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| January 30, 2017

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________

FORM 10-K
_____________________________________________
(Mark One)
ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from

to

Commission file number 1-3619
_____________________________________________

PFIZER INC.
(Exact name of registrant as specified in its charter)

_____________________________________________
Delaware

13-5315170

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

235 East 42nd Street

10017-5755

New York, New York
(Address of principal executive offices)

(Zip Code)

(212) 733-2323
(Registrant’s telephone number, including area code)
_____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
on which registered
New York Stock Exchange

Title of each class
Common Stock, $.05 par value
Securities registered pursuant to Section 12(g) of the Act:
None
_____________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files.) Yes ý No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant’s
most recently completed second fiscal quarter, June 27, 2014, was approximately $188 billion. The registrant has no non-voting common stock.
The number of shares outstanding of the registrant’s common stock as of February 20, 2015 was 6,128,855,392 shares of common stock, all of one class.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 2014 Annual Report to Shareholders

Parts I, II and IV

Portions of the Proxy Statement for the 2015 Annual Meeting of Shareholders

Part III

TABLE OF CONTENTS
Page

PART I
ITEM 1. BUSINESS
General
Pfizer Website
Commercial Operations
Biopharmaceutical Products
Consumer Healthcare
Research and Development
International Operations
Marketing
Patents and Other Intellectual Property Rights
Competition
Raw Materials
Government Regulation and Price Constraints
Environmental Matters
Tax Matters
Employees
Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012
ITEM 1A. RISK FACTORS
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 2. PROPERTIES
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. MINE SAFETY DISCLOSURES
EXECUTIVE OFFICERS OF THE COMPANY
PART II
ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9B. OTHER INFORMATION
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
15(a)(1) Financial Statements
15(a)(2) Financial Statement Schedules
15(a)(3) Exhibits

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PART I
ITEM 1.
General

BUSINESS

Pfizer Inc. is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend
and significantly improve their lives through the discovery, development and manufacture of healthcare products. Our global portfolio includes medicines
and vaccines, as well as many of the world’s best-known consumer healthcare products. We work across developed and emerging markets to advance
wellness, prevention, treatments and cures that challenge the most feared diseases of our time. We collaborate with healthcare providers, governments and
local communities to support and expand access to reliable, affordable healthcare around the world. Our revenues are derived from the sale of our products,
and, to a much lesser extent, from alliance agreements, under which we co-promote products discovered by other companies (Alliance revenues). The
majority of our revenues come from the manufacture and sale of biopharmaceutical products.
The Company was incorporated under the laws of the State of Delaware on June 2, 1942. Unless the context requires otherwise, references to “Pfizer,”
“the Company,” “we,” “us” or “our” in this Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (2014 Form 10-K) refer to Pfizer Inc.
and its subsidiaries. References to developed markets in this 2014 Form 10-K include the United States (U.S.), Western Europe, Japan, Canada, Australia,
Scandinavia, South Korea, Finland and New Zealand; and references to emerging markets in this 2014 Form 10-K include the rest of the world, including,
among other countries, China, Brazil, Mexico, Russia, India and Turkey.
On February 5, 2015, we announced that we have entered into a definitive merger agreement under which we agreed to acquire Hospira, Inc. (Hospira),
the world’s leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, for $90 per share in cash, for a total enterprise
value of approximately $17 billion. The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and
the approval of Hospira’s shareholders, and is expected to close in the second half of 2015.
On June 24, 2013, we completed the full disposition of our Animal Health business. For additional information, see the Notes to Consolidated
Financial Statements—Note 2D. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures and Equity-Method Investments: Divestitures
in our 2014 Financial Report (as defined below).
On November 30, 2012, we completed the sale of our Nutrition business to Nestlé for $11.85 billion in cash. For additional information, see the Notes
to Consolidated Financial Statements—Note 2D. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures and Equity-Method
Investments: Divestitures in our 2014 Financial Report.
For a further discussion of our strategy and our business development initiatives, see the Overview of Our Performance, Operating Environment,
Strategy and Outlook—Our Strategy and —Our Business Development Initiatives sections in our 2014 Financial Report.
Our businesses are heavily regulated in most of the countries in which we operate. In the U.S., the principal authority regulating our operations is the
U.S. Food and Drug Administration (FDA). The FDA regulates the safety and efficacy of the products we offer and our research, quality, manufacturing
processes, product promotion, advertising and product labeling. Similar regulations exist in most other countries, and in many countries the government also
regulates our prices. See Government Regulation and Price Constraints below.
Pfizer Website
This 2014 Form 10-K, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are available (free of charge) on our website
(www.pfizer.com), in text format and, where applicable, in interactive data file format, as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the Securities and Exchange Commission (SEC).
Throughout this 2014 Form 10-K, we “incorporate by reference” certain information from other documents filed or to be filed with the SEC, including
our Proxy Statement for the 2015 Annual Meeting of Shareholders (2015 Proxy Statement) and the 2014 Financial Report, portions of which are filed as
Exhibit 13 to this 2014 Form 10-K, and which also will be contained in Appendix A to our 2015 Proxy Statement (2014 Financial Report). The SEC allows
us to disclose important information by
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referring to it in that manner. Please refer to such information. Our 2014 Annual Report to Shareholders consists of the 2014 Financial Report and the
Corporate and Shareholder Information attached to the 2015 Proxy Statement. Our 2014 Financial Report will be available on our website (www.pfizer.com)
on or about February 27, 2015. Our 2015 Proxy Statement will be available on our website (www.pfizer.com) on or about March 12, 2015.
We use our website (www.pfizer.com) as a means of disclosing material non-public information and for complying with our disclosure obligations under
Regulation Fair Disclosure promulgated by the SEC. These disclosures are included on our website (www.pfizer.com) in the “Investors” or “News” sections.
Accordingly, investors should monitor these portions of our website (www.pfizer.com), in addition to following Pfizer’s press releases, SEC filings and public
conference calls and webcasts.
Information relating to corporate governance at Pfizer, including our Corporate Governance Principles; Director Qualification Standards; Pfizer Policies
on Business Conduct (for all of our employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer); Code of
Business Conduct and Ethics for Members of the Board of Directors; information concerning our Directors; ways to communicate by e-mail with our
Directors; Board Committees; Committee Charters; Charter of the Lead Independent Director; and transactions in Pfizer securities by Directors and Officers;
as well as Chief Executive Officer and Chief Financial Officer certifications, are available on our website (www.pfizer.com). We will provide any of the
foregoing information without charge upon written request to our Corporate Secretary, Pfizer Inc., 235 East 42nd Street, New York, NY 10017-5755.
Information relating to shareholder services, including the Computershare Investment Program, book-entry share ownership and direct deposit of dividends,
is also available on our website (www.pfizer.com).
The information contained on our website does not, and shall not be deemed to, constitute a part of this 2014 Form 10-K. Pfizer’s references to the
URLs for websites are intended to be inactive textual references only.
Commercial Operations
At the beginning of our fiscal year 2014, we began managing our commercial operations through a new global commercial structure consisting of two
distinct businesses: an Innovative Products business and an Established Products business. The Innovative Products business is composed of two operating
segments: the Global Innovative Pharmaceutical segment (GIP) and the Global Vaccines, Oncology and Consumer Healthcare segment (VOC). The
Established Products business consists of the Global Established Pharmaceutical segment (GEP). Each operating segment is led by a single manager and has
responsibility for its commercial activities and for certain in-process research and development (IPR&D) projects for new investigational products and
additional indications for in-line products that generally have achieved proof of concept. Each business has a geographic footprint across developed and
emerging markets.
Some additional information about each product grouping follows:
Innovative Products Business:

Global Innovative Pharmaceutical segment—GIP is focused on developing, registering and commercializing novel, value-creating medicines that
significantly improve patients’ lives. These therapeutic areas include inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases
and women’s/men’s health and include leading brands, such as Xeljanz, Eliquis and Lyrica (U.S. and Japan). GIP has a pipeline of medicines in
inflammation, cardiovascular/metabolic disease, neuroscience and pain, and rare diseases.

Global Vaccines, Oncology and Consumer Healthcare segment—VOC focuses on the development and commercialization of vaccines and products
for oncology and consumer healthcare. Consumer Healthcare manufactures and markets several well known, over-the-counter (OTC) products. Each
of the three businesses in VOC operates as a separate, global business, with distinct specialization in terms of the science and market approach
necessary to deliver value to consumers and patients.

Established Products Business:

Global Established Pharmaceutical segment—GEP includes the brands that have lost market exclusivity and, generally, the mature, patent-protected
products that are expected to lose exclusivity through 2015 in most major markets and, to a much smaller extent, generic pharmaceuticals.
Additionally, GEP includes our sterile injectable products and biosimilar development portfolio.
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We expect that the GIP and VOC biopharmaceutical portfolios of innovative, largely patent-protected, in-line products will be sustained by ongoing
investments to develop promising assets and targeted business development in areas of focus to ensure a pipeline of highly-differentiated product candidates
in areas of unmet medical need. The assets managed by these groups are science-driven, highly differentiated and generally require a high-level of
engagement with healthcare providers and consumers.
GEP is expected to generate strong consistent cash flow by providing patients around the world with access to effective, lower-cost, high-value
treatments. GEP leverages our biologic development, regulatory and manufacturing expertise to seek to advance its biosimilar development portfolio. In
addition, GEP may also engage in targeted business development to further enable its commercial strategies.
For a further discussion of these operating segments, including prior-period information that has been conformed to the current commercial structure, as
well as comparative segment information for 2014, 2013 and 2012, see the Notes to Consolidated Financial Statements—Note 18. Segment, Geographic and
Other Revenue Information, including the tables therein captioned Selected Income Statement Information, Geographic Information and Significant Product
Revenues, the table captioned Revenues by Segment and Geographic Area and the Analysis of Operating Segment Information section in our 2014 Financial
Report, which are incorporated by reference.
Biopharmaceutical Products
In 2014, our biopharmaceutical business was managed through GIP, GEP and the vaccines and oncology businesses of VOC, which are discussed under
Commercial Operations above.
For a discussion of certain of our key biopharmaceutical products, including Lyrica, the Prevnar family of products, Enbrel, Celebrex, Lipitor, Viagra,
Zyvox, Sutent, Norvasc, the Premarin family of products, Eliquis and Xeljanz, see the Analysis of the Consolidated Statements of
Income—Biopharmaceutical—Selected Product Descriptions section in our 2014 Financial Report.
We have entered into collaboration and/or co-promotion agreements relating to certain biopharmaceutical products, including Aricept, Enbrel (in the
U.S. and Canada), Spiriva and Rebif, each of which has expired or will expire in various markets over the next several years. For additional information,
including a description of these collaboration and co-promotion agreements and their expiration dates, see the Analysis of the Consolidated Statements of
Income—Biopharmaceutical—Selected Product Descriptions and the Overview of Our Performance, Operating Environment, Strategy and Outlook—Our
Operating Environment—Industry-Specific Challenges—Intellectual Property Rights and Collaboration/Licensing Rights sections in our 2014 Financial
Report and Item 1A. Risk Factors—Dependence on Key In-Line Products below.
In addition, Eliquis was developed and is being commercialized in collaboration with Bristol-Myers Squibb Company (BMS). For additional
information, see the Analysis of the Consolidated Statements of Income—Biopharmaceutical—Selected Product Descriptions section in our 2014 Financial
Report.
Revenues from biopharmaceutical products contributed approximately 92% of our total revenues in 2014, 93% of our total revenues in 2013, and 94%
of our total revenues in 2012.
We recorded direct product sales of more than $1 billion for each of 10 biopharmaceutical products in 2014, 2013 and 2012. These products
represented 54% of our revenues from biopharmaceutical products in 2014, 51% of our revenues from biopharmaceutical products in 2013 and 50% of our
revenues from biopharmaceutical products in 2012. See Item 1A. Risk Factors—Dependence on Key In-Line Products below.
Worldwide revenues from biopharmaceutical products in 2014 were $45.7 billion, a decrease of 5% compared to 2013, reflecting a decrease in
operational revenues of 3% and the unfavorable impact of foreign exchange of 2%.
Geographically, in the U.S., revenues from biopharmaceutical products decreased 8% in 2014, compared to 2013. In our international markets, revenues
from biopharmaceutical products decreased 3% in 2014, compared to 2013, which primarily reflects the unfavorable impact of foreign exchange. During
2014, international revenues from biopharmaceutical products represented 62% of total revenues from biopharmaceutical products, compared to 61% in
2013.
For additional information, including a discussion of key operational revenue drivers, see the Analysis of the Consolidated Statements of
Income—Biopharmaceutical Revenues—Revenues—Major Biopharmaceutical Products and —Biopharmaceutical—Selected Product Descriptions sections
in our 2014 Financial Report.
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Consumer Healthcare
Based on 2014 revenues, our Consumer Healthcare business is the fifth-largest branded multi-national, OTC, healthcare products business in the world
and produces two of the ten largest selling consumer healthcare brands (Centrum and Advil) in the world. Consumer Healthcare revenues totaled $3.4 billion
for 2014, an increase of 3% compared to 2013, reflecting operational revenue growth of 5%, partially offset by the unfavorable impact of foreign exchange of
2%.
The Consumer Healthcare business holds strong positions in various geographic markets, with its highest revenue volume in the U.S., China, Canada,
Germany, Italy and Brazil.
Major categories and product lines in our Consumer Healthcare business include:

Dietary Supplements: Centrum brands (including Centrum, Centrum Silver, Centrum Men’s and Women’s, Centrum Specialist, Centrum Flavor
Burst, and Centrum Kids), Caltrate, and Emergen-C;

Pain Management: Advil brands (including Advil, Advil PM, Advil Liqui-Gels, Advil Film Coated, Children’s Advil, Infants’ Advil and Advil
Migraine), and ThermaCare;

Gastrointestinal: Nexium 24HR/Nexium Control;

Respiratory: Robitussin, Advil Cold & Sinus, Advil Congestion Relief, and Dimetapp; and

Personal Care: ChapStick and Preparation H.

In August 2012, we entered into an agreement with AstraZeneca PLC (AstraZeneca) for the exclusive, global, OTC rights for Nexium, a leading
prescription drug currently approved to treat the symptoms of gastroesophageal reflux disease. In December 2011, we completed our acquisition of the
consumer healthcare business of Ferrosan, a Danish company engaged in the sale of science-based consumer healthcare products, including dietary
supplements and lifestyle products, primarily in the Nordic region and the emerging markets of Russia and Central and Eastern Europe. For additional
information, see the Notes to Consolidated Financial Statements—Note 2A. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures,
and Equity-Method Investments: Acquisitions and —Note 2B. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures, and EquityMethod Investments: Licensing Agreements in our 2014 Financial Report and the Overview of Our Performance, Operating Environment, Strategy and
Outlook—Our Business Development Initiatives section in our 2014 Financial Report.
For additional information regarding the revenues of our Consumer Healthcare business, see the Notes to Consolidated Financial Statements—Note 18.
Segment, Geographic and Other Revenue Information and the Analysis of Operating Segment Information—Global Vaccines, Oncology and Consumer
Healthcare Operating Segment section in our 2014 Financial Report.
Research and Development
Innovation by our research and development (R&D) operations is very important to our success. Our goal is to discover, develop and bring to market
innovative products that address major unmet medical needs. We spent $8.4 billion in 2014, $6.7 billion in 2013 and $7.5 billion in 2012 on R&D.
Biopharmaceutical R&D
We conduct research internally and also through contracts with third parties, through collaborations with universities and biotechnology companies
and in cooperation with other pharmaceutical firms. We also seek out promising chemical and biological lead molecules and innovative technologies
developed by third parties to incorporate into our discovery and development processes or projects, as well as our product lines, through collaborations,
alliance and license agreements, acquisitions and other arrangements.
Drug discovery and development is time-consuming, expensive and unpredictable. According to the Pharmaceutical Benchmarking Forum, out of 30
compounds entering preclinical development, only one is approved by a regulatory authority in a major market (U.S., the European Union (EU) or Japan).
The process from early discovery or design to development to regulatory approval can take more than 10 years. Drug candidates can fail at any stage of the
process, and candidates may not receive regulatory approval even after many years of research.
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As of year-end 2014, we had 298 projects in R&D, ranging from discovery through registration, of which 86 programs are in Phase 1 through
registration, with the remainder of the projects in pre-clinical development. At year-end 2014, our Phase 3 portfolio contained 23 programs. Development of a
single compound is often pursued as part of multiple programs. While these new candidates may or may not eventually receive regulatory approval, new drug
candidates entering clinical development phases are the foundation for future products.
In addition to discovering and developing new products, our R&D operations seek to add value to our existing products by improving their
effectiveness, enhancing ease of dosing and by discovering new indications for them.
Information concerning several of our drug candidates in development, as well as supplemental filings for existing products, is set forth in the Analysis
of the Consolidated Statements of Income—Product Developments—Biopharmaceut…

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