What changed in this filing

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Item 1A. Risk Factors

2022-02-28 compared with 2021-03-01 · 202 added, 172 removed, 670 unchanged (36% of the section changed)

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• Strategic Risks

◦ The risks and uncertainties associated with the pending transaction involving our biosimilars business.

◦ Our strategic initiatives, including our strategic alliances, may not achieve all intended benefits.

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◦ Even if our products in development receive regulatory approval, such products may not achieve expected levels of market acceptance.

◦ The development, approval process, manufacture and commercialization of biosimilar products involve unique challenges and uncertainties, and our failure to successfully introduce biosimilar products could have a negative impact on our business and future operating results.

◦ Our business is highly dependent upon market perceptions of us, our products and brands, and the safety and quality of our products and brands, as well as the effectiveness of our sales and marketing activities, and we may be adversely impacted by negative publicity or findings.

◦ We have a limited number of manufacturing facilities and certain third-party suppliers produce a substantial portion of our API and products, some of which require a highly exacting and complex manufacturing process.

◦ Our future success is highly dependent on our ability to attract, motivate and retain key personnel.

• Compliance Risks

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• Finance Risks

◦ Viatris’ future dividend payments cannot be guaranteed.

◦ There can be no guarantee that we will continue to pay dividends or that we will implement a stock buyback program.

◦ We may not be able to maintain competitive financial flexibility and our corporate tax rate which could adversely affect us and our shareholders

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• the potential difficulty retaining key personnel and other employees of Mylan and the Upjohn Business;

• challenges in reducing reliance on certain transition services provided by Pfizer prior to the expiration of any period in which such services are provided;

• challenges in reducing reliance on certain transition services provided by Pfizer, including difficulty hiring employees or finding other suitable replacements and managing the amounts of related replacement costs, prior to the expiration of any period in which such services are provided;

• reducing costs associated with the transition services provided by Pfizer.

In addition to integration activities with respect to Mylan and the Upjohn Business, on November 16, 2020, Viatris announced a significant global restructuring program in order to achieve specified synergies over the next four years, or sooner, and ensure the new company is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

This Viatris restructuring program incorporates and expands upon a prior Mylan restructuring program.

On December 11, 2020 and February 25, 2021, Viatris disclosed additional details related to this global restructuring program that may impact up to 20% of its global workforce and includes the closing, downsizing or divesting of up to 15 manufacturing facilities.

In addition to integration activities with respect to Mylan and the Upjohn Business, Viatris is also implementing a significant global restructuring program in order to achieve specified synergies and ensure the new company is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

The process of integrating operations and implementing restructuring initiatives could cause an interruption of, or loss of momentum in, the activities of one or more of Viatris’ businesses.

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See “ The integration of the Upjohn Business with Mylan following the Combination, as well as our global restructuring program, may present significant challenges ” above.

Even if the integration and restructuring program are successful, we may not achieve these synergies, growth opportunities and other financial and operating benefits within the timeline we anticipate, or at all.

example, the benefits from the Combination may be offset by significant costs incurred in connection with our global restructuring program and the Combination, including integration and post-closing costs, costs associated with our TSAs with Pfizer, and capital expenditures, which could be higher than currently estimated.

Even if the integration and global restructuring program are successful, we may not achieve these synergies, growth opportunities and other financial and operating benefits within the timeline we anticipate, or at all.

For example, the benefits from the Combination may be offset by significant costs incurred in connection with our global restructuring program and the Combination, including integration and post-closing costs, costs associated with our TSAs with Pfizer, and capital expenditures, which could be higher than currently estimated.

The quantification of synergies expected to result from the Combination is based on significant estimates and assumptions that are subjective in nature and inherently uncertain.

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In connection with such transition services, Viatris and Pfizer agreed, among other things, that each of them will each bear 50% of the first $380 million of certain reasonable out-of-pocket costs incurred by Pfizer in connection with the services, with Viatris bearing all of such costs in excess of $380 million.

As of December 31, 2021, the Company has incurred approximately $83.5 million of such expenses.

In addition, in connection with the Combination, Viatris agreed to indemnify Pfizer for certain liabilities.

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In connection with the Combination, Pfizer received the IRS Ruling and the Tax Opinion, each to the effect that, for U.S.

within the meaning of Section 355 of the Code and the Pfizer Distribution Payments will qualify as money distributed to Pfizer creditors or stockholders in connection with the reorganization for purposes of Section 361(b) of the Code.

federal income tax purposes, the Distribution, together with certain related transactions, will qualify as a tax-free “reorganization” within the meaning of Section 368(a)(1)(D) of the Code, the Distribution will qualify as a tax-free distribution within the meaning of Section 355 of the Code and the Pfizer Distribution Payments will qualify as money distributed to Pfizer creditors or stockholders in connection with the reorganization for purposes of Section 361(b) of the Code.

Although the IRS Ruling is generally binding on the IRS, the continuing validity of the IRS Ruling is subject to the accuracy of the factual representations made in the ruling request.

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Even if the Distribution were otherwise to qualify as a tax-free transaction under Sections 368(a)(1)(D) and 355 of the Code, the Distribution would be taxable to Pfizer (but not to Pfizer’s stockholders) pursuant to Section 355(e) of the Internal Revenue Code if there were a 50 percent or greater change in ownership of either Pfizer or Viatris, directly or indirectly, as part of a plan or series of related transactions that included the Distribution.

For this purpose, any acquisitions of Pfizer or Viatris common stock within the period beginning two years before the Distribution and ending two years after the Distribution are presumed to be part of such a plan, although Pfizer may be able to rebut that presumption.

For this purpose, any acquisitions of Pfizer or Viatris common stock within the period beginning two years before the Distribution and ending two years after the Distribution (i.e., on November 16, 2022) are presumed to be part of such a plan, although Pfizer may be able to rebut that presumption.

For purposes of this test, the Combination will be treated as part of a plan, but the Combination standing alone will not cause the Distribution to be taxable to Pfizer under Section 355(e) of the Code because holders immediately before the Distribution of Pfizer common stock directly owned more than 50 percent of Viatris common stock immediately following the Combination.

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In addition, the Tax Matters Agreement generally prohibits Viatris and its affiliates from taking certain actions that could cause the Distribution and certain related transactions to fail to qualify as tax-free transactions to Pfizer and its stockholders.

Furthermore, unless an exception applies, for a two-year period following the date of the Distribution, Viatris and its subsidiaries may not:

Furthermore, unless an exception applies, for a two-year period following the date of the Distribution (i.e., until November 16, 2022), Viatris and its subsidiaries may not:

• engage in transactions in which Viatris’ stock is acquired;

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• amend the Viatris Charter or take any other action affecting the relative voting rights of any of its stock or stock rights.

If Viatris intends to take certain restricted actions, it must notify Pfizer of the proposal to take such action and either (a) obtain a ruling from the IRS or an unqualified opinion acceptable to Pfizer to the effect that such action will not affect the tax-free status of the Distribution and certain related transactions or (b) receive from Pfizer a waiver of such requirement.

If Viatris intends to take certain restricted actions before November 16, 2022, it must notify Pfizer of the proposal to take such action and either (a) obtain a ruling from the IRS or an unqualified opinion acceptable to Pfizer to the effect that such action will not affect the tax-free status of the Distribution and certain related transactions or (b) receive from Pfizer a waiver of such requirement.

However, none of the receipt of an IRS ruling, an unqualified tax opinion or a waiver by Pfizer will relieve Viatris of any responsibility to indemnify Pfizer for tax-related losses resulting from such actions.

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Strategic Risks

There are risks and uncertainties associated with the pending transaction involving our biosimilars business, one or more of which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends or stock price .

There are a number of risks and uncertainties associated with the pending Biocon Biologics Transaction, including, among other things, the potential failure of a condition to closing, including the conditions related to obtaining required regulatory and other consents and approvals, which could give rise to the termination of Biocon Agreement and related agreements executed between us, Biocon and Biocon Biologics, as applicable.

Either party has the right to terminate the Biocon Agreement if the closing has not occurred by March 31, 2023, subject to extension in certain circumstances.

For example, a failure by Biocon Biologics to obtain necessary financing to consummate the transactions contemplated by the Biocon Agreement prior to such date could cause the Biocon Agreement to be terminated.

To the extent that the current market price of our common stock reflects an assumption that the transactions contemplated by the Biocon Agreement and related agreements will be consummated in the timeframe and manner currently anticipated, and that a portion of the proceeds to us will be used to pay down debt and/or to fund other important company initiatives, any delay in closing or failure to close could result in a decline in the market price of our common stock.

Similarly, any delay in closing or failure to close could result in damage to our relationships with customers, suppliers and employees, including our existing relationships with Biocon and Biocon Biologics, and have an adverse effect on our business.

Pending the completion of the transactions contemplated by the Biocon Agreement, the attention of our management may be directed toward such transactions and related matters, and their focus may be diverted from the day-to-day business operations of our company, including from other opportunities that might otherwise be beneficial to us.

We have agreed to indemnify Biocon Biologics and certain of its representatives against certain losses suffered as a result of certain breaches of our representations, warranties, covenants and agreements in the Biocon Agreement and related documents.

Any event that results in a right for Biocon Biologics to seek indemnity from us could result in substantial liability to us and could adversely affect our financial position and results of operations.

In addition, in connection with the closing of the pending transaction with Biocon Biologics, we will enter into a transition services agreement pursuant to which we will provide services to Biocon Biologics, including commercialization services substantially the same as we currently provide to our biosimilar business, generally for a period of up to two years.

Once in effect, our obligations under the transition services agreement may result in additional expenses that are borne by us and may divert our focus and resources that would otherwise be invested into maintaining or growing our retained business.

Furthermore, a significant portion of the consideration that we will receive in the pending transaction with Biocon will be in the form of equity in Biocon Biologics, which is a privately held Indian company.

Although we have negotiated certain “downside” protection regarding the value of that equity in the Biocon Agreement and related documents, such protection does not guarantee any particular liquidity event or our ability to monetize our equity and, even if we are able to successfully liquidate our equity, the downside protection may be inadequate to guarantee a minimum return that we or investors expect.

In addition, we believe the success of the Biocon biologics business over at least the first two years after closing, will be highly dependent upon the successful transition of the business to Biocon, including no major disruption in services provided under the transition services agreement, which will also have a significant impact on the value of the equity we will own in Biocon Biologics.

Whether the Biocon Biologics transaction is ultimately consummated or not, the pendency could have a number of negative effects on our current business, including potentially disrupting our regular operations, diverting the attention of our workforce and management team, and increasing workforce turnover.

It could also disrupt existing business relationships, make it harder to develop new business relationships, or otherwise negatively impact the way that we operate the business, which could negatively impact Viatris’ results of operations and cash flows during the pendency of the transaction.

If we successfully complete the pending transaction involving our biosimilars business, our total revenues, results of operations and cash flows from operating activities are expected to be negatively impacted in the periods after close.

We have expended significant time and resources, and expect to continue to expend significant time and resources, on the transaction involving our biosimilars business, including management time and focus, costs and expenses related to the separation of the biosimilars business from Viatris, the provision of the transition services and other transaction costs.

Many of these expenses must be paid regardless of whether the transaction closes, and even if the expected benefits are not achieved.

We may also face other challenges as a result of the announcement and completion of the transactions contemplated by the Biocon Agreement, including that we may not be able to realize the anticipated benefits from such transactions, such as deploying the proceeds to pay down our outstanding indebtedness and/or fund other important initiatives, and maintaining employee morale and retaining key management and other employees to provide the transition services and to operate our retained business.

Any of the risks described above could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Our strategic initiatives, including our strategic alliances, may not achieve all intended benefits.

In addition to the integration and restructuring activities discussed above, we have entered into and continue to consider and evaluate various strategic transactions and business arrangements on an ongoing basis, including acquisitions, asset purchases, partnerships, collaborations, joint ventures, divestitures, product rationalization and investments.

In addition to the integration and restructuring activities and the Biocon Biologics Transaction, each of which is discussed above, we have entered into and continue to consider and evaluate various strategic transactions and business arrangements on an ongoing basis, including acquisitions, asset purchases, partnerships, collaborations, joint ventures, divestitures, product rationalization and investments.

These transactions and arrangements may be material both from a strategic and financial perspective.

We may miscalculate the risks associated with our strategic initiatives, including business development transactions, at the time they are made or not have the resources or ability to access all the relevant information to evaluate them properly, including with regard to the potential of R&D pipelines, manufacturing issues, compliance issues, or the outcome of ongoing legal and other proceedings.

There can be no assurance that we will be able to fully realize the expected benefits of any such transactions or arrangements.

Furthermore, although our expectation is to engage in divestitures and product rationalizations only if they advance or otherwise support our overall strategy, any such sale could reduce the size or scope of our business, our market share in particular markets or our opportunities with respect to certain markets or products.

We have also entered into strategic alliances with partners to develop, manufacture, market and/or distribute certain products, and/or certain components of our products, in various markets.

Furthermore, divestitures, product rationalizations or asset sales could result in decreased total revenues, results of operations and cash flows from operating activities in future periods, reduce the size or scope of our business, our market share in particular markets or our opportunities and ability to compete with respect to certain markets, therapeutic areas or products.

In addition, should we seek to divest other of our assets and business, we may be unable to dispose of such businesses and assets on satisfactory or commercially reasonable terms or within our anticipated timeline, in part because of competition from other companies in pursuing similar transactions in the pharmaceutical industry.

We have also entered into strategic alliances with partners, including through our Global Healthcare Gateway®, to develop, manufacture, market and/or distribute certain products, and/or certain components of our products, in various markets.

We commit substantial effort, funds and other resources to these various collaborations, including with respect to the development of biosimilar products.

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In addition, our Global Healthcare Gateway® may not achieve all of its expected benefits.

The overall execution of a strategic initiative may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships, and diversion of management’s and/or employee’s attention, among other potential adverse consequences.

The overall execution of a strategic initiative may result in material unanticipated problems, expenses, liabilities, competitive responses, operational inefficiencies, adverse tax consequences, loss of customer relationships, difficulty attracting and retaining qualified employees, and diversion of management’s and/or employee’s attention, among other potential adverse consequences.

In addition, we may have to terminate a strategic alliance, or our collaboration partners may be unable to fulfill their collaboration obligations.

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The growth of overall healthcare costs has led governments and payors to implement new measures to control healthcare spending.

As a result, we face numerous cost-containment measures by governments and other payors, including certain government-imposed industry-wide price reductions, mandatory rebates or pricing, international reference pricing (i.e., the practice of a country linking its regulated medicine prices to those of other countries), volume-based procurement, tender systems, shifting of the payment burden to patients through higher co-payments, and requirements for increased transparency on pricing.

This international patchwork of price regulation and differing economic conditions and incomplete value assessments across countries has led to varying access to quality medicine in many markets and some third party trade in our products between countries and may have an adverse impact on the pricing of our products.

Many markets in which we operate have implemented or may implement tender systems for generic pharmaceuticals in an effort to lower prices.

Many markets in which we operate have implemented or may implement tender systems for generic and biosimilar pharmaceuticals in an effort to lower prices.

Under such tender systems, manufacturers submit bids which establish prices for generic pharmaceutical products.

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In addition, if customers to whom we supply API do not win their tender bids, the amount of API that we sell to them may be reduced.

The tender system often results in companies underbidding one another by proposing low pricing in order to win the tender.

Other markets may also consider the implementation of a tender system or have implemented, or plan to implement, government mandated price reductions and/or other forms of price controls.

Even if a tender system or other price controls are ultimately not implemented, the anticipation of such could result in price reductions.

While criteria other than price can be included in tenders, tender systems often select the lowest bid, which often results in companies underbidding one another by proposing low pricing in order to win the tender.

Other markets may also consider the implementation of a tender system, and even if a tender system or other price controls are ultimately not implemented, the anticipation of such could result in price reductions.

In the EU, U.K.

and some other international markets, the government provides healthcare at low cost to consumers and regulates pharmaceutical prices, patient eligibility and/or reimbursement levels to control costs for the government-sponsored healthcare system.

These systems of price regulations may lead to inconsistent and lower prices.

Within the EU and in other countries, the availability of our products in some markets at lower prices undermines our sales in other markets with higher prices.

Additionally, certain countries set prices by reference to the prices in other countries where our products are marketed.

Thus, our inability to secure adequate prices in a particular country may also impair our ability to obtain acceptable prices in existing and potential new markets and may create the opportunity for third party cross-border trade.

In addition to the impacts of these government-sponsored healthcare systems, in the EU, U.K.

and other international markets, certain governmental agencies have or are considering enacting further measures to decrease the costs of providing healthcare, including government mandated price reductions and/or other forms of price controls, including retrospective “clawback” price reductions.

as a result of the COVID-19 pandemic and the changing healthcare landscape in those markets.

In China, pricing pressures have increased in recent years, and the Chinese government has also increased its focus on patient access and reimbursement for pharmaceutical medicines.

For example, in 2013, China began to implement a QCE process for post-LOE products to improve the quality of domestically manufactured generic drugs, primarily by requiring such drugs to pass a test to assess their bioequivalence to a qualified reference drug (typically the originator drug).

In addition, VBP policy for post- LOE products is now in its third year and includes more than 150 molecules.

While all major Viatris brands are already included in the VBP molecule list, historically we have had limited success in the bidding process and most contracts went to local Chinese generic companies.

In addition, VBP policy for post- LOE products is now in its fourth year and includes more than 200 molecules.

In addition, the bidding process has resulted in significant price cuts for the molecules included with some bidders reducing the price of their products by as much as 96% as they attempt to secure volumes on the Chinese pharmaceutical market.

We expect pricing pressures on our products included in the VBP program to continue to increase as a result of these programs, and Viatris may be unable to successfully win contracts through these centralized procurement projects in the future.

We have failed, and may continue to fail, to win bids due to various factors, including

uncompetitive bidding prices.

We expect pricing pressures on our products included in the VBP program to continue to increase as a result of these programs.

We have failed, and may continue to fail, to win bids due to various factors, including uncompetitive bidding prices.

In addition, the URP policy will cap reimbursement of molecules at their VBP tender winning price.

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There has also been increasing U.S.

federal and state legislative and enforcement interest with respect to drug pricing, as well as from international organizations like the United Nations, World Health Organization and Organization for Economic Cooperation and Development, in addition to intense publicity and scrutiny regarding such matters, including publicity and pressure resulting from prices charged by competitors and peer companies for new products as well as price increases by competitors and peer companies on older products that some have deemed excessive.

In particular, U.S.

federal prosecutors have issued subpoenas to pharmaceutical companies, including Mylan, seeking information about their drug pricing practices, among other issues.

Congress has also conducted hearings with respect to drug pricing and members of Congress have sought information from certain pharmaceutical companies, including Mylan, relating to drug-price increases.

In addition, there have been legislation and legislative and regulatory proposals concerning drug prices and related issues, including the perceived need to bring more transparency to drug pricing, reviewing the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs.

In the U.S., in addition to new state transparency laws and the introduction of several federal pricing bills, several executive orders were signed and rules were issued in 2020 relating to drug pricing, some of which have been delayed and/or are the subject of litigation.

These new orders and rules related to Medicare Part D rebate reform, providing discounted insulin and/or EpiPen® Auto-Injector to patients in Federally Qualified Health Centers, drug importation from Canada, and most favored nation pricing for Medicare.

Although we expect to see continued focus in regulating pricing, we cannot predict what, if any, additional legislative or regulatory developments may transpire at the state or country level, particularly given a new administration and changes in control of Congress, or what the ultimate impact may be.

federal and state legislative and enforcement interest with respect to drug pricing, as well as from international organizations like the United Nations, WHO and Organization for Economic Cooperation and Development, in addition to intense publicity and scrutiny regarding such matters, including publicity and pressure resulting from prices charged by competitors and peer companies for new products as well as price increases by competitors and peer companies on older products that some have deemed excessive.

In addition, there have been executive orders, legislation, and legislative and regulatory proposals, including in connection with government programs such as Medicare, concerning drug prices and related issues, including the perceived need to bring more transparency to drug pricing, reviewing the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs.

In the U.S., certain of these pressures are further compounded by increasing consolidation among wholesalers, retailer drug chains, PBMs, private insurers, managed care organizations and other private payors, which can increase their negotiating power, particularly with respect to our generic drugs.

Please also refer to “ A significant portion of our revenues is derived from sales to a limited number of customers.”

The international patchwork of price regulation, failing to win tenders, the implementation of price control systems, adverse legislation and regulation, the consolidation of our customers, or continued social or government pressure to lower the cost of pharmaceutical products could have a material adverse impact on our business, reputation, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

The numerous cost-containment measures by governments and other payors, failing to win tenders, the implementation of price control systems, adverse legislation and regulation, the consolidation of our customers, or continued social or government pressure to lower the cost of pharmaceutical products could have a material adverse impact on our business, reputation, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Healthcare reform legislation could have a material adverse effect on our business.

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The ACA may be subject to revisions and modifications in the future.

Further, Congress continues to consider drug pricing legislation that, if passed and signed into law, could impact companies’ ability to increase prices for products beyond the rate of inflation.

Further, Congress continues to consider drug pricing legislation that, if passed and signed into law, could impact companies’ ability to increase prices for products beyond the rate of inflation, and could allow Medicare to negotiate prices on a subset of brand drugs.

We are unable to predict the future course of federal or state healthcare legislation or reform, including temporary or permanent healthcare reform measures resulting from the COVID-19 pandemic or the outcome of challenges to such laws or reforms once passed.

The ACA and further changes in the law or regulatory framework that reduce our revenues or increase our

costs could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

The ACA and further changes in the law or regulatory framework that reduce our revenues or increase our costs could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Additionally, we encounter similar regulatory and legislative issues in most other countries.

In the EU and some other international markets, the government provides healthcare at low cost to consumers and regulates pharmaceutical prices, patient eligibility and/or reimbursement levels to control costs for the government-sponsored healthcare system.

These systems of price regulations may lead to inconsistent and lower prices.

Within the EU and in other countries, the availability of our products in some markets at lower prices undermines our sales in other markets with higher prices.

Additionally, certain countries set prices by reference to the prices in other countries where our products are marketed.

Significant additional reforms to the U.S.

or EU healthcare systems, or to the healthcare systems of other markets in which we operate, could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

healthcare system, or to the healthcare systems of other markets in which we operate, could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

We have significant operations globally, which exposes us to the risks inherent in conducting our business internationally.

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• the impact of the COVID-19 pandemic;

• compliance with the national and local laws, regulations and customs of countries in which we do business, including, but not limited to, data privacy and protection, import/export and enforcement of intellectual property protections;

• compliance with the national and local laws, regulations and customs of countries in which we do business, including, but not limited to, data privacy and protection, environmental and social regulations, import/export and enforcement of intellectual property protections;

• less established legal and regulatory regimes in certain jurisdictions, including China, where the interpretation and enforcement of laws, rules and regulations may involve uncertainties and can be inconsistent;

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• compliance with a variety of U.S.

laws including, but not limited to, regulations put forth by the U.S.

laws including, but not limited to, trade controls or sanctions, regulations put forth by the U.S.

Treasury’s Office of Foreign Assets Control, the Iran Threat Reduction and Syria Human Rights Act of 2012 and rules relating to the use of certain “conflict minerals” under Section 1502 of the Dodd-Frank Wall Street Reform and the Consumer Protection Act;

• increased trade controls or sanctions as a result of the escalation of tensions between Russia and Ukraine that may affect our ability to market or sell pharmaceuticals in either country;

• changes in laws, regulations, and practices affecting the pharmaceutical industry and the healthcare system, including but not limited to imports, exports, manufacturing, quality, cost, pricing, reimbursement, approval, inspection, and delivery of healthcare;

• changes in policies designed to promote foreign investment, including significant tax incentives, liberalized import and export duties, and preferential rules on foreign investment and repatriation;

• increased U.S.

Congressional and executive branch scrutiny of overseas pharmaceutical manufacturing, including executive orders and policy proposals related to increasing U.S.

production of pharmaceutical products and API;

• increased EU and U.S.

scrutiny of overseas pharmaceutical manufacturing, including executive orders and policy proposals related to increasing domestic production of pharmaceutical products and API;

• differing local product preferences and product requirements;

• adverse changes in the economies in which we or our partners and suppliers operate as a result of a slowdown in overall growth, a change in government or economic policies, or financial, political, or social change or instability in such countries that affects the markets in which we operate, particularly emerging markets;

• changes in employment or labor laws, wage increases, or rising inflation in the countries in which we or our partners and suppliers operate;

• changes in employment or labor laws, or wage increases in the countries in which we or our partners and suppliers operate;

• local, regional and global restrictions on banking and commercial activities in certain markets, especially emerging markets;

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• volatility in international financial markets and increased foreign currency risk;

• risks and uncertainties related to the formal withdrawal of the U.K.

from the EU, commonly referred to as Brexit, and the subsequent entry into a trade agreement that governs the U.K.’s relationship with the EU, including with respect to divergent national laws and regulations, import/export restrictions, delays in regulatory approvals and changes in pharmaceutical regulations governing marketing authorizations in the EU and the U.K., which could materially impact the way we conduct our operations in those markets;

• changes resulting from the formal withdrawal of the U.K.

from the EU, commonly referred to as Brexit, including those related to additional trade agreements, tariffs and customs regulations and currency fluctuations, which could materially impact the way we conduct our operations in those markets;

• supply disruptions and increases in energy and transportation costs;

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as a result of the escalation of trade tensions between the countries or otherwise;

• burdens to comply with multiple, changing and potentially conflicting foreign laws and regulations, including those relating to the environment, carbon emissions, health and safety, labor and human rights;

• burdens to comply with multiple, changing and potentially conflicting laws, regulations and disclosure requirements, including those relating to environmental, social and governance matters, carbon emissions, health and safety, labor and human rights;

• natural or man-made disasters, including droughts, floods, earthquakes, hurricanes and the impact of climate change in the countries in which we or our partners and suppliers operate;

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We applied purchase accounting to the Combination and determined that Mylan was the accounting acquirer in the Combination for purposes of applying purchase accounting to the acquired assets and assumed liabilities of the Upjohn Business in connection with the Combination.

The illegal distribution and sale by third parties of counterfeit versions of our products or of diverted or stolen products could have a negative impact on our reputation and our business.

The pharmaceutical drug supply has been increasingly challenged by the vulnerability of distribution channels to illegal counterfeiting and the presence of counterfeit products in a growing number of markets and over the internet.

Third parties may illegally distribute and sell counterfeit versions of our products that do not meet our rigorous manufacturing and testing standards.

The illegal distribution and sale by third parties of counterfeit or IP-infringing versions of our products or of diverted or stolen products could have a negative impact on our reputation and our business.

The pharmaceutical drug supply has been increasingly challenged by the vulnerability of distribution channels to illegal counterfeiting and the presence of counterfeit or IP-infringing products in a growing number of markets and widespread over the internet.

Third parties may illegally distribute and sell counterfeit or IP-infringing versions of our products that do not meet our rigorous manufacturing and testing standards.

Counterfeit products are frequently unsafe or ineffective and can be potentially life-threatening.

Counterfeit medicines may contain harmful substances, the wrong dose of API or no API at all.

Counterfeit medicines may contain harmful substances, the wrong API, an incorrect dose of API or no API at all, depriving patients of the therapeutic benefit of such medicines.

However, to distributors and users, counterfeit products may be visually indistinguishable from the authentic version.

Reports of adverse reactions to counterfeit drugs or increased levels of counterfeiting could materially affect patient confidence in the authentic product.

Reports of adverse reactions to counterfeit or IP-infringing drugs or increased levels of counterfeiting could materially affect patient confidence in the authentic product.

It is possible that adverse events caused by unsafe counterfeit products will mistakenly be attributed to the authentic product.

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• greater financial resources.

We also face increasing competition from lower-cost generic products and other branded products.

We also face increasing competition from lower-cost generic products and other branded products, including our ARV products.

Certain of our products are not protected by patent rights or have limited patent life and will soon lose patent protection.

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As a result, sales of many of these products may decline or stop growing over time, and may decline faster than has been projected.

For example, the compound patent for Celebrex in Japan expired in November 2019, and generics entered the market in June 2020.

For example, Perforomist® lost exclusivity and experienced generic competition in June 2021, and the compound patent for Celebrex in Japan expired in November 2019 with generics entering the market in June 2020.

In June 2019, Lyrica’s pediatric exclusivity in the United States expired, and multi-source generic competition commenced in the United States in July 2019.

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For example, several companies launched a generic to Lyrica in Japan in December 2020 despite pending patent infringement litigation.

The litigation remains ongoing and the patents expire in July 2022.

The litigation remains ongoing, we have received several unfavorable rulings, and the patents expire in July 2022.

We may not be successful in managing competition from non-branded generics or other alternatives, or in generally managing revenues after loss of exclusivity, and our business may be materially adversely affected.

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In China, for example, we face strong competition from certain generic manufacturers, which may result in price cuts and volume loss on some of Viatris’ branded products.

In many emerging markets, we face increased competition and contracting markets for certain of our ARV products, primarily related to competing therapies.

We also face competition in the United States, the EU and other mature markets that have a robust generics market and favorable regulatory conditions for generics.

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• Competitors’ products may also be safer, more effective, more effectively marketed or sold, or have lower prices or better performance features than ours;

• PBMs and other pharmaceutical manufacturers may utilize contracting strategies that could decrease generic utilization of or otherwise negatively impact our products;

• PBMs and other pharmaceutical manufacturers may utilize contracting strategies that could decrease utilization of or otherwise negatively impact our products;

• Vertical integration of pharmacies and large purchasing organizations or consolidation among distribution outlets;

• Our sales may suffer as a result of changes in consumer demand for our products, including those related to fluctuations in consumer buying patterns tied to seasonality, willingness of customers to switch among products of different pharmaceutical manufacturers, importation by consumers or the introduction of new products by competitors.

• Our sales may suffer as a result of changes in consumer demand for our products, including those related to fluctuations in consumer buying patterns tied to seasonality or COVID-19, willingness of customers to switch among products of different pharmaceutical manufacturers, importation by consumers or the introduction of new products by competitors.

The occurrence of any of the above risks could have an adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

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For the years ended December 31, 2021 and 2020, Viatris’ top ten products in terms of sales, in the aggregate, represented approximately 33% and 23%, respectively, of the Company’s net sales.

In the future, we expect that the mix of our top products will change and the concentration of sales for those top products will increase as a result of the Combination.

The increase in the concentration of our top product sales in 2021 was primarily driven by the impact of the Combination.

If the volume or pricing of our largest selling products declines in the future, our business, financial condition, results of operations, cash flows, and/or share price could be materially adversely affected.

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We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including its impact on our workforce, suppliers, vendors, business partners, distribution channels, customers and patients.

As the rate of infection remains high in many countries, including the U.S., attempts continue to be made to reduce the spread of COVID-19, including quarantines, vaccination programs, government restrictions on movement, business closures and suspensions, canceled events and activities, self-isolation, and other voluntary and/or mandated changes in behavior.

Both the outbreak of the disease and actions to slow its spread have created significant uncertainty, economic volatility and disruption, and increased unemployment, which have impacted and may continue to impact our business operations and have materially adversely affected and may continue to materially adversely affect our workforce and business operations as well as our financial condition, results of operations, cash flows and/or stock price and may impact our ability to pay dividends.

While our business operations are currently considered essential based on current government guidelines throughout the world due to the important role pharmaceutical manufacturers play within the global healthcare system, many of our administrative offices have been operating under work from home protocols, which are expected to continue at least through mid-2021.

As the pandemic continues to evolve and new COVID-19 variants are detected, the rate of infection remains high in many countries, including the U.S.

Attempts continue to be made to reduce the spread of COVID-19, including quarantines, vaccination programs (including boosters), increased testing, government restrictions on movement, business closures and suspensions, canceled events and activities, self-isolation, and other voluntary and/or mandated changes in behavior.

Both the outbreak, and continued spread of COVID-19 and actions to slow its spread have created and continue to create significant uncertainty, economic volatility and disruption, supply chain disruption, and increased unemployment, which have impacted and may continue to impact our business operations and workforce.

In addition, recovery from the pandemic may not proceed as anticipated, and may have unpredictable impacts on demand for our products, our workforce and our business operations.

All of these factors could have a material adverse impact on our workforce, business operations, financial condition, results of operations, cash flows and/or stock price and may impact our ability to pay dividends.

In addition, certain programs or incentives implemented to ensure employee health and safety, such as subsidized testing, hazard pay, sick leave and bonus payments, have increased our operating costs.

Extended changes in work conditions, including work from home protocols, could strain our business continuity plans, reduce productivity and morale, or introduce operational risk, including but not limited to increased cybersecurity risk.

For example, remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts and malware attacks that seek to exploit the COVID-19 pandemic.

Additionally, we have taken extra precautions at our manufacturing facilities to aid in the protection of on-site personnel and operations, including the implementation of social distancing guidelines, daily health assessments of on-site

personnel and split shifts where feasible.

For example, remote working environments may be less secure and some may seek to exploit the COVID-19 pandemic to initiate hacking attacks, phishing and social engineering attempts and malware attacks.

If we experience an increase in reported illnesses or quarantining at any of our facilities, including critical manufacturing sites, it is possible that such facilities may need to close for an extended period of time, which could negatively affect our ability to produce, ship, and supply products to our customers and would impact our business and financial results.

In addition, customer-facing field operations have moved to a remote engagement model and global restrictions have been placed on travel and in-person meetings.

In addition, some of our customer-facing field personnel continue to operate on a remote engagement model to ensure continued support for healthcare professionals, patient care and access to needed products.

A remote engagement model may not be as successful as in-person meetings and could result in lower sales of products, particularly new products.

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For instance, the FDA has announced its intention to temporarily postpone certain inspections of domestic and foreign manufacturing facilities.

The FDA and comparable foreign regulatory agencies may have slower response times or reduced resources and, as a result, review of regulatory submissions, inspections, approval of new products and other timelines important to our business may be materially impacted, which could delay our new product launches and have a material adverse effect on our business.

The FDA and comparable foreign regulatory agencies may have slower response times or reduced resources and, as a result, review of regulatory submissions, inspections, approval of

new products and other timelines important to our business may be materially impacted, which could delay our new product launches and have a material adverse effect on our business.

In addition, our continued access to external sources of liquidity depends on multiple factors, including the condition of debt capital markets, our operating performance, and maintaining strong credit ratings.

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In addition, reduced consumer and customer spending, reduced government or third-party payor coverage or reimbursement, or new government controls, may drive us and our competitors to decrease prices, may reduce the ability of customers to pay, or may result in reduced demand for our products.

The occurrence of any of these risks could have a material adverse effect on our industry, business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

In addition, accelerating rates of inflation are expected to continue in the near future and have resulted, and may continue to result, in increased costs of labor, raw materials, other supplies and freight and distribution costs, among others.

For the pharmaceutical industry and the healthcare systems in the markets in which we participate, the pricing dynamics of our products generally does not provide the opportunity to pass on such costs to customers.

Inflation may also result in higher interest rates and increased costs of capital.

The occurrence of any of the above risks could have a material adverse effect on our industry, business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Failure to comply with applicable environmental and occupational health and safety laws and regulations worldwide could adversely impact our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

We are subject globally to various laws and regulations concerning, among other things, the environment, climate change, water, chemicals and employee safety.

We are subject globally to various laws and regulations concerning, among other things, the environment, climate change, water, waste, chemicals and employee safety.

These requirements include regulation of the handling, manufacture, transportation, storage, use and disposal of materials and wastes, including the discharge of regulated materials and emissions into the environment.

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In the normal course of our business, we are exposed to risks relating to possible releases of hazardous substances into the environment, which could cause environmental or property damage or personal injuries, and which could result in (i) our noncompliance with such environmental and occupational health and safety laws, regulations and permits and (ii) regulatory enforcement actions or claims for personal injury and property damage against us.

If environmental discharge occurs, or if we discover contamination caused by prior operations, including by prior owners and operators of properties we acquire or lease, we could be liable for cleanup or remediation obligations, damages and fines or have relevant permits, authorizations or registrations modified or revoked.

If environmental discharge occurs, or if we discover contamination caused by third parties, including by prior owners and operators of properties we acquire or lease, or by neighboring properties or other offsite sources, we could be liable for cleanup or remediation obligations, damages and fines or have relevant permits, authorizations or registrations modified or revoked, regardless of our responsibility for such contamination.

In addition, any non-compliance with environmental and occupational health and safety laws and regulations and permits, or emissions into the environment, whether actual or perceived, may result in significant reputational damage.

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Environmental and occupational health and safety laws and regulations are also complex and subject to change, and our related capital expenditures and costs for compliance may increase substantially in the future as a result of such changes, the development and manufacturing of a new product or increased development or manufacturing activities at any of our facilities.

We may be required to expend significant funds and our manufacturing activities could be delayed or suspended or we may lose the ability to purchase or use certain materials, or face restrictions on the amounts of materials we may use or purchase, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

We may be required to expend significant funds and our

manufacturing activities could be delayed or suspended or we may lose the ability to purchase or use certain materials, or face restrictions on the amounts of materials we may use or purchase, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

The pharmaceutical industry is heavily regulated, and we face significant costs and uncertainties associated with our efforts to comply with applicable laws and regulations.

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We are committed to conducting our business, including the sale and marketing of our products, in compliance with all applicable laws and regulations.

These laws and regulations, however, are numerous and complex and it is possible that a governmental authority may challenge our activities, or that an employee or agent could violate these laws and regulations without our knowledge.

These laws and regulations, however, are numerous, complex and continue to evolve, and it is possible that a governmental authority may challenge our activities, or that an employee or agent could violate these laws and regulations without our knowledge.

Failure to comply with these laws and regulations could result in a range of consequences, including, but not limited to, fines, penalties, disgorgement, exclusion from U.S.

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In recent years, the regulatory framework in China regarding the pharmaceutical industry has undergone significant changes and Chinese authorities have become increasingly vigilant in enforcing laws in the pharmaceutical industry.

We believe that Viatris’ strategies regarding pharmaceutical research, development, manufacturing and commercialization in China

are currently aligned with the Chinese government’s policies, but they may in the future diverge, requiring a change in such strategies.

We believe that Viatris’ strategies regarding pharmaceutical research, development, manufacturing and commercialization in China are currently aligned with the Chinese government’s policies, but they may in the future diverge, requiring a change in such strategies.

Any such change may result in increased compliance costs to us or cause delays in or prevent the successful research, development, manufacturing or commercialization of our products in China, result in the loss of required licenses and permits or the suspension or termination of Viatris’ activities in China.

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We have provided thorough responses to the FDA regarding the issues identified and remediation is ongoing.

In addition, in November 2018, the FDA issued a warning letter with respect to our manufacturing plant in Morgantown, West Virginia.

We implemented comprehensive restructuring and remediation activities at our Morgantown plant and on May 11, 2020, we received a closeout letter from the FDA.

However, we or our partners may receive similar observations and correspondence in the future.

If we are unable to resolve these observations and address regulatory concerns in a timely fashion, our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price could be materially affected.

We and our partners have in the past and may in the future receive similar observations and correspondence.

We utilize controlled substances in certain of our current products and products in development, and therefore must meet the requirements of the Controlled Substances Act of 1970 and the related regulations administered by the DEA in the U.S., as well as those of similar laws in other countries where we operate.

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The use of legal, regulatory, and legislative strategies by both brand and generic competitors, including but not limited to “authorized generics” and regulatory petitions, may increase costs associated with the introduction or marketing of our generic products, could delay or prevent such introduction, and could significantly reduce our revenue and profit .

Our competitors, both branded and generic, often pursue strategies to prevent or delay generic alternatives to branded products.

Our competitors, both branded and generic, often pursue strategies that could prevent or delay generic alternatives to branded products.

These strategies include, but are not limited to:

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• launching their own authorized generic product prior to or at the same time or after generic competition initially enters the market;

• pricing a branded product at a discount equivalent to generic pricing, as was the case for Copaxone after the launch of Mylan’s generic glatiramer acetate products;

• filing frivolous petitions with the FDA or other regulatory bodies seeking to prevent or delay approvals, including timing the filings so as to thwart generic competition by causing delays of our product approvals;

• pricing a branded product at a discount equivalent to generic pricing;

• filing frivolous petitions with the FDA or other regulatory bodies seeking to prevent or delay approvals, including timing the frivolous filings so as to thwart generic competition by causing delays of our product approvals;

• contracting strategies among pharmaceutical manufacturers and PBMs that could decrease generic or biosimilar utilization and negatively impact our product launches;

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Our future revenues and profitability will depend, in part, upon our ability to successfully and timely develop, license, or otherwise acquire and commercialize new products.

Product development is inherently risky, especially for new drugs for which safety and efficacy have not been established and/or the market is not yet proven as well as for complex generic drugs and biosimilars.

Product development is inherently risky, especially for new drugs for which safety and efficacy have not been established and/or the market is not yet fully developed as well as for complex generic drugs and biosimilars.

Likewise, product licensing involves inherent risks, including, among others, uncertainties due to matters that may affect the achievement of milestones, as well as the possibility of contractual disagreements with regard to whether the supply of product meets certain specifications or terms such as license scope or termination rights.

As Viatris focuses more in complex products, the development and commercialization process requires substantial time, effort and financial resources.

As Viatris focuses more on complex products, the development and commercialization process requires substantial time, effort and financial resources.

We, or a partner, may not be successful in commercializing such products on a timely basis, or at all, which could adversely affect our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

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Access to and the supply of necessary biological materials may be limited, and government regulations restrict access to and regulate the transport and use of such materials.

Even if our biosimilar products are approved for marketing, the products may not be commercially successful, may require more time than expected to achieve market acceptance, and may not generate profits in amounts that are sufficient to

offset the amount invested to obtain such approvals.

Market success of biosimilar products will depend on demonstrating to regulators, patients, physicians and payors (such as insurance companies) that such products are safe and effective yet offer a more competitive price or other benefit over existing therapies.

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A substantial portion of our capacity, as well as our current production, is attributable to a limited number of manufacturing facilities and certain third-party suppliers.

restrictions, or other events could impair our ability to produce and ship products to the market on a timely basis and could, among other consequences, subject us to exposure to claims from customers.

A significant disruption at any one of such facilities within our internal or third-party supply chain, even on a short-term basis, whether due to the failure of a third-party supplier to fulfill the terms of their agreement with us, labor disruption, adverse quality or compliance observation, other regulatory action, infringement of brand or other third-party intellectual property rights, natural disaster, civil or political unrest, export or import restrictions, or other events could impair our ability to produce and ship products to the market on a timely basis and could, among other consequences, subject us to exposure to claims from customers.

Any of these events could have a material adverse effect on our reputation, business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

The adverse effects of any of these events could be exacerbated as a result of our previously announced global restructuring program, which we expect will involve closing, downsizing or divesting up to 15 manufacturing facilities globally.

The adverse effects of any of these events could be exacerbated as a result of our previously announced global restructuring program, which includes the closing, downsizing or divesting of a number of facilities globally.

If we or our third-party suppliers’ face significant manufacturing issues, this could lead to shutdowns, delays or product shortages, or to our being entirely unable to supply certain products to customers for an extended period of time.

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We purchase certain API and other materials and supplies that we use in our manufacturing operations, as well as certain finished products, from many different foreign and domestic suppliers.

The price of API and other materials and supplies is subject to volatility, and in certain cases, we have listed only one supplier in our applications with regulatory agencies.

The price of API and other materials and supplies is subject to volatility, including as a result of global supply chain disruptions due to COVID-19 or other events.

In certain cases, we have listed only one supplier in our applications with regulatory agencies.

There is no guarantee that we will always have timely, sufficient or affordable access to critical raw materials or finished product supplied by third parties, even when we have more than one supplier, which could lead to our or our partners’ and suppliers’ inability to supply sufficient quantities of our products to meet market demand.

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In addition, the manufacture of some of our products is a highly exacting and complex process, due in part to strict regulatory requirements.

Problems may arise during manufacturing at our or our third-party suppliers’ facilities for a variety of reasons, including, among others, equipment malfunction, failure to follow specific protocols and procedures, problems with raw materials, natural disasters, power outages, labor or other civil unrest, cybersecurity issues and environmental factors.

Problems may arise during manufacturing at our or our third-party suppliers’ facilities for a variety of reasons, including, among others, equipment malfunction, failure to follow specific protocols and procedures, problems with raw materials, natural disasters, power outages, labor disputes or other civil unrest, cybersecurity or compliance issues, and environmental, health and safety issues, laws, regulations and permits.

If problems arise during the production of a batch of product, that batch of product may have to be discarded.

This could, among other things, lead to increased costs, lost revenue, damage to customer relations, time and expense spent investigating the cause, and, depending on the cause, similar losses with respect to other batches or products.

This could, among other things, lead to increased costs, contractual penalties, lost revenue, damage to customer relations, time and expense spent investigating the cause, and, depending on the cause, similar losses with respect to other batches or products.

If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred.

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Our future success is highly dependent on our ability to attract, motivate and retain key personnel.

It is important that we attract, motivate and retain qualified personnel in order to develop and commercialize new products, manage our business, and compete effectively.

Given the size, complexity and global reach of our business, it is important that we attract, motivate and retain qualified management and other key employees in order to develop and commercialize new products, manage our business, and compete effectively.

Our ability to do so also depends in part on how well we maintain a strong, diverse and inclusive workplace culture that is attractive to employees.

Competition for qualified personnel in the pharmaceutical industry is intense.

We may lose key personnel or may be unable to attract, retain and motivate qualified individuals, or the associated costs may increase.

If we fail to attract, develop, incentivize and retain key scientific, technical, commercial, regulatory or management personnel, this could lead to loss of customers, business disruption, and a decline in revenues, adversely affect the progress of pipeline products, or otherwise adversely affect our operations.

Additionally, while we work to ensure that we have effective plans in place for management succession, any anticipated or unanticipated management transition could create uncertainty, which could disrupt or result in changes to our strategy and have a negative impact on our business.

prospective Viatris employees also may experience uncertainty about their future roles at the Company following the consummation and/or integration of recent acquisitions, including the Combination, our global restructuring program, or our other strategic initiatives or programs, which may adversely impact our ability to retain key personnel and other employees.

Current or prospective Viatris employees may have changing expectations around workplace flexibility, and a failure to meet these evolving expectations may result in reduced ability to attract and retain talent.

In addition, current or prospective Viatris employees may experience uncertainty about their future roles at the Company as a result of the continued integration process with respect to the Combination, the end of certain TSA arrangements, our global restructuring program, or other strategic initiatives.

As a result, we may lose key personnel or may be unable to attract, retain and motivate qualified individuals, or the associated costs may increase.

If we fail to attract, develop, incentivize and retain key scientific, technical, commercial, regulatory, information security/privacy, or management personnel, this could lead to loss of customers, business disruption, and a decline in revenues, adversely affect the progress of pipeline products, or otherwise adversely affect our operations.

Additionally, while we work to ensure that we have effective plans in place for management succession throughout the organization, any anticipated or unanticipated management transition could create uncertainty, which could disrupt or result in changes to our strategy and have a negative impact on our business.

If we are unsuccessful in retaining our key employees or enforcing certain post-employment contractual provisions such as confidentiality or non-competition provisions, it may have a material adverse impact on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

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We operate in jurisdictions that have experienced corruption, bribery, pay-offs and other similar practices from time-to-time and, in certain circumstances, such practices may be local custom.

We have implemented and trained relevant employees regarding internal control policies and procedures that mandate compliance with these anti-corruption laws.

We have implemented and trained relevant employees and third party agents regarding internal control policies and procedures that mandate compliance with these anti-corruption laws.

However, we cannot be certain that these policies and procedures will protect us against liability.

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Our ability to commercialize any branded product successfully will largely depend upon our or any partner’s or supplier’s ability to obtain, maintain and enforce patents and trademarks of sufficient scope to lawfully prevent third parties from developing and/or marketing infringing products.

In the absence of adequate intellectual property protections or other barriers to entry, competitors may adversely affect our branded products business by independently developing and/or

marketing substantially equivalent products.

In the absence of adequate intellectual property protections or other barriers to entry, competitors may adversely affect our branded products business by independently developing and/or marketing substantially equivalent products.

It is also possible that we could incur substantial costs if we initiate litigation against others to protect or enforce our intellectual property rights.

We may file patent filings covering the API, formulation, methods of making, and/or methods of using for our branded products and branded product candidates.

We may submit patent filings covering the API, formulation, methods of making, and/or methods of using for our branded products and branded product candidates.

We may not be issued patents based on patent applications already filed or that we file in the future.

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For example, many companies launched a generic to Lyrica in Japan in December 2020 despite pending patent litigation and the fact that these patents expire in July 2022.

The patent litigation remains ongoing and we are taking legal steps to preserve the ability to exclusively provide to patients and physicians through patent expiry in July 2022.

The patent litigation remains ongoing and we have received several unfavorable rulings.

In addition, branded products often have market viability based upon the goodwill of the product name, which typically is the subject of a trademark registration or filing.

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Some of the applicable laws may impose liability even in the absence of specific intent to defraud.

Furthermore, should there be ambiguity with regard to how to properly calculate and report payments—and even in the absence of any such ambiguity—a governmental authority may

take a position contrary to a position we have taken, and may impose or pursue civil and/or criminal sanctions.

Furthermore, should there be ambiguity with regard to how to properly calculate and report payments—and even in the absence of any such ambiguity—a governmental authority may take a position contrary to a position we have taken, and may impose or pursue civil and/or criminal sanctions.

Governmental agencies may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid.

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Criminal charges, substantial fines and/or civil penalties, limitations on Viatris’ ability to conduct business in applicable jurisdictions, as well as reputational harm and increased public interest in the matter could result from government investigations With respect to government enforcement of state and federal laws, including antitrust laws, as well as private plaintiff litigation of so-called “pay for delay” patent settlements, large verdicts, settlements or government fines are possible, especially in the U.S.

Additionally, there is a possibility that the U.S.

federal government, or state legislatures, could enact legislation to limit patent settlements between pharmaceutical companies and deem such patent agreements as anticompetitive.

Such a change could impact our ability to launch generic products prior to the originator’s patent expiry.

Additionally, some state legislatures have and the U.S.

federal government or additional state legislatures could, enact legislation to limit patent settlements between pharmaceutical companies and deem such patent agreements as anticompetitive.

These changes could impact our ability to launch generic products prior to the originator’s patent expiry.

In connection with the Combination, the Company has generally assumed liability for, and control of, pending and threatened legal matters relating to the Upjohn Business and has agreed to indemnify Pfizer for liabilities arising out of such assumed legal matters.

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Emerging developments in the U.S.

legal landscape relative to the liability of generic pharmaceutical manufacturers for certain product liabilities claims could increase our exposure to litigation costs and damages.

legal landscape relative to the liability of generic pharmaceutical manufacturers for certain product liabilities claims could increase our exposure to litigation costs and damages, including in connection with third party defense and indemnification demands.

Although we maintain a combination of self-insurance and commercial insurance, no reasonable amount of insurance can fully protect against all risks because of the potential liability inherent in the business of producing pharmaceuticals for human consumption.

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and Mylan Specialty L.P., then subsidiaries of Mylan and now subsidiaries of Viatris, entered into the CIA with the OIG-HHS.

The CIA has a five-year term and requires, among other things, enhancements to our

compliance program, fulfillment of reporting and monitoring obligations, management certifications and resolutions from Mylan Inc.’s board, as well as that an independent review organization annually review various matters relating to the Medicaid Drug Rebate Program, among other things.

If we fail to comply with the CIA, the OIG-HHS may impose substantial monetary penalties or exclude us from federal healthcare programs, including Medicare, Medicaid or the VA, which could have a material adverse effect on our business, financial condition and results of operations.

The CIA has a five-year term and requires, among other things, enhancements to our compliance program, fulfillment of reporting and monitoring obligations, management certifications and resolutions from Mylan Inc.’s board, as well as that an independent review organization annually review various matters relating to the Medicaid Drug Rebate Program, among other things.

We are increasingly dependent on IT and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.

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We are increasingly dependent on sophisticated IT systems and infrastructure to operate our business.

We also have outsourced significant elements of our operations to third parties, including as part of our TSAs with Pfizer.

Some of these third parties are outside the U.S., including significant elements of our IT infrastructure, and as a result we are managing many independent vendor relationships with third parties who may or could have access to our confidential information.

The size and complexity of our IT systems, and those of our third-party vendors with whom we contract, make such systems potentially vulnerable to service interruptions.

In addition, we and our vendors have experienced and expect to continue to experience phishing attempts, firewall and business email compromises and other third-party attacks on our or our vendors’ IT systems, networks and infrastructures.

The number of new vulnerabilities identified to these systems combined with the increased number of systems that reach end of life each year creates an opportunity for successful malicious attacks.

Such attacks are increasingly sophisticated and are made by groups and individuals with a wide range of motives and expertise, including state and quasi-state actors, criminal groups, “hackers” and others.

Any security breach or other disruption to our or our vendors’ IT infrastructure could also interfere with or disrupt our business operations, including our manufacturing, distribution, R&D, sales and/or marketing activities.

We outsource significant elements of our operations to third parties, including as part of our TSAs with Pfizer.

The overall increase in supply chain attacks on companies generally, such as SolarWinds, Kronos, and Accellion, and our interdependency on third party suppliers increases the potential for supply disruptions and service IT outages.

In addition to our reliance upon third parties to provide IT and information security services, the market for such services continues to contract and converge, increasing both the challenges in identifying competent providers and the impact of a breach incident with any single vendor.

In the ordinary course of business, we and our vendors collect, store and transmit large amounts of confidential information (including trade secrets or other intellectual property, proprietary business information and personal information), and it is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information.

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However, such information can be difficult to protect.

While we have taken steps to protect such information, and to ensure that the third-party vendors’ on which we rely have taken adequate steps to protect such information, there can be no assurance that our or our vendors’ efforts will prevent service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful use or disclosure of confidential or material non-public information that could adversely affect our business operations or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information.

While we have taken steps to identify and protect such information, and to ensure that the third-party vendors’ on which we rely have taken adequate steps to protect such information, there can be no assurance that our or our vendors’ efforts will prevent service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful use or disclosure of confidential or material non-public information that could adversely affect our business operations or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information.

A breach of our or our vendors’ security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of trade secrets, proprietary information, or other confidential information, whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary technology or information, and/or adversely affect our business position.

Further, any such interruption, security breach, or loss, misappropriation, and/or unauthorized access, use or disclosure of confidential information, including personal information regarding our patients and employees, could result in financial, legal, business, and reputational harm to us and could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from a breakdown, breach, cyber-attack or other compromise of or interruption to our IT systems or confidential and other sensitive information.

We also cannot ensure that any limitation of liability or indemnity provisions in our contracts, including with vendors and service providers, for a security lapse or breach or other security incident would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim.

We are subject to data privacy and security laws and regulations in many different jurisdictions and countries where we do business, and our or our vendors’ inability to comply could result in fines, penalties, or reputational damage, and could impact the way we operate our business.

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As the legislative and regulatory landscape for data privacy and security continues to evolve around the world, there has been an increasing focus on data privacy and security matters that may affect our business.

In the U.S., HIPAA governs the use, disclosure, and security of protected health information by HIPAA covered entities and business associates.

states have enacted, or proposed, data privacy laws and regulations governing the confidentiality, security, use and disclosure of personal information, which may impose greater restrictions than federal data privacy and security laws and regulations.

For example, the state of California adopted the CCPA, which took effect on January 1, 2020, and California voters approved the California Privacy Rights Act in November 2020, which will be effective on January 1, 2023.

These laws provide California consumers with increased privacy rights and protections with respect to their personal information, including, among others, the right to know what personal information is collected, used, shared, or sold

and a right to deletion of personal information held by businesses and businesses’ service providers.

We may also be subject to other state data privacy and security breach notification laws, state health information privacy laws, and federal and state consumer protection laws which impose requirements for the collection, use, disclosure, transmission and protection of personal information.

In the U.S., federal laws include HIPAA, which governs the use, disclosure, and security of protected health information by HIPAA covered entities and business associates.

states, including California, Virginia, Colorado, Pennsylvania and Florida, have enacted or proposed broad data privacy laws and regulations governing the confidentiality, security, use and disclosure of personal information, which may impose greater restrictions than federal data privacy and security laws and regulations and provide transparency and privacy rights for their citizens.

We may also be subject to other state data privacy and security breach notification laws, state health information privacy laws, and federal and state consumer protection laws such as the federal Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act, which impose requirements for the collection, use, disclosure, transmission and protection of personal information.

Each of these laws are subject to varying interpretations by courts and regulatory or government agencies, creating complex compliance issues for us.

If we, or the third-party vendors on which we rely, fail to comply with applicable laws and regulations we could be subject to fines, penalties or sanctions, including criminal penalties.

Outside of the U.S., data protection laws, including China’s Cybersecurity Law, the EU’s GDPR, EU member states implementing regulations, and other jurisdictional data protection laws and regulations impose significant compliance obligations on our organization.

The GDPR contains data protection requirements in the EU and imposes a framework of obligations and restrictions governing the collection, processing, and the transmission of personal data to jurisdictions outside of the EU.

The GDPR affords individuals with a series of privacy rights related to the collection, processing, and transmission of their personal data.

The GDPR imposes significant compliance obligations, including required processes and policies governing our collection, transmission, processing and use of individuals personal data.

Outside of the U.S., the EU’s and U.K.’s GDPR and local implementing regulations impose significant compliance obligations on our organization.

The GDPR contains data protection requirements in the EU and U.K.

and imposes a framework of obligations and restrictions governing the collection, processing, and the transmission of personal information to jurisdictions outside of the EU and U.K..

The GDPR affords individuals with a series of privacy rights related to the collection, processing, and transmission of their personal information.

The GDPR imposes significant compliance obligations, including required processes and policies governing our collection, transmission, processing and use of individuals personal information.

In addition, the GDPR includes significant penalties for non-compliance, with fines up to the higher of €20 million or 4% of total annual worldwide revenue.

In general, GDPR, and other data protection laws and regulations, could require adaptation of our technologies or practices to satisfy local country data protection requirements and standards.

Other countries in which we operate, including Australia, Canada, China, India, Japan, Russia and South Africa, have, or are developing, laws and regulations governing the collection, use, securing and transmission of personal information as well that may affect our business or require us to adapt our technologies or practices.

Recently, Brazil enacted significant data privacy legislation, the Lei Geral de Protecaode Dados, which became effective in August 2020.

Other countries, including India, Russia and Korea, are considering legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements.

Other countries in which we operate, such as Australia, Brazil, Canada, India, Japan, South Korea, Russia and South Africa, have, or are developing, laws and regulations governing the collection, use, securing and transmission of personal information as well that may affect our business or require us to adapt our technologies or practices.

Recently, China enhanced its Cybersecurity Law and Data Security Law framework by enacting a significant and omnibus data privacy law, the Personal Information Protection Law (PIPL), which became effective in November 2021.

The PIPL is China’s first comprehensive data protection law which aims to protect the rights and interests of individuals by introducing stringent requirements for companies doing business in China regarding the protection, control, and use of personal information.

These and similar initiatives could increase the cost of developing, implementing or maintaining our IT systems, require us to allocate more resources to compliance initiatives or increase our costs.

In addition, a failure by us, or our third-party vendors, to comply with applicable data privacy and security laws may lead to government enforcement actions and private litigation, which could result in financial, legal, business, and reputational harm to us and could have a material adverse effect on the way we operate our business, our financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance practices and disclosure.

Increasing scrutiny and evolving expectations from customers, regulators, investors, employees, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing expectations and scrutiny from customers, regulators, investors, employees and other stakeholders related to their environmental, social and governance practices and disclosure.

Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, climate change, health and safety, supply chain management, diversity, labor conditions and human rights, both in our own operations and in our supply chain.

Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and our stock price.

In addition, a growing number of our customers, including certain government purchasers, have adopted, or may adopt, procurement policies that include social and environmental requirements, including, for example, requirements to conduct third party audits, or these customers may seek to include such provisions in their procurement contract terms and conditions.

In addition, a growing number of our customers, including certain government purchasers, have adopted, or may adopt, procurement policies that include social and environmental requirements, including, for example, requirements to monitor and conduct third party audits, or these customers may seek to include such provisions in their procurement contract terms and conditions.

These social and environmental responsibility provisions and initiatives are subject to change, vary from jurisdiction to jurisdiction, and certain elements may be difficult and/or cost prohibitive for us to comply with given the inherent complexity of our external supply chain and the global scope of our operations.

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Alternatively, we may be ineligible to participate in bids or tenders in certain markets, which may result in lost sales and revenues.

Any of the factors mentioned above, or the perception that we or our suppliers or contract manufacturers have not responded appropriately to the growing concern for such issues, regardless of whether we are legally required to do so, may damage our reputation and have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Any of the factors mentioned above, or the perception that we or our suppliers or contract manufacturers have not responded appropriately to the growing concern for such issues, regardless of whether we are legally required to do so, may damage our reputation and have a material adverse effect on our business, employees relations, access to investors and capital, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Our business and operations are subject to risks related to climate change.

The effects of global climate change present risks to our business.

Extreme weather, natural disasters, power outages, or other conditions caused by climate change could adversely impact our supply chain and the availability and cost of raw materials, water supply, and other components required for the operation of our business, or result in the delay and/or disruption of our ability to deliver products.

Such conditions could also result in physical damage to our or our partners’ products, plants and distribution centers, as well as the infrastructure and facilities of hospitals, medical care facilities and other customers.

Our programs to plan for and mitigate risk and build resilience to the impacts of climate change may not be successful.

Current or future insurance arrangements may not provide protection for costs that may arise from such events, particularly if such events are catastrophic in nature or occur in combination.

In addition, regulations intended to limit greenhouse gas emissions or water usage, such as carbon pricing, taxes on emissions, fuel and energy, or to mitigate the impacts of climate change may become more prevalent, which could increase our operating costs and the costs charged by suppliers.

These events could have a material adverse effect on the way we operate our business, our financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Finance Risks

Viatris’ future dividend payments cannot be guaranteed.

Although Viatris intends to pay quarterly dividends to its stockholders commencing in 2021, there is no assurance that Viatris will declare and pay, or have the ability to declare and pay, any dividends on its common stock in the future.

Whether dividends will be paid, and the amount and frequency of any such dividend payments, will depend upon a number of factors, including Viatris’ results of operation, cash flows, financial position, competitive or commercial developments, contractual or statutory restrictions and any other factors considered relevant by the Viatris Board.

There can be no guarantee that we will continue to pay dividends or that we will implement repurchases under our stock buyback program.

Although Viatris currently intends to continue to pay quarterly dividends to its stockholders, there is no assurance that Viatris will declare and pay, or have the ability to declare and pay, any dividends on its common stock in the future.

Whether dividends will be paid, and the amount and frequency of any such dividend payments, will depend upon a number of factors, including Viatris’ results of operations, cash flows, financial position, competitive or commercial developments, contractual or statutory restrictions and any other factors considered relevant by the Viatris Board.

Such payments, and the amount and frequency thereof, are also subject to the other risks set forth in these risk factors.

In addition, payment of a cash dividend will reduce the amount of cash available to the Company for other activities, including repayment of debt, investment in the business or other capital expenditures.

In addition, although the Board of Directors has authorized a stock buyback program, there is no guarantee that we will implement repurchases under the program or, if we do, the timing or amount of any future share repurchases under such program.

Even if implemented, we will not be obligated to repurchase shares under any such stock buyback program and, until November 2022, such a program may be impacted by certain conditions in our Tax Matters Agreement.

Other factors, including changes in tax or securities laws, could also impact our stock buybacks.

A stock buyback program could affect our stock price and increase volatility, and any announcement of a pause in, or termination of, a share buyback program may result in a decrease in our stock price.

Payment of a cash dividend or share repurchases will reduce the amount of cash available to the Company for other activities, including repayment of debt, investment in the business or other capital expenditures.

If the intercompany terms of cross border arrangements that we have among our subsidiaries are determined to be inappropriate or ineffective, our tax liability may increase.

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Furthermore, the tax laws of other jurisdictions could change in the future, and such changes could cause a material change in our effective tax rate.

In addition, we have invested in a number of clean energy operations capable of producing refined coal that we believe qualify for tax credits under Section 45 of the Code.

However, our clean energy investments may not yield the tax credits that we expect them to produce, whether as a result of a failure to satisfy the applicable conditions, changes in IRS rules or interpretation, or a decrease in demand for coal.

Congress could also modify or repeal Section 45 of the Code and remove the tax credits retroactively.

In the past we have impaired the value of certain of our clean energy investments and terminated others.

The ability to claim tax credits under these provisions is set to expire in 2021 and may not be renewed.

Any of the factors discussed above could materially increase our overall effective income tax rate and income tax expense and could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

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The final determination of any tax audits or related litigation could be materially different from our income tax provisions and accruals.

Additionally, changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in our overall profitability, changes in the valuation of deferred tax assets and liabilities, the results of audits and the examination of previously filed tax returns by taxing authorities, and continuing assessments of our tax exposures could impact our tax liabilities and affect our income tax expense, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Additionally, changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in our overall profitability, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or in their application, the results of audits and the examination of previously filed tax returns and related challenges and assessments by taxing authorities, and continuing assessments of our tax exposures could impact our tax liabilities and affect our income tax expense, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Currency fluctuations and changes in exchange rates could adversely affect our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

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Dollars, a significant portion of our revenues, indebtedness and other liabilities and our costs are denominated in non-U.S.

currencies, including among others the Chinese Renminbi, Euro, Swedish Krona, Indian Rupee, Korean Won, Japanese Yen, Australian Dollar, Canadian Dollar, British Pound Sterling and Brazilian Real.

currencies, including among others the Chinese Renminbi, Euro, Swedish Krona, Indian Rupee, Korean Won, Japanese Yen, Australian Dollar, Canadian Dollar, British Pound Sterling, South African Rand and Brazilian Real.

Our results of operations and, in some cases, cash flows, have in the past been and may in the future be adversely affected by certain movements in currency exchange rates.

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• limiting our ability to obtain additional financing to fund our working capital, capital expenditures, acquisitions and debt service requirements and other financing needs;

• increasing our vulnerability to increases in interest rates in general because a substantial portion of our indebtedness bears interest at floating rates;

• increasing our vulnerability to increases in interest rates in general related to any of our indebtedness that bears interest at floating rates;

• increasing our exposure to currency fluctuations, since a significant portion of our indebtedness is denominated in currencies other than the U.S.

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From time to time, we issue variable rate debt based on LIBOR or undertake interest rate swaps that contain a variable element based on LIBOR.

While the FCA had announced that it intended to phase out LIBOR as a benchmark by the end of 2021, the administrator of LIBOR announced in November 2020 its intention to consult on ceasing publication of one-week and two-month U.S.

dollar LIBOR settings at the end of 2021 and ceasing publication of the remaining overnight and one-, three-, six- and 12-month U.S.

dollar LIBOR settings at the end of June 2023.

While the proposal is not yet final, the FCA and other similar entities have supported this announcement and issued additional guidance.

On March 5, 2021, the FCA, the regulatory supervisor of LIBOR’s administrator, announced the

cessation or loss of representativeness of certain LIBOR benchmark settings by the end of 2021, including the

one-week and two-month U.S.

dollar LIBOR settings, with publication of the overnight and one-, three-, six- and 12-month U.S.

dollar LIBOR settings ceasing at the end of June 2023.

federal banking agencies also issued a joint statement in November 2020 encouraging banks to stop using LIBOR for new contracts as soon as possible but in any event by the end of the year.

As of December 31, 2020, less than 5% of our outstanding debt is linked to LIBOR.

As of December 31, 2021, we had no outstanding debt linked to LIBOR.

Our credit facilities provide that, should LIBOR cease to exist, we may amend the credit facilities to replace LIBOR with (i) in the case of U.S.

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Estimates, judgments and assumptions are inherently subject to change in the future and any necessary revisions to prior estimates, judgments or assumptions could lead to a restatement.

Furthermore, although we have recorded reserves for litigation related contingencies based on estimates of probable future costs, such litigation related contingencies could result in substantial further costs.

Furthermore, although we have recorded reserves for certain critical accounting estimates, including litigation related contingencies based on estimates of probable future costs, actual costs in the future could be substantially in excess of those reserves.

Also, any new or revised accounting standards may require adjustments to previously issued financial statements.

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In particular, Section 404 of the Sarbanes-Oxley Act of 2002 requires management’s annual review and evaluation of our internal control over financial reporting and attestation as to the effectiveness of these controls by our independent registered public accounting firm.

If we fail to maintain the adequacy of our

internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting.

During the third quarter of 2021, we began to transition certain support services from Pfizer, as well as certain subsidiaries, to a new ERP system.

We have modified and will continue to modify our internal controls relating to our business and financial processes throughout the transition period, which is expected through the end of calendar year 2022.

While we believe that this new system and the related changes to internal controls will ultimately strengthen our internal control over financial reporting, there are inherent risks in implementing any new ERP system.

If we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting.

Additionally, internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.

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If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, this could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

There is a limited carveout offered by the SEC staff in its published Frequently Asked Questions on Management’s Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports (revised September 24, 2007) that allows an acquired business to be excluded from management’s annual report on internal control over financial reporting in circumstances where it is not possible to conduct an assessment of the acquired business’s internal controls and less than a year has passed since an acquisition.

While we have availed ourselves of this relief with respect to the Upjohn Business for purposes of management’s annual report on internal control over financial reporting as of December 31, 2020 and were otherwise able to conclude that our internal control over financial reporting was effective as of such date, there can be no assurance that our exclusion of internal controls at the Upjohn Business from our assessment will not be met with negative market reaction and will not have an adverse effect on our stock price.

In addition, with respect to next year’s report, it is possible that we may experience delays in implementing or be unable to implement necessary internal controls and procedures with respect to the Upjohn Business or we may encounter problems or delays in completing the implementation of any requested improvements in connection with the attestation process required of our independent registered public accounting firm pursuant to Section 404.

Accordingly, either we or our independent registered public accounting firm (or both) may conclude that our internal controls are ineffective because of a material weakness in internal controls at Upjohn Business, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Viatris could suffer additional losses due to asset impairment charges.

Viatris has significant amounts of goodwill and intangible assets on its balance sheet.

Viatris expects to test goodwill for impairment during the second quarter of every fiscal year, and on an interim date should events or changes in circumstances indicate the carrying value of goodwill may not be recoverable in accordance with ASC 350 “Goodwill and Other Intangible Assets.” If the fair value of a reporting unit is revised downward due to declines in business performance or other factors, an impairment under ASC 350 could result and a non-cash charge could be required.

Viatris expects to test intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

This assessment of the recoverability of finite-lived intangible assets could result in an impairment and a non-cash charge could be required.

Viatris tests goodwill for impairment during the second quarter of every fiscal year, and on an interim date should events or changes in circumstances indicate the carrying value of goodwill may not be recoverable in accordance with ASC 350 “Goodwill and Other Intangible Assets.” If the fair value of a reporting unit is revised downward due to declines in business performance or other factors, an impairment under ASC 350 could result and a non-cash charge could be required.

Viatris tests intangible assets with indefinite lives for impairment on an annual basis and intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

This assessment of the recoverability of intangible assets could result in an impairment and a non-cash charge could be required.

Such impairments could materially affect Viatris’ reported net earnings, business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

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In connection with the Combination, Viatris assumed material pension obligations associated with the Upjohn Business.

In particular, Viatris retained all liabilities relating to the Puerto Rico defined benefit pension plans and Pfizer Puerto

Rico Retiree Medical and Dental Plan.

In particular, Viatris retained all liabilities relating to the Puerto Rico defined benefit pension plans and Pfizer Puerto Rico Retiree Medical and Dental Plan.

In addition, with respect to non-U.S.

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In addition, the price of our common stock may be affected by the valuations and recommendations of the analysts who cover us, and if our results do not meet the analysts’ forecasts and expectations, the price of our common stock could decline as a result of analysts lowering their valuations and recommendations or otherwise.

Following periods of volatility in the market and/or in the price of a company’s stock, securities class-action litigation actions have been instituted against companies (including Mylan) and may be instituted against us in the future.

Such litigation may result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

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Accordingly, if the Viatris Board determines that a potential business combination transaction is not in the best interests of Viatris and its stockholders, but certain stockholders believe that such a transaction would be beneficial to Viatris and its stockholders, such stockholders may elect to sell their shares in Viatris and the trading price of Viatris common stock could decrease.

These and other provisions of the

Viatris Charter, the Viatris Bylaws and the DGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on Viatris’ business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

These and other provisions of the Viatris Charter, the Viatris Bylaws and the DGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on Viatris’ business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

The Viatris Charter designates the Court of Chancery of the State of Delaware, or, if such court lacks subject matter jurisdiction, another state court of the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware), as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by Viatris’ stockholders, which could discourage lawsuits against Viatris and its directors and officers.

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Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, Viatris may incur additional costs associated with resolving such matters in other jurisdictions or forums, which could materially and adversely affect Viatris’ business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

Our business and operations could be negatively affected by pressures from outside of the control of the company, including, but not limited to, shareholder actions, government regulations and disclosure requirements, and other market dynamics, which could cause us to incur significant expenses, hinder execution of our business strategy and negatively impact our share price.

In recent years, shareholder actions, government regulations and disclosure requirements, and other market dynamics, involving corporate governance, environmental and social matters, human capital, strategic direction and operations has become increasingly prevalent.

In the event we become the subject of shareholder challenges or more extensive government regulation or intervention in these areas, this may create a significant distraction for our management and employees, negatively impact our ability to execute our business plans, require our management to expend significant time and resources, create uncertainties with respect to our financial position and operations, adversely affect our ability to attract and retain key employees or result in loss of potential business opportunities with our current and potential customers and business partners.

In addition, such actions, regulation and intervention may cause significant fluctuations in our share price based on temporary or speculative market perceptions, uncertainties or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business, which could cause the market value of our common stock to decline.

Unresolved Staff Comments

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For information regarding legal proceedings, refer to Note 19 Litigation included in Item 8 in Part II of this 10-K.

Mine Safety Disclosures

Not applicable.

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 1A. Risk Factors