending or challenging brand patents or exclusivities, which is described further in Note 19 included in Part II.

Item 8 of this Form 10-K.

Viatris focuses its sales and marketing efforts on the people who make key decisions around pharmaceutical prescribing, dispensing or buying.

Decision-makers vary by country or region, reflecting law and custom, giving rise to different types of pharmaceutical markets.

Many countries feature a mix of or hybrids of various market types, though the Company may focus on just one type.

Many countries feature a mix of or hybrids of various market types, though the Company may focus on just one type in a particular country.

In prescription markets, physicians decide which medicines patients will take.

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the process is known as detailing.

Examples of countries served by Viatris that are mainly prescription markets are U.S.

Examples of countries served by Viatris that are mainly prescription markets are the U.S.

brand business, Japan, China, Russia, Turkey, Poland and Mexico.

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Large sales forces are not needed to reach these decision-makers.

Examples of generic markets served by Viatris that are mainly tender markets are New Zealand, Sweden and South Africa.

Examples of generic markets served by Viatris that are mainly tender markets are New Zealand, Sweden, South Africa, as well as Germany.

In distribution markets, retailers and wholesalers make drug-purchasing decisions.

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Business Segments

Viatris reports segment information on the basis of markets and geography.

In conjunction with the formation of Viatris, the Company has changed its reportable segments, from North America, Europe, and Rest of World, to Developed Markets, Greater China, JANZ, and Emerging Markets.

This approach reflects the Company’s focus on bringing its broad and diversified portfolio of branded, complex generics, and generic products to people in markets everywhere.

Viatris has four reportable segments:

Developed Markets, Greater China, JANZ, and Emerging Markets.

The Company reports segment information on the basis of markets and geography, which reflects its focus on bringing its broad and diversified portfolio of branded, complex generics and biosimilars, and generic products to people in markets everywhere.

Our Developed Markets segment comprises our operations primarily in North America and Europe.

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Our JANZ segment reflects our operations in Japan, Australia and New Zealand.

Our Emerging Markets segment encompasses our operations in countries with developing markets and emerging economies including countries in Asia, the Middle East, South and Central America, Africa and Eastern Europe, and also includes the Company’s ARV franchise.

Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.

Developed Markets

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Our leadership position in a number of countries provides us a platform to fulfill the needs of patients, physicians, pharmacies, customers and payors.

Significant products sold by the Developed Markets segment include Lyrica®, Lipitor®, Creon®, Influvac®, Wixela™ Inhub™, and the EpiPen® Auto-Injector.

Significant products sold by the Developed Markets segment include Lyrica®, Lipitor®, Creon®, Influvac®, Wixela® Inhub®, the EpiPen® Auto-Injector, Hulio®, Fraxiparine®, and Yupelri®.

New product launches are an important growth driver.

Important recent launches include Dimethyl Fumarate, Mesalamine extended release capsule, Trastuzumab injection, and Fludrocortisone.

Important recent launches include SEMGLEE®, Abiraterone, and Cyclosporine Ophthalmic Emulsion in early 2022.

While our U.S.

customer base is extensive, it increasingly comprises a small number of very large firms as the pharmaceutical industry continues to undergo tremendous change and consolidation.

Viatris is well positioned to serve such customers - in the U.S.

and elsewhere - due to the scale we have built in terms of R&D, API and finished-dosage-form manufacturing, and portfolio breadth.

customer base is extensive, it increasingly comprises a small number of very large firms as the pharmaceutical industry has undergone and continues to undergo tremendous change and consolidation.

We believe Viatris is well positioned to serve such customers in the Developed Markets due to the scale we have built in terms of R&D, API and finished-dosage-form manufacturing, and portfolio breadth.

Greater China

The Greater China segment now includes our operations in mainland China, Taiwan and Hong Kong.

The Greater China segment includes our operations in mainland China, Taiwan and Hong Kong.

Since the closing of the Combination, the Viatris Greater China portfolio is predominantly branded LOE products.

Our products compete in both the hospital segment, where reimbursement is primarily funded by the government, and the retail pharmacy channel, which is mainly self-pay.

In China, the recent healthcare reform measures are aimed at controlling the overall healthcare costs, while providing better and broader care to the population.

Healthcare spending is expected to increase in-line with GDP growth.

The VBP policy for LOE molecules is now in its third year and includes more than 150 molecules.

All major Viatris brands are already included in the VBP molecule lists.

We have re-balanced our business to expand our focus on the retail pharmacy and e-commerce channels while maintaining our focus on the hospital channel.

The VBP policy for LOE molecules is now in its fourth year and includes more than 200 molecules.

All major Viatris brands are included in the VBP molecule lists.

We have re-balanced our business to expand our focus on the retail pharmacy and e-commerce channels while maintaining our presence in the hospital channel.

Healthcare consumerism, increased spending power, and demand for premium medical products have generated strong growth in these new channels and partially absorbed the reductions seen in hospital channel due to VBP.

The URP policy will cap reimbursement of molecules at their VBP tender winning price, is expected to start in during 2021.

URP will create additional pricing and volume pressure for pharmaceutical products that are subject to the program and is expected to negatively impact our results of operations.

Additional pricing and volume pressure for pharmaceutical products sold in the hospital channels is expected to continue during 2022 and could negatively impact our results of operations.

For additional information, see “Risk Factors - We have and may continue to experience pressure on the pricing of and reimbursements for certain of our products due to pricing controls, social or government pressure to lower the cost of drugs, and consolidation across the supply chain.

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The JANZ segment consists of our operations in Japan, Australia and New Zealand.

In Japan, the NHI regulates the pricing of pharmaceutical products to healthcare providers in the retail market.

In Japan, the NHI regulates the pricing of pharmaceutical products to healthcare providers.

The Company sells products in Japan primarily through a network of wholesalers who then sell the products to doctors, hospitals and pharmacies.

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Pricing of reimbursed pharmaceutical products is regulated by the government and funded via the Medicare levy and through company and patient contributions.

The Company sells products primarily through the wholesale system.

The Company sells products primarily through the wholesale system, while promoting its products to both physicians and pharmacists.

Significant products within the JANZ segment include AMITIZA®, Lipacreon®, Lyrica®, Norvasc®, and Effexor®.

New product launches are an important growth driver.

Important recent launches include Trastuzumab injection.

Important recent launches include adalimumab biosimilar in Japan.

Emerging Markets

The Emerging Markets segment encompasses our operations in 82 countries with developing markets and emerging economies including countries in Asia, the Middle East, South and Central America, Africa and Eastern Europe.

The Emerging Markets segment also includes the Company’s anti-retroviral franchise.

Many countries in this segment are brand-focused, and generic penetration is low.

Among our products sold in the segment are Lipitor®, Lyrica®, Norvasc®, Celebrex®, and anti-retrovirals.

The Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.

With healthcare at various stages of development across these markets, we believe we are positioned to not only leverage our large geographical footprint to maximize the similarities between these markets, but also tailor solutions to meet local need.

There is demand in this segment for better healthcare to serve a growing population and economic expansion.

Many countries in this segment are brand-conscious with generic penetration rates lower than developed markets.

Among our products sold in the segment are Lipitor®, Lyrica®, Norvasc®, Celebrex®, and ARVs.

New product launches are an important growth driver.

New products sold in the Emerging Markets segment in 2020 includes Remdesivir.

New products sold in the Emerging Markets segment in 2021 include Remdesivir and a number of biosimilars.

Refer to Note 15 Segment Information included in Part II.

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Regulation by governmental authorities is a significant factor in the R&D, manufacture, marketing, sales and distribution of pharmaceuticals.

Human therapeutic products are subject to rigorous preclinical and clinical testing to gather data to support approval, which requires extensive data and information;

manufacturing is conducted under exacting conditions governed by extensive regulation;

and post-approval activities, such as advertising and promotion and pharmacovigilance, are subject to extensive regulation.

Our products are subject to robust developmental studies which include analytical determinations of strength, quality, purity as well as rigorous safety and efficacy determinations using preclinical, pharmacokinetic studies and clinical evaluations to gather data to support regulatory review and approval.

This body of work results in extensive data and scientific information that is incorporated into a given product’s regulatory dossier.

Manufacturing is conducted under exacting conditions governed by extensive regulation including strict in-process and finished pharmaceutical products specifications and controls.

Post-approval activities, such as advertising and promotion, pharmacovigilance, post-marketing regulatory commitments, and pharmacopeial monographs, are subject to extensive regulation and controls as well.

The lengthy process of developing products and obtaining required approvals and the continuing need for post-approval compliance with applicable statutes and regulations require the expenditure of substantial resources.

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Further, approved drugs, as well as their manufacturers, are subject to ongoing post-marketing review and inspection, which can lead to the discovery of previously unknown problems with products or the manufacturing or quality control procedures used in their production, which may result in restrictions on their manufacture, sale or use or in their withdrawal from the market.

Any failure or delay by us, our suppliers of manufactured drug product, collaborators or licensees, in obtaining regulatory approvals could adversely affect the marketing of our products and our ability to receive product revenue, license revenue or profit-sharing payments.

Any failure or delay by us, our suppliers of manufactured drug product, collaborators or licensees, in obtaining and maintaining regulatory approvals could adversely affect the marketing of our products and our ability to receive product revenue, license revenue or profit-sharing payments.

Other Regulatory Requirements

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Research and Development

Our R&D organization, which includes researchers and regulatory and clinical experts, numbers more than 2,000 people who work collaboratively across our 12 different R&D centers around the world, including 10 technology-focused development sites and 2 global R&D centers.

Our research, development and medical platform seeks to deliver new product opportunities (brand, complex generic, biosimilar and generic) across all of our markets and to develop new expanded opportunities for products in our existing portfolio.

Our product pipeline includes a variety of dosage forms.

While committed to generics and specialty products, over the last several years, a greater portion of our investments has been focused on complex or difficult-to-formulate products, such as biosimilars, than on commodity products, such as conventional oral solid dosage forms.

Collectively, the investments in all our research efforts represent more than 2,000 products under development or pending approval around the world.

Our R&D organization, which includes researchers and regulatory and clinical experts, work collaboratively across our different R&D centers around the world, which include technology-focused development sites and global R&D centers.

Our research, development and clinical platform, which includes regulatory activities, seeks to deliver new product opportunities across all of our categories and markets and to evaluate opportunities to expand the scope of our existing product portfolio.

Our product pipeline includes a variety of dosage forms, including oral solid dosage forms, transdermals, injectables, inhalation, and other delivery systems.

While committed to generics and specialty products, over the last several years, a greater portion of our investments has been focused on complex or difficult-to-formulate products, such as biosimilars and extended release injectables, rather than on commodity products, such as conventional oral solid dosage forms.

For example, we are working on a number of programs including the potential to be first to market for our BOTOX® (onabotulinumtoxinA) and Eylea® (aflibercept) biosimilars.

Intellectual Property

We consider the protection of our intellectual property rights to be extremely valuable, and we act to protect them from infringement by third parties.

We have an extensive trademark portfolio and routinely apply to register key brand-name, generic, branded generic, biosimilar and OTC trade names in numerous countries around the world.

We have an extensive trademark portfolio and routinely apply to register key brand-name, generic, branded generic, biosimilar and trade names in numerous countries around the world.

Our registered trademarks are renewable indefinitely, and these registrations are properly maintained in accordance with the laws of the countries in which they are registered.

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Human Capital

We work to advance responsible and sustainable operations and leverage our collective expertise and perspectives to empower people to live healthier at every stage of life, recognizing that our actions affect the stakeholders and communities we serve.

Our passionate and talented workforce is fundamental in bringing Viatris’ mission to life.

Together, we are creating a performance-driven, highly engaging and inclusive culture with colleagues united by a shared purpose, a dedication to excellence and a mutual respect for one another that enables us to fully realize the potential of this new enterprise.

Our people, our culture

Our approximately 37,000 diverse colleagues are fueled by a shared passion, purpose, and genuine care for the patients we serve, and see healthcare not as it is, but as it should be.

To us, that means empowering patients worldwide to live healthier at every stage of life.

It also means empowering our colleagues to be the best they can be every day.

This is our mindset as we build our performance-driven, highly engaging and inclusive culture:

“The Viatris Way”.

Since Day 1, we have had several accomplishments that lay the foundation for the kind of company we want to be, including:

• Establishing four inaugural Employee Resource Groups (ERGs):

Blacks, Women, LGBTQ+ and Working Parents.

We believe that it is only through the diverse experiences and perspectives of all our colleagues that we can elicit the best ideas, drive innovation, and achieve business results;

• Being recognized on the Forbes® 2021 World’s Best Employers list.

Talent, training and development

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Together, we are building a highly inclusive organization and our goal is to provide a safe, supportive community where employees feel they belong and can use their unique experiences, perspectives and skills to make a difference in the lives of others.

As a new company spanning nearly every corner of the world, we are energized by the diversity of our workforce.

We are bringing together colleagues and allies with common interests and diverse experiences in voluntary networks called employee resource groups.

Employee wellbeing and safety

Employee well-being and safety

Viatris is committed to providing a safe and healthy workplace for our employees, contractors and visitors.

In addressing the COVID-19 pandemic and helping meet urgent global health needs, tens of thousands of dedicated Viatris employees across the world worked to help ensure a stable supply of much needed treatments.

In addressing the COVID-19 pandemic and helping meet urgent global health needs, tens of thousands of dedicated Viatris employees across the world have worked to help ensure a stable supply of much needed treatments.

Because protecting the health and safety of our workforce remains paramount, we continue to align with government directives and the advice of relevant international, national and local health authorities at every Viatris facility around the world.

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Approach to restructuring

Viatris has commenced a global restructuring program intended to ensure that the organization is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

Any workforce actions taken as part of this restructuring program will be implemented in a way that is consistent with the company’s strong commitment to treating employees fairly and with respect.

Viatris is undertaking a global restructuring program intended to ensure that the organization is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

Any workforce actions taken as part of this restructuring program have been and will continue to be implemented in a way that is consistent with the company’s strong commitment to treating employees fairly and with respect.

Exchange Act Reports

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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 1. Business