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Note 12. Contingencies and Certain Commitments

We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies. For a discussion of our tax contingencies, see Note ~~5C.~~5B. For a discussion of our legal contingencies, see below.

A. Legal Proceedings

Our legal contingencies include, but are not limited to, the following:

Patent litigation, which typically involves challenges to the coverage and/or validity of patents on various products, processes or dosage forms. We are the plaintiff in the majority of these actions. An adverse outcome in actions in which we are the plaintiff could result in loss of patent protection for a drug, a significant loss of revenues from that drug or impairment of the value of associated assets.

Product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others, often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.

Commercial and other matters, which can include merger-related and product-pricing claims and environmental claims and proceedings, can involve complexities that will vary from matter to matter.

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Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other jurisdictions.

Certain of these contingencies could result in losses, including damages, fines and/or civil penalties, which could be substantial, and/or criminal charges.

We believe that our claims and defenses in matters in which we are a defendant are substantial, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations in the period in which the amounts are accrued and/or our cash flows in the period in which the amounts are paid.

We have accrued for losses that are both probable and reasonably estimable. Substantially all of our contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies heavily on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions.

The principal pending matters to which we are a party are discussed below. In determining whether a pending matter is a principal matter, we consider both quantitative and qualitative factors in order to assess materiality, such as, among other things, the amount of damages and the nature of any other relief sought in the proceeding, if such damages and other relief are specified; our view of the merits of the claims and of the strength of our defenses; whether the action purports to be, or is, a class action and, if not certified, our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; whether related actions have been transferred to multidistrict litigation; any experience that we or, to our knowledge, other companies have had in similar proceedings; whether disclosure of the action would be important to a reader of our financial statements, including whether disclosure might change a reader’s judgment about our financial statements in light of all of the information that is available to the reader; the potential impact of the proceeding on our reputation; and the extent of public interest in the matter. In addition, with respect to patent matters in which we are the plaintiff, we consider, among other things, the financial significance of the product protected by the patent(s) at issue. As a result of considering qualitative factors in our determination of principal matters, there are some matters discussed below with respect to which management believes that the likelihood of possible loss in excess of amounts accrued is remote.

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A1.Legal Proceedings––Patent Litigation

Like other pharmaceutical companies, we are involved in numerous suits relating to our patents, including but not limited to, those discussed below. Most of the suits involve claims by generic drug manufacturers that patents covering our products, processes or dosage forms are invalid and/or do not cover the product of the generic drug manufacturer. Also, counterclaims, as well as various independent actions, have been filed alleging that our assertions of, or attempts to enforce, patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws. In addition to the challenges to the U.S. patents on a number of our products that are discussed below, patent rights to certain of our products are being challenged in various other jurisdictions. We are also party to patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payers, governments or other parties are seeking damages from us for allegedly causing delay of generic entry. Additionally, our licensing and collaboration partners face challenges by generic drug manufacturers to patents covering products for which we have licenses or co-promotion rights. We also are often involved in other proceedings, such as inter partes review, post-grant review, re-examination or opposition proceedings, before the U.S. Patent and Trademark Office, the European Patent Office, or other foreign counterparts relating to our intellectual property or the intellectual property rights of others. Also, if one of our patents is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products. For example, several of the patents in our pneumococcal vaccine portfolio were challenged in inter partes review and post-grant review proceedings in the ~~United States.~~U.S. The Patent Trial and Appeal Board refused to initiate proceedings as to 2 patents. In June 2018, the Patent Trial and Appeal Board ruled on ~~one~~another patent, holding that ~~one~~1 claim was valid and that all other claims were invalid. The party challenging that patent has appealed the decision. In March and June 2019, an additional patent was found invalid in separate proceedings by the Patent Trial and Appeal Board. We have appealed. Challenges to other patents remain pending ~~before~~in jurisdictions outside the U.S. ~~Patent and Trademark Office.~~The invalidation of ~~these~~all of the patents in our pneumococcal portfolio could potentially allow a competitor pneumococcal vaccine into the marketplace. In the event that any of the patents are found valid and infringed, a competitor pneumococcal vaccine

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might be prohibited from entering the market or required to pay Pfizer a royalty. We are also subject to patent litigation pursuant to which one or more third parties seeks damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities. For example, our Hospira subsidiaries are involved in patent and patent-related disputes over their attempts to bring generic pharmaceutical and biosimilar products to market. If one of our marketed products is found to infringe valid patent rights of a third party, such third party may be awarded significant damages, or we may be prevented from further sales of that product. Such damages may be enhanced as much as three-fold in the event that we or one of our subsidiaries, like Hospira, is found to have willfully infringed valid patent rights of a third party.

Actions In Which We Are The Plaintiff

Bosulif (bosutinib)

In December 2016, Wyeth LLC, Wyeth Pharmaceuticals Inc., and PF Prism C.V. (collectively, ~~Wyeth)~~the Wyeth Group) brought a patent-infringement action against Alembic Pharmaceuticals, Ltd, Alembic Pharmaceuticals, Inc. (collectively, Alembic), Sun Pharmaceutical Industries, Inc., and Sun Pharmaceutical Industries ~~Limited~~Ltd. (collectively, Sun), in the U.S. District Court for the District of Delaware in connection with abbreviated new drug applications respectively filed with the FDA by Alembic and Sun, each seeking approval to market generic versions of bosutinib. Alembic is challenging ~~patents, which expire in 2026,~~a patent covering polymorphic forms of bosutinib, which expires in 2026, and a patent covering methods of treating chronic myelogenous ~~leukemia.~~leukemia, which expires in 2025. Sun is also challenging the same patent covering polymorphic forms of bosutinib that expires in 2026. In March 2017, the Wyeth Group brought a patent-infringement action against MSN Laboratories Private Limited and MSN Pharmaceuticals, Inc. (collectively, MSN), in the U.S. District Court for the District of Delaware in connection with an abbreviated new drug application filed with the FDA by MSN, seeking approval to market a generic version of bosutinib, and challenging a patent expiring in 2026 covering polymorphic forms of bosutinib. In September 2017, the case against MSN was dismissed. Also, in September 2017, the Wyeth Group brought an additional patent-infringement action against Sun in the U.S. District Court for the District of Delaware asserting the infringement and validity of ~~two~~2 other patents challenged by Sun, ~~which expire in 2025 and 2026, respectively,~~ covering compositions of bosutinib and methods of treating chronic myelogenous ~~leukemia.~~leukemia, each of which expire in 2025. In October 2019, we settled the cases against each of Alembic and Sun on terms not material to Pfizer.

EpiPen

In July 2010, King, which we acquired in 2011 and is a wholly-owned subsidiary, brought a patent-infringement action against Sandoz in the U.S. District Court for the District of New Jersey in connection with Sandoz’s abbreviated new drug application filed with the FDA seeking approval to market an epinephrine injectable product. Sandoz is challenging patents, which expire in 2025, covering the next-generation autoinjector for use with epinephrine that is sold under the EpiPen brand name.

Precedex Premix

In June 2014,Ben Venue Laboratories, Inc. (Ben Venue)notified our subsidiary, Hospira, that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that a patent ~~relating~~related to the use of Precedex in an intensive care unit setting, which ~~expires~~expired in March 2019, was invalid or not infringed. In August 2014, Hospira and Orion Corporation (co-owner of the patent that is the subject of the lawsuit) filed suit against Ben Venue, Hikma Pharmaceuticals PLC (Hikma), and West-Ward Pharmaceutical Corp. in the U.S. District Court for the District of Delaware asserting the validity and infringement of the patent. In October 2014,

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Eurohealth International Sarl was substituted for Ben Venue and Hikma. In June 2016, this case was settled on terms not material to Pfizer.

In June 2015, Amneal Pharmaceuticals LLC (Amneal) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that ~~four~~4 patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In August 2015, Hospira filed suit against Amneal in the U.S. District Court for the District of Delaware asserting the validity and infringement of the patents that are the subject of the lawsuit. In January 2018, the District Court ruled that ~~one~~1 of the ~~four~~4 patents was valid and infringed, and that the other ~~three~~3 patents were invalid. In February and March 2018, respectively, each of Amneal and Hospira appealed the District Court decision to the U.S. Court of Appeals for the Federal Circuit. In January 2019, the U.S. Court of Appeals for the Federal Circuit affirmed the District Court’s decision.

In December 2015, Fresenius Kabi USA LLC (Fresenius) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that ~~four~~certain patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In January 2016, Hospira filed suit against Fresenius in the U.S. District Court for the Northern District of Illinois, asserting the validity and infringement of those patents. In December 2018, the District Court ruled that the asserted patents ~~that are~~were invalid. Hospira has appealed the ~~subject~~District Court’s decision to the U.S. Court of Appeals for the ~~lawsuit.~~Federal Circuit.

In August 2016, Par Sterile Products, LLC (Par) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that ~~four~~ 4

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patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In September 2016, Hospira filed suit against Par in the U.S. District Court for the District of Delaware asserting the validity and infringement of the patents that are the subject of the lawsuit. In December 2016, the case was stayed pending the outcome of Hospira’s suit against Amneal (including all appeals). In February 2019, a new stay was entered, extending the stay until the outcome of the appeal in the Fresenius case.

In December 2017, Gland Pharma Limited (Gland) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that ~~six~~6 patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In February 2018, Hospira filed suit against Gland in the U.S. District Court for the District of Delaware asserting the validity and infringement of ~~four~~4 patents that are the subject of the lawsuit. The case against Gland has been stayed pending the outcome of the appeal in the Fresenius case.

In December 2017, Jiangsu Hengrui Medicine Co., Ltd. (Hengrui) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that ~~six~~6 patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In February 2018, Hospira filed suit against Hengrui in the U.S. District Court for the District of Delaware asserting the validity and infringement of ~~four~~4 patents that are the subject of the lawsuit. The case against Hengrui has been stayed pending the outcome of the appeal in the Fresenius case.

In February 2018, Baxter Healthcare Corporation (Baxter) filed a declaratory judgment action against Hospira in the U.S. District Court for the District of Delaware seeking a declaration of non-infringement of ~~four~~4 patents relating to the Precedex premix formulations and their use. ~~One~~NaN of the patents included in the action ~~expires~~related to the use of Precedex in an intensive care unit setting and expired in 2019 and the other ~~three~~3 patents expire in 2032. In March 2018, Hospira filed a counterclaim for infringement of the patent ~~expiring~~that expired in 2019. In November 2018, the case was dismissed by mutual agreement of the parties.

Xeljanz (tofacitinib)

In February 2017, we brought a patent-infringement action against MicroLabs USA Inc. and MicroLabs Ltd. (collectively, MicroLabs) in the U.S. District Court for the District of Delaware asserting the infringement and validity of ~~three~~3 patents challenged by MicroLabs in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 5 mg tablets. ~~Of the three patents that are the subject~~In November 2018, we settled all of the lawsuit, one covers the active ingredient and expires in December 2025, the second covers an enantiomer of tofacitinib and expires in 2022, and the third covers a polymorphic form of tofacitinib and expires in 2023. Three other patents for Xeljanz expiring in December 2020 haveour claims against MicroLabs on terms not ~~been challenged by MicroLabs.~~material to Pfizer.

Separately, also in February 2017, we brought a patent-infringement action against Sun Pharmaceutical Industries Ltd. (Sun Ltd.) in the U.S. District Court for the District of Delaware asserting the infringement and validity of our patent covering a polymorphic form of tofacitinib, expiring in 2023, that was challenged by Sun ~~Pharmaceutical Industries~~ Ltd. in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 11 mg extended release tablets. In November 2017, we brought an additional patent-infringement action against Sun ~~Pharmaceuticals Industries~~ Ltd. in the U.S. District Court for the District of Delaware asserting the infringement and validity of another patent challenged by Sun ~~Pharmaceuticals Industries Ltd,~~Ltd., which covers the active ingredient and expires in December 2025. In October 2018, we brought a third patent infringement action against Sun Ltd. in the U.S. District Court for the District of Delaware asserting the infringement and validity of our patent covering the extended release formulation of tofacitinib, which expires in 2034. In March and April 2019, the actions against Sun Ltd. were dismissed by mutual agreement of the parties.

In March 2017, we brought a patent-infringement action against Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Ltd. (collectively, Zydus) in the U.S. District Court for the District of Delaware asserting the infringement and validity of 3 patents: the ~~same~~

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~~three patents that are~~patent covering the ~~subject~~active ingredient expiring in December 2025, the patent covering an enantiomer of tofacitinib expiring in 2022, and the ~~action against MicroLabs,~~patent covering a polymorphic form of tofacitinib expiring in 2023, which Zydus challenged in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 5 mg tablets.

Also, in March 2017, we brought separate actions in the U.S. District Court for the District of Delaware against Prinston Pharmaceutical Inc., Zhejiang Huahai Pharmaceutical Co., Ltd., Huahai US Inc. and Solco Healthcare US, LLC (collectively, Prinston) and against Breckenridge Pharmaceutical Inc., Pensa Pharma S.A. and Laboratorios Del Dr. Esteve, S.A. (collectively, Breckenridge) on the ~~two~~2 patents expiring in 2022 and 2023, respectively, that were challenged by Prinston and Breckenridge in their respective abbreviated new drug applications seeking approval to market generic versions of tofacitinib 5 mg tablets. In October 2017, we brought an additional patent-infringement action against Breckenridge in the U.S. District Court for the District of Delaware asserting the infringement and validity of ~~four~~4 additional patents challenged by Breckenridge, ~~three~~3 of which expire in December 2020 and ~~one~~1 of which expires in December 2025. In March 2018, we brought another patent infringement action against Prinston in the U.S. District Court for the District of Delaware asserting the infringement and validity of an additional patent, which had been subsequently challenged by Prinston and which expires in

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December 2025. In May 2018, we settled all of our claims against Breckenridge on terms not material to Pfizer. In January 2019, we settled all of our claims against Prinston on terms not material to Pfizer.

In December 2018, we brought a separate patent infringement action against Teva Pharmaceuticals USA, Inc. (Teva) in the U.S. District Court for the District of Delaware asserting the infringement and validity of our patent covering extended release formulations of tofacitinib that was challenged by Teva in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 11 mg extended release tablets.

In March 2019, we brought a separate patent infringement action against Ajanta Pharma Ltd. and Ajanta Pharma USA Inc. (collectively, Ajanta) in the U.S. District Court for the District of Delaware asserting the infringement and validity of 2 patents: the patent covering the active ingredient that expires in December 2025 and the patent covering a polymorphic form of tofacitinib that expires in 2023, each of which Ajanta challenged in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 5 mg tablets.

Inlyta (axitinib)

In April 2018, Apotex Inc. notified us that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Inlyta. Apotex Inc. asserts the invalidity and non-infringement of the crystalline form patent for Inlyta that expires in 2030. In May 2018, we filed suit against Apotex Inc. in the U.S. District Court for the District of Delaware, asserting the validity and infringement of the crystalline form patent for Inlyta.

In May 2019, Glenmark Pharmaceuticals Limited (Glenmark) notified us that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Inlyta. Glenmark asserts the invalidity and non-infringement of the crystalline form patent for Inlyta that expires in 2030. In June 2019, we filed suit against Glenmark in the U.S. District Court for the District of Delaware, asserting the validity and infringement of the crystalline form patent for Inlyta.

Kerydin (tavaborole)

In September 2018, several generic companies notified us that they had filed abbreviated new drug applications with the FDA seeking approval to market generic versions of Kerydin. The generic companiesassert the invalidity and non-infringement of methods of use and formulation patents for tavaborole that expire in 2026 and 2027, including pediatric exclusivity. In October 2018, Anacor, our wholly-owned subsidiary, filed infringement lawsuits against each of the generic filers in the U.S. District Court for the District of Delaware and the U.S. District Court for the District of West Virginia.

Ibrance (palbociclib)

In March 2019, several generic companies notified us that they had filed abbreviated new drug applications with the FDA seeking approval to market generic versions of Ibrance. The generic companies assert the invalidity and non-infringement of 2 composition of matter patents and a method of use patent covering palbociclib, each of which expire in 2023. In April 2019, we brought patent infringement actions against each of the generic filers in various federal courts, asserting the validity and infringement of the patents challenged by the generic companies.

Matters Involving Our Collaboration/Licensing Partners

Xtandi (enzalutamide)

In December 2016, Medivation and Medivation Prostate Therapeutics, Inc. (collectively, the Medivation Group); Astellas Pharma Inc., Astellas US LLC and Astellas Pharma US, Inc. (collectively, Astellas); and The Regents of the University of California filed patent-infringement suits in the U.S. District Court for the District of Delaware against Actavis Laboratories FL, Inc. and Actavis LLC (collectively, Actavis); Zydus; and Apotex Inc. and Apotex Corp. (collectively, Apotex) in connection with those companies’ respective abbreviated new drug applications filed with the FDA for approval to market generic versions of enzalutamide. The generic manufacturers are challenging patents, which expire as early as 2026, covering enzalutamide and treatments for prostate cancer. In May 2017, the Medivation Group filed a patent-infringement suit against Roxane Laboratories Inc. (Roxane) in the same court in connection with Roxane’s abbreviated new drug application with the FDA for approval to market a generic version of enzalutamide. In ~~June~~2018 and ~~July 2018,~~2019, we settled all ~~of our~~pending claims against ~~Actavis and Apotex, respectively,~~the various generic challengers on terms not material to Pfizer.

~~Inlyta (axitinib)~~

~~Kerydin (tavaborole)~~

In September 2018, several generic companies notified us that they had filed abbreviated new drug applications with the FDA seeking approval to market generic versions of Kerydin. The generic companiesassert the invalidity and non-infringement of methods of use and formulation patents for tavaborole that expire in 2026 and 2027, including pediatric exclusivity. In October 2018, Anacor, our wholly-owned subsidiary, ~~filed infringement lawsuits against each of the generic filers in the U.S. District Court for the District of Delaware.~~

~~Matters Involving Our Collaboration/Licensing Partners~~

~~Toviaz (fesoterodine)––Inter-Partes Reviews~~

In January 2016, Mylan Pharmaceuticals and Mylan Laboratories (collectively, Mylan) filed petitions with the U.S. Patent and Trademark Office requesting inter partes reviews of five of the patents covering fesoterodine, the active ingredient in Toviaz: three composition-of-matter patents and a method-of-use patent that expire in 2019 and a patent covering salts of fesoterodine that expires in 2022. The patents are owned by UCB Pharma GmbH, and we have an exclusive, worldwide license to market Toviaz from UCB Pharma GmbH. In July 2016, the Patent Trial and Appeal Board agreed to institute inter partes reviews of all five patents. Amerigen Pharmaceuticals Limited (Amerigen), Alembic Pharmaceuticals Limited and Torrent Pharmaceuticals Limited joined the inter partes reviews. In July 2017, the U.S. Patent and Trademark Office issued decisions upholding all five patents. In September 2017, Mylan and Amerigen appealed the U.S. Patent and Trademark Office decisions to the U.S. Court of Appeals for the Federal Circuit. ~~In January 2018, Mylan withdrew its appeal. Amerigen’s appeal of the decision upholding the patent covering salts of fesoterodine that expires in 2022 is the only pending appeal.~~

Eliquis

In February, March, and April 2017, ~~twenty-five~~NaN generic companies sent BMS Paragraph-IV certification letters informing BMS that they had filed abbreviated new drug applications seeking approval of generic versions of Eliquis, challenging the validity and infringement of one or more of the ~~three~~3 patents listed in the Orange Book for Eliquis. The patents currently are set to expire in 2019, 2026, and 2031. Eliquis has been jointly developed and is being commercialized by BMS and Pfizer. In April 2017, BMS and Pfizer filed patent-infringement actions against all generic filers in the U.S. District Court for the District of

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Delaware and the U.S. District Court for the District of West Virginia, asserting that each of the generic companies’ proposed products would infringe each of the patent(s) that each generic filer challenged. Some generic filers challenged only the 2031

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patent, some challenged both the 2031 and 2026 patent, and one generic company challenged all ~~three~~3 patents. We and BMS have settled with certain of the generic companies on terms not material to Pfizer, and we and BMS may settle with other generic companies in the future.

Actions In Which We Are The Defendant

Inflectra (infliximab-dyyb)

In March 2015, Janssen and New York University, together, brought a patent-infringement action in the U.S. District Court for the District of Massachusetts against Hospira, Celltrion Healthcare Co. Ltd. and Celltrion Inc. alleging that infliximab-dyyb, to be marketed by Hospira in the U.S. under the brand name Inflectra, would infringe ~~six~~6 patents relating to infliximab, its manufacture and use. Claims with respect to ~~four~~4 of the patents were dismissed by the plaintiffs, leaving ~~two~~2 patents at issue: the infliximab antibody patent and a patent relating to cell culture media. In January 2018, the antibody patent was declared invalid by the Court of Appeals for the Federal Circuit. In July 2018, the U.S. District Court for the District of Massachusetts granted defendants’ motion for summary judgment and ruled that the patent relating to cell culture media was not infringed.

~~Bavencio (avelumab)~~

~~In July 2017, BMS, E.R. Squibb & Sons LLC, Ono Pharmaceutical Co. Ltd., and Tasuku Honjo brought a patent-infringement action in~~ Janssen appealed the District Court’s decision to the U.S. ~~District~~ Court of Appeals for the District of Delaware against Pfizer, Merck KGaA, and EMD Serono, Inc., alleging that Bavencio (avelumab) infringes one patent relating to methods for treating tumors with anti-PD-L1 antibodies, which expires in 2023.Federal Circuit.

A2. Legal Proceedings––Product Litigation

Like other pharmaceutical companies, we are defendants in numerous cases, including but not limited to those discussed below, related to our pharmaceutical and other products. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss.

Asbestos

Between 1967 and 1982, Warner-Lambert owned American Optical Corporation (American Optical), which manufactured and sold respiratory protective devices and asbestos safety clothing. In connection with the sale of American Optical in 1982, Warner-Lambert agreed to indemnify the purchaser for certain liabilities, including certain asbestos-related and other claims. As of September ~~30, 2018,~~29, 2019, approximately ~~56,880~~46,500 claims naming American Optical and numerous other defendants were pending in various federal and state courts seeking damages for alleged personal injury from exposure to asbestos and other allegedly hazardous materials. Warner-Lambert was acquired by Pfizer in 2000 and is a ~~wholly-owned~~wholly owned subsidiary of Pfizer. Warner-Lambert is actively engaged in the defense of, and will continue to explore various means of resolving, these claims.

Numerous lawsuits are pending against Pfizer in various federal and state courts seeking damages for alleged personal injury from exposure to products allegedly containing asbestos and other allegedly hazardous materials sold by Pfizer and certain of its previously owned subsidiaries.

There also are a small number of lawsuits pending in various federal and state courts seeking damages for alleged exposure to asbestos in facilities owned or formerly owned by Pfizer or its subsidiaries.

Effexor

Beginning in May 2011, actions, including purported class actions, were filed in various federal courts against Wyeth and, in certain of the actions, affiliates of Wyeth and certain other defendants relating to Effexor XR, which is the extended-release formulation of Effexor. The plaintiffs in each of the class actions seek to represent a class consisting of all persons in the U.S. and its territories who directly purchased, indirectly purchased or reimbursed patients for the purchase of Effexor XR or generic Effexor XR from any of the defendants from June 14, 2008 until the time the defendants’ allegedly unlawful conduct ceased. The plaintiffs in all of the actions allege delay in the launch of generic Effexor XR in the U.S. and its territories, in violation of federal antitrust laws and, in certain of the actions, the antitrust, consumer protection and various other laws of certain states, as the result of Wyeth fraudulently obtaining and improperly listing certain patents for Effexor XR in the Orange Book, enforcing certain patents for Effexor XR and entering into a litigation settlement agreement with a generic drug manufacturer with respect to Effexor XR. Each of the plaintiffs seeks treble damages (for itself in the individual actions or on behalf of the putative class in the purported class actions) for alleged price overcharges for Effexor XR or generic Effexor XR in the U.S. and its territories since June 14, 2008. All of these actions have been consolidated in the U.S. District Court for the District of New Jersey.

In October 2014, the District Court dismissed the direct purchaser plaintiffs’ claims based on the litigation settlement agreement, but declined to dismiss the other direct purchaser plaintiff claims. In January 2015, the District Court entered partial final

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judgments as to all settlement agreement claims, including those asserted by direct purchasers and end-payer plaintiffs, which plaintiffs appealed to the U.S. Court of Appeals for the Third Circuit. In August 2017, the U.S. Court of Appeals for the Third Circuit reversed the District Court’s decisions and remanded the claims to the District Court.

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Lipitor

Antitrust Actions

Beginning in November 2011, purported class actions relating to Lipitor were filed in various federal courts against, among others, Pfizer, certain affiliates of Pfizer, and, in most of the actions, Ranbaxy, Inc. (Ranbaxy) and certain affiliates of Ranbaxy. The plaintiffs in these various actions seek to represent nationwide, multi-state or statewide classes consisting of persons or entities who directly purchased, indirectly purchased or reimbursed patients for the purchase of Lipitor (or, in certain of the actions, generic Lipitor) from any of the defendants from March 2010 until the cessation of the defendants’ allegedly unlawful conduct (the Class Period). The plaintiffs allege delay in the launch of generic Lipitor, in violation of federal antitrust laws and/or state antitrust, consumer protection and various other laws, resulting from (i) the 2008 agreement pursuant to which Pfizer and Ranbaxy settled certain patent litigation involving Lipitor, and Pfizer granted Ranbaxy a license to sell a generic version of Lipitor in various markets beginning on varying dates, and (ii) in certain of the actions, the procurement and/or enforcement of certain patents for Lipitor. Each of the actions seeks, among other things, treble damages on behalf of the putative class for alleged price overcharges for Lipitor (or, in certain of the actions, generic Lipitor) during the Class Period. In addition, individual actions have been filed against Pfizer, Ranbaxy and certain of their affiliates, among others, that assert claims and seek relief for the plaintiffs that are substantially similar to the claims asserted and the relief sought in the purported class actions described above. These various actions have been consolidated for pre-trial proceedings in a Multi-District Litigation (In re Lipitor Antitrust Litigation MDL-2332) in the U.S. DistrictCourt for the District of New Jersey.

In September 2013 and 2014, the District Court dismissed with prejudice the claims by direct purchasers. In October and November 2014, the District Court dismissed with prejudice the claims of all other Multi-District Litigation plaintiffs. All plaintiffs have appealed the District Court’s orders dismissing their claims with prejudice to the U.S. Court of Appeals for the Third Circuit. In addition, the direct purchaser class plaintiffs appealed the order denying their motion to amend the judgment and for leave to amend their complaint to the U.S. Court of Appeals for the Third Circuit. In August 2017, the U.S. Court of Appeals for the Third Circuit reversed the District Court’s decisions and remanded the claims to the District Court.

Also, in January 2013, the State of West Virginia filed an action in West Virginia state court against Pfizer and Ranbaxy, among others, that asserts claims and seeks relief on behalf of the State of West Virginia and residents of that state that are substantially similar to the claims asserted and the relief sought in the purported class actions described above.

Personal Injury Actions

A number of individual and multi-plaintiff lawsuits have been filed against us in various federal and state courts alleging that the plaintiffs developed type 2 diabetes purportedly as a result of the ingestion of Lipitor. Plaintiffs seek compensatory and punitive damages.

In February 2014, the federal actions were transferred for consolidated pre-trial proceedings to a Multi-District Litigation (In re Lipitor (Atorvastatin Calcium) Marketing, Sales Practices and Products Liability Litigation (No. II) MDL-2502) in the U.S. District Court for the District of South Carolina. Since 2016, certain cases in the Multi-District Litigation were remanded to certain state courts. In January 2017, the District Court granted our motion for summary judgment, dismissing substantially all of the remaining cases pending in the Multi-District Litigation. In January 2017, the plaintiffs appealed the District Court’s decision to the U.S. Court of Appeals for the Fourth Circuit. In June 2018, the U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s decision.

Viagra

A number of individual and multi-plaintiff lawsuits have been filed against us in various federal and state courts alleging that the plaintiffs developed melanoma and/or the exacerbation of melanoma purportedly as a result of the ingestion of Viagra. Plaintiffs seek compensatory and punitive damages.

In April 2016, the federal actions were transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In Re: Viagra (Sildenafil Citrate) Products Liability Litigation, MDL-2691) in the U.S. District Court for the Northern District of California. In December 2016, federal actions filed against Lilly and filed against both us and Lilly, were transferred for coordinated pre-trial proceedings to the Multi-District Litigation (In re: Viagra (Sildenafil Citrate) and Cialis (Tadalafil) Products Liability Litigation, MDL-2691).

Intravenous Solutions

Beginning in November 2016, purported class actions were filed in the U.S. District Court for the Northern District of Illinois against Hospira, Hospira Worldwide, Inc. and certain other defendants relating to intravenous saline solution. Plaintiffs seek to

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represent a class consisting of all persons and entities in the U.S. who directly purchased intravenous saline solution sold by any of the defendants from January 1, 2013 until the time the defendants’ allegedly unlawful conduct ceases. Plaintiffs allege that the defendants’ conduct restricts output and artificially fixes, raises, maintains and/or stabilizes the prices of intravenous saline

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solution sold throughout the U.S. in violation of federal antitrust laws. Plaintiffs seek treble damages (for themselves and on behalf of the putative classes) and an injunction against defendants for alleged price overcharges for intravenous saline solution in the U.S. since January 1, 2013. All of these actions have been consolidated in the U.S. District Court for the Northern District of Illinois. In July 2018, the District Court granted defendants’ motions to dismiss the consolidated amended complaint without prejudice. Plaintiffs filed a second amended complaint in September 2018. On February 3, 2017, we completed the sale of our global infusion systems net assets, HIS, which includes intravenous saline solution, to ICU Medical. The litigation is the subject of cross-claims for indemnification by both Pfizer and ICU Medical under the purchase agreement.

Separately, in April 2017, Pfizer, Hospira and two employees of Pfizer received grand jury subpoenas issued by the United States District Court for the Eastern District of Pennsylvania, in connection with an investigation by the U.S. Department of Justice, Antitrust Division. The subpoenas seek documents related to the sale, manufacture, pricing and shortages of intravenous solutions, including saline, as well as communications among industry participants regarding these issues. The Department of Justice investigation is also the subject of cross-claims for indemnification by both Pfizer and ICU Medical under the purchase agreement. In addition, in August 2015, the New York Attorney General issued a subpoena to Hospira for similar information. Hospira has produced records to the New York Attorney General and coordinated with ICU Medical to produce records to the U.S. Department of Justice.

Hormone Therapy Consumer Class Action

A certified consumer class action is pending against Wyeth in the U.S. District Court for the Southern District of California based on the alleged off-label marketing of its hormone therapy products. The case was originally filed in December 2003. The class consists of California consumers who purchased Wyeth’s hormone-replacement products between January 1995 and January 2003 and who do not seek personal injury damages therefrom. The class seeks compensatory and punitive damages, including a full refund of the purchase price.

~~Eliquis~~

A number of individual and multi-plaintiff lawsuits have been filed against us and BMS in various federal and state courts pursuant to which plaintiffs seek to recover for personal injuries, including wrongful death, due to bleeding allegedly as a result of the ingestion of Eliquis. Plaintiffs seek compensatory and punitive damages.

~~In February 2017, the federal actions were transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In Re: Eliquis (Apixaban) Products Liability Litigation MDL-2754~~) in the U.S. District Court for the Southern District of New York. In July 2017, the District Court dismissed substantially all of the actions that were pending in the Multi-District Litigation. In August 2017, certain plaintiffs appealed the District Court’s dismissal to the U.S. Court of Appeals for the Second Circuit. Additional cases continue to be transferred to the Multi-District Litigation.

EpiPen

Beginning in February 2017, purported class actions were filed in various federal courts by indirect purchasers of EpiPen against Pfizer, and/or its affiliates King and Meridian, and/or various entities affiliated with Mylan, ~~N.V.,~~ and Mylan ~~N.V.~~ Chief Executive Officer, Heather Bresch. The plaintiffs in these actions seek to represent U.S. nationwide classes comprising persons or entities who paid for any portion of the end-user purchase price of an EpiPen between 2009 until the cessation of the defendants’ allegedly unlawful conduct. In August 2017, a similar lawsuit brought in the U.S. District Court for the District of New Jersey on behalf of a purported class of direct purchaser plaintiffs against Pfizer, King, Meridian and Mylan was voluntarily dismissed without prejudice. Against Pfizer and/or its affiliates, plaintiffs generally allege that Pfizer’s and/or its affiliates’ settlement of patent litigation regarding EpiPen delayed market entry of generic EpiPen in violation of federal antitrust laws and various state antitrust or consumer protection laws. At least one lawsuit also alleges that Pfizer and/or Mylan ~~N.V.~~ violated the federal Racketeer Influenced and Corrupt Organizations Act. Plaintiffs also filed various consumer protection and unjust enrichment claims against, and relating to conduct attributable solely to, Mylan ~~Pharmaceuticals~~and/or its affiliates regarding EpiPen. Plaintiffs seek treble damages for alleged overcharges for EpiPen since 2009. In August 2017, the actions were consolidated for coordinated pre-trial proceedings in a Multi-District Litigation (In re: EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation, MDL-2785) in the U.S. District Court for the District of Kansas with other EpiPen-related actions against Mylan ~~N.V.~~ and/or its affiliates to which Pfizer, King and Meridian are not parties.

Nexium 24HR and Protonix

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August 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In re: Proton-Pump Inhibitor Products Liability Litigation (No. II)) in the U.S. District Court for the District of New Jersey. On July 31, 2019, we completed the transaction in which we and GSK combined our respective consumer healthcare businesses into a new consumer healthcare joint venture that operates globally under the GSK Consumer Healthcare name. As part of the joint venture transaction, the joint venture has agreed to assume, and to indemnify Pfizer for, liabilities arising out of such litigation to the extent related to Nexium 24HR.

Docetaxel

Personal Injury Actions

A number of lawsuits have been filed against Hospira and Pfizer in various federal and state courts alleging that plaintiffs who were treated with Docetaxel developed permanent hair loss. The significant majority of the cases also name other defendants, including the manufacturer of the branded product, Taxotere. Plaintiffs seek compensatory and punitive damages.

In October 2016, the federal cases were transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In re Taxotere (Docetaxel) Products Liability Litigation, MDL-2740) in the U.S. District Court for the Eastern District of Louisiana.

Mississippi Attorney General Government Investigation

In October 2018, the Attorney General of Mississippi filed a complaint in Mississippi state court against the manufacturer of the branded product and ~~eight~~8 other manufacturers including Pfizer and Hospira, alleging, with respect to Pfizer and Hospira, a failure to warn about a risk of permanent hair loss in violation of the Mississippi Consumer Protection Act. The action seeks civil penalties and injunctive relief.

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Adalimumab Biosimilars

Beginning in March 2019, purported class actions relating to Humira and adalimumab biosimilars were filed in the United States District Court for the Northern District of Illinois against AbbVie Inc. (AbbVie), certain affiliates of AbbVie, and other pharmaceutical manufacturers. Pfizer is a named defendant in three of the actions. The plaintiffs seek to represent nationwide and multi-state classes consisting of persons and/or entities who are indirect purchasers of Humira from January 1, 2017 until the allegedly unlawful antitrust effects cease. Against Pfizer, the plaintiffs generally allege that Pfizer’s and AbbVie’s 2018 licensing agreements, resolving all global intellectual property matters for Pfizer’s proposed adalimumab biosimilar, delayed market entry of Pfizer’s biosimilar product in the U.S. in violation of federal antitrust laws, various state antitrust or consumer protection laws, and unjust enrichment laws. Plaintiffs seek injunctive relief and treble damages for alleged overcharges for Humira since 2017. In August 2019, the plaintiffs filed an amended consolidated complaint that superseded the prior complaints and does not name Pfizer as a defendant. As a result, Pfizer is no longer a party to the case.

Array Securities Litigation

In November 2017, 2 purported class actions were filed in the U.S. District Court for the District of Colorado alleging that Array, which we acquired in July 2019 and is our wholly owned subsidiary, and certain of its former officers violated federal securities laws in connection with certain disclosures made, or omitted, by Array regarding the NRAS-mutant melanoma program. In March 2018, the actions were consolidated into a single proceeding.

A3. Legal Proceedings––Commercial and Other Matters

Average Wholesale Price Litigation

Pfizer, certain of its subsidiaries and other pharmaceutical manufacturers were sued in various state courts by a number of states alleging that the defendants provided average wholesale price (AWP) information for certain of their products that was higher than the actual average prices at which those products were sold. The AWP is used to determine reimbursement levels under Medicare Part B and Medicaid and in many private-sector insurance policies and medical plans. All but ~~one~~1 of those actions have been resolved through settlement, dismissal or final judgment. The plaintiff state, Illinois,in the ~~one~~1 remaining action, claims that the alleged spread between the AWPs at which purchasers were reimbursed and the actual sale prices was promoted by the defendants as an incentive to purchase certain of their products. The actionalleges, among other things, fraudand violation of the state’s unfair trade practices andconsumer protection statutes and seeks monetary and other relief, including civil penalties and treble damages. In September 2019, we settled the remaining action on terms not material to Pfizer. All actions have now been resolved through settlement, dismissal or final judgment.

~~Monsanto-Related Matters~~Intravenous Solutions

~~In 1997, Monsanto Company (Former Monsanto) contributed~~Beginning in November 2016, purported class actions were filed in the U.S. District Court for the Northern District of Illinois against Hospira, Hospira Worldwide, Inc. and certain ~~chemical manufacturing operations~~other defendants relating to intravenous saline solution. Plaintiffs seek to represent a class consisting of all persons and ~~facilities to a newly formed corporation, Solutia Inc. (Solutia),~~entities in the U.S. who directly purchased intravenous saline solution sold by any of the defendants from January 1, 2013 until the time the defendants’ allegedly unlawful conduct ceases. Plaintiffs allege that the defendants’ conduct restricts output and spun off the shares of Solutia. In 2000, Former Monsanto merged with Pharmacia & Upjohn Company to form Pharmacia. Pharmacia then transferred its agricultural operations to a newly created subsidiary, named Monsanto Company (New Monsanto), which it spun off in a two-stage process that was completed in 2002. Pharmacia was acquired by Pfizer in 2003 and is a wholly-owned subsidiary of Pfizer.

In connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities related to Pharmacia’s former agricultural business. New Monsanto has defendedartificially fixes, raises, maintains and/or ~~is defending Pharmacia in connection with various claims and litigation arising out~~stabilizes the prices of ~~or related to, the agricultural business, and has been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.~~

In connection with its spin-off in 1997, Solutia assumed, and agreed to indemnify Pharmacia for, liabilities related to Former Monsanto’s chemical businesses. As the result of its reorganization under Chapter 11 of the U.S. Bankruptcy Code, Solutia’s indemnification obligations relating to Former Monsanto’s chemical businesses are primarily limited to sites that Solutia has owned or operated. In addition, in connection with its spinoff that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities primarily related to Former Monsanto’s chemical businesses, including, but not limited to, any such liabilities that Solutia assumed. Solutia’s and New Monsanto’s assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls. Solutia and/or New Monsanto are defending Pharmacia in connection with various claims and litigation arising out of, or related to, Former Monsanto’s chemical businesses, and have been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.

~~Environmental Matters~~

In 2009, we submitted to the U.S. Environmental Protection Agency (EPA) a corrective measures study report with regard to Pharmacia’s discontinued industrial chemical facility in North Haven, Connecticut. In September 2010, our corrective measures study report was approved by the EPA, and we commenced construction of the site remedy in late 2011 under an Updated Administrative Order on Consent with the EPA.intravenous saline

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Also, in 2009, we submitted a revised site-wide feasibility study with regard to Wyeth Holdings Corporation’s (formerly, American Cynamid Company) discontinued industrial chemical facility in Bound Brook, New Jersey. In July 2011, Wyeth Holdings Corporation finalized an Administrative Settlement Agreement with the EPA and Order on Consent for Removal Action (the 2011 Administrative Settlement Agreement) with the EPA with regard to the Bound Brook facility. In May 2012, we completed construction of an interim remedy to address the discharge of impacted groundwater from that facility to the Raritan River. In September 2012, the EPA issued a final remediation plan for the Bound Brook facility’s main plant area, which is generally in accordance with one of the remedies evaluated in our revised site-wide feasibility study. In March 2013, Wyeth Holdings Corporation (now Wyeth Holdings LLC) entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the main plant area and to perform a focused feasibility study for two adjacent lagoons. In September 2015,solution sold throughout the U.S., in violation of federal antitrust laws. Plaintiffs seek treble damages (for themselves and on behalf of the ~~EPA, filed a complaint~~putative classes) and ~~consent decree with the federal District Court~~an injunction against defendants for ~~the District of New Jersey that allows Wyeth Holdings LLC to complete the design and to implement the remedy~~alleged price overcharges for the main plant area. In December 2015, the consent decree (which supersedes the 2011 Administrative Settlement Agreement) was entered by the District Court. We have accrued for the estimated costs of the site remedies for the North Haven and Bound Brook facilities. In September 2018, the EPA issued a final remediation plan for the two adjacent lagoons, which is generally in accordance with one of the remedies evaluated in our focused feasibility study.

We are a party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and other state, local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.

~~Contracts with Iraqi Ministry of Health~~

~~In October 2017, a number of United States service members, civilians, and their families brought a complaint~~intravenous saline solution in the ~~Federal District Court for the District~~U.S. since January 1, 2013. All of Columbia against a number of pharmaceutical and medical devices companies, including Pfizer and certain of its subsidiaries, alleging that the defendants violated the United States Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health, and seeks monetary relief. In July 2018, the U.S. Department of Justice requested documents related to this matter, which are being provided.

~~Allergan Complaint for Indemnity~~

In August 2018, Pfizer was named as a defendant in a third-party complaint for indemnity, along with King Pharmaceuticals LLC, a Pfizer subsidiary (King), filed by Allergan Finance LLC (Allergan) in a Multi-District Litigation (~~In re National Prescription Opiate Litigation MDL 2804~~)these actions have been consolidated in the U.S. District Court for the Northern District of ~~Ohio.~~Illinois. In July 2018, the District Court granted defendants’ motions to dismiss the consolidated amended complaint without prejudice. Plaintiffs filed a second amended complaint in September 2018. On February 3, 2017, we completed the sale of our global infusion systems net assets, HIS, which includes intravenous saline solution, to ICU Medical. The litigation is the subject of cross-claims for indemnification by both Pfizer and ICU Medical under the purchase agreement.

Hormone Therapy Consumer Class Action

EpiPen

Beginning in February 2017, purported class actions were filed in various federal courts by indirect purchasers of EpiPen against Pfizer, and/or its affiliates King and Meridian, and/or various entities affiliated with Mylan, and Mylan Chief Executive Officer, Heather Bresch. The plaintiffs in these actions seek to represent U.S. nationwide classes comprising persons or entities who paid for any portion of the end-user purchase price of an EpiPen between 2009 until the cessation of the defendants’ allegedly unlawful conduct. In August 2017, a similar lawsuit ~~asserts~~brought in the U.S. District Court for the District of New Jersey on behalf of a purported class of direct purchaser plaintiffs against Pfizer, King, Meridian and Mylan was voluntarily dismissed without prejudice. Against Pfizer and/or its affiliates, plaintiffs generally allege that Pfizer’s and/or its affiliates’ settlement of patent litigation regarding EpiPen delayed market entry of generic EpiPen in violation of federal antitrust laws and various state antitrust or consumer protection laws. At least one lawsuit also alleges that Pfizer and/or Mylan violated the federal Racketeer Influenced and Corrupt Organizations Act. Plaintiffs also filed various consumer protection and unjust enrichment claims against, and relating to conduct attributable solely to, Mylan and/or its affiliates regarding EpiPen. Plaintiffs seek treble damages for ~~indemnity related~~alleged overcharges for EpiPen since 2009. In August 2017, the actions were consolidated for coordinated pre-trial proceedings in a Multi-District Litigation (In re: EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation, MDL-2785) in the U.S. District Court for the District of Kansas with other EpiPen-related actions against Mylan and/or its affiliates to ~~Kadian,~~ which ~~was owned for a short period by~~Pfizer, King ~~in 2008, prior to Pfizer's acquisition~~and Meridian are not parties.

Nexium 24HR and Protonix

A number of ~~King in 2010.~~

~~A4. Legal Proceedings––Government Investigations~~

~~Like~~individual and multi-plaintiff lawsuits have been filed against Pfizer, certain of its subsidiaries and/or other pharmaceutical ~~companies, we are subject~~manufacturers in various federal and state courts alleging that the plaintiffs developed kidney-related injuries purportedly as a result of the ingestion of certain proton pump inhibitors. The cases against Pfizer involve Protonix and/or Nexium 24HR and seek compensatory and punitive damages and, in some cases, treble damages, restitution or disgorgement. In August 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to ~~extensive regulation by government agencies~~a Multi-District Litigation (In re: Proton-Pump Inhibitor Products Liability Litigation (No. II)) in the U.S.~~, other developed markets and multiple emerging markets~~ District Court for the District of New Jersey. On July 31, 2019, we completed the transaction in which we ~~operate.~~and GSK combined our respective consumer healthcare businesses into a new consumer healthcare joint venture that operates globally under the GSK Consumer Healthcare name. As part of the joint venture transaction, the joint venture has agreed to assume, and to indemnify Pfizer for, liabilities arising out of such litigation to the extent related to Nexium 24HR.

Docetaxel

Personal Injury Actions

In October 2016, the federal cases were transferred for coordinated pre-trial proceedings to a ~~result, we have interactions~~Multi-District Litigation (In re Taxotere (Docetaxel) Products Liability Litigation, MDL-2740) in the U.S. District Court for the Eastern District of Louisiana.

Mississippi Attorney General Government Investigation

In October 2018, the Attorney General of Mississippi filed a complaint in Mississippi state court against the manufacturer of the branded product and 8 other manufacturers including Pfizer and Hospira, alleging, with ~~government agencies on an ongoing basis. Criminal charges,~~respect to Pfizer and ~~substantial fines and/or~~Hospira, a failure to warn about a risk of permanent hair loss in violation of the Mississippi Consumer Protection Act. The action seeks civil penalties as well as limitations on our ability to conduct business in applicable jurisdictions, could result from government investigations. In addition, in a qui tam lawsuit in which the government declines to intervene, the relator may still pursue a suit for the recovery of civil damages and ~~penalties on behalf of the government. Among the investigations by government agencies are the matters discussed below.~~

~~Phenytoin Sodium Capsules~~

In 2012, Pfizer sold the U.K. Marketing Authorisation for phenytoin sodium capsules to a third party, but retained the right to supply the finished product to that third party. In May 2013, the U.K. Competition & Markets Authority (CMA) informed us that it had launched an investigation into the supply of phenytoin sodium capsules in the U.K. market. In August 2015, the CMA issued a Statement of Objections alleging that Pfizer and Pfizer Limited, a U.K. subsidiary, engaged in conduct that violates U.K. and EU antitrust laws. In December 2016, the CMA imposed a £84.2 million fine on Pfizer and Pfizer Limited. Pfizer appealed the CMA decision to The Competition Appeal Tribunal in February 2017. On June 7, 2018, the Competition Appeal Tribunal overturned the CMA decision as well as the associated fine. On June 28, 2018, the CMA sought permission to appeal the Competition Appeal Tribunal’s judgment.

~~Greenstone Investigations~~

Since July 2017, the U.S. Department of Justice’s Antitrust Division has been investigating our Greenstone generics business. We believe this is related to an ongoing antitrust investigation of the generic pharmaceutical industry. The government has been obtaining information from Greenstone. In April 2018, Greenstone received requests for information from the Antitrust Department of the Connecticut Office of the Attorney General. We have been providing information pursuant to these requests.injunctive relief.

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~~Subpoena~~Adalimumab Biosimilars

Beginning in March 2019, purported class actions relating to ~~Manufacturing~~Humira and adalimumab biosimilars were filed in the United States District Court for the Northern District of ~~Quillivant XR~~Illinois against AbbVie Inc. (AbbVie), certain affiliates of AbbVie, and other pharmaceutical manufacturers. Pfizer is a named defendant in three of the actions. The plaintiffs seek to represent nationwide and multi-state classes consisting of persons and/or entities who are indirect purchasers of Humira from January 1, 2017 until the allegedly unlawful antitrust effects cease. Against Pfizer, the plaintiffs generally allege that Pfizer’s and AbbVie’s 2018 licensing agreements, resolving all global intellectual property matters for Pfizer’s proposed adalimumab biosimilar, delayed market entry of Pfizer’s biosimilar product in the U.S. in violation of federal antitrust laws, various state antitrust or consumer protection laws, and unjust enrichment laws. Plaintiffs seek injunctive relief and treble damages for alleged overcharges for Humira since 2017. In August 2019, the plaintiffs filed an amended consolidated complaint that superseded the prior complaints and does not name Pfizer as a defendant. As a result, Pfizer is no longer a party to the case.

Array Securities Litigation

In ~~October 2018, we received a subpoena from~~November 2017, 2 purported class actions were filed in the U.S. ~~Attorney’s Office~~District Court for the ~~Southern~~ District of ~~New York seeking records relating~~Colorado alleging that Array, which we acquired in July 2019 and is our wholly owned subsidiary, and certain of its former officers violated federal securities laws in connection with certain disclosures made, or omitted, by Array regarding the NRAS-mutant melanoma program. In March 2018, the actions were consolidated into a single proceeding.

A3. Legal Proceedings––Commercial and Other Matters

Average Wholesale Price Litigation

Pfizer, certain of its subsidiaries and other pharmaceutical manufacturers were sued in various state courts by a number of states alleging that the defendants provided average wholesale price (AWP) information for certain of their products that was higher than the actual average prices at which those products were sold. The AWP is used to ~~our relationship with another drug manufacturer~~determine reimbursement levels under Medicare Part B and ~~its production~~Medicaid and ~~manufacturing~~in many private-sector insurance policies and medical plans. All but 1 of ~~drugs~~those actions have been resolved through settlement, dismissal or final judgment. The plaintiff state, Illinois,in the 1 remaining action, claims that the alleged spread between the AWPs at which purchasers were reimbursed and the actual sale prices was promoted by the defendants as an incentive to purchase certain of their products. The actionalleges, among other things, fraudand violation of the state’s unfair trade practices andconsumer protection statutes and seeks monetary and other relief, including ~~but~~civil penalties and treble damages. In September 2019, we settled the remaining action on terms not ~~limited~~material to ~~Quillivant XR. We will be producing records pursuant to the subpoena.~~Pfizer. All actions have now been resolved through settlement, dismissal or final judgment.

Intravenous Solutions

~~See~~ ~~Note 12A2. Legal Proceedings~~––~~Product~~Beginning in November 2016, purported class actions were filed in the U.S. District Court for the Northern District of Illinois against Hospira, Hospira Worldwide, Inc. and certain other defendants relating to intravenous saline solution. Plaintiffs seek to represent a class consisting of all persons and entities in the U.S. who directly purchased intravenous saline solution sold by any of the defendants from January 1, 2013 until the time the defendants’ allegedly unlawful conduct ceases. Plaintiffs allege that the defendants’ conduct restricts output and artificially fixes, raises, maintains and/or stabilizes the prices of intravenous saline

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Hormone Therapy Consumer Class Action

EpiPen

Beginning in February 2017, purported class actions were filed in various federal courts by indirect purchasers of EpiPen against Pfizer, and/or its affiliates King and Meridian, and/or various entities affiliated with Mylan, and Mylan Chief Executive Officer, Heather Bresch. The plaintiffs in these actions seek to represent U.S. nationwide classes comprising persons or entities who paid for any portion of the end-user purchase price of an EpiPen between 2009 until the cessation of the defendants’ allegedly unlawful conduct. In August 2017, a similar lawsuit brought in the U.S. District Court for the District of New Jersey on behalf of a purported class of direct purchaser plaintiffs against Pfizer, King, Meridian and Mylan was voluntarily dismissed without prejudice. Against Pfizer and/or its affiliates, plaintiffs generally allege that Pfizer’s and/or its affiliates’ settlement of patent litigation regarding EpiPen delayed market entry of generic EpiPen in violation of federal antitrust laws and various state antitrust or consumer protection laws. At least one lawsuit also alleges that Pfizer and/or Mylan violated the federal Racketeer Influenced and Corrupt Organizations Act. Plaintiffs also filed various consumer protection and unjust enrichment claims against, and relating to conduct attributable solely to, Mylan and/or its affiliates regarding EpiPen. Plaintiffs seek treble damages for alleged overcharges for EpiPen since 2009. In August 2017, the actions were consolidated for coordinated pre-trial proceedings in a Multi-District Litigation––~~Intravenous Solutions~~ ~~above~~ (In re: EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation, MDL-2785) in the U.S. District Court for ~~information regarding government investigations~~the District of Kansas with other EpiPen-related actions against Mylan and/or its affiliates to which Pfizer, King and Meridian are not parties.

Nexium 24HR and Protonix

A number of individual and multi-plaintiff lawsuits have been filed against Pfizer, certain of its subsidiaries and/or other pharmaceutical manufacturers in various federal and state courts alleging that the plaintiffs developed kidney-related injuries purportedly as a result of the ingestion of certain proton pump inhibitors. The cases against Pfizer involve Protonix and/or Nexium 24HR and seek compensatory and punitive damages and, in some cases, treble damages, restitution or disgorgement. In August 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In re: Proton-Pump Inhibitor Products Liability Litigation (No. II)) in the U.S. District Court for the District of New Jersey. On July 31, 2019, we completed the transaction in which we and GSK combined our respective consumer healthcare businesses into a new consumer healthcare joint venture that operates globally under the GSK Consumer Healthcare name. As part of the joint venture transaction, the joint venture has agreed to assume, and to indemnify Pfizer for, liabilities arising out of such litigation to the extent related to ~~sales~~Nexium 24HR.

Docetaxel

Personal Injury Actions

A number of ~~intravenous solution~~lawsuits have been filed against Hospira and Pfizer in various federal and state courts alleging that plaintiffs who were treated with Docetaxel developed permanent hair loss. The significant majority of the cases also name other defendants, including the manufacturer of the branded product, Taxotere. Plaintiffs seek compensatory and punitive damages.

Mississippi Attorney General Government Investigation

In October 2018, the Attorney General of Mississippi filed a complaint in Mississippi state court against the manufacturer of the branded product and 8 other manufacturers including Pfizer and Hospira, alleging, with respect to Pfizer and Hospira, a failure to warn about a risk of permanent hair loss in violation of the Mississippi Consumer Protection Act. The action seeks civil penalties and injunctive relief.

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Adalimumab Biosimilars

Array Securities Litigation

A3. Legal Proceedings––Commercial and Other Matters

Average Wholesale Price Litigation

Pfizer, certain of its subsidiaries and other pharmaceutical manufacturers were sued in various state courts by a number of states alleging that the defendants provided average wholesale price (AWP) information for certain of their products that was higher than the actual average prices at which those products were sold. The AWP is used to determine reimbursement levels under Medicare Part B and Medicaid and in many private-sector insurance policies and medical plans. All but 1 of those actions have been resolved through settlement, dismissal or final judgment. The plaintiff state, Illinois,in the 1 remaining action, claims that the alleged spread between the AWPs at which purchasers were reimbursed and the actual sale prices was promoted by the defendants as an incentive to purchase certain of their products. The actionalleges, among other things, fraudand violation of the state’s unfair trade practices andconsumer protection statutes and seeks monetary and other relief, including civil penalties and treble damages. In September 2019, we settled the remaining action on terms not material to Pfizer. All actions have now been resolved through settlement, dismissal or final judgment.

Monsanto-Related Matters

In 1997, Monsanto Company (Former Monsanto) contributed certain chemical manufacturing operations and facilities to a newly formed corporation, Solutia Inc. (Solutia), and spun off the shares of Solutia. In 2000, Former Monsanto merged with Pharmacia & Upjohn Company to form Pharmacia. Pharmacia then transferred its agricultural operations to a newly created subsidiary, named Monsanto Company (New Monsanto), which it spun off in a two-stage process that was completed in 2002. Pharmacia was acquired by Pfizer in 2003 and is a wholly owned subsidiary of Pfizer.

In connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities related to Pharmacia’s former agricultural business. New Monsanto has defended and/or is defending Pharmacia in connection with various claims and litigation arising out of, or related to, the agricultural business, and has been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.

Environmental Matters

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

study report was approved by the EPA, and we commenced construction of the site remedy in late 2011 under an Updated Administrative Order on Consent with the EPA.

Also, in 2009, we submitted a revised site-wide feasibility study with regard to Wyeth Holdings Corporation’s (formerly, American Cyanamid Company) discontinued industrial chemical facility in Bound Brook, New Jersey. In July 2011, Wyeth Holdings Corporation finalized an Administrative Settlement Agreement with the EPA and Order on Consent for Removal Action (the 2011 Administrative Settlement Agreement) with the EPA with regard to the Bound Brook facility. In May 2012, we completed construction of an interim remedy to address the discharge of impacted groundwater from that facility to the Raritan River. In September 2012, the EPA issued a final remediation plan for the Bound Brook facility’s main plant area, which is generally in accordance with one of the remedies evaluated in our revised site-wide feasibility study. In March 2013, Wyeth Holdings Corporation (now Wyeth Holdings LLC) entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the main plant area and to perform a focused feasibility study for 2 adjacent lagoons. In September 2015, the U.S., on behalf of the EPA, filed a complaint and consent decree with the federal District Court for the District of New Jersey that allows Wyeth Holdings LLC to complete the design and to implement the remedy for the main plant area. In December 2015, the consent decree (which supersedes the 2011 Administrative Settlement Agreement) was entered by the District Court. In September 2018, the EPA issued a final remediation plan for the 2 adjacent lagoons, which is generally in accordance with one of the remedies evaluated in our focused feasibility study, and in September 2019, Wyeth Holdings LLC entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the lagoons. We have accrued for the estimated costs of the site remedies for the North Haven and Bound Brook facilities.

Contracts with Iraqi Ministry of Health

In October 2017, a number of United States service members, civilians, and their families brought a complaint in the U.S. District Court for the District of Columbia against a number of pharmaceutical and medical devices companies, including Pfizer and certain of its subsidiaries, alleging that the defendants violated the United States Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health, and seeks monetary relief. In July 2018, the U.S. Department of Justice requested documents related to this matter, which are being provided.

Allergan Complaint for Indemnity

In August 2018, Pfizer was named as a defendant in a third-party complaint for indemnity, along with King, filed by Allergan Finance LLC (Allergan) in a Multi-District Litigation (In re National Prescription Opiate Litigation MDL 2804) in the U.S. District Court for the Northern District of Ohio. The lawsuit asserted claims for indemnity related to Kadian, which was owned for a short period by King in 2008, prior to Pfizer's acquisition of King in 2010. In December 2018, the District Court dismissed the lawsuit. In February 2019, Allergan filed a similar complaint in the Supreme Court of the State of New York, asserting claims for indemnity related to Kadian.

A4. Legal Proceedings––Government Investigations

Like other pharmaceutical companies, we are subject to extensive regulation by government agencies in the U.S., other developed markets and multiple emerging markets in which we operate. As a result, we have interactions with government agencies on an ongoing basis. Criminal charges, substantial fines and/or civil penalties, limitations on our ability to conduct business in applicable jurisdictions, corporate integrity or deferred prosecution agreements, as well as reputational harm and increased public interest in the matter could result from government investigations in the U.S. and other jurisdictions in which we do business. In addition, in a qui tam lawsuit in which the government declines to intervene, the relator may still pursue a suit for the recovery of civil damages and penalties on behalf of the government. Among the investigations by government agencies are the matters discussed below.

Phenytoin Sodium Capsules

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Appeal Tribunal overturned the CMA decision as well as the associated fine. The CMA appealed the judgment to the Court of Appeal.

Greenstone Investigations

U.S. Department of Justice Antitrust Division Investigation

Since July 2017, the U.S. Department of Justice's Antitrust Division has been investigating our Greenstone generics business. We believe this is related to an ongoing broader antitrust investigation of the generic pharmaceutical industry. The government has been obtaining information from Greenstone.

State Attorneys General Generics Antitrust Litigation

In April 2018, Greenstone received requests for information from the Antitrust Department of the Connecticut Office of the Attorney General. In May 2019, Attorneys General of more than 40 states plus the District of Columbia and Puerto Rico filed a complaint against a number of pharmaceutical companies, including Greenstone and Pfizer. The matter has been consolidated with a Multi-District Litigation (In re: Generic Pharmaceuticals Pricing Antitrust Litigation MDL No. 2724) in the Eastern District of Pennsylvania. As to Greenstone and Pfizer, the complaint alleges anticompetitive conduct in violation of federal and state antitrust laws and state consumer protection laws.

Subpoena relating to Manufacturing of Quillivant XR

In October 2018, we received a subpoena from the U.S. Attorney’s Office for the Southern District of New York (SDNY) seeking records relating to our relationship with another drug manufacturer and its production and manufacturing of drugs including, but not limited to, Quillivant XR. We are producing records pursuant to the subpoena.

Government Inquiries relating to Meridian Medical Technologies

In February 2019, we received a civil investigative demand from the U.S. Attorney’s Office for the SDNY. The civil investigative demand seeks records and information related to alleged quality issues involving the manufacture of auto-injectors at our Meridian site. In August 2019, we received a HIPAA subpoena from the U.S. Attorney’s Office for the Eastern District of Missouri seeking similar records and information. We are producing records in response to these requests.

U.S. Department of Justice/SEC Inquiry relating to Russian Operations

In June 2019, we received an informal request from the U.S. Department of Justice’s FCPA Unit seeking documents relating to our operations in Russia. In September 2019, we received a similar request from the SEC’s FCPA unit. We are producing records pursuant to these requests.

Contracts with Iraqi Ministry of Health

See Note 12A3.Contingencies and Certain Commitments: Legal Proceedings––Commercial and Other Matters––Contracts with Iraqi Ministry of Health above for information regarding U.S. government investigations related to contracts with the Iraqi Ministry of Health.

Docetaxel––Mississippi Attorney General Government Investigation

See Note 12A2. Contingencies and Certain Commitments: Legal Proceedings––Product Litigation––Docetaxel––Mississippi Attorney General Government Investigation above for information regarding a government investigation related to Docetaxel marketing practices.

~~A5. Legal Proceedings--Matters Resolved During the First Nine Months of 2018~~

~~During 2018, certain matters, including the matters discussed below, were resolved or were the subject of definitive settlement agreements or settlement agreements-in-principle.~~

~~Celebrex~~

Beginning in July 2014, purported class actions were filed in the U.S. District Court for the Eastern District of Virginia against Pfizer and certain subsidiaries of Pfizer relating to Celebrex. The plaintiffs sought to represent U.S. nationwide or multi-state classes consisting of persons or entities who directly purchased from the defendants, or indirectly purchased or reimbursed patients for some or all of the purchase price of, Celebrex or generic Celebrex from May 31, 2014 until the cessation of the defendants’ allegedly unlawful conduct. The plaintiffs alleged delay in the launch of generic Celebrex in violation of federal antitrust laws or certain state antitrust, consumer protection and various other laws as a result of Pfizer fraudulently obtaining and improperly listing a patent on Celebrex, engaging in sham litigation and prolonging the impact of sham litigation through settlement activity that further delayed generic entry. Each of the actions sought treble damages on behalf of the putative class for alleged price overcharges for Celebrex since May 31, 2014. In December 2014, the District Court granted the parties’ joint motions to consolidate the direct purchaser and end-payer cases, and all such cases were consolidated as of March 2015. In October 2014 and March 2015, we filed motions to dismiss the direct purchasers’ and end-payers’ amended complaints, respectively. In November 2015, the District Court denied in part and granted in part our motion to dismiss the direct purchasers’ amended complaint. In February 2016, the District Court denied in part and granted in part our motion to dismiss the end-payers’ amended complaint, and in August 2016, the District Court dismissed substantially all of the end-payers’ remaining claims. In February 2017, the District Court dismissed with prejudice all of the end-payers’ claims. In March 2017, the end-payers appealed the District Court’s order dismissing their claims with prejudice to the U.S. Court of Appeals for the Fourth Circuit. In August 2017, the District Court granted the direct purchasers’ motion for class certification. In November 2017, Pfizer and the direct purchasers entered into an agreement to resolve the direct purchasers’ class action for $94 million. In April 2018, the court approved the agreement. In November 2017, Pfizer and the end-payers entered into an agreement to resolve the claims of the end-payer plaintiffs on terms not material to Pfizer.

~~Subpoenas relating to Copayment Assistance Organizations~~

In December 2015 and July 2016, Pfizer received subpoenas from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to the Patient Access Network Foundation and other 501(c)(3) organizations that provide financial assistance to Medicare patients. In May 2018, Pfizer entered into a civil settlement to resolve the matter. Pfizer paid $23.85 million to the United States, and entered into a five-year Corporate Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services.

~~Civil Investigative Demand relating to Pharmacy Benefit Managers~~

In March 2016, Pfizer received a Civil Investigative Demand from the U.S. Attorney’s Office for the Southern District of New York (SDNY) related to Pfizer’s contractual relationships with pharmacy benefit managers with respect to certain pharmaceutical products over the period from January 1, 2006 to the present. We have provided information to the government in response to this Civil Investigative Demand. In July 2018, Pfizer was served with a qui tam complaint that appears to be related to the SDNY investigation. The complaint was unsealed following the government’s decision not to intervene in the case.

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

B. Guarantees and Indemnifications

In the ordinary course of business and in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities prior to or following a transaction. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we may be required to reimburse the loss. These indemnifications are generally subject to various restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of September ~~30, 2018,~~29, 2019, the estimated fair value of these indemnification obligations was not significant.

In addition, in connection with our entry into certain agreements, our counterparties agree to indemnify us. For example, our collaboration agreement with EMD Serono, Inc. to co-promote Rebif in the U.S. expired at the end of 2015 and included certain indemnity provisions. Patent litigation brought by Biogen Idec MA Inc. against EMD Serono Inc. and Pfizer is pending in the U.S. District Court for the District of New Jersey and the United States Court of Appeals for the Federal Circuit. EMD Serono Inc. has acknowledged that it is obligated to satisfy any award of damages.

Pfizer Inc. has also guaranteed the long-term debt of certain companies that it acquired and that now are subsidiaries of Pfizer.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

C. Certain Commitments

~~Accelerated share repurchase agreement~~––On ~~March 12, 2018,~~February 7, 2019, we entered into an accelerated share repurchase agreement with ~~Citibank~~GS&Co. to repurchase ~~$4.0~~approximately $6.8 billion of our common stock. Pursuant to the terms of the agreement, on ~~March 14, 2018,~~February 12, 2019, we paid ~~$4.0~~approximately $6.8 billion to ~~Citibank~~GS&Co. and received an initial delivery of approximately 87130 million shares of our common stock from ~~Citibank at a price of $36.61 per share,~~GS&Co., which represented, based on the closing price of our common stock on the NYSE on ~~March 12, 2018,~~February 7, 2019, approximately 80% of the notional amount of the accelerated share repurchase agreement. On ~~September 5, 2018,~~August 1, 2019, the accelerated share repurchase agreement with ~~Citibank~~GS&Co. was completed, which, per the terms of the agreement, resulted in ~~Citibank~~GS&Co. owing us a certain number of shares of Pfizer common stock. Pursuant to the agreement’s settlement terms, we received an additional 2133.5 million shares of our common stock from ~~Citibank~~GS&Co. on ~~September 7, 2018.~~August 5, 2019. The average price paid for all of the shares delivered under the accelerated share repurchase agreement was ~~$36.86~~$41.42 per share. The common stock received is included in Treasury ~~stock~~.stock. This agreement was entered into pursuant to our previously announced share repurchase authorization. After giving effect to the accelerated share repurchase agreement ~~as well as~~and other share repurchases through September ~~30, 2018~~,29, 2019, our remaining share-purchase authorization was approximately ~~$9.2~~$5.3 billion at on September ~~30, 2018~~.

~~Corporate headquarters lease agreement~~––In April 2018, we entered an agreement to lease space in an office building in the Hudson Yards neighborhood of New York City. We will relocate our global headquarters to this property with occupancy expected beginning in 2022. Our future minimum rental commitment under this 20-year lease is approximately $1.7 billion. In July 2018, we completed the sale of our current headquarters at 219 and 235 East 42nd Street. We also agreed to lease these properties from the buyer while we complete our relocation.

29, 2019.

Note 13.Segment, Geographic and Other Revenue Information

A. Segment Information

WeAt the beginning of our 2019 fiscal year, we began to manage our commercial operations through ~~two~~a new global structure consisting of 3 distinct business segments: Pfizer ~~Innovative Health (IH)~~Biopharmaceuticals Group (Biopharma), Upjohn and ~~Pfizer Essential Health (EH). The IH and EH segments are~~through July 31, 2019, Pfizer’s Consumer Healthcare business (Consumer Healthcare), each led by a single manager. Each operating segment has responsibility for its commercial activities. Upjohn and Consumer Healthcare are responsible for their own R&D activities while Biopharma receives its R&D services from GPD and ~~for certain~~WRDM. These services include IPR&D projects for new investigational products and additional indications for in-line ~~products that generally have achieved proof-of-concept.~~products. Each business has a geographic footprint across developed and emerging markets. Our chief operating decision maker uses the revenues and earnings of the ~~two~~ operating segments, among other factors, for performance evaluation and resource allocation.

Biopharma and Upjohn are the only reportable segments. We ~~regularly review~~have revised prior-period information (Revenues and Earnings, as defined by management) to conform to the current management structure. As our ~~segments and~~operations were not managed under the ~~approach used by management for performance evaluation and resource allocation. In July 2018, we announced that we will reorganize our commercial operations effective at~~new structure until the beginning of ~~our~~fiscal 2019, ~~fiscal year. We will organize the company into three businesses: a science-based Innovative Medicines business, which will include all~~certain costs and expenses could not be directly attributed to one of the ~~current Pfizer Innovative Health medicines and vaccines business units as well as biosimilars and~~then new operating segments. As a new hospital business unit for anti-infectives and sterile injectables; an off-patent branded and generic Established Medicines business operating with substantial autonomy within Pfizer; and a Consumer Healthcare business. We are currently evaluating the impact toresult, our operating ~~segments~~segment results for the third quarter and ~~other costs and activities based on how the businesses will be managed in 2019.~~

first nine months of 2018 include allocations, which management believes are reasonable. As described in Note 1Aand Note 2B, acquisitions and the ~~February 3, 2017 sale~~contribution of ~~HIS~~our Consumer Healthcare business to the GSK Consumer Healthcare joint venture have impacted our results of operations in ~~2017.~~2019.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Operating Segments



Some additional information about our Biopharma and Upjohn business segments ~~as of September 30, 2018~~ follows:
	Pfizer Biopharmaceuticals Group
~~IH focuses on developing~~Biopharma is a science-based innovative medicines business that includes six business units – Oncology, Inflammation & Immunology, Rare Disease, Hospital, Vaccines and ~~commercializing novel, value-creating~~Internal Medicine. The new Hospital unit commercializes our global portfolio of sterile injectable and anti-infective medicines and ~~vaccines~~includes Pfizer’s contract manufacturing operation, Pfizer CentreOne. At the beginning of our 2019 fiscal year, we also incorporated our biosimilar portfolio into our Oncology and Inflammation & Immunology business units and certain legacy established products into the Internal Medicine business unit. Each business unit is committed to delivering breakthroughs that ~~significantly improve~~change patients’ ~~lives,~~lives.		Upjohn is a global, primarily off-patent branded and generic medicines business, which includes a portfolio of 20 globally recognized solid oral dose brands, as well as ~~products for consumer healthcare.~~ ~~Key therapeutic areas include internal medicine, vaccines, oncology, inflammation & immunology, rare disease and consumer healthcare.~~	EH includes legacy brands that have lost or will soon lose market exclusivity in both developed and emerging markets, branded and generic sterile injectable products, biosimilars, and select branded products including anti-infectives. EH also includes an R&D organization, as well as our contract manufacturing business. ~~Through February 2, 2017, EH also included HIS.~~ a U.S.-based generics platform, Greenstone.
~~Leading brands~~Select products include: - Prevnar 13/Prevenar 13 - ~~Xeljanz~~ Ibrance - Eliquis - ~~Lyrica~~ ~~(U.S., Japan and certain other markets)~~ Xeljanz - Enbrel (outside the U.S. and Canada) - ~~Ibrance~~ Chantix/Champix - ~~Xtandi~~ Sutent - ~~Several OTC consumer healthcare products (e.g.,~~ ~~Advil~~ ~~and~~ ~~Centrum~~)Xtandi		~~Leading brands~~Select products include: - Lyrica - Lipitor - Norvasc - ~~Norvasc~~ ~~- Lyrica~~ ~~(Europe, Russia, Turkey, Israel and Central Asia countries)~~ - Celebrex - Viagra*Viagra - ~~Inflectra/Remsima~~ - ~~Sulperazon~~ - ~~Several other sterile injectable products~~Certain generic medicines


*	Viagra lost exclusivity in the U.S. in December 2017. Beginning in 2018, revenues for Viagra in the U.S. and Canada, which were reported in IH through 2017, are reported in EH (which reported all other Viagra revenues excluding the U.S. and Canada through 2017). Therefore, beginning in 2018, total Viagra worldwide revenues are reported in EH.

~~The following organizational change impacted our operating segments in 2018:~~On July 29, 2019, we announced that we entered into a definitive agreement to combine Upjohn with Mylan, creating a new global pharmaceutical company. For additional information, see Note 1A.

~~Effective in the first quarter of 2018, certain costs~~On July 31, 2019, Pfizer’s Consumer Healthcare business, an over-the-counter medicines business, was combined with GSK’s consumer healthcare business to form a new consumer healthcare joint venture. See Note 1A and Note 2B for Pfizer’s StratCO group, which were previously reported in the operating results of our operating segments and Corporate, are reported in Other Unallocated. StratCO costs primarily include headcount costs, vendor costs and data costs largely in support of Pfizer’s commercial operations. The majority of the StratCO costs reflect additional amounts that our operating segments would have incurred had each segment operated as a standalone company during the periods presented. The reporting change was made to streamline accountability and speed decision making. In the third quarter of 2017, we reclassified approximately $125 million of costs from IH, approximately $36 million of costs from EH and approximately $19 million of costs from Corporate to Other unallocated costs to conform to the current period presentation. In the first nine months of 2017, we reclassified approximately $344 million of costs from IH, approximately $114 million of costs from EH and approximately $40 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.information.

Other Costs and Business Activities

Certain pre-tax costs are not allocated to our operating segment results, such as costs associated with the following:

~~WRD,~~WRDM––the R&D and Medical expenses managed by our WRDM organization, which is generally responsible for research projects for our ~~IH business~~Biopharma portfolio until proof-of-concept is achieved and then for transitioning those projects to ~~the IH segment via~~ the GPD organization for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. The ~~WRD~~WRDM organization also has responsibility for certain science-based and other platform-services organizations, which provide end-to-end technical expertise and other services to the various R&D projects, as well as the Worldwide Medical and Safety group, which ensures that Pfizer provides all stakeholders––including ~~EH R&D projects. WRD is also responsible for facilitating all regulatory submissions~~patients, healthcare providers, pharmacists, payers and ~~interactions~~ health authorities––with ~~regulatory agencies, including all safety-event activities.~~complete and up-to-date information on the risks and benefits associated with Pfizer products so that they can make appropriate decisions on how and when to use Pfizer’s medicines.

GPD––the costs associated with our GPD organization, which is generally responsible for ~~the clinical development of assets that are in~~ clinical trials ~~for our WRD and Innovative portfolios.~~from WRDM in the Biopharma portfolio, including late stage portfolio spend. GPD also provides technical support and other services to Pfizer R&D projects. GPD is responsible for facilitating all regulatory submissions and interactions with regulatory agencies.

Other––the operating results of our Consumer Healthcare business, through July 31, 2019, and costs associated with other commercial activities not managed as part of Biopharma or Upjohn, including all strategy, business development, portfolio management and valuation capabilities, which previously had been reported in various parts of the organization.

Corporate ~~representing~~and Other Unallocated––the costs associated with platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance, and worldwide procurement), ~~the provision of medical information to healthcare providers, patients~~patient advocacy activities and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality improvement and medical education, and partnerships with global public health and medical associations, as well as certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments. Effective in the first quarter of 2018, certain costs for StratCO, which were previously reported in the operating results of our operating segments and Corporate, are reported in Other Unallocated. For additional information, see note below on Other unallocated costs.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~Other unallocated costs, representing~~gains and losses on investments, as well as overhead expenses associated with our manufacturing (which include manufacturing variances associated with production) and commercial operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs (which include manufacturing variances associated with production). In connection with the StratCO reporting change, in the third quarter of 2017, we reclassified approximately $125 million of costs from IH, approximately $36 million of costs from EH and approximately $19 million of costs from Corporate to Other unallocated costs to conform to the current period presentation. In the first nine months of 2017, we reclassified approximately $344 million of costs from IH, approximately $114 million of costs from EH and approximately $40 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.costs.

Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and PP&E; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items (such as gains on the completion of joint venture transactions, restructuring charges, legal charges or ~~legal charges)~~net gains and losses on investments in equity securities) that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

Segment Assets

We manage our assets on a total company basis, not by operating segment, as many of our operating assets are shared ~~(such as our plant network assets)~~ or commingled (such as accounts receivable, as many of our customers are served by ~~both~~multiple operating segments). Therefore, our chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Total assets were approximately ~~$168~~$170 billion as of September ~~30, 2018~~29, 2019 and ~~$172~~$159 billion as of December 31, ~~2017~~2018.

Selected Income Statement Information

As described in Note 1A and Note 2B, acquisitions and the contribution of our Consumer Healthcare business to the GSK Consumer Healthcare joint venture have impacted our results of operations in 2019.

The following table provides selected income statement information by reportable segment:
Three Months Ended
Revenues
Earnings^(a)
(MILLIONS OF DOLLARS) September 30,
2018
October 1,
2017
September 30,
2018
October 1,
2017
Reportable Segments:
IH^(b)
$ 8,471
$ 8,118
$ 5,388
$ 5,000
EH^(b)
4,826
5,050
2,527
2,801
Total reportable segments 13,298
13,168
7,915
7,801
Other business activities^{(c), (d)}
—
—
(736 ) (759 )
Reconciling Items:

Corporate^{(b), (d)}
—
—
(1,337 ) (1,363 )
Purchase accounting adjustments^(d)
—
—
(1,309 ) (1,154 )
Acquisition-related costs^(d)
—
—
(112 ) (155 )
Certain significant items^(e)
—
—
213
(449 )
Other unallocated^{(b), (d)}
—
—
(457 ) (335 )
$ 13,298
$ 13,168

$ 4,177
$ 3,585

Nine Months Ended
Revenues
Earnings^(a)
(MILLIONS OF DOLLARS) September 30,
2018
October 1,
2017
September 30,
2018
October 1,
2017
Reportable Segments:
IH^(b)
$ 24,573
$ 23,204
$ 15,419
$ 14,534
EH^(b)
15,097
15,639
8,133
8,672
Total reportable segments 39,670
38,843
23,552
23,206
Other business activities^{(c), (d)}
—
—
(2,130 ) (2,205 )
Reconciling Items:
Corporate^{(b), (d)}
—
—
(3,633 ) (3,908 )
Purchase accounting adjustments^(d)
—
—
(3,665 ) (3,527 )
Acquisition-related costs^(d)
—
—
(221 ) (347 )
Certain significant items^(e)
—
—
(8 ) (797 )
Other unallocated^{(b), (d)}
—
—
(1,064 ) (1,070 )
$ 39,670
$ 38,843
$ 12,831
$ 11,351

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~



The following table provides selected income statement information by reportable segment:
	Three Months Ended
	Revenues				Earnings^(a)
(MILLIONS OF DOLLARS)	September 29, 2019		September 30, 2018		September 29, 2019			September 30, 2018
Reportable Segments:
Biopharma	$	10,108	$	9,422	$	6,503		$	6,206
Upjohn	2,195		3,036		1,353			2,051
Total reportable segments	12,303		12,458		7,856			8,257
Other business activities	—		—		(1,443		)	(1,298		)
Reconciling Items:
Corporate and other unallocated	377		839		(1,431		)	(1,658		)
Purchase accounting adjustments	—		—		(1,141		)	(1,309		)
Acquisition-related costs	—		—		(300		)	(112		)
Certain significant items^(b)	—		—		7,187			298
	$	12,680	$	13,298	$	10,727		$	4,177

	Nine Months Ended
	Revenues				Earnings^(a)
(MILLIONS OF DOLLARS)	September 29, 2019		September 30, 2018		September 29, 2019			September 30, 2018
Reportable Segments:
Biopharma	$	28,887	$	27,737	$	18,484		$	17,987
Upjohn	8,077		9,302		5,577			6,442
Total reportable segments	36,964		37,040		24,062			24,428
Other business activities	—		—		(3,750		)	(3,605		)
Reconciling Items:
Corporate and other unallocated	2,098		2,631		(4,108		)	(4,558		)
Purchase accounting adjustments	—		—		(3,357		)	(3,665		)
Acquisition-related costs	—		—		(152		)	(221		)
Certain significant items^(b)	—		—		6,495			452
	$	39,062	$	39,670	$	19,190		$	12,831

^(a)

Income from continuing operations before provision for taxes on ~~income. IH’s~~income. Biopharma’s earnings include dividend income of ~~$91 million and $54~~$43 million in the third quarter of ~~2018~~2019 and ~~2017~~$91 million in the third quarter of 2018, ~~respectively,~~ and ~~$226 million and $211~~$184 million in the first nine months of ~~2018~~2019 and ~~2017, respectively,~~$226 million in the first nine months of 2018 from our investment in ViiV. For additional information, see Note 4.

^(b)

In connection with the StratCO reporting change, in the third quarter of 2017, we reclassified approximately $125 million of costs from IH, approximately $36 million of costs from EH and approximately $19 million of costs from Corporate to Other unallocated costs to conform to the current period presentation. In the first nine months of 2017, we reclassified approximately $344 million of costs from IH, approximately $114 million of costs from EH and approximately $40 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.


^(c)	~~Other business activities includes the costs managed by our WRD and GPD organizations.~~


^(d)	~~For a description, see the “Other Costs and Business Activities” section above.~~


^(e)	Certain significant items are substantive and/or unusual, and in some cases recurring, items ~~(such as restructuring or legal charges)~~(as noted above) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

For Earnings in the third quarter of ~~2018~~2019, certain significant items includes: (i) restructuring ~~credits~~charges and implementation costs associated with our cost-reduction ~~initiatives~~initiatives that are not associated with an acquisition of ~~$35~~$110 million, (ii) ~~net~~ charges for certain legal matters of ~~$37~~$63 million,, (iii) ~~income~~charges for business and legal entity alignment of $2$89 million, ~~representing an adjustment to amounts previously recorded to write down~~(iv) net gains recognized during the ~~HIS net assets to fair value less costs to sell~~period on investments in equity securities of $3 million, (v) a pre-tax gain associated with the completion of the GSK Consumer Healthcare joint venture transaction of $8.1 billion and ~~(iv)~~(vi) other ~~income~~charges of ~~$282~~$641 million, which includes, among other things, a ~~non-cash $343~~$337 million ~~pre-tax gain~~charge in ~~Other (income)/deductions––net~~ Research and development expenses related to our acquisition of Therachon, a $127 million charge for rivipansel in Cost of sales, primarily for inventory manufactured for expected future sale and charges of $161 million for external incremental costs, such as transaction costs and costs to separate our Consumer Healthcare business into a separate legal entity associated with our transaction with Bain Capital to create a new biopharmaceutical company, Cerevel, to continue development of a portfolio of clinical and preclinical stage neuroscience assets primarily targeting disordersthe formation of the ~~central nervous system.~~GSK Consumer Healthcare joint venture. For additional information, see Note 1A, Note 2B, Note 3 and Note 4.

For Earnings in the third quarter of ~~2017~~2018, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of ~~$55~~$35 million, (ii) net charges for certain legal matters of $37 million, (iii) charges for business and legal entity alignment of $1 million, (iv) net gains recognized during the period on investments in equity securities of $85 million and (v) other income of $286 million, which includes, among other things, a non-cash $343 million pre-tax gain in Other (income)/deductions––net associated with our transaction with Bain Capital to create a new biopharmaceutical company, Cerevel, to continue development of a portfolio of clinical and pre-clinical stage neuroscience assets primarily targeting disorders of the central nervous system. For additional information, see Note 3 and Note 4.

For Earnings in the first nine months of 2019, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $280 million, (ii) charges for certain legal matters of ~~$183~~$72 million, (iii) ~~income of $12 million, representing an adjustment to amounts previously recorded to write down the HIS net assets to fair value less costs to sell, (iv)~~ certain asset impairment charges of ~~$127~~$149 million, ~~(v)~~(iv) charges for business and legal entity alignment of ~~$16~~$353 million, (v) net gains recognized during the period on investments in equity securities of $139 million, (vi) a pre-tax gain associated with the completion of the GSK Consumer Healthcare joint venture transaction of $8.1 billion, (vii) net losses on early retirement of debt of $138 million and ~~(vi)~~(viii) other charges of ~~$81~~$738 million, which includes, among other things, ~~$55~~a $337 million charge in ~~inventory losses, overhead costs~~ Research and development expenses related to ~~the period~~our acquisition of Therachon, a $127 million chargefor rivipansel in ~~which our Puerto Rico plants were not operational, and incremental costs, all of which resulted from hurricanes in Puerto Rico and are included in~~ Cost of sales., primarily for inventory manufactured for expected future sale and charges of $223 million for external incremental costs, such as transaction costs and costs to separate our Consumer Healthcare business into a separate legal entity associated with the formation of the GSK Consumer Healthcare joint venture. For additional information, see Note 1A, Note 2B,, Note 3 andNote 4.4.

For Earnings in the first nine months of 2018, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $127 million, (ii) net credits for certain legal matters of $70 million, (iii) ~~income of $1 million, representing an adjustment to amounts previously recorded to write down the HIS net assets to fair value less costs to sell, (iv)~~ certain asset impairment charges of $31 million, ~~(v)~~(iv) charges for business and legal entity alignment of $4$5 million, (v) net gains recognized during the period on investments in equity securities of $460 million, (vi) net losses on early retirement of debt of $3 million and ~~(vi)~~(vii) other income of ~~$84~~$89 million, which includes, among other things, a non-cash $343 million pre-tax gain in Other (income)/deductions––net associated with our transaction with Bain Capital to create a new biopharmaceutical company, Cerevel, to continue development of a portfolio of clinical and ~~preclinical~~pre-clinical stage neuroscience assets primarily targeting disorders of the central nervous system, a $119 million charge, in the aggregate, in Selling, ~~information~~informational and administrative expenses, for a special, one-time bonus paid to virtually all Pfizer colleagues, excluding executives, which was one of several actions taken by us after evaluating the expected positive net impact of the December 2017 enactment of the TCJA, ~~on us,~~ and a non-cash $50 million pre-tax gain in Other (income)/deductions––netas a result of the contribution of our allogeneic ~~chimeric antigen receptor~~CAR T cell therapy development program assets in connection with our contribution agreement entered into with Allogene. For additional information, see ~~Note 2B~~, Note 3 and Note 4.

~~For Earnings in the first nine months of~~ ~~2017~~, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $133 million, (ii) charges for certain legal matters of $191 million, (iii) charges of $52 million, representing adjustments to amounts previously recorded to write-down the HIS net assets to fair value less costs to sell, (iv) certain asset impairment charges of $127 million, (v) charges for business and legal entity alignment of $54 million and (v) other charges of $239 million, which include, among other things, $55 million in inventory losses, overhead costs related to the period in which our Puerto Rico plants were not operational, and incremental costs, all of which resulted from hurricanes in Puerto Rico and are included in ~~Cost of sales~~, and a net loss of $30 million related to the sale of our 40% ownership investment in Teuto, including the extinguishment of a put option for the then remaining 60% ownership interest, which is included in ~~Other (income)/deductions––net. For additional information, see~~ ~~Note 2B~~, ~~Note 3~~ ~~and~~ ~~Note 4~~.

Equity in the net income of investees accounted for by the equity method is not significant for any of our operating segments.

The operating segment information does not purport to represent the revenues, costs and income from continuing operations before provision for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented.

B. Geographic Information

As described in Note 1Aand Note 2B, acquisitions and the ~~February 3, 2017 sale~~contribution of ~~HIS~~our Consumer Healthcare business to the GSK Consumer Healthcare joint venture have impacted our results of operations in ~~2017.~~

2019.

																									The following table provides revenues by geographic area:
	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
(MILLIONS OF DOLLARS)	September 30, 2018		October 1, 2017		% Change		September 30, 2018		October 1, 2017		% Change		September 29, 2019		September 30, 2018		% Change		September 29, 2019		September 30, 2018		% Change
U.S.	$	6,361	$	6,534	(3	)	$	18,861	$	19,516	(3	)	$	5,850	$	6,361	(8	)	$	18,360	$	18,861	(3	)
Developed Europe^(a)	2,231		2,163		3		6,657		6,309		6		2,135		2,231		(4	)	6,450		6,657		(3	)
Developed Rest of World^(b)	1,640		1,632		1		4,795		4,797		—		1,585		1,640		(3	)	4,758		4,795		(1	)
Emerging Markets^(c)	3,066		2,839		8		9,358		8,222		14		3,110		3,066		1		9,493		9,358		1
Revenues	$	13,298	$	13,168	1		$	39,670	$	38,843	2		$	12,680	$	13,298	(5	)	$	39,062	$	39,670	(2	)

Product Developments—Biopharmaceutical

We continue to invest in R&D to provide potential future sources of revenues through the development of new products, as well as through additional uses for in-line and alliance products. Notwithstanding our efforts, there are no assurances as to when, or if, we will receive regulatory approval for additional indications for existing products or any of our other products in development.

We continue to strengthen our global R&D organization and pursue strategies intended to improve innovation and overall productivity in R&D to achieve a sustainable pipeline that will deliver value in the near term and over time.

For additional information about our R&D organization, see the “Overview of Our Performance, Operating Environment, Strategy and Outlook—Our Strategy—Organizing for Growth” and “—Description of Research and Development Operations” sections of this MD&A.

A comprehensive update of Pfizer’s development pipeline was published as of October ~~30, 2018~~29, 2019 and is available at www.pfizer.com/science/drug-product-pipeline. It includes an overview of our research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.

The following series of tables provides information about significant regulatory actions by, and filings pending with, the FDA and regulatory authorities in the EU and Japan, as well as additional indications and new drug candidates in late-stage development.



RECENT FDA APPROVALS
PRODUCT	INDICATION	DATE APPROVED
Ruxience™ (rituximab-pvvr)^(a)	A biosimilar to Rituxan^® (rituximab) for the treatment of adult patients with non-Hodgkin’s lymphoma, chronic lymphocytic leukemia, and granulomatosis with polyangiitis and microscopic polyangiitis	July 2019
Zirabev (bevacizumab-bvzr)^(b)	A biosimilar to Avastin^® (bevacizumab) for the treatment of mCRC; unresectable, locally advanced, recurrent or metastatic NSCLC; recurrent glioblastoma; metastatic RCC; and persistent, recurrent or metastatic cervical cancer	June 2019
Bavencio (avelumab)	Bavencio (avelumab) in combination with Inlyta (axitinib) for the first-line treatment of patients with advanced RCC, which is being developed in collaboration with Merck KGaA, Germany	May 2019
Vyndaqel (tafamidis meglumine)	Treatment of the cardiomyopathy of wild-type or hereditary transthyretin-mediated amyloidosis (ATTR-CM) in adults to reduce cardiovascular mortality and cardiovascular-related hospitalization	May 2019
Vyndamax (tafamidis)	Treatment of the cardiomyopathy of wild-type or hereditary ATTR-CM in adults to reduce cardiovascular mortality and cardiovascular-related hospitalization	May 2019
Trazimera (trastuzumab-qyyp)^(c)	A biosimilar to Herceptin^® (trastuzumab) for all eligible indications of the reference product	March 2019
Daurismo (glasdegib)	Treatment of newly-diagnosed acute myeloid leukemia in adult patients who are 75 years or older or who have comorbidities that preclude use of intensive induction chemotherapy	November 2018
Lorbrena (lorlatinib)	Treatment of patients with ALK-positive metastatic NSCLC whose disease has progressed on crizotinib and at least one other ALK inhibitor for metastatic disease; or whose disease has progressed on alectinib or ceritinib as the first ALK inhibitor therapy for metastatic disease	November 2018
~~Talzenna (talazoparib)~~	~~Treatment of adult patients with deleterious or suspected deleterious germline BRCA-mutated (gBRCAm) human epidermal growth factor receptor 2 (HER2)-negative locally advanced or metastatic breast cancer~~	~~October 2018~~
~~Vizimpro (dacomitinib)~~	First-line treatment of patients with metastatic non-small cell lung cancer with epidermal growth factor receptor exon 19 deletion or exon 21 L858R substitution mutations as detected by an FDA-approved test, which is being developed in collaboration with SFJ	~~September 2018~~
~~Nivestym (filgrastim-aafi)~~^(a)	~~A biosimilar to Neupogen® (filgrastim) for all eligible indications of the reference product~~	~~July 2018~~
~~Xtandi (enzalutamide)~~	~~Treatment of men with non-metastatic castration-resistant prostate cancer, which is being developed through a collaboration with Astellas~~	~~July 2018~~
~~Xeljanz (tofacitinib)~~	~~Treatment of adult patients with moderately to severely active ulcerative colitis~~	~~May 2018~~
~~Retacrit (epoetin alfa-epbx)~~^(b)	~~A biosimilar to Epogen® and Procrit® (epoetin alfa) for all indications of the reference product~~	~~May 2018~~
~~Steglatro (ertugliflozin)~~	~~An adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus, which is being developed in collaboration with Merck~~	~~December 2017~~
~~Segluromet (ertugliflozin and metformin)~~	An adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus who are not adequately controlled on a regimen containing ertugliflozin or metformin, or in patients who are already treated with both ertugliflozin and metformin, which is being developed in collaboration with Merck	~~December 2017~~
~~Steglujan (ertugliflozin and sitagliptin)~~	An adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus when treatment with both ertugliflozin and sitagliptin is appropriate, which is being developed in collaboration with Merck	~~December 2017~~
~~Bosulif (bosutinib)~~	~~Treatment of adult patients with newly-diagnosed chronic phase Philadelphia chromosome-positive Ph+ CML, which is being developed in collaboration with Avillion~~	~~December 2017~~
~~Xeljanz (tofacitinib) and Xeljanz XR~~	Xeljanz 5 mg twice daily and Xeljanz XR extended release 11 mg once daily for the treatment of adult patients with active psoriatic arthritis who have had an inadequate response or intolerance to methotrexate or other disease-modifying antirheumatic drugs	~~December 2017~~
~~Sutent (sunitinib)~~	~~Adjuvant treatment in adult patients at high risk of recurrent renal cell carcinoma following nephrectomy (surgical removal of the cancerous kidney)~~	~~November 2017~~


^(a)	~~Neupogen®~~ Rituxan^® is a registered trademark of ~~Amgen~~Biogen MA Inc.


^(b)	~~Epogen®~~ Avastin^® is a registered ~~U.S.~~ trademark of ~~Amgen~~Genentech, Inc.~~; Procrit®~~


^(c)	Herceptin^® is a registered ~~U.S.~~ trademark of ~~J&J.~~Genentech, Inc.



PENDING U.S. NDAs AND SUPPLEMENTAL FILINGS
PRODUCT	PROPOSED INDICATION	DATE FILED*
Xtandi (enzalutamide)	Treatment of metastatic hormone-sensitive prostate cancer, which is being developed through a collaboration with Astellas	August 2019
~~PF-05280586~~PF-06881894^(a)	A potential biosimilar to ~~Rituxan® (rituximab)~~Neulasta^®(pegfilgrastim)	~~September 2018~~August 2019
~~PF-06439535~~PF-06410293^(b)	A potential biosimilar to ~~Avastin® (bevacizumab)~~Humira^® (adalimumab)	~~August 2018~~
~~glasdegib~~	~~Treatment of adult patients with previously untreated acute myeloid leukemia in combination with low-dose cytarabine, a type of chemotherapy~~	~~June 2018~~January 2019
~~PF-05280014~~Vyndaqel (tafamidis meglumine)^(c)	~~A potential biosimilar to Herceptin® (trastuzumab)~~	~~August 2017~~
~~tafamidis meglumine~~^(d)	Treatment of transthyretin familial amyloid polyneuropathy	February 2012


*	The dates set forth in this column are the dates on which the FDA accepted our submissions.


^(a)	~~Rituxan~~Neulasta^®is a registered U.S. trademark of ~~Biogen MA~~Amgen Inc.


^(b)	~~Avastin~~Humira^® is a registered trademark of ~~Genentech, Inc.~~AbbVie Biotechnology Ltd.

^(c)

~~Herceptin~~^® is a registered trademark of Genentech, Inc. In April 2018, we received a “complete response” letter from the FDA with respect to our biologics license application (BLA) for PF-05280014, our proposed biosimilar to trastuzumab, which was submitted for all indications of the reference product. The FDA highlighted the need for additional technical information, which does not relate to safety or clinical data submitted in the application. In October 2018, the FDA acknowledged for review our BLA resubmission.

^(d)

In May 2012, the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee voted that the tafamidis meglumine data provide substantial evidence of efficacy for a surrogate endpoint that is reasonably likely to predict a clinical benefit. In June 2012, the FDA issued a “complete response” letter with respect to ~~the~~this tafamidis NDA. The FDA has requested the completion of a second efficacy study, and also has asked for additional information on the data within the current tafamidis NDA. Pfizer has completed study B3461028, a global Phase 3 study to support ~~a potential~~the new indication inof transthyretin amyloid cardiomyopathy, which includes patients with wild type and variant transthyretin. ~~This study has achieved its primary endpoint, and we~~We are working with the FDA to identify next steps.



REGULATORY APPROVALS AND FILINGS IN THE EU AND JAPAN
PRODUCT	DESCRIPTION OF EVENT	DATE APPROVED	DATE FILED*
~~Vyndaqel (tafamidis meglumine)~~Braftovi (encorafenib) and Mektovi (binimetinib)	Application filed in ~~Japan~~the EU for second-or-third-line treatment of ~~transthyretin amyloid cardiomyopathy (ATTR-CM)~~BRAF-mutant mCRC, which is being developed in collaboration with the Pierre Fabre Group	—	November ~~2018~~2019
~~Xtandi (enzalutamide)~~Bavencio (avelumab)	Application approved in the EU for Bavencio (avelumab) in combination with Inlyta (axitinib) for the first-line treatment of ~~adult men~~advanced RCC, which is being developed in collaboration with ~~high-risk non-metastatic castration-resistant~~Merck KGaA, Germany	October 2019	—
PF-06881894^(a)	Application filed in the EU for a potential biosimilar to Neulasta® (pegfilgrastim)	—	October 2019
Rituximab Pfizer (rituximab)^(b)	Application approved in Japan for a biosimilar to Rituxan^® (rituximab) for the treatment of CD20-positive, B-cell non-Hodgkin’s Lymphoma, CD20-positive, B-cell lymphoproliferative disease under immunosuppression, and Granulomatosis with polyangiitis, and microscopic polyangiitis	September 2019	—
Bosulif (bosutinib)	Application filed in Japan for the treatment of chronic myelogenous leukemia (CML), which is being developed in collaboration with Avillion LLP	—	July 2019
Xtandi (enzalutamide)	Application filed in the EU for the treatment of metastatic hormone-sensitive prostate cancer, which is being developed through a collaboration with Astellas	~~October 2018~~—	July 2019
Talzenna (talazoparib)	Application approved in the EU for monotherapy for the treatment of adult patients with germline breast cancer susceptibility gene (gBRCA)1/2-mutations, who have human epidermal growth factor receptor 2-negative (HER2-) locally advanced or metastatic breast cancer	June 2019	—
~~Trastuzumab BS for I.V. Infusion 60mg/150mg “Pfizer”~~Bevacizumab Pfizer (bevacizumab)^(a)(c)	Application approved in Japan for a biosimilar to ~~Herceptin® (trastuzumab)~~	~~September 2018~~	—
~~Lorbrena (lorlatinib)~~	~~Application approved in Japan~~Avastin^® (bevacizumab) for the treatment of ~~patients with ALK-positive~~ metastatic ~~non-small cell lung~~colorectal cancer ~~previously treated with one or more ALK inhibitor~~	~~September 2018~~June 2019	—
~~PF-05280586~~^(b) Daurismo (glasdegib)	Application filed in the EU for ~~a potential biosimilar to Rituxan® (rituximab)~~ treatment of newly-diagnosed acute myeloid leukemia in adult patients who are 75 years or older or who have co-morbidities that preclude use of intensive induction chemotherapy	—	~~August 2018~~May 2019
~~Xeljanz (tofacitinib)~~Lorviqua (lorlatinib)	Application approved in the EU as monotherapy, for the treatment of adult patients with ~~moderately to severely active ulcerative colitis who have had an inadequate response, lost response,~~ALK- positive advanced non-small cell lung cancer whose disease has progressed after: • alectinib or ~~were intolerant to either conventional therapy~~ceritinib as the first ALK tyrosine kinase inhibitor (TKI) therapy; or ~~a biologic agent~~ • crizotinib and at least one other ALK TKI	~~July 2018~~May 2019	—
~~Trazimera~~^(a) Vizimpro (dacomitinib)	Application approved in the EU for a biosimilar to Herceptin® (trastuzumab) for the treatment of human epidermal growth factor (HER2) overexpressing breast cancer and HER2 overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma	~~July 2018~~	—
~~Infliximab BS for I.V. Infusion 100mg “Pfizer”~~^(c)	~~Application approved in Japan for a biosimilar to Remicade® (infliximab)~~	~~July 2018~~	—
~~Xeljanz (tofacitinib)~~	Application approved in the EU for Xeljanz in combination with methotrexate for the treatment of active psoriatic arthritis in adult patients who have had an inadequate response or who have been intolerant to a prior disease-modifying antirheumatic drug therapy	~~June 2018~~	—
~~talazoparib~~	~~Application filed in the EU for the treatment of patients with germline BRCA-mutated advanced breast cancer~~	—	~~June 2018~~
~~Xeljanz (tofacitinib)~~	~~Application approved in Japan for the treatment of ulcerative colitis~~	~~May 2018~~	—
~~dacomitinib~~	Application filed in Japan for the treatment of patients with locally advanced or metastatic non-small cell lung cancer with epidermal growth factor receptor (EGFR) mutations, which is being developed in collaboration with SFJ	—	~~May 2018~~
~~crisaborole~~	~~Application filed in the EU for the treatment of mild-to-moderate atopic dermatitis~~	—	~~May 2018~~
~~Mylotarg (gemtuzumab ozogamicin)~~	~~Application approved in the EU for treatment of patients age 15 years and above with previously untreated, de novo, CD33-positive acute myeloid leukemia, except acute promyelocytic leukemia~~	~~April 2018~~	—
~~Bosulif (bosutinib)~~	Application approved in the EU for the treatment of adults with newly diagnosed chronic phase Philadelphia chromosome-positive chronic myelogenous leukemia (Ph+ CML), which is being developed in collaboration with Avillion	~~April 2018~~	—
~~dacomitinib~~	~~Application filed in the EU~~as monotherapy for the first-line treatment of adult patients with locally advanced or metastatic non-small cell lung cancer with EGFR activating mutations, which is being developed in collaboration with SFJ	April 2019	—
Vyndaqel (tafamidis meglumine)	Application approved in Japan for treatment of transthyretin amyloid cardiomyopathy	March ~~2018~~2019	—
~~Steglatro (ertugliflozin)~~ Zirabev^(c)	~~Approval~~Application approved in the EU ~~as an adjunct~~for a biosimilar to ~~diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus:~~ • ~~as monotherapy in patients for whom the use of metformin is considered inappropriate due to intolerance or contraindications; and~~ • ~~in addition to other medicinal products~~Avastin^® (bevacizumab) for the treatment of ~~diabetes,~~metastatic carcinoma of the colon or rectum, metastatic breast cancer, unresectable advanced, metastatic or recurrent NSCLC, advanced and/or metastatic renal cell cancer and persistent, recurrent, or metastatic carcinoma of the cervix	February 2019	—
Vyndaqel (tafamidis free acid)	Application filed in the EU for the treatment of adults with transthyretin amyloid cardiomyopathy	—	January 2019
Bavencio (avelumab)	Application filed in Japan for Bavencio (avelumab) in combination with Inlyta (axitinib) for the first-line treatment of advanced RCC, which is being developed in collaboration with Merck	~~March 2018~~ KGaA, Germany	—	January 2019
~~Segluromet (ertugliflozin and metformin)~~Vizimpro (dacomitinib)	~~Approval~~Application approved in ~~the EU as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus:~~ • ~~in patients not adequately controlled on their maximally tolerated dose of metformin alone;~~ • ~~in patients on their maximally tolerated doses of metformin in addition to other medicinal products~~Japan for the treatment of ~~diabetes; and~~ • in patients ~~already being treated~~ with ~~the combination of ertugliflozin and metformin as separate tablets,~~locally advanced or metastatic non-small cell lung cancer with EGFR mutations, which is being developed in collaboration with ~~Merck~~ SFJ	~~March 2018~~	—
~~Steglujan (ertugliflozin and sitagliptin)~~	~~Approval in the EU as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus:~~ • ~~when metformin and/or a sulphonylurea (SU) and one of the monocomponents of Steglujan do not provide adequate glycaemic control; and~~ • ~~in patients already being treated with the combination of ertugliflozin and sitagliptin as separate tablets, which is being developed in collaboration with Merck~~	~~March 2018~~January 2019	—
~~PF-06439535~~PF-06410293^(d)	Application filed in the EU for a potential biosimilar to ~~Avastin® (bevacizumab)~~Humira^® (adalimumab)	—	~~March~~November 2018
PF-05280586^(b)	Application filed in the EU for a potential biosimilar to Rituxan^® (rituximab)	—	August 2018
crisaborole	Application filed in the EU for the treatment of mild-to-moderate atopic dermatitis	—	May 2018
Xeljanz (tofacitinib)	Application filed in the EU for modified release 11mg tablet for ~~rheumatoid arthritis~~RA	—	March 2018
~~lorlatinib (PF-06463922)~~	~~Application filed in the EU for the treatment of patients with ALK-positive metastatic non-small cell lung cancer, previously treated with one or more ALK inhibitors~~	—	~~February 2018~~
~~Besponsa (inotuzumab ozogamicin)~~	~~Approval in Japan for the treatment of relapsed or refractory CD 22- positive acute lymphoblastic leukemia~~	~~January 2018~~	—


*	For applications in the EU, the dates set forth in this column are the dates on which the EMA validated our submissions.


^(a)	~~Herceptin~~Neulasta^® is a registered trademark of ~~Genentech,~~Amgen Inc.


^(b)	Rituxan^® is a registered trademark of Biogen MA Inc.

^(c)

~~Remicade~~^® ~~is a registered Japan trademark of Janssen. In February 2016, we divested the rights for development and commercialization of PF-06438179, a potential biosimilar to Remicade~~^® (infliximab) in the 28 countries that form the EEA to Sandoz, which was a condition to the European Commission’s approval of the Hospira transaction. We retain commercialization rights to PF-06438179 in all countries outside of the EEA.


^(d)(c)	~~Avastin®~~ Avastin^® is a registered trademark of Genentech, Inc.


^(d)	Humira^® is a registered trademark of AbbVie Biotechnology Ltd.



LATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS FOR IN-LINE AND IN-REGISTRATION PRODUCTS
PRODUCT	PROPOSED INDICATION
~~Bavencio (avelumab)~~	~~A monoclonal antibody that inhibits PD-L1, in combination with Inlyta (axitinib), a tyrosine kinase inhibitor,~~ ~~for the first-line treatment of advanced renal cell carcinoma, which is being developed in collaboration with~~ ~~Merck KGaA, Germany~~
~~Bavencio (avelumab)~~	A monoclonal antibody that inhibits PD-L1, in combination with talazoparib in patients with previously untreated advanced ovarian cancer, which is being developed in collaboration with Merck KGaA, Germany
Bavencio (avelumab)	A monoclonal antibody that inhibits PD-L1 for the first-line treatment of stage IIIb/IV non-small cell lung cancer, which is being ~~developed in collaboration with Merck KGaA, Germany~~
~~Bavencio (avelumab)~~^(a)	A monoclonal antibody that inhibits PD-L1 for treatment of stage IIIb/IV non-small cell lung cancer that has progressed after a platinum-containing doublet, which is being developed in collaboration with Merck KGaA, Germany
~~Bavencio (avelumab)~~	~~A monoclonal antibody that inhibits PD-L1 for treatment of platinum-resistant/refractory ovarian cancer,~~ ~~which is being developed in collaboration with Merck KGaA, Germany~~
~~Bavencio (avelumab)~~	~~A monoclonal antibody that inhibits PD-L1 for the first-line treatment of ovarian cancer, which is being~~ developed in collaboration with Merck KGaA, Germany
Bavencio (avelumab)	A monoclonal antibody that inhibits PD-L1 for maintenance treatment, in the first-line setting, for patients with urothelial cancer, which is being developed in collaboration with Merck KGaA, Germany
Bavencio (avelumab)	A monoclonal antibody that inhibits PD-L1 for maintenance treatment of advanced or metastatic gastric/ gastro-esophageal junction cancers, which is being developed in collaboration with Merck KGaA, Germany
Bavencio (avelumab)	A monoclonal antibody that inhibits PD-L1 for treatment of locally advanced squamous cell carcinoma of the head and neck, which is being developed in collaboration with Merck KGaA, Germany
Braftovi (encorafenib) and Mektovi (binimetinib)	Second-or-third-line treatment of BRAF-mutant mCRC (ex-EU)
Daurismo (glasdegib)	A smoothened inhibitor, in combination with azacitidine, for the treatment of acute myeloid leukemia
Ibrance (palbociclib)	Treatment of HER2+ advanced breast cancer, in collaboration with the Alliance Foundation Trials, LLC
Ibrance (palbociclib)	Treatment of high-risk early breast cancer, in collaboration with the German Breast Group
Ibrance (palbociclib)	Treatment of HR+ early breast cancer, in collaboration with the Alliance Foundation Trials, LLC, and the Austrian Breast Colorectal Cancer Study Group
Lorbrena (lorlatinib)	Treatment of patients with metastatic non-small cell lung cancer whose tumors are ALK-positive as detected by an FDA-approved test
Xeljanz (tofacitinib)	Treatment of ankylosing spondylitis
Xtandi (enzalutamide)	Treatment of non-metastatic ~~high risk~~ hormone-sensitive prostate cancer, which is being developed through a collaboration with Astellas
Talzenna (talazoparib)	An oral PARP inhibitor, in combination with Xtandi (enzalutamide)	~~Treatment~~, for the treatment of metastatic ~~hormone-sensitive~~castration-resistant prostate cancer ~~which is being developed through a collaboration with Astellas~~
~~Vyndaqel (tafamidis meglumine)~~	~~Adult symptomatic transthyretin cardiomyopathy (ex-Japan)~~

^(a)

In February 2019, the company took steps to transition rheumatoid arthritis study patients who were on tofacitinib 10 mg twice daily to tofacitinib 5 mg twice daily in the ongoing FDA post-marketing requirement study A3921133, a study performed in patients considered to be at high risk for certain side effects. This action was taken as the result of notification from the tofacitinib Rheumatology Data Safety Monitoring Board of a safety signal regarding the tofacitinib 10 mg twice daily treatment arm in study A3921133. The 5 mg twice daily dose is the FDA approved dose in the U.S. for adult patients with moderate to severe rheumatoid arthritis. In July 2019, the FDA updated the U.S. prescribing information for Xeljanz to include two additional boxed warnings as well as changes to the indication and dosing for UC. These updates were based on the FDA’s review of data from the ongoing post-marketing requirement RA study A3921133. In addition, the EU product labeling (SmPC) for Xeljanz was updated in July 2019 to reflect provisional measures required by the EMA’s pharmacovigilance committee (PRAC) while a review was conducted. The PRAC has completed its review and has recommended to the EMA’s scientific committee (CHMP) that caution should be utilized in treating patients with Xeljanz who are at risk for certain side effects. This recommendation will be reviewed by the CHMP who will issue a final opinion; this is expected during November 2019. The CHMP opinion will be provided to the European Commission to issue a legally-binding decision; this procedure is expected to be completed in early 2020.

In February 2018, we and our partner Merck KGaA, Darmstadt, Germany, announced that the Bavencio Phase 3 trial in second-line NSCLC did not meet its pre-specified primary endpoint. We are continuing to further evaluate the detailed results.



NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT
CANDIDATE	PROPOSED INDICATION
~~glasdegib (PF-0444913)~~aztreonam-avibactam (PF-06947387)	A ~~smoothened~~beta lactam/beta lactamase inhibitor for the treatment of ~~acute myeloid leukemia~~
~~lorlatinib (PF-06463922)~~	~~A next generation ALK/ROS1 tyrosine kinase inhibitor for the first-line treatment of~~ patients with ~~ALK-positive advanced non-small cell lung cancer~~infections caused by Gram-negative bacteria, including those that produce metallo-beta-lactamases, for which there are limited or no treatment options
fidanacogene elaparvovec (PF-06838435)	An investigational gene therapy for the treatment of hemophilia B
~~PF-04965842~~PF-06482077	A 20-Valent pneumococcal conjugate vaccine for the prevention of invasive pneumococcal disease and pneumonia caused by Streptococcus pneumoniae serotypes covered by the vaccine in adults 18 years of age and older
PF-06651600	A selective dual Janus kinase 3 (JAK3) and Tyrosine kinase Expressed in hepatocellular Carcinoma (TEC) family inhibitor for the treatment of patients with moderate to severe alopecia areata
abrocitinib (PF-04965842)	A Janus kinase 1 (JAK1) inhibitor for the treatment of moderate-to-severe atopic dermatitis
PF-06425090	A prophylactic vaccine for ~~active immunization to prevent~~prevention of primary clostridium difficile ~~colitis~~infection (CDI) in individuals
~~PF-06410293~~^(a) PF-06802861	~~A potential biosimilar to Humira® (adalimumab)~~
~~rivipansel (GMI-1070)~~	~~A pan-selectin~~An oral inhibitor of p38 mitogen-activated protein kinase for the treatment of patients with symptomatic dilated cardiomyopathy due to a Lamin A/C gene mutation
rivipansel (GMI-1070)^(a)	A triple selectin inhibitor, with highest potency for E-selectin for the treatment of acute vaso-occlusive ~~crisis in hospitalized individuals~~crises associated with sickle cell disease in patients aged 6 years and above, which was licensed from GlycoMimetics Inc.
somatrogon (PF-06836922)	A long-acting hGH-CTP for the treatment of growth hormone deficiency in children, which is being developed in collaboration with OPKO
somatrogon (PF-06836922)	A long-acting hGH-CTP for the treatment of growth hormone deficiency in adults, which is being developed in collaboration with OPKO
~~talazoparib (MDV3800)~~	~~An oral PARP inhibitor for the treatment of metastatic castration-resistant prostate cancer~~
tanezumab^(b)	An anti-nerve growth factor monoclonal antibody for the treatment of pain, which is being developed in collaboration with Lilly

^(a)

In August 2019, we announced that the Phase 3 RESET (Rivipansel Evaluating Safety, Efficacy and Time to Discharge) pivotal study did not meet its primary or key secondary efficacy endpoints. The objective of the trial was to evaluate the efficacy and safety of rivipansel in patients aged six and older with sickle cell disease who were hospitalized for a vaso-occlusive crisis and required treatment with IV opioids. The primary endpoint was time to readiness-for-discharge and the key secondary efficacy endpoints were time-to-discharge, cumulative IV opioid consumption, and time to discontinuation of IV opioids. Detailed analyses of the RESET study, including additional data on efficacy and safety endpoints, which are not available at this time, will be submitted for presentation at a future scientific meeting. We are awaiting additional data to determine next steps.

~~Humira~~^®(b)

In April 2019, Pfizer and Lilly announced top-line results from a Phase 3 study (A4091058) evaluating subcutaneous (SC) administration of tanezumab 2.5 mg and 5 mg. The objective of the study was to compare the long-term joint safety and 16-week efficacy of tanezumab relative to nonsteroidal anti-inflammatory drugs in patients with moderate-to-severe osteoarthritis (OA) of the hip or knee. During additional routine quality-control activities that occurred after the study was completed and the database was locked, an adverse event of osteonecrosis, which required adjudication was identified in a patient treated with tanezumab 2.5 mg SC. Accounting for the one additional adjudicated case of osteonecrosis in the tanezumab 2.5 mg arm, the incidence of the primary joint safety endpoint for the 2.5 mg SC arm is ~~a registered trademark of AbbVie Biotechnology Ltd.~~3.9

percent (vs. 3.8 percent, reported in the top-line report). This additional finding does not change the conclusion of the study. Detailed results from this study will be presented at the 2019 American College of Rheumatology and the Association of Rheumatology Professionals Annual Meeting on November 11 and 12, 2019.

Additional product-related programs are in various stages of discovery and development. ~~Also, see the discussion in the “Our Strategy––Our Business Development Initiatives” section of this MD&A.~~

~~COSTS AND EXPENSES~~Costs and Expenses

The changes in expenses below reflect, among other things, a decline in expenses resulting from the ~~favorable impact~~July 31, 2019 completion of the ~~February 2017 sale of HIS. The operating~~Consumer Healthcare JV transaction with GSK. Our financial results, ~~of HIS are included in~~and our ~~operating results through February 2, 2017 and, therefore,~~Consumer Healthcare segment’s operating results, for the third quarter of ~~2017~~ ~~do not~~2019 reflect ~~any contribution from HIS global~~only one month of Consumer Healthcare segment domestic operations ~~while~~and two months of Consumer Healthcare segment international operations. Likewise, our financial results, and our Consumer Healthcare segment’s operating results, for the first nine months of ~~2017~~2019 reflect ~~approximately one month~~seven months of ~~HIS~~Consumer Healthcare segment domestic operations and ~~approximately two~~eight months of ~~HIS~~Consumer Healthcare segment international operations. ~~Our operating results for 2018 do not reflect any HIS global operations.~~For additional information, see Notes to Condensed Consolidated Financial Statements—Note 1A.Basis of Presentation and Significant Accounting Policies: Basis of Presentation.

Cost of Sales


	Three Months Ended								Nine Months Ended							Three Months Ended								Nine Months Ended
(MILLIONS OF DOLLARS)	September 30, 2018			October 1, 2017			% Change		September 30, 2018			October 1, 2017			% Change	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change
Cost of sales	$	2,694		$	2,844		(5	)	$	8,173		$	7,972		3	$	2,602		$	2,694		(3	)	$	7,611		$	8,173		(7	)
As a percentage of Revenues	20.3		%	21.6		%			20.6		%	20.5		%		20.5		%	20.3		%			19.5		%	20.6		%

Cost of sales decreased 5%$92 million, or 3%, in the third quarter of ~~2018~~2019, compared to the same period in ~~2017~~2018, primarily due to:

the favorable impact of the July 31, 2019 completion of the Consumer Healthcare joint venture transaction with GSK; and

lower royalty expense for Lyrica due to the June 2019 loss of exclusivity in the U.S.,

partially offset by:


•	a $127 million charge for rivipansel, primarily for inventory manufactured for expected future sale (see Notes to Condensed Consolidated Financial Statements––Note 2C. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangement: Research and Development Arrangement).

Cost of sales decreased$562 million, or 7%, in the first nine months of 2019, compared to the same period in 2018, primarily due to:

the favorable impact of foreign exchange of ~~$212 million and~~ $341 million;

the favorable impact of hedging activity on intercompany inventory of ~~$18~~$216 million;

the favorable impact of the July 31, 2019 completion of the Consumer Healthcare joint venture transaction with GSK; and

lower ~~volumes driven by the SIP portfolio, primarily~~royalty expense for Lyrica due to ~~legacy Hospira product shortages~~the June 2019 loss of exclusivity in the U.S., ~~as well as generic competition in developed markets; and~~

~~the non-recurrence of $55 million in inventory losses, overhead costs, and incremental costs related to the period in 2017 during which our Puerto Rico plants were not operational due to hurricanes,~~

partially offset by:

~~increased sales volumes for various key products within our~~an unfavorable change in product ~~portfolio;~~

~~higher costs across the SIP portfolio, as a result of the complexity of high quality product manufacture across the legacy Hospira plants;~~mix; and


•	a $127 million charge for rivipansel, primarily for inventory manufactured for expected future sale (see Notes to Condensed Consolidated Financial Statements––Note 2C. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangement: Research and Development Arrangement).

anThe slight increase in ~~royalty expenses based on the mix of products sold.~~

Cost of sales~~increased3% in the first nine months of~~ ~~2018,~~ ~~compared to the same period in~~ ~~2017, primarily due to:~~

~~the unfavorable impact of foreign exchange of $157 million and the unfavorable impact of hedging activity on intercompany inventory of $114 million;~~

~~increased sales volumes for various key products within our product portfolio; and~~

~~an increase in royalty expenses based on the mix of products sold,~~

~~partially offset by:~~

~~lower volumes driven by the SIP portfolio, primarily due to legacy Hospira product shortages in the U.S., as well as generic competition in developed markets;~~

the non-recurrence of $55 million in inventory losses, overhead costs, and incremental costs related to the period in 2017 during which our Puerto Rico plants were not operational due to hurricanes; and

~~the non-recurrence of charges related to a product recall that occurred in 2017.~~

~~The decrease in~~ ~~Cost of sales~~ as a percentage of revenues in the third quarter of ~~2018~~ ~~and the slight increase in~~ ~~Cost of sales~~ ~~as a percentage of revenues for the first nine months of~~ ~~2018~~,2019, compared to the same ~~periods~~period in ~~2017~~2018, was primarily due to all of the factors discussed above, as well as the impact of the loss of exclusivity of Lyrica in the U.S., partially offset by an increase in alliance revenues, which have no associated cost of sales.

The decrease in Cost of sales as a percentage of revenues in the first nine months of 2019, compared to the same period in 2018, was primarily due to all of the factors discussed above, as well an increase in alliance revenues, which have no associated cost of sales, partially offset by the impact of the loss of exclusivity of Lyrica in the U.S.

Selling, Informational and Administrative (SI&A) Expenses


	Three Months Ended							Nine Months Ended							Three Months Ended								Nine Months Ended
(MILLIONS OF DOLLARS)	September 30, 2018			October 1, 2017			% Change	September 30, 2018			October 1, 2017			% Change	September 29, 2019			September 30, 2018			% Change		September 29, 2019			September 30, 2018			% Change
Selling, informational and administrative expenses	$	3,494		$	3,504		—	$	10,448		$	10,249		2	$	3,260		$	3,494		(7	)	$	10,110		$	10,448		(3	)
As a percentage of Revenues	26.3		%	26.6		%		26.3		%	26.4		%		25.7		%	26.3		%			25.9		%	26.3		%

~~The unfavorable change in~~ ~~Other (income)/deductions––net~~ ~~primarily reflects the non-recurrence of income from resolution of a contract disagreement, the non-recurrence of a gain on the redemption of an acquired bond in 2017~~ and the unfavorable impact of foreign exchange ~~partially~~of $233 million, or 2%.

The following provides an analysis of the decrease in Upjohn worldwide Revenues:



(MILLIONS OF DOLLARS)
Upjohn Revenues, for the nine months ended September 30, 2018	$	9,302

Operational growth/(decline):
Lower worldwide revenues for Lyrica, primarily in the U.S., reflecting the expected significantly lower volumes associated with multi-source generic competition that began in July 2019	(736		)
Lower revenues for Viagra and Upjohn’s authorized generic for Viagra in the U.S. resulting from increased generic competition following Viagra's December 2017 patent expiration	(181		)
Decline in revenues for Revatio driven by lower U.S. Oral Suspension formulation sales and pricing pressures due to a recent generic entry, and for Relpax, driven by continued generic competition across developed markets	(98		)
Volume-driven growth from Celebrex and Effexor, primarily in Japan and China	68
Growth from Lipitor, primarily due to volume growth and geographic expansion in provinces in China where the VBP has not yet been implemented, partially offset by pricing pressures for Lipitor and Norvasc from the implementation of the VBP in certain cities in China, lower volumes in Japan for Norvasc and the discontinued sales of Lipitor in Saudi Arabia	37
Other operational factors, net	(82		)
Operational decline, net	(992		)
Unfavorable impact of foreign exchange	(233		)
Upjohn Revenues decrease	(1,225		)
Upjohn Revenues, for the nine months ended September 29, 2019	$	8,077

Total Upjohn revenues from emerging markets decreased $52 million, or 2%, to $3.0 billion, reflecting 4% operational growth more than offset by anthe unfavorable impact of foreign exchange of 6% on total Upjohn revenues from emerging markets. The operational increase in ~~income from collaborations, out-licensing arrangements~~emerging markets was primarily driven by Lipitor, Viagra, Celebrex and ~~sales of compound/product rights.~~Norvasc.

Costs and Expenses


•	Cost of sales as a percentage of Revenues increased 0.1 percentage points driven by lower Lyrica revenues in developed markets, primarily related to the June 2019 loss of exclusivity for Lyrica in the U.S., partially offset by lower royalty expense for Lyrica due to the patent expiration, and a favorable impact of foreign exchange.


•	The decrease in Cost of sales of 13% was primarily driven by lower royalty expense due to the June 2019 loss of exclusivity for Lyrica in the U.S., a favorable impact of foreign exchange, as well as lower atorvastatin active product ingredients import duties in China.

•

Selling, informational and administrativeexpenses decreased 14% driven by a reduction in field force expense as well as advertising and promotion expenses in developed markets, primarily related to Lyrica in the U.S., as well as a favorable impact of foreign exchange, partially offset by the non-recurrence of one-time general and administrative expense reversals in the second and third quarters of 2018, and investments in China across key brands.


•	Research and developmentexpenses and Other (income)/deductions––net were relatively unchanged.

ANALYSIS OF THE CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Changes in the components of Accumulated other comprehensive loss ~~for the third quarter and first nine months of2018~~ reflect the following:

•

For Foreign currency translation adjustments, net, the third quarter and first nine months of2019 primarily reflect the reclassification resulting from the contribution of our Consumer Healthcare business to the Consumer Healthcare joint venture with GSK, and the strengthening of the U.S. dollar against the euro, partially offset by the weakening of the U.S. dollar against the Japanese yen and the results of our net investment hedging program. The first nine months of 2019 also reflect the strengthening of the U.S. dollar against the Australian dollar. For additional information, see Notes to Consolidated Financial Statements—Note 2B. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangement: Equity-Method Investment and Assets and Liabilities Held for Sale.

•

For Unrealized holding gains on derivative financial instruments, net and Unrealized holding gains/(losses) on available-for-sale securities, net, thethird quarter and first nine months of2019reflect the impact of fair value remeasurements and the reclassification of amounts into income. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 7. Financial Instruments.

~~For~~ ~~Foreign currency translation adjustments, net,the third quarter of 2018 primarily reflects the strengthening of the U.S. dollar against the Chinese renminbi, U.K. pound and Australian dollar, and for the first nine months of~~ ~~2018, primarily reflects the strengthening of the U.S. dollar against the U.K. pound, Turkish lira and Brazilian real, partially offset by the weakening of the U.S. dollar against the Japanese yen.~~

~~For~~ ~~Unrealized holding gains/(losses) on derivative financial instruments, net~~ ~~and~~ ~~Unrealized holding gains/(losses) on available-for-sale securities, net,~~ ~~reflects the impact of fair value re-measurements and the reclassification of amounts into income. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 1B. Basis of Presentation and Significant Accounting Policies––Adoption of New Accounting Standards~~ ~~and Notes to Condensed Consolidated Financial Statements—Note 7. Financial Instruments~~.

~~For~~ ~~Benefit plans: actuarial gains/(losses), net,~~ ~~the third quarter of~~ ~~2018~~ ~~primarily reflects (i) the amortization of changes in the pension benefit obligation previously recognized in~~ ~~Other comprehensive income,~~ ~~(ii) the favorable impact of foreign exchange, (iii) settlement activity and (iv) an $8 million reduction in the plan liability due to an interim re-measurement. For the first nine months of~~ ~~2018, primarily reflects (i) the amortization of changes in the pension benefit obligation previously recognized in~~ ~~Other comprehensive income~~, (ii) a $92 million reduction in the plan liability due to an interim re-measurement, (iii) settlement activity and (iv) the favorable impact of foreign exchange. For additional information, see Notes to Condensed Consolidated Financial Statements—~~Note 10.Pension and Postretirement Benefit Plans~~.

~~For~~ ~~Benefit plans: prior service costs and other, net, the third quarter and the first nine months of~~ ~~2018~~ ~~reflect the reclassification into income of amounts related to (i) amortization of changes in prior service costs and credits previously recognized in~~ ~~Other comprehensive income~~ ~~and (ii) curtailment activity. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans~~.

~~For~~ ~~Tax provision/(benefit) on other comprehensive income/(loss),~~ ~~the first nine months of~~ ~~2018~~ ~~reflect the reclassification of the stranded tax amounts related to the TCJA from AOCI to~~ ~~Retained earnings,~~ ~~which was recorded in the first quarter of 2018. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 1B. Basis of Presentation and Significant Accounting Policies––Adoption of New Accounting Standards~~ ~~and Notes to Condensed Consolidated Financial Statements—Note 5D.Tax Matters:~~ ~~Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)~~.

•

For Benefit plans: actuarial gains/(losses), net, mainly reflects for the third quarter and the first nine months of 2019 (i) the amortization of changes in the pension benefit obligation previously recognized in Other comprehensive income, (ii) the favorable impact of foreign exchange, (iii) settlement activity and (iv) a $194 million increase in the plan liability due to interim plan remeasurements. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10.Pension and Postretirement Benefit Plans.

•

For Benefit plans: prior service costs and other, net, the third quarter and the first nine months of 2019 reflect the reclassification into income of amounts related to amortization of changes in prior service costs and credits previously recognized in Other comprehensive income. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans.

ANALYSIS OF THE CONDENSED CONSOLIDATED BALANCE SHEETS

For information about certain of our financial assets and liabilities, including Cash and cash equivalents, Short-term investments, Equity-method investments, Long-term investments, Short-term borrowings, including current portion of long-term debt, and Long-term debt, see the “Analysis of the Condensed Consolidated Statements of Cash Flows” section of this MD&A, the “Analysis of Financial Condition, Liquidity and Capital Resources: Selected Measures of Liquidity and Capital Resources” section of this MD&A and Notes to Condensed Consolidated Financial Statements—Note 7. Financial Instruments.

For information about events and circumstances impacting our tax-related accounts, see Notes to Condensed Consolidated Financial Statements—Note 5. Tax Matters.

For a description of changes in Total Equity, see the consolidated statements of equity.

For information related to changes in Accumulated other comprehensive loss, see the “Analysis of the Condensed Consolidated Statements of Comprehensive Income” section of this MD&A and Notes to Condensed Consolidated Financial Statements—Note 6. Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests.

The changes in our asset and liability accounts as of September ~~30, 2018,~~29, 2019, compared to December 31, ~~2017~~2018, generally reflect, ~~among other things,~~and the following explanations exclude, fluctuations in foreign currency exchange rates, ~~as well as~~ the impact of the adoption of new accounting standards in the first quarter of ~~2018~~. ~~The following explanations exclude the impact~~2019, our Consumer Healthcare business joint venture with GSK, and our acquisitions of ~~foreign exchange~~Array and ~~the impact of the adoption of new accounting standards in the first quarter of 2018~~Therachon (see Notes to Condensed Consolidated Financial Statements—

Note 1B. Basis of Presentation and Significant Accounting Policies: Adoption of New Accounting Standards and Note 2. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangementfor additional information).

~~For~~ ~~Trade accounts receivable, less allowance for doubtful accounts,~~ ~~the change reflects the timing of sales and collections in the normal course of business.~~

~~For~~ ~~Inventories,~~ the change reflects the increases for certain products to meet targeted levels in the normal course of business, including inventory build for supply recovery, network strategy and new product launches.

~~For~~ ~~Other current assets,~~ the change reflects an increase in receivables associated with derivative financial instruments, partially offset by the receipt of a milestone payment related to the first marketing authorization for ertugliflozin (see Notes to Condensed Consolidated Financial Statements—~~Note 2D.~~ ~~Acquisition, Divestitures, Licensing Arrangements, Collaborative Arrangements and Privately Held Investment: Collaborative Arrangements~~).

~~For~~ ~~PP&E~~,~~the change primarily reflects capital additions in the normal course of business, partially offset by depreciation during the period.~~

~~For~~ ~~Identifiable intangible assets, less accumulated amortization~~, the change primarily reflects amortization for the period, partially offset by an intangible asset recorded in connection with the EU approval of Mylotarg (see Notes to Condensed Consolidated Financial Statements—~~Note 9A. Identifiable Intangible Assets and Goodwill: Identifiable Intangible Assets).~~

~~For~~ ~~Trade accounts payable,~~ ~~the change reflects the timing of purchases and payments in the normal course of business.~~

~~For~~ ~~Other current liabilities, the change reflects a decrease in liabilities associated with:~~


◦•	~~payments~~ For Trade accounts receivable, less allowance for ~~contingent consideration obligations;~~doubtful accounts, the change reflects the timing of sales and collections in the normal course of business.


◦	~~payments to settle certain legal and product liability obligations;~~


◦	~~payments for restructuring activities;~~

◦•

~~payments~~For Inventories, the change reflects the increases for certain products to meet targeted levels in the ~~current portion~~normal course of ~~obligations recorded in connection with~~business, including inventory build for supply recovery, new product launches and market demand, partially offset by the ~~U.S. approval~~write off of ~~Bosulif, and the EU and U.S. approvals of Besponsa~~rivipansel inventory previously expected to be sold (see Notes to Condensed Consolidated Financial Statements—Note ~~7E. Financial Instruments: Other Noncurrent Liabilities)~~;2C. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangement: Research and Development Arrangement for additional information).


◦•	~~payables related~~ For Other current assets, the change reflects increases in receivables in the normal course of business.


•	For PP&E,the change primarily reflects capital additions in the normal course of business, partially offset by depreciation during the period.


•	For Identifiable intangible assets, less accumulated amortization, the change primarily reflects amortization for the period and intangible asset impairment charges (see Notes to Condensed Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net), partially offset by additions for the period.


•	For Other noncurrent assets, the change reflects a net increase in assets in the normal course of business, and an increase in receivables associated with derivative financial ~~instruments,~~instruments.

~~partially offset by increases related to:~~


•	For Trade accounts payable, the change reflects the timing of purchases and payments in the normal course of business.


•	For Other current liabilities, the change reflects a decrease in liabilities associated with:


◦	payments and accruals in the normal course of business;


◦	payments for restructuring activities; and


◦	~~reclassifications from noncurrent liabilities.~~payments for contingent consideration obligations,

~~For~~ ~~Pension benefit obligations, net, the decrease primarily reflects a voluntary pension contribution, direct employer benefit payments, and an interim re-measurement in a U.S. non-qualified plan.~~

~~For~~ ~~Other noncurrent liabilities, the change reflects an increase in liabilities associated with:~~

partially offset by:


◦	an increase due to reclassifications from noncurrent to current.


•	For Pension benefit obligations, net, the change reflects pension contributions and direct employer benefit payments, partially offset by interim plan remeasurements.


•	For Other noncurrent liabilities, the change reflects:


◦	a decrease in payables associated with derivative financial instruments;

◦

~~an increase~~a decrease in restructuring liabilities ~~associated with~~related to the ~~sale-leaseback~~reversal of certain accruals related to our ~~New York headquarters~~acquisition of Wyeth upon the effective favorable settlement of a U.S. IRS audit for multiple tax years (see Notes to Condensed Consolidated Financial Statements—Note ~~12C.~~5B. Tax Contingencies ~~and Certain Commitments: Certain Commitments~~ ~~for additional information)~~); and


◦	a ~~change in the fair value of contingent consideration (see Notes~~decrease due to ~~Condensed Consolidated Financial Statements—Note 4~~. ~~Other (Income)/Deductions—Net~~), reclassifications from noncurrent to current,

partially offset by:


◦	~~reclassifications~~an increase in accruals in the normal course of business.

•

For Treasury stock, the change reflects $8.9 billion of share repurchases, composed of $6.8 billion paid to ~~current liabilities.~~GS&Co. in February 2019 pursuant to the terms of an accelerated share repurchase agreement as well as $2.1 billion of open-market share repurchases. See Notes to Condensed Consolidated Financial Statements—Note 12C. Contingencies and Certain Commitments: Certain Commitments for additional information.

~~For~~ ~~Treasury stock,~~ the change reflects $4.0 billion paid to Citibank in March 2018 pursuant to the terms of an accelerated share repurchase agreement as well as open market share repurchases. See Notes to Condensed Consolidated Financial Statements—~~Note 12C. Contingencies and Certain Commitments: Certain Commitments~~ ~~for additional information.~~

ANALYSIS OF THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended							Nine Months Ended
(MILLIONS OF DOLLARS)	September 30, 2018			October 1, 2017			% Change	September 29, 2019			September 30, 2018			% Change
Cash provided by/(used in):
Operating activities	$	11,089		$	9,713		14	$	8,819		$	11,089		(20	)
Investing activities	5,289			19			*	(1,112		)	5,289			*
Financing activities	(14,034		)	(9,607		)	46	(6,045		)	(14,034		)	(57	)
Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents	(116		)	67			*	(41		)	(116		)	(65	)
Net increase in Cash and cash equivalents and restricted cash and cash equivalents	$	2,227		$	193		*	$	1,620		$	2,227		(27	)
* Calculation not meaningful or results are equal to or greater than 100%.

~~In the condensed consolidated statements of cash flows, the line item~~ ~~Other changes in assets and liabilities, net of acquisitions and divestitures~~ is presented excluding the effects of changes in foreign currency exchange rates, as these changes do not reflect actual cash inflows or outflows, and excluding any other significant non-cash movements. Accordingly, the amounts shown will not necessarily agree with the changes in the assets and liabilities that are presented in our condensed consolidated balance sheets.

Operating Activities

Our net cash provided by operating activities was ~~$11.1~~$8.8 billion in the first nine months of ~~2018~~2019, compared to ~~$9.7~~$11.1 billion in the same period in ~~2017~~2018. The ~~increase~~decrease in net cash provided by operating activities ~~reflects an increase in net cash generated from net income. The net cash generated~~ reflects the timing of receipts from customers and payments to vendors in the ordinary course of ~~business.~~business, and the upfront cash payment associated with our acquisition of Therachon (see Notes to Condensed Consolidated Financial Statements––Note 2A. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangement: Acquisitions), partially offset by an increase in net income and a decrease in benefit plan contributions.

In the first nine months of ~~2018~~2019, the change in the line item Other adjustments, net primarily reflects, among other items:

~~unrealized net gains on equity securities resulting from~~ the ~~adoption~~non-recurrence of ~~a new accounting standard on January 1, 2018 related to financial assets and liabilities (see Notes to Condensed Consolidated Financial Statements—Note 1B. Basis of Presentation and Significant Accounting Policies: Adoption of New Accounting Standards~~);

a non-cash gain associated with our transaction with Bain Capital to create a new biopharmaceutical company to continue development of a portfolio of clinical and ~~preclinical~~pre-clinical stage neuroscience assets ~~(see Notes to Condensed Consolidated Financial Statements––Note 2B.~~ ~~Acquisition, Divestitures, Licensing Arrangements, Collaborative Arrangements~~in 2018;

a reduction in net unrealized gains on equity securities;

a reduction in net realized gains on equity securities; and ~~Privately Held Investment~~: ~~Divestitures); and~~

the non-recurrence of a non-cash gain on the contribution of Pfizer’s allogeneic CAR T developmental program assets, in connection with our contribution agreement with Allogene ~~(see Notes to Condensed Consolidated Financial Statements—Note 2B.~~ ~~Acquisition, Divestitures, Licensing Arrangements, Collaborative Arrangements and Privately Held Investment: Divestitures~~),

in 2018,

partially offset by:

net ~~losses~~gains on foreign exchange contracts hedging a portion of our forecasted intercompany inventory sales (that fixes the cost of inventory sold later to customers)~~; and~~.

~~a decrease in gains on the sale of property, plant and equipment.~~

In the ~~first nine months~~condensed consolidated statements of ~~2018~~ ~~and~~ ~~2017~~,cash flows, the line item Other changes in assets and liabilities, net of acquisitions and divestitures is presented excluding the effects of changes in foreign currency exchange rates, as these changes do not reflect actual cash inflows or outflows, and excluding any other significant non-cash movements. Accordingly, the amounts shown will not necessarily agree with the changes in the assets and liabilities that are presented in our condensed consolidated balance sheets. In the first nine months of 2019 and 2018, the line item Other changes in assets and liabilities, net of acquisitions and divestitures, primarily reflects changes, in the normal course of business, in trade accounts receivable, inventories, other current assets, other noncurrent assets, trade accounts payable, accrued compensation, ~~and~~ other current and noncurrent ~~liabilities.~~liabilities, as well as in the first nine months of 2019, the adjustment necessary to reflect the non-cash nature of a favorable settlement of a U.S. IRS audit for multiple tax years (see Notes to Condensed Consolidated Financial Statements––Note 5A. Tax Matters: Taxes on Income from Continuing Operations).

For additional information about changes in other assets and liabilities account balances, see the “Analysis of the Condensed Consolidated Balance Sheets” in this MD&A.

Investing Activities

Our net cash ~~provided by~~used in investing activities was ~~$5.3~~$1.1 billion in the first nine months of ~~2018~~2019, compared to net cash provided by investing activities of ~~$19 million~~$5.3 billion in the same period in ~~2017~~2018. The ~~increase~~change in net cash provided byby/(used in) investing activities was primarily attributable to:

~~an increase in net proceeds generated from the sale of investments of $4.5 billion in~~ ~~2018~~ ~~for cash needs; and~~

~~a decrease in~~ cash used for ~~acquisitions,~~the acquisition of Array, net of cash acquired, of ~~$1.0~~$10.9 billion ~~due to~~in the ~~acquisition~~third quarter of ~~the development and commercialization rights to AstraZeneca’s small molecule anti-infectives business and substantially all of the remaining consideration for the Medivation acquisition in~~ ~~2017~~ ~~(see Notes to Condensed Consolidated Financial Statements—Note 2A.~~

2019,

partially offset by:

~~Acquisition, Divestitures, Licensing Arrangements, Collaborative Arrangements and Privately Held Investment: Acquisition~~).


•	an increase in net proceeds generated from the sale of investments of $5.0 billion for cash needs, including financing the acquisition of Array (see Notes to Condensed Consolidated Financial Statements––Note 2A. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangement: Acquisitions).

Financing Activities

Our net cash used inby financing activities was ~~$14.0~~$6.0 billion in the first nine months of ~~2018~~2019, compared to ~~$9.6~~$14.0 billion in the same period in ~~2017~~2018. The ~~increase~~decrease in net cash used in financing activities was primarily attributable to:


•	$10.1 billion net proceeds raised from short-term borrowings in the first nine months of 2019, primarily in connection with the acquisition of Array, compared to net payments on short-term borrowings of $3.3 billion in the first nine months of 2018,

partially offset by:

~~$3.2 billion less proceeds raised from short-term borrowings in the first nine months~~higher repayments on long-term debt of ~~2018, compared to the first nine months of~~ ~~2017; and~~

$2.7 billion;

higher purchases of common stock of ~~$2.2 billion,~~

~~partially offset by:~~$1.7 billion; and

lower ~~repayments on long-term debt~~proceeds from the exercise of ~~$1.4 billion.~~stock options of $796 million.

ANALYSIS OF FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We rely largely on operating cash flows, short-term investments, short-term commercial paper borrowings and long-term debt to provide for our liquidity requirements. We continue our efforts to improve cash inflows through working capital efficiencies. We target specific areas of focus including accounts receivable, inventories, accounts payable, and other working capital, which allows us to optimize our operating cash flows. Due to our significant operating cash flows as well as our financial assets, access to capital markets and available lines of credit and revolving credit agreements, we believe that we have, and will maintain, the ability to meet our liquidity needs for the foreseeable future, which include:

the working capital requirements of our operations, including our R&D activities;

investments in our business;

dividend payments and potential increases in the dividend rate;

share repurchases;

the cash requirements associated with our cost-reduction/productivity initiatives;

paying down outstanding debt;

contributions to our pension and postretirement plans; and

business-development activities.

Our long-term debt is rated high-quality by both S&P and Moody’s. See the “Credit Ratings” section below. As market conditions change, we continue to monitor our liquidity position. We have taken and will continue to take a conservative approach to our financial investments. Both short-term and long-term investments consist primarily of high-quality, highly liquid, well-diversified available-for-sale debt securities.

Selected Measures of Liquidity and Capital Resources

													The following table provides certain relevant measures of our liquidity and capital resources:
(MILLIONS OF DOLLARS, EXCEPT RATIOS AND PER COMMON SHARE DATA)	September 30, 2018			December 31, 2017			September 29, 2019			December 31, 2018
Selected financial assets:
Selected financial assets^(a):
Cash and cash equivalents^(a)	$	3,559		$	1,342		$	2,785		$	1,139
Short-term investments^(a)	13,680			18,650			6,302			17,694
Long-term investments^(a)	6,444			7,015
Long-term investments, excluding private equity investments at cost							1,981			1,823
	23,684			27,007			11,067			20,656
Debt:
Short-term borrowings, including current portion of long-term debt	7,385			9,953			16,617			8,831
Long-term debt	33,652			33,538			36,044			32,909
	41,037			43,491			52,662			41,740
Selected net financial liabilities^(b)	$	(17,353	)	$	(16,484	)	$	(41,595	)	$	(21,084	)

Working capital^(c)	$	12,569		$	10,714		$	(3,515	)	$	18,068
Ratio of current assets to current liabilities	1.43:1			1.35:1			0.90:1			1.57:1
Total Pfizer Inc. shareholders’ equity per common share^(d)	$	12.21		$	11.93		$	11.77		$	11.09


^(a)	See Notes to Condensed Consolidated Financial Statements––Note 7. Financial Instruments for a description of certain assets held and for a description of credit risk related to our financial instruments held.

^(b)

The increase in selected net financial liabilities was primarily driven by ~~the~~a decrease in short-term investments ~~used~~and a net increase in short-term debt, mainly as a result of cash paid for ~~cash needs, partially offset by~~ the ~~repayment~~acquisition of ~~debt.~~Array. We retain a strong financial liquidity position as a result of our net cash provided by operating activities, our high-quality financial asset portfolio and access to capital markets. For additional information, see the “Credit Ratings” section of this MD&A.

financial asset portfolio and access to capital markets. Both Moody’s and S&P rating agencies maintained our strong investment-grade corporate debt rating subsequent to the acquisitions of Medivation and Anacor. For additional information, see the “Credit Ratings” section of this MD&A.


^(c)	The ~~increase~~decrease in working capital was primarily due to:


•	a decrease in Short-term investments mainly driven by the financing requirements for the acquisition of Array, share repurchase activities, dividend payments, capital expenditures and debt repayment, partially offset by operating cash flow generation, cash from employee stock option exercises and the long-term debt issuance;

the impact of the deconsolidation of the Consumer Healthcare business as a result of the completion of the Consumer Healthcare joint venture transaction;

an increase in short-term borrowings as a result of the issuance of commercial paper, mostly to finance the acquisition of Array; and

the net impact of foreign currency exchange,

partially offset by:

the timing of accruals, cash receipts and payments in the ordinary course of business;

~~a decrease in short-term borrowings as a result of repayments of commercial paper;~~ and

an increase in inventory related to increases for certain products to meet targeted levels in the normal course of business, including inventory build for supply recovery, network strategy and new product launches,

~~partially offset by:~~

~~a decrease in Short-term investments~~ mainly driven by the financing requirements for share repurchase activities, dividend payments, capital expenditures and debt repayment, partially offset by operating cash flow generation, cash from employee stock option exercises and reclassification of long-term to short-term investments;

an increase in income taxes payable related to the timing of accruals in certain major markets in the ordinary course of business and the reclassification of the first federal installment of transition tax previously recorded in noncurrent liabilities; and

~~the net impact of foreign currency exchange.~~

•

an increase in inventory related to increases for certain products to meet targeted levels in the normal course of business, including inventory build for supply recovery, new product launches and market demand, partially offset by the write off of rivipansel inventory previously expected to be sold (see Notes to Condensed Consolidated Financial Statements—Note 2C. Acquisitions, Equity-Method Investment and Assets and Liabilities Held for Sale and Research and Development Arrangement: Research and Development Arrangement for additional information).


^(d)	Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury stock).

~~On September 7, 2018,~~In March 2019, we completed a public offering of $5.0 billion aggregate principal amount of senior unsecured notes (see Notes to Condensed Consolidated Financial ~~Statements–~~Statements––Note ~~7D.Financial~~7D. Financial Instruments: Long-Term Debt).

On October 6, 2016, we announced that we entered into a definitive agreement under which ICU Medical agreed to acquire all of our global infusion systems net assets, HIS. The revised transaction closed on February 3, 2017. At closing, we received 3.2 million newly issued shares of ICU Medical common stock (as originally agreed). In August 2018, we sold 700,000 shares of ICU Medical common stock. We continue to hold 2.5 million shares of ICU Medical common stock. The lock-up period under the shareholder agreement that we entered into with ICU Medical in connection with these shares expired on August 3, 2018 and the shares are registrable upon our request subject to the terms thereof. Given that the shares were received in connection with our divestiture of the HIS business, and that our business model is generally not to invest in equities, we are evaluating our options to monetize the shares subject to market conditions and other relevant factors.

For additional information about the sources and uses of our funds, see the “Analysis of the Condensed Consolidated Balance Sheets” and the “Analysis of the Condensed Consolidated Statements of Cash Flows” sections of this MD&A.

Domestic and International Selected Financial Assets

Many of our operations are conducted outside the U.S., and significant portions of our selected financial assets are held internationally. The amount of funds held in U.S. tax jurisdictions can fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as business-development activities. As part of our ongoing liquidity assessments, we regularly monitor the mix of domestic and international cash flows (both inflows and outflows). ~~Given the recent~~The changes in tax law under the TCJA, which includes transitioning U.S. international taxation from a worldwide tax system to a territorial tax system, in the fourth quarter of 2017, we recorded an estimated repatriation tax on deemed repatriated accumulated post-1986 earnings of foreign subsidiaries for which we plan to elect payment over eight years through 2026. These changes will also allow us to more easily access our selected financial assets globally. ~~As a result of the enactment of the TCJA, in 2018 we repatriated the~~The majority of our cash we held internationally as of year-end ~~2017.~~2017 was repatriated in 2018.

Agreement to Combine Upjohn with Mylan

In connection with the recently-announced agreement to combine Upjohn with Mylan discussed in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Business” and “––Our Strategy––Our Business Development Initiatives” sections of this MD&A, Upjohn will incur $12 billion of debt prior to the closing of the transaction. Immediately prior to the separation, Upjohn will make a cash distribution of $12 billion to Pfizer, which will be funded by the proceeds of such debt. Following the separation, Upjohn will remain the obligor with respect to the debt.

Credit Ratings

Two major corporate debt-rating organizations, Moody’s and S&P, assign ratings to our short-term and long-term debt. A security rating is not a recommendation to buy, sell or hold securities and the rating is subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating.

In June 2019, S&P placed Pfizer on “CreditWatch Negative” following the announcement of Pfizer’s intention to acquire Array. The CreditWatch placement was resolved with a one-notch downgrade of Pfizer’s debt rating to ‘AA-’ upon the consummation of the transaction. In July 2019, we announced that we entered into a definitive agreement to combine Upjohn with Mylan, which resulted in actions from both Moody’s and S&P. Moody’s placed Pfizer’s long-term rating under review for downgrade (limited to one-notch, or ‘A2’ upon close of the Mylan transaction) while S&P lowered Pfizer’s rating to ‘AA-’ (as a result of the Array transaction) and confirmed it will still remain on CreditWatch Negative (with the expectation the rating will be lowered one additional notch to ‘A+’ upon close of the Mylan transaction).



The following table provides the current ratings assigned by these rating agencies to our commercial paper and senior unsecured long-term debt:
NAME OF RATING AGENCY	Pfizer Commercial Paper	Pfizer Long-Term Debt	Outlook/Watch	Date of Last Rating Change
NAME OF RATING AGENCY	Rating	Rating	Outlook/Watch	Date of Last Rating Change
Moody’s^(a)	P-1	A1	Under Review for Downgrade	October 2009
S&P^(b)	A-1+	AAAA-	~~October 2009~~CreditWatch Negative	July 2019


^(a)	~~In September 2016, Moody’s updated their credit outlook from negative outlook to stable.~~


^(b)	~~In April 2016, S&P updated their credit outlook from negative watch to stable.~~

Debt Capacity––Lines of Credit

We have available lines of credit and revolving credit agreements with a group of banks and other financial intermediaries. We typically maintain cash and cash equivalent balances and short-term investments which, together with our available revolving credit facilities, are in excess of our commercial paper and other short-term borrowings. As of September ~~30, 2018,~~ 29, 2019,we had access to ~~$7.6~~a total of $15.0 billion of lines of credit, of which $571 million expire within one year. Of these lines of credit, $7.6 billion were unused, of which our lenders have committed to loan us $7.1 billion at our request, primarily under ourin U.S. revolving credit facilities consisting of a $7.0 billion facility expiring in ~~2022,~~2023 and an $8.0 billion facility expiring in September 2020, which may be used to support our commercial paper borrowings. In addition to the U.S. revolving credit facilities, our lenders have provided us an additional $526 million lines of credit, of which $497 million expire within one year. Of these total lines of credit, $15.5 billion were unused as of September 29, 2019. In connection with the recently-announced agreement to combine Upjohn with Mylan discussed in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Business” and “––Our Strategy––Our Business Development Initiatives” sections of this MD&A, Upjohn entered into a fully underwritten, 364-day senior unsecured bridge facility for up to $12 billion. This bridge facility is expected to terminate upon the issuance of $12 billion of debt securities, loans or a combination of the two by Upjohn prior to the transaction close.

LIBOR

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. Banks currently reporting information used to set LIBOR will stop doing so after 2021. Various parties, including government agencies, are seeking to identify an alternative rate to replace LIBOR. We are monitoring their efforts, and we will likely amend contracts to accommodate any replacement rate where it is not already provided.

Global Economic Conditions––General

The global economic environment has not had, nor do we anticipate it will have, a material impact on our liquidity or capital resources. Due to our significant operating cash flows, financial assets, access to capital markets and available lines of credit and revolving credit agreements, we continue to believe that we have, and will maintain, the ability to meet our liquidity needs for the foreseeable future. We monitor our liquidity position continuously in the face of evolving economic conditions. For additional information see the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment––The Global Economic Environment” section in this MD&A.

Global Economic Conditions––Venezuela and Argentina Operations

Our Venezuela ~~operations continue to operate with the U.S. dollar as the functional currency due to the hyperinflationary status of the Venezuelan economy.~~

We used the Venezuelan bolivar soberano rate of 60.27 as our best estimate to revalue our Venezuelan bolivar denominated net monetary assets. The current DICOM rate is about 64.89. Future actions by the Venezuelan government in response to economic uncertainties could impact the recoverability of our investment in Venezuela, which could result in an impairment charge and under extreme circumstances, could impact our ability to continue to operate in the country in the same manner as we have historically. We have in Venezuela a few net monetary assets and $46 million of non-monetary assets, and $11 million of deferred foreign exchange losses reported in the balance sheet in ~~Accumulated other comprehensive loss––Foreign currency translation adjustments~~ ~~at August 26, 2018, our international quarter-end.~~

~~Global Economic Conditions––Argentina Operations~~

~~Our~~ Argentina operations function in a hyperinflationary ~~economy.~~economies. The impact to Pfizer is not considered material.

Off-Balance Sheet Arrangements

In the ordinary course of business and in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with a transaction or that are related to events and activities prior to or following a transaction. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we may be required to reimburse the loss. These indemnification obligations generally are subject to various restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of September ~~30, 2018,~~29, 2019, the estimated fair value of our indemnity obligations was not significant.

Certain of our co-promotion or license agreements give our licensors or partners the rights to negotiate for, or in some cases to obtain under certain financial conditions, co-promotion or other rights in specified countries with respect to certain of our products.

Share-Purchase Plans and Accelerated Share Repurchase Agreements

Our December ~~2015 $11~~2017 $10 billion share repurchase program was exhausted in the ~~third~~first quarter of ~~2018.~~2019.

In December ~~2017,~~2018, the Board of Directors authorized ~~an additional~~a new $10 billion share repurchase program to be utilized over time (the 2018 program) and share repurchases commenced thereunder in the ~~third~~first quarter of ~~2018 (the 2017 program).~~2019.

On ~~March 12, 2018,~~February 7, 2019, we entered into an accelerated share repurchase agreement with ~~Citibank~~GS&Co. to repurchase ~~$4.0~~approximately $6.8 billion of our common ~~stock.~~stock, and on August 1, 2019, the accelerated share repurchase agreement with GS&Co. was completed. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 1212C. Contingencies and Certain Commitments: Certain Commitments and “Unregistered Sales of Equity Securities and Use of Proceeds––Issuer Purchases of Equity Securities” in Part II, Item 2 of this Quarterly Report on Form 10-Q.

																	The following table provides the number of shares of our common stock purchased and the cost of purchases under our publicly announced share purchase plans, including our accelerated share repurchase agreements:
	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
(SHARES IN MILLIONS, DOLLARS IN BILLIONS)	September 30, 2018^(a)		October 1, 2017		September 30, 2018^(a)		October 1, 2017^(b)		September 29, 2019^(a)		September 30, 2018^(b)		September 29, 2019^(a)		September 30, 2018^(b)
Shares of common stock purchased	47		—		192		150		34		47		213		192
Cost of purchase	$	1.1	$	—	$	7.2	$	5.0	$	—	$	1.1	$	8.9	$	7.2

^(a)

Represents shares purchased pursuant to an accelerated share repurchase agreement with GS&Co. entered into on February 7, 2019, as well as other share repurchases. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 12C. Contingencies and Certain Commitments: Certain Commitments and “Unregistered Sales of Equity Securities and Use of Proceeds––Issuer Purchases of Equity Securities” in Part II, Item 2 of this Quarterly Report on Form 10-Q.

^(b)

Represents shares purchased pursuant to an accelerated share repurchase agreement with Citibank entered into on March 12, 2018, as well as other share repurchases. For additional information, see Notes to ~~Condensed~~ Consolidated Financial Statements––Note 12. ~~Contingencies and Certain Commitments~~ ~~and “Unregistered Sales of~~ Equity Securities and Use of Proceeds––Issuer Purchases of Equity Securities” in Part II, Item 2 of this Quarterly Report on Form 10-Q and the Quarterly Report on Form 10-Q for the quarterly period ended April 1, 2018.


^(b)	~~Represents shares purchased pursuant to an accelerated share repurchase agreement entered into on February 2, 2017. For additional information, see Notes to Consolidated Financial Statements––Note 12~~. ~~Equity~~ in our ~~2017~~2018 Financial Report.

AtAfter giving effect to the accelerated share repurchase agreement and other share repurchases through September ~~30, 2018,~~29, 2019, our remaining share-purchase authorization ~~under the 2017 program~~ was approximately ~~$9.2 billion.~~$5.3 billion on September 29, 2019.

Dividends on Common Stock

In September ~~2018,~~2019, our Board of Directors declared a dividend of ~~$0.34~~$0.36 per share, payable on December 3, ~~2018~~2, 2019, to shareholders of record at the close of business on November 9, ~~2018~~8, 2019.

NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

See Notes to Condensed Consolidated Financial Statements––Note 1B. Basis of Presentation and Significant AccountingPolicies: Adoption of New Accounting Standards.



Recently Issued Accounting Standards, Not Adopted as of September ~~30, 2018~~29, 2019
Standard/Description	Effective Date	Effect on the Financial Statements or Other Significant Matters
~~In February 2016, the FASB issued new guidance on accounting for~~ ~~leases~~. The new ASU provides guidance for both lessee and lessor accounting models. Among other things, the new guidance requires that a right of use asset and a lease liability be recognized for leases with a duration of greater than one year. Since its issuance, the FASB has issued several ASUs, including amending the guidance to offer an additional transition method.	~~January 1, 2019. Earlier application is permitted.~~	We have made substantial progress in completing our review of the impact of this new guidance. We anticipate recognition of approximately $2 billion of additional assets and corresponding liabilities on our balance sheet. We have also assessed the potential impact of embedded leases on our consolidated financial statements, given our manufacturing outsourcing, service arrangements and other agreements. In connection with this guidance we are currently designing new global processes and technological solutions to provide the appropriate financial accounting and disclosure data. We continue to monitor changes, modifications, clarifications or interpretations undertaken by the FASB, which may impact our conclusions.
~~In March 2017, the FASB issued new guidance that shortens the~~ ~~amortization period for certain callable debt securities held at a premium. The new guidance requires the premium to be amortized to the earliest call date.~~	January 1, 2019. Early application is permitted, including in interim periods, so long as any adjustments are reflected as of the beginning of the fiscal year that includes the interim period in which the guidance is applied.	~~We do not have any investments with features subject to this standard and do not expect this new guidance to have a material impact on our consolidated financial statements.~~
~~In July 2017, the FASB issued new guidance on accounting for~~ ~~certain financial instruments with characteristics of liabilities and equity,~~ ~~and accounting for certain financial instruments with~~ ~~down round features~~ (a feature in a financial instrument that reduces the strike price of an issued financial instrument if the issuer sells shares of its stock for an amount less than the currently stated strike price of the issued financial instrument or issues an equity-linked financial instrument with a strike price below the currently stated strike price of the issued financial instrument).	~~January 1, 2019. Earlier application is permitted.~~	~~We do not have any financial instruments with features subject to this standard and do not expect this new guidance to have a material impact on our consolidated financial statements.~~
~~In June 2018, the FASB issued new guidance to simplify the accounting for~~ ~~share-based payments to nonemployees~~ by aligning it with the accounting for share-based payments to employees, with certain exceptions. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date.	~~January 1, 2019. Early adoption is permitted, including in interim periods.~~	~~We do not have any share-based awards issued to nonemployees and do not expect this new guidance to have a material impact on our consolidated financial statements.~~



~~Standard/Description~~	~~Effective Date~~	~~Effect on the Financial Statements or Other Significant Matters~~
In June 2016, the FASB issued new guidance on accounting for credit losses of financial instruments. The new guidance replaces the probable initial recognition threshold for incurred loss estimates in current GAAP with a methodology that reflects expected credit loss estimates.	January 1, 2020. ~~Earlier application is permitted as of fiscal years beginning after December 15, 2018, including interim periods within that fiscal year.~~	We are assessing the impact of the provisions of this new guidance on our consolidated financial statements. This standard includes our financial instruments, such as accounts receivable, and investments that are generally of high credit quality. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. The new guidance requires us to identify, analyze, document and support new methodologies for quantifying expected credit loss estimates for our financial instruments, using information such as historical experience and current economic ~~environmental~~ conditions, plus the use of reasonable supportable forecast information. We do not expect this new guidance to have a material impact on our consolidated financial statements.
In January 2017, the FASB issued new guidance for goodwill impairment testing. The new guidance eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under the new guidance the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, although it cannot exceed the total amount of goodwill allocated to that reporting unit.	January 1, 2020. ~~Earlier application is permitted.~~	We do not expect this new guidance to have a material impact on our consolidated financial statements.
In August 2018, the FASB issued new guidance related to customers’ accounting for implementation costs incurred in a cloud computing arrangement that is considered a service contract. The new guidance aligns the requirements for capitalizing implementation costs in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new guidance can be adopted either prospectively or retrospectively.	January 1, 2020. ~~Earlier application is permitted.~~	We are assessing the impact of the provisions of this new guidance on our consolidated financial statements. We do not expect this new guidance to have a material impact on our consolidated financial statements.
In November 2018, the FASB issued new guidance clarifying the interaction between the accounting guidance for collaboration agreements and revenue from contracts with customers.	January 1, 2020. ~~Earlier application is permitted~~	We ~~are assessing~~have assessed the impact of the provisions of this new guidance and do not expect it will have a material impact on our consolidated financial statements.

FORWARD-LOOKING INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS

This report and other written or oral statements that we make from time to time contain forward-looking statements. Such forward-looking statements involve substantial risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “will,” “may,” “could,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “assume,” “target,” “forecast,” “guidance,” “goal,” “objective,” ~~“aim”~~“aim,” “seek” and other words and terms of similar meaning or by using future dates in connection with any discussion of, among other things, our anticipated operating and financial performance, business plans and prospects, expectations for our product pipeline, in-line products and product candidates, including anticipated regulatory submissions, data read-outs, study starts, approvals, revenue contribution, growth, performance, timing of exclusivity and potential benefits, ~~of Pfizer’s products and product candidates,~~ strategic reviews, capital allocation ~~business-development~~objectives, plans ~~the benefits expected from our plans to organize our commercial operations into three businesses effective at the beginning~~for and prospects of ~~the company's 2019 fiscal year,~~ our acquisitions and other ~~business development~~business-development activities, benefits anticipated from the reorganization of our commercial operations in 2019, sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies, such as legal proceedings, government regulation, our ability to successfully capitalize on growth opportunities or prospects, manufacturing and product supply and plans relating to share repurchases and dividends. In particular, these include statements relating to future actions, business plans and prospects, our acquisitions and other business development activities, the disposition of the HIS net assets, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies, such as legal proceedings, plans relating to share repurchases and dividends, government regulation and financial results, including, ~~in particular,~~among others, the anticipated progress in remediation efforts at certain of our Hospira manufacturing facilities and the expectations related to our supply issues set forth in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Business––Product Manufacturing” section of this MD&A, the expected impact of patent expiries on our ~~plans~~business set forth in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment––Industry-Specific Challenges––Intellectual Property Rights and Collaboration/Licensing Rights” section of this MD&A, the expected pricing pressures on our products in the U.S. and internationally and the anticipated impact to ~~organize~~ our ~~company into three businesses effective at~~business set forth in the ~~beginning~~“Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment––Industry-Specific Challenges––Regulatory Environment/Pricing and Access––Government and Other Payer Group Pressures” section of this MD&A, the benefits expected from the reorganization of our commercial operations in 2019 ~~fiscal year~~ and our expectations regarding growth set forth in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Strategy––Organizing for Growth” section of this MD&A, the ~~anticipated timeframe for any decision regarding strategic alternatives for Pfizer Consumer Healthcare~~expected timing and benefits of our agreement to combine Upjohn with Mylan to create a new global pharmaceutical company set forth in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our ~~Business”~~Business,” and “––Our Strategy––Our Business Development Initiatives” sections of this MD&A, the anticipated costs related to our preparations for Brexit set forth in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment––The Global Economic Environment” section of this MD&A, our anticipated liquidity position set forth in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment––The Global Economic Environment” and the “Analysis of Financial Condition, Liquidity and Capital Resources” sections of this MD&A, our plans for increasing investment in the U.S. set forth in the “Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Strategy––Capital Allocation and Expense Management––Increasing Investment in the U.S.” section of this MD&A, the financial guidance set forth in the ~~“Our~~“Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Financial Guidance for ~~2018~~2019” section of this MD&A, the expected impact of ACIP’s latest recommendation for Prevnar 13 for adults 65 and older on Prevnar 13’s revenues set forth in the “Analysis of the Condensed Consolidated Statements of Income––Revenues––Selected Product Discussion––Prevnar 13/Prevenar 13” section of this MD&A, the expected impact of updates to the prescribing information for Xeljanz on its prescribing and growth set forth in the “Analysis of the Condensed Consolidated Statements of Income––Revenues––Selected Product Discussion––Xeljanz” section of this MD&A, the anticipated costs and ~~cost~~ savings ~~including~~ from our ~~acquisition of Hospira~~2017-2019 initiatives and our ~~cost-reduction/productivity initiatives~~Organizing for Growth initiative, set forth in the “Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives” section of this MD&A and in Notes to Condensed Consolidated Financial Statements––Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives, the benefits expected from our business development transactions and the contributions that we expect to make from our general assets to ~~our~~the company’s pension and postretirement plans during ~~2018~~2019 set forth in Notes to Condensed Consolidated Financial Statements––Note 10. Pension and Postretirement Benefit Plans. Among the factors that could cause actual results to differ materially from past results and future plans and projected future results are the following:

the outcome of ~~research and development~~R&D activities, including, without limitation, the ability to meet anticipated pre-clinical ~~and~~or clinical ~~trial~~endpoints, commencement ~~and~~and/or completion dates for our pre-clinical or clinical trials, regulatory submission ~~and~~dates, regulatory approval dates ~~and~~and/or launch dates, ~~for product candidates,~~ as well as the possibility of unfavorable pre-clinical and clinical trial results, including the possibility of unfavorable new clinical data and ~~additional~~further analyses of existing clinical data;

~~decisions by regulatory authorities regarding whether and when~~the risk we may not be able to ~~approve our drug applications, which will depend on the assessment by such regulatory authorities~~successfully address all of the benefit-risk profile suggested by the totality of the efficacy and safety information submitted; decisions by regulatory authorities regarding labeling, ingredients and other matters that could affect the availability or commercial potential of our products; uncertainties regarding our ability to address the comments received ~~by us~~ from regulatory authorities such as the FDA ~~and~~or the EMA, ~~with respect~~or obtain approval from regulators, which will depend on myriad factors, including such regulator making a determination as to ~~certain~~whether a product’s benefits outweigh its known risks and a determination of ~~our drug applications to~~ the ~~satisfaction of those authorities;~~product’s efficacy; regulatory decisions impacting labeling, manufacturing processes, safety and/or other matters; and recommendations by technical or advisory committees, such as ACIP, that may impact the use of our vaccines;

the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;

the outcome of post-approval clinical trials, which could result in the loss of marketing approval, ~~for a product or~~ changes in ~~the~~product labeling, ~~for,~~ and/or ~~increased~~new or ~~new~~increased concerns about the ~~safety~~side effects or efficacy of, a product that could affect its availability or commercial ~~potential;~~

~~risks associated with preliminary, early stage or interim data, including~~potential, such as the ~~risk that final results of studies~~update to the U.S. prescribing information for which preliminary, early stage or interim data have been provided and/or additional clinical trials may be different from (including less favorable than) the preliminary, early stage or interim data resultsXeljanz and ~~may not support further clinical development of the applicable product candidate or indication;~~Xeljanz extended release;

the success of external business-development activities, including the ability to identify and execute on potential business development opportunities, the ability to satisfy the conditions to closing of announced transactions in the anticipated time frame or at all, the ability to realize the anticipated benefits of any such transactions, and the potential need to obtain additional equity or debt financing to pursue these opportunities, which could result in increased leverage and impact our credit ratings;

competitive developments, including the impact on our competitive position of new product entrants, in-line branded products, generic products, private label products, biosimilars and product candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates;

the implementation by the FDA and regulatory authorities in certain ~~other~~ countries of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products, with attendant competitive pressures, after the expiration of any applicable exclusivity period and patent rights;

risks related to our ability to develop and launch biosimilars, including risks associated with “at risk” launches, defined as the marketing of a product by Pfizer before the final resolution of litigation (including any appeals) brought by a third party alleging that such marketing would infringe one or more patents owned or controlled by the third party, and access challenges for our biosimilar products where our product may not receive appropriate formulary access or remains in a disadvantaged position relative to the innovator product;

the ability to meet competition from generic, branded and biosimilar products after the loss or expiration of patent protection for our products or competitor products;

the ability to successfully market both new and existing products domestically and internationally;

difficulties or delays in manufacturing, including delays caused by natural events, such as hurricanes; supply shortages at our facilities; and legal or regulatory actions, such as warning letters, suspension of manufacturing, seizure of product, ~~debarment,~~ injunctions, ordebarment, voluntary recall of a ~~product;~~product or failure to secure product approvals;

trade buying patterns;

the impact of existing and future legislation and regulatory provisions on product exclusivity;

trends toward managed care and healthcare cost containment, and our ability to obtain or maintain timely or adequate pricing or favorable formulary placement for our products;

the impact of any significant spending reductions or cost controls affecting Medicare, Medicaid or other publicly funded or subsidized health programs or changes in the tax treatment of employer-sponsored health insurance that may be implemented;

the impact of any U.S. healthcare reform or legislation, including any replacement, repeal, modification or invalidation of some or all of the provisions of the U.S. Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act;

U.S. federal or state legislation or regulatory action and/or policy efforts affecting, among other things, pharmaceutical product pricing, intellectual property, reimbursement or access, including under Medicaid, Medicare and other publicly funded or subsidized health programs; patient out-of-pocket costs for medicines, manufacturer prices and/or price increases that could result in new mandatory rebates and discounts or other pricing restrictions; general budget control actions; the importation of prescription drugs from outside the U.S. at prices that are regulated by governments of various foreign countries; revisions to reimbursement of biopharmaceuticals under government programs; restrictions on U.S. direct-to-consumer advertising; limitations on interactions with healthcare professionals; or the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on the cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines; as well as pricing pressures for our products as a result of highly competitive insurance markets;

legislation or regulatory action in markets outside the U.S., including China, affecting pharmaceutical product pricing, intellectual property, reimbursement or access, including, in particular, continued government-mandated reductions in prices and access restrictions for certain biopharmaceutical products to control costs in those markets;

the exposure of our operations outside the U.S. to possible capital and exchange controls, economic conditions, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest, unstable governments and legal systems and inter-governmental disputes;

contingencies related to actual or alleged environmental contamination;

claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates;

any significant breakdown, infiltration or interruption of our information technology systems and infrastructure;

legal defense costs, insurance expenses and settlement costs;

the risk of an adverse decision or settlement and the adequacy of reserves related to legal proceedings, including patent litigation, such as claims that our patents are invalid and/or do not cover the product of the generic drug manufacturer or where one or more third parties seeks damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities, product liability and other product-related litigation, including personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, commercial, environmental, government investigations, employment and other legal proceedings, including various means for resolving asbestos litigation, as well as tax issues;

the risk that our currently pending or future patent applications may not result in issued patents, or be granted on a timely basis, or any patent-term extensions that we seek may not be granted on a timely basis, if at all;

our ability to protect our patents and other intellectual property, both domestically and internationally;

interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;

governmental laws and regulations affecting domestic and foreign operations, including, without limitation, tax obligations and changes affecting the tax treatment by the U.S. of income earned outside the U.S. that may result from pending and possible future proposals, including further clarifications and/or interpretations of the ~~recently passed TCJA;~~TCJA enacted in 2017;

any significant issues involving our largest wholesale distributors, which account for a substantial portion of our revenues;

the possible impact of the increased presence of counterfeit medicines in the pharmaceutical supply chain on our revenues and on patient confidence in the integrity of our medicines;

the end result of any negotiations between the U.K. government and the EU regarding the terms of the U.K.’s exit from the EU, which could have implications on our research, commercial and general business operations in the U.K. and the EU, including the approval and supply of our products;

any significant issues that may arise related to the outsourcing of certain operational and staff functions to third parties, including with regard to quality, timeliness and compliance with applicable legal or regulatory requirements and industry standards;

any significant issues that may arise related to our joint ventures and other third-party business arrangements;

changes in U.S. generally accepted accounting principles;

further clarifications and/or changes in interpretations of existing laws and regulations, or changes in laws and regulations, in the U.S. and other countries;

uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions and recent and possible future changes in global financial markets; the related risk that our allowance for doubtful accounts may not be adequate; and the risks related to volatility of our income due to changes in the market value of equity investments;

any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas;

growth in costs and expenses;

changes in our product, segment and geographic mix;

the impact of purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items;

the impact of acquisitions, divestitures, restructurings and internal reorganizations, including ~~our plans to organize~~the reorganization of our commercial operations in 2019, the transaction with GSK which combined our respective consumer healthcare businesses into ~~three businesses effective at the beginning of the company’s 2019 fiscal year,~~a new consumer healthcare joint venture and our agreement to combine Upjohn with Mylan, as well as any other corporate strategic initiatives, and cost-reduction and productivity initiatives, each of which requires upfront costs but may fail to yield anticipated benefits and may result in unexpected costs or organizational disruption;

the impact of product recalls, withdrawals and other unusual items;

the risk of an impairment charge related to our intangible assets, goodwill or equity-method investments;

risks related to internal control over financial reporting;

risks and uncertainties related to ~~our~~ acquisitions, such as the acquisition of ~~Hospira, Anacor, Medivation and AstraZeneca’s small molecule anti-infectives business,~~Array, including, among other things, the ability to realize the anticipated benefits of those acquisitions, including the possibility that the expected cost savings and/or accretion ~~related to the~~from certain of those acquisitions ~~of Hospira, Anacor and Medivation~~ will not be realized or will not be realized within the expected time frame; the risk that the businesses will not be integrated successfully; disruption from the transactions making it more difficult to maintain business and operational relationships; risks related to our ability to grow revenues for ~~Xtandi;~~certain acquired products; significant transaction costs; and unknown liabilities;

risks and uncertainties related to our transaction with GSK, which combined our respective consumer healthcare businesses into a new consumer healthcare joint venture, including, among other things, risks related to the ability to realize the anticipated benefits of the transaction, including the possibility that the expected benefits and cost synergies from the transaction will not be realized or will not be realized within the expected time period, the risk that the businesses will not be integrated successfully, the possibility that a future separation of the joint venture as an independent company via a demerger of GSK’s equity interest to GSK’s shareholders and a listing of the joint venture on the U.K. equity market may not occur, disruption from the transaction making it more difficult to maintain business and operational relationships, negative effects of the transaction on the market price of Pfizer’s common stock and on Pfizer’s operating results, significant transaction costs, unknown liabilities, the risk of litigation and/or regulatory actions related to the transaction, other business effects, including the effects of industry, market, economic, political or regulatory conditions, future exchange and interest rates, changes in tax and other laws, regulations, rates and policies, future business combinations or disposals and competitive developments; and

risks and uncertainties related to our ~~evaluation of strategic alternatives for our Consumer Healthcare business,~~agreement to combine Upjohn with Mylan to create a new global pharmaceutical company, including, among other things, risks related to the satisfaction of the conditions to closing the transaction (including the failure to obtain necessary shareholder and regulatory approvals) in the anticipated timeframe or at all and the possibility that the transaction does not close, risks related to the ability to realize the anticipated benefits of ~~any strategic alternatives we may pursue for our Consumer Healthcare business;~~ the ~~potential for disruption to our business and diversion of management’s attention from other aspects of our business;~~transaction, including the possibility that ~~such strategic alternatives~~the expected benefits and cost synergies from the proposed transaction will not be ~~completed~~realized or will not be realized within the expected time period, the risk that the businesses will not be integrated successfully, disruption from the transaction making it more difficult to maintain business and operational relationships, negative effects of the announcement or the consummation of the proposed transaction on ~~terms that are advantageous~~the market price of Pfizer’s common stock, Pfizer’s credit ratings and/or on Pfizer’s or the combined company’s operating results, significant transaction costs, unknown liabilities, the risk of litigation and/or regulatory actions related to ~~Pfizer;~~ the ~~possibility that we may be unable to realize a higher value for Pfizer Consumer Healthcare through strategic alternatives;~~proposed transaction, other business effects, including the effects of industry, market, economic, political or regulatory conditions, future exchange and ~~unknown liabilities.~~interest rates, changes in tax and other laws, regulations, rates and policies, future business combinations or disposals and competitive developments.

We cannot guarantee that any forward-looking statement will be realized. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements, and are cautioned not to put undue reliance on forward-looking statements.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the SEC. You are advised, however, to consult any further disclosures we make on related subjects.

~~Our~~ ~~2017~~Additional discussion regarding certain risks, uncertainties and assumptions described above, as well as other material risks to our business, is included under the heading entitled “Risk Factors” in Part I, Item 1A. of our 2018 Form ~~10-K listed various important factors that~~10-K. These risks could cause actual results to differ materially from past and projected future results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. ~~Readers can find them in Part I, Item 1A, of that filing under the heading “Risk Factors.”~~ We incorporate that section of ~~that~~the 2018 Form 10-K in this filing and investors should refer to it. ~~Reference is also made to Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.~~ You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

The operating segment information provided in this report does not purport to represent the revenues, costs and income from continuing operations before provision for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented.

This report includes discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data. In addition, clinical trial data are subject to differing interpretations, and, even when we view data as sufficient to support the safety and/or effectiveness of a product candidate or a new indication for an in-line product, regulatory authorities may not share our views and may require additional data or may deny approval altogether.

~~Financial Risk Management~~

~~Interest Rate Risk~~

~~With respect to our investments, we strive to maintain a predominantly floating–rate basis position, but our strategy may change based on prevailing market conditions.~~

We currently borrow primarily on a long-term, fixed-rate basis. Historically, we strove to borrow primarily on a floating-rate basis; but in recent years we borrowed on a long-term, fixed-rate basis. From time to time, depending on market conditions, we will change the profile of our outstanding debt by entering into derivative financial instruments like interest rate swaps.

Legal Proceedings and Contingencies

Information with respect to legal proceedings and contingencies required by this Item is incorporated herein by reference to Notes to Condensed Consolidated Financial Statements––Note 12A. Contingencies and Certain Commitments: Legal Proceedings in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is incorporated by reference from the discussion under the heading Financial Risk Management in our ~~2017~~2018 Financial ~~Report and Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.~~

Report.

Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the SEC.

During our most recent fiscal quarter, there has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is incorporated herein by reference to Notes to Condensed Consolidated Financial Statements––Note 12A. Contingencies and Certain Commitments: Legal Proceedings in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Tax Matters

Additional information with respect to tax matters required by this Item is incorporated herein by reference to Notes to Condensed Consolidated Financial Statements––Note ~~5C.~~5B. Tax Matters: Tax Contingencies in Part I, Item 1, of this Quarterly Report on Form 10-Q.

We account for income tax contingencies using a benefit recognition model. If our initial assessment fails to result in the recognition of a tax benefit, we regularly monitor our position and subsequently recognize the tax benefit: (i) if there are changes in tax law, analogous case law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to “more likely than not”; (ii) if the statute of limitations expires; or (iii) if there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency. We regularly re-evaluate our tax positions based on the results of audits of federal, state and foreign income tax filings, statute of limitations expirations, changes in tax law or receipt of new information that would either increase or decrease the technical merits of a position relative to the “more-likely-than-not” standard.

Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution. Finalizing audits with the relevant taxing authorities can include formal administrative and legal proceedings, and, as a result, it is difficult to estimate the timing and range of possible changes related to our uncertain tax positions, and such changes could be significant.

Item 1A. Risk Factors

~~The~~We refer to the “Our Operating Environment”, “The Global Economic Environment” and “Forward-Looking Information and Factors That May Affect Future Results” sections of the MD&A of this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors”, of our ~~2017~~2018 Form ~~10-K are incorporated by reference herein. We are including~~10-K. There have been no material changes from the ~~following risk factor which should be read in conjunction with our description of~~ risk factors discussed in Part I, Item 1A, “Risk Factors” of our ~~2017~~2018 Form 10-K.

~~MARKET FLUCTUATIONS IN OUR EQUITY INVESTMENTS~~

In the first quarter of 2018, we adopted a new accounting standard whereby certain equity investments are measured at fair value with changes in fair value now recognized in net income. We expect the adoption of this new accounting standard may increase the volatility of our income in future periods due to changes in the fair value of equity investments. For additional information, see Notes to Condensed Consolidated Financial Statements––~~Note 1B~~. ~~Basis of Presentation and Significant Accounting Policies: Adoption of New Accounting Standards~~.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides certain information with respect to our purchases of shares of the Company’s common stock during the third fiscal quarter of ~~2018~~2019:

Issuer Purchases of Equity Securities^(a)

Period
Total Number of
Shares Purchased^(a)(b)

Average Price
Paid per Share^(a)(b)

Total Number of Shares Purchased as Part of Publicly Announced Plan^(a)

Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan^(a)

July 2, 2018 through July 29, 2018 7,765
$ 36.43
—
$ 10,292,715,228
July 30, 2018 through August 26, 2018 10,626
$ 40.45
—
$ 10,292,715,228
August 27, 2018 through September 30, 2018 46,671,505
$ 40.36
46,652,993
$ 9,187,715,502
Total 46,689,896
$ 40.36
46,652,993



Period	Total Number of Shares Purchased^(a)^, ^(b⁾	Average Price Paid per Share^(b)		Total Number of Shares Purchased as Part of Publicly Announced Plan^(a)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan^(a)
July 1, 2019 through July 28, 2019	30,230	$	43.28	—	$	5,292,881,709
July 29, 2019 through August 25, 2019	33,620,322	$	41.42	33,501,384	$	5,292,881,709
August 26, 2019 through September 29, 2019	23,422	$	37.78	—	$	5,292,881,709
Total	33,673,974	$	41.41	33,501,384

^(a)

Our December ~~2015 $11~~2017 $10 billion share repurchase program was exhausted in the ~~third~~first quarter of ~~2018.~~2019. In December ~~2017,~~2018, the Board of Directors authorized ~~an additional~~a new $10 billion share repurchase program to be utilized over time (the 2018 program) and share repurchases commenced thereunder in the ~~third~~first quarter of ~~2018 (the 2017 program).~~2019. On ~~March 12, 2018,~~February 7, 2019, we entered into an accelerated share repurchase agreement with ~~Citibank~~GS&Co. to repurchase ~~$4.0~~approximately $6.8 billion of our common stock and on ~~September 5, 2018,~~August 1, 2019, the accelerated share repurchase agreement with ~~Citibank~~GS&Co. was completed. For additional information, see the Notes to Condensed Consolidated Financial Statements––Note ~~12.~~12C. Contingencies and Certain Commitments: Certain Commitments. At September ~~30, 2018,~~29, 2019, our remaining share-purchase authorization under the ~~2017~~2018 program was approximately ~~$9.2~~$5.3 billion.

^(b)

In addition to the ~~amounts purchased under our share repurchase program, including amounts purchased~~33.5 million shares received under the accelerated share repurchase agreement with ~~Citibank,~~ GS&Co. (see the Notes to Condensed Consolidated Financial Statements––Note 12C. Contingencies and Certain Commitments: Certain Commitments),these columns represent (i) ~~32,041~~166,539 shares of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of awards under our long-term incentive programs and (ii) the open market purchase by the trustee of ~~4,862~~6,051 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who were granted performance share awards and who deferred receipt of such awards.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits



Exhibit ~~10.1~~2.1	-	~~Amendment~~Business Combination Agreement, dated July 29, 2019, by and among Pfizer Inc., Upjohn Inc., Utah Acquisition Sub Inc., Mylan N.V., Mylan I B.V. and Mylan II B.V. is incorporated by reference from our Current Report on Form 8-K filed on July 29, 2019 (File No. ~~3 to the Pfizer Supplemental Savings Plan.~~001-03619)*
Exhibit 2.2	-	Separation and Distribution Agreement, dated as of July 29, 2019, by and among Pfizer Inc. and Upjohn Inc. is incorporated by reference from our Current Report on Form 8-K filed on July 29, 2019 (File No. 001-03619)*
Exhibit 15	-	Accountants’ Acknowledgment.
Exhibit 31.1	-	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	-	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	-	Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2	-	Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101:
EX-101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
EX-101.SCH EX-101.CAL EX-101.LAB EX-101.PRE EX-101.DEF		Inline XBRL Taxonomy Extension Schema Inline XBRL Taxonomy Extension Calculation Linkbase Inline XBRL Taxonomy Extension Label Linkbase Inline XBRL Taxonomy Extension Presentation Linkbase Inline XBRL Taxonomy Extension Definition Document
Exhibit 104		Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


*	Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Pfizer agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Pfizer Inc.
		(Registrant)


Dated:	November ~~8, 2018~~7, 2019	/s/ Loretta V. Cangialosi
		Loretta V. Cangialosi, Senior Vice President and Controller (Principal Accounting Officer and Duly Authorized Officer)

~~119~~118



~~DELAWARE~~ Delaware	13-5315170
(State of Incorporation)	~~13-5315170~~ (I.R.S. Employer Identification No.)



Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.05 par value	PFE	New York Stock Exchange
0.000% Notes due 2020	PFE20A	New York Stock Exchange
0.250% Notes due 2022	PFE22	New York Stock Exchange
1.000% Notes due 2027	PFE27	New York Stock Exchange



~~YES~~ X Yes	~~NO ___~~x	No	☐



~~YES~~ X Yes	~~NO ___~~x	No	☐



PART I. FINANCIAL INFORMATION	Page

Item 1.
Financial Statements

Condensed Consolidated Statements of Income for the three and nine months ended September 29, 2019 and September 30, 2018 ~~and October 1, 2017~~	5

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 29, 2019 and September 30, 2018 ~~and October 1, 2017~~	6

Condensed Consolidated Balance Sheets as of September ~~30, 2018~~29, 2019 and December 31, ~~2017~~2018	7

Condensed Consolidated Statements of Equity for the three and nine months ended September 29, 2019 and September 30, 2018	8

Condensed Consolidated Statements of Cash Flows for the nine months ended September 29, 2019 and September 30, 2018 ~~and October 1, 2017~~	810

Notes to Condensed Consolidated Financial Statements	912

Review Report of Independent Registered Public Accounting Firm	5452

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations	5553

Item 3.
Quantitative and Qualitative Disclosures About Market Risk	114

Item 4.
Controls and Procedures	114

PART II. OTHER INFORMATION

Item 1.
Legal Proceedings	115

Item 4.1A.
~~Controls and Procedures~~Risk Factors	115

~~PART II. OTHER INFORMATION~~

Item 1.2.
~~Legal Proceedings~~Unregistered Sales of Equity Securities and Use of Proceeds	116

Item ~~1A.~~3.
~~Risk Factors~~Defaults Upon Senior Securities	116

Item 2.4.
~~Unregistered Sales of Equity Securities and Use of Proceeds~~Mine Safety Disclosures	116

Item 5.
Other Information	116

Item 6.
Exhibits	117

~~Item 3.~~
~~Defaults Upon Senior Securities~~	~~117~~

~~Item 4.~~
~~Mine Safety Disclosures~~	~~117~~

~~Item 5.~~
~~Other Information~~	~~117~~

~~Item 6.~~
~~Exhibits~~Signature	118

~~Signature~~	~~119~~



~~2017~~2018 Financial Report	Financial Report for the fiscal year ended December 31, ~~2017,~~2018, which was filed as Exhibit 13 to the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2017~~2018
~~2017~~2018 Form 10-K	Annual Report on Form 10-K for the fiscal year ended December 31, ~~2017~~2018
ACA (Also referred to as U.S. Healthcare Legislation)	U.S. Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act
ACIP	Advisory Committee on Immunization Practices
Akcea	Akcea Therapeutics, Inc.
ALK	anaplastic lymphoma kinase
Alliance revenues	Revenues from alliance agreements under which we co-promote products discovered or developed by other companies or us
Allogene	Allogene Therapeutics, Inc.
~~AMPA~~	~~α-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid~~
Anacor	Anacor Pharmaceuticals, Inc.
AOCI	Accumulated Other Comprehensive Income
Array	Array BioPharma Inc.
Astellas	Astellas Pharma Inc., Astellas US LLC and Astellas Pharma US, Inc.
~~ASU~~	~~Accounting Standards Update~~
~~ATM-AVI~~	~~aztreonam-avibactam~~
~~Avillion~~	~~Avillion LLP~~
Bain Capital	Bain Capital Private Equity and Bain Capital Life Sciences
~~Biogen~~Bamboo	~~Biogen~~Bamboo Therapeutics, Inc.
Biopharma	Pfizer Biopharmaceuticals Group
BMS	Bristol-Myers Squibb Company
~~BRCA~~	~~BReast CAncer susceptibility gene~~
CAR T	chimeric antigen receptor T cell
CDC	U.S. Centers for Disease Control and Prevention
~~Cellectis~~	~~Cellectis S.A.~~
Cerevel	Cerevel Therapeutics, LLC
~~CIAS~~cGMP	~~cognitive impairment associated with schizophrenia~~current Good Manufacturing Practices
Citibank	Citibank, N.A.
~~CML~~	~~chronic myelogenous leukemia~~
Developed Markets	U.S., Western Europe, Japan, Canada, ~~Australia,~~ South Korea, Australia, Scandinavian countries, Finland and New Zealand
~~EEA~~EGFR	~~European Economic Area~~epidermal growth factor receptor
EH	Essential Health
EMA	European Medicines Agency
Emerging Markets	Includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Eastern Europe, ~~Africa,~~ the Middle East, Africa, Central Europe and Turkey
EPS	earnings per share
EU	European Union
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FDA	U.S. Food and Drug Administration
GAAP	Generally Accepted Accounting Principles
GIST	gastrointestinal stromal tumors
GPD	Global Product Development organization
~~HER2-~~GSK	~~human epidermal growth factor receptor 2-negative~~GlaxoSmithKline plc
GS&Co.	Goldman, Sachs & Co. LLC
hGH-CTP	human growth hormone
HIS	Hospira Infusion Systems
Hisun Pfizer	Hisun Pfizer Pharmaceuticals Company Limited
Hospira	Hospira, Inc.
HR+	hormone receptor-positive
ICU Medical	ICU Medical, Inc.
IH	Innovative Health
Ionis	Ionis Pharmaceuticals, Inc.
IPR&D	in-process research and development
IRS	U.S. Internal Revenue Service



J&J	Johnson & Johnson
JV	Joint Venture
King	King Pharmaceuticals LLC (formerly King Pharmaceuticals, Inc.)
LDL	low density lipoprotein
LEP	Legacy Established Products
LIBOR	London Interbank Offered Rate
Lilly	Eli Lilly & Company
LOE	loss of exclusivity
MCC	Merkel ~~Cell Carcinoma~~cell carcinoma
MCO	~~Managed Care Organization~~managed care organization
mCRC	metastatic colorectal cancer
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Medivation	Medivation LLC (formerly Medivation, Inc.)
Merck	Merck & Co., Inc.
Meridian	Meridian Medical Technologies, Inc.
Moody’s	Moody’s Investors Service
Mylan	Mylan N.V.
NDA	new drug application
~~NovaQuest~~	~~NovaQuest Co-Investment Fund V, L.P.~~
NSCLC	non-small cell lung cancer
NYSE	New York Stock Exchange
OPKO	OPKO Health, Inc.
OTC	over-the-counter
PARP	poly ADP ribose polymerase
PBM	~~Pharmacy Benefit Manager~~pharmacy benefit manager
Pharmacia	Pharmacia Corporation
PP&E	~~Property,~~property, plant & equipment
PsA	psoriatic arthritis
Quarterly Report on Form 10-Q	Quarterly Report on Form 10-Q for the quarterly period ended September ~~30, 2018~~29, 2019
RA	rheumatoid arthritis
RCC	renal cell carcinoma
R&D	research and development
~~RPI~~ROU	~~RPI Finance Trust~~right of use
Sandoz	Sandoz, Inc., a division of Novartis AG
SEC	U.S. Securities and Exchange Commission
~~Servier~~	~~Les Laboratoires Servier SAS~~
SFJ	SFJ Pharmaceuticals Group
Shire	Shire International GmbH
SI&A	~~Selling,~~selling, informational and administrative
~~SIP~~	~~Sterile Injectable Pharmaceuticals~~
S&P	Standard and Poor’s
~~StratCO~~	~~Strategy and Commercial Operations~~
~~Tax Cuts and Jobs Act or~~ TCJA	~~Legislation~~legislation commonly referred to as the U.S. Tax Cuts and Jobs Act of 2017
~~Teuto~~Therachon	~~Laboratório Teuto Brasileiro S.A.~~Therachon Holding AG
UC	ulcerative colitis
U.K.	United Kingdom
U.S.	United States
ViiV	ViiV Healthcare Limited
~~WRD~~VBP	Volume-based procurement program
WRDM	Worldwide Research, Development and ~~Development~~Medical


^(a)	Excludes amortization of intangible assets, except as disclosed in Note 9A. Identifiable Intangible Assets and Goodwill: Identifiable Intangible Assets.


^(b)	Reclassified into Other (income)/deductions—net and Cost of sales in the condensed consolidated statements of income. For additional information on amounts reclassified into Other (income)/deductions—net and Cost of sales, see Note ~~7F.~~7E. Financial Instruments: Derivative Financial Instruments and Hedging Activities.


^(b)(c)	For additional information, see Notes to Consolidated Financial Statements—Note 1B. Basis of Presentation and Significant Accounting Policies: Adoption of New Accounting Standards. in 2018 in our 2018 Financial Report.



	PFIZER INC. SHAREHOLDERS
	Preferred Stock					Common Stock						Treasury Stock
(MILLIONS, EXCEPT PREFERRED SHARES)	Shares		Stated Value			Shares	Par Value		Add’l Paid-In Capital			Shares		Cost			Retained Earnings			Accum. Other Comp. Loss			Share- holders’ Equity			Non-controlling interests			Total Equity
Balance, June 30, 2019	458		$	18		9,363	$	468	$	86,963		(3,801	)	$	(110,786	)	$	94,440		$	(11,535	)	$	59,568		$	357		$	59,924
Net income																	7,680						7,680			4			7,684
Other comprehensive income/(loss), net of tax																				(265		)	(265		)	(9		)	(275		)
Cash dividends declared:
Common stock																	(2,006		)				(2,006		)				(2,006		)
Preferred stock																	—						—						—
Noncontrolling interests																							—			2			2
Share-based payment transactions						3	—		136			—		(8		)							128						128
Purchases of common stock												(34	)	—									—						—
Preferred stock conversions and redemptions	(8	)	—						—			—		—									(1		)				(1		)
Other^(a)									—			—		—			—			—			—			(61		)	(61		)
Balance, September 29, 2019	449		$	18		9,366	$	468	$	87,099		(3,835	)	$	(110,795	)	$	100,113		$	(11,801	)	$	65,103		$	293		$	65,396

	PFIZER INC. SHAREHOLDERS
	Preferred Stock					Common Stock						Treasury Stock
(MILLIONS, EXCEPT PREFERRED SHARES)	Shares		Stated Value			Shares	Par Value		Add’l Paid-In Capital			Shares		Cost			Retained Earnings			Accum. Other Comp. Loss			Share- holders’ Equity			Non-controlling interests			Total Equity
Balance July 1, 2018	502		$	20		9,303	$	465	$	84,898		(3,438	)	$	(95,463	)	$	89,860		$	(10,003	)	$	69,778		$	346		$	70,124
Net income																	4,114						4,114			8			4,122
Other comprehensive income/(loss), net of tax																				(414		)	(414		)	(9		)	(422		)
Cash dividends declared:
Common stock																	(1,977		)				(1,977		)				(1,977		)
Preferred stock																	—						—						—
Noncontrolling interests																							—			—			—
Share-based payment transactions						23	1		930			—		(6		)							926						926
Purchases of common stock												(47	)	(1,105		)							(1,105		)				(1,105		)
Preferred stock conversions and redemptions	(14	)	(1		)				(1		)	—		—									(1		)				(1		)
Other									—			—					(2		)	—			(2		)	—			(2		)
Balance, September 30, 2018	488		$	20		9,326	$	466	$	85,828		(3,484	)	$	(96,574	)	$	91,995		$	(10,417	)	$	71,319		$	346		$	71,664



Adopting the standard related to leases impacted our prior period condensed consolidated balance sheet as follows:
(MILLIONS OF DOLLARS)	As Previously Reported Balance at December 31, 2018		Effect of Change Higher/(Lower)			Balance at January 1, 2019
Other current assets	$	2,461	$	(1	)	$	2,460
Noncurrent deferred tax assets and other noncurrent tax assets	1,924		(11		)	1,913
Other noncurrent assets	2,799		1,351			4,149
Other current liabilities	10,753		258			11,011
Other noncurrent liabilities	5,850		1,060			6,910
Retained earnings	89,554		20			89,574



Adoption of the standard related to pension and postretirement benefit costs impacted our prior period condensed consolidated statements of income as follows:
	Three Months Ended October 1, 2017
(MILLIONS OF DOLLARS)	As Previously Reported			Effect of Change Higher/(Lower)			As Restated
Cost of sales	$	2,847		$	(3	)	$	2,844
Selling, informational and administrative expenses	3,500			4			3,504
Research and development expenses	1,859			6			1,865
Restructuring charges and certain acquisition-related costs	149			(35		)	114
Other (income)/deductions––net	51			28			79
Income from continuing operations before provision for taxes on income	3,585			—			3,585

	Nine Months Ended October 1, 2017
(MILLIONS OF DOLLARS)	As Previously Reported			Effect of Change Higher/(Lower)			As Restated
Cost of sales	$	7,980		$	(9	)	$	7,972
Selling, informational and administrative expenses	10,233			16			10,249
Research and development expenses	5,346			21			5,367
Restructuring charges and certain acquisition-related costs	377			(110		)	267
Other (income)/deductions––net	(16		)	81			65
Income from continuing operations before provision for taxes on income	11,351			—			11,351



Adoption of the standards impacted our condensed consolidated balance sheet as follows:
				Effect of New Accounting Standards Higher/(Lower)
(MILLIONS OF DOLLARS)	As Previously Reported Balance at December 31, 2017			Revenues			Financial Assets and Liabilities			Income Tax Accounting			Reclassification of Certain Tax Effects from AOCI			Balance at January 1, 2018
Trade accounts receivable	$	8,221		$	13		$	—		$	—		$	—		$	8,234
Inventories	7,578			(11		)	—			—			—			7,567
Current tax assets	3,050			(11		)	—			(3		)	—			3,036
Noncurrent deferred tax assets and other noncurrent tax assets	1,855			(17		)	—			—			—			1,838
Other noncurrent assets	3,227			—			—			(204		)	—			3,023
Other current liabilities	11,115			(123		)	—			—			—			10,992
Noncurrent deferred tax liabilities	3,900			106			—			(18		)	—			3,988
Other noncurrent liabilities	6,149			(459		)	—			—			—			5,690
Retained earnings	85,291			450			419			(189		)	495			86,466
Accumulated other comprehensive loss	(9,321		)	—			(419		)	—			(495		)	(10,235		)



Adoption of the standards related to the classification of certain transactions in the statement of cash flows and the presentation of restricted cash in the statement of cash flows impacted our condensed consolidated statement of cash flows as follows:
	Nine Months Ended October 1, 2017
				Effect of New Accounting Standards Inflow/(Outflow)
(MILLIONS OF DOLLARS)	As Previously Reported			Cash Flow Classification			Restricted Cash			As Restated
Operating Activities
Other adjustments, net	$	(561	)	$	(43	)	$	—		$	(604	)
Other changes in assets and liabilities, net of acquisitions and divestitures	(3,644		)	—			28			(3,616		)
Investing Activities
Proceeds from redemptions/sales of short-term investments	5,783			—			(5		)	5,778
Proceeds from redemptions/sales of long-term investments	2,417			—			(14		)	2,403
Financing Activities
Principal payments on short-term borrowings	(7,691		)	33			—			(7,659		)
Net proceeds from short-term borrowings with original maturities of three months or less	555			10			—			566
Net increase in cash and cash equivalents and restricted cash and cash equivalents	184			—			9			193
Cash and cash equivalents and restricted cash and cash equivalents, beginning	2,595			—			70			2,666
Cash and cash equivalents and restricted cash and cash equivalents, ending	2,779			—			79			2,858



~~YES ____~~Yes	NO X ☐	No	x



The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:
(MILLIONS OF DOLLARS)	September 30, 2018		December 31, 2017
Cash and cash equivalents	$	3,559	$	1,342
Restricted cash and cash equivalents in Short-term investments	40		—
Restricted cash and cash equivalents in Long-term investments	59		—
Restricted cash and cash equivalents in Other current assets	—		14
Restricted cash and cash equivalents in Other noncurrent assets	—		75
Total cash and cash equivalents and restricted cash and cash equivalents shown in the condensed consolidated balance sheets	$	3,658	$	1,431

									The following table provides information about the balance sheet classification of these accruals:
(MILLIONS OF DOLLARS)	September 30, 2018		December 31, 2017		September 29, 2019		December 31, 2018
Reserve against Trade accounts receivable, less allowance for doubtful accounts	$	1,297	$	1,352	$	1,203	$	1,288

Other current liabilities:
Accrued rebates	3,235		2,674		3,275		3,208
Other accruals	641		512		617		531

Other noncurrent liabilities	374		385		463		399
Total accrued rebates and other accruals	$	5,548	$	4,923	$	5,557	$	5,426



For operating leases, the ROU assets and liabilities are presented in our condensed consolidated balance sheet as follows:
		Balance at
(MILLIONS OF DOLLARS)	Balance Sheet Classification	September 29, 2019
ROU assets	Other noncurrent assets	$	1,306
Lease liabilities (short-term)	Other current liabilities	281
Lease liabilities (long-term)	Other noncurrent liabilities	1,037



Our total lease costs are as follows:
	Three Months Ended			Nine Months Ended
(MILLIONS OF DOLLARS)	September 29, 2019			September 29, 2019
Operating lease cost	$	111		$	310
Variable lease cost	74			192
Sublease income	(10		)	(31		)
Total lease cost	$	174		$	471



Other supplemental information includes the following:
	Weighted-Average Remaining Contractual Lease Term (Years) as of	Weighted-Average Discount Rate as of
(MILLIONS OF DOLLARS)	September 29, 2019	September 29, 2019		Nine Months Ended September 29, 2019
Operating leases	6.8	3.6	%
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases				$	244
(Gains)/losses on sale and leaseback transactions, net				(32		)
ROU assets obtained in exchange for new operating lease liabilities				$	250



The table below reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded in the condensed consolidated balance sheet as of September 29, 2019:
(MILLIONS OF DOLLARS)
Period	Operating Lease Liabilities
Next one year^(a)	$	322
1-2 years	279
2-3 years	222
3-4 years	176
4-5 years	110
Thereafter	406
Total undiscounted lease payments	1,516
Less: Imputed interest	197
Present Value of Minimum Lease Payments	1,319
Less: Current portion	281
Noncurrent portion	$	1,037


^(a)	Reflects lease payments due within 12 months subsequent to the balance sheet date.



As of December 31, 2018, the future minimum rental commitments under non-cancelable operating leases follow:
(MILLIONS OF DOLLARS)	2019		2020		2021		2022		2023		After 2023
Lease commitments	$	300	$	252	$	210	$	267	$	248	$	2,040



The amounts associated with the Consumer Healthcare business, as well as other assets classified as held for sale consisted of the following:
(MILLIONS OF DOLLARS)	December 31, 2018
Assets Held for Sale
Cash and cash equivalents	$	32
Trade accounts receivable, less allowance for doubtful accounts	532
Inventories	538
Other current assets	56
PP&E	675
Identifiable intangible assets, less accumulated amortization	5,763
Goodwill	1,972
Noncurrent deferred tax assets and other noncurrent tax assets	54
Other noncurrent assets	57
Total Consumer Healthcare assets held for sale	9,678
Other assets held for sale^(a)	46
Assets held for sale	$	9,725

Liabilities Held for Sale

Trade accounts payable	$	406
Income taxes payable	39
Accrued compensation and related items	93
Other current liabilities	353
Pension benefit obligations, net	39
Postretirement benefit obligations, net	33
Noncurrent deferred tax liabilities	870
Other noncurrent liabilities	56
Total Consumer Healthcare liabilities held for sale	$	1,890



The following table provides the components of costs associated with acquisitions and cost-reduction/productivity initiatives:
	Three Months Ended						Nine Months Ended
(MILLIONS OF DOLLARS)	September 30, 2018			October 1, 2017			September 30, 2018			October 1, 2017
Restructuring (credits)/charges:
Employee terminations	$	(24	)	$	(55	)	$	(53	)	$	(113	)
Asset impairments^(a)	12			101			8			126
Exit costs	14			10			14			16
Restructuring charges/(credits)^(b)	1			56			(32		)	28
Transaction costs^(c)	1			(14		)	1			4
Integration costs^(d)	82			73			202			235
Restructuring charges and certain acquisition-related costs	85			114			172			267
Net periodic benefit costs recorded in Other (income)/deductions––net^(e)	41			35			103			110
Additional depreciation––asset restructuring, virtually all of which is recorded in Cost of sales^(f)	12			39			43			74
Implementation costs recorded in our condensed consolidated statements of income as follows^(g):
Cost of sales	21			26			57			77
Selling, informational and administrative expenses	17			22			51			46
Research and development expenses	9			9			22			26
Total implementation costs	48			57			130			150
Total costs associated with acquisitions and cost-reduction/productivity initiatives	$	186		$	245		$	447		$	601


^(a)	~~The asset impairment charges for the three and nine months ended October 1, 2017 are largely associated with our acquisitions of Hospira and Medivation.~~


•	For the third quarter of 2019, Biopharma ($10 million charge); Upjohn ($6 million credit); and Other ($79 million charge).


•	For the first nine months of 2019, Biopharma ($38 million credit); Upjohn ($27 million credit); and Other ($15 million charge).


^(f)	Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.


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



The following table provides the components of and changes in our restructuring accruals:
(MILLIONS OF DOLLARS)	Employee Termination Costs			Asset Impairment Charges			Exit Costs			Accrual
Balance, December 31, 2017^(a)	$	1,039		$	—		$	66		$	1,105
Provision/(Credit)	(53		)	8			14			(32		)
Utilization and other^(b)	(235		)	(8		)	(34		)	(277		)
Balance, September 30, 2018^(c)	$	750		$	—		$	46		$	796


^(a)	~~Included in~~ ~~Other current liabilities~~ ~~($643 million) and~~ ~~Other noncurrent liabilities~~ ~~($462 million).~~


^(b)	~~Includes adjustments for foreign currency translation.~~


^(a)	Included in Other current liabilities ($823 million) and Other noncurrent liabilities ($428 million).


^(b)	Includes the reversal of certain accruals related to our acquisition of Wyeth upon the effective favorable settlement of a U.S. IRS audit for multiple tax years. See Note 5B for additional information.