Help please!

I am trying to organize a paper to analyze an SEC 10K for the Pfizer company for a final project but I do not know where to start. Attached is the SEC 10K report, and I have to use three or more accounting concepts learned in the course (such as how they measure inventory, debt to asset ratio, etc.). Any help would be beneficial, thanks!

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-K _____________________________________________ (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-3619 _____________________________________________ PFIZER INC. (Exact name of registrant as specified in its charter) _____________________________________________ Delaware 13-5315170 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 235 East 42nd Street 10017-5755 New York, New York (Address of principal executive offices) (Zip Code) (212) 733-2323 (Registrant's telephone number, including area code) _____________________________________________ Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on which registered New York Stock Exchange Title of each class Common Stock, $.05 par value Securities registered pursuant to Section 12(g) of the Act: None _____________________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of \"large accelerated filer,\" \"accelerated filer\" and \"smaller reporting company\" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant's most recently completed second fiscal quarter, June 27, 2014, was approximately $188 billion. The registrant has no non-voting common stock. The number of shares outstanding of the registrant's common stock as of February 20, 2015 was 6,128,855,392 shares of common stock, all of one class. DOCUMENTS INCORPORATED BY REFERENCE Portions of the 2014 Annual Report to Shareholders Parts I, II and IV Portions of the Proxy Statement for the 2015 Annual Meeting of Shareholders Part III TABLE OF CONTENTS Page PART I ITEM 1. BUSINESS General Pfizer Website Commercial Operations Biopharmaceutical Products Consumer Healthcare Research and Development International Operations Marketing Patents and Other Intellectual Property Rights Competition Raw Materials Government Regulation and Price Constraints Environmental Matters Tax Matters Employees Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 ITEM 1A. RISK FACTORS ITEM 1B. UNRESOLVED STAFF COMMENTS ITEM 2. PROPERTIES ITEM 3. LEGAL PROCEEDINGS ITEM 4. MINE SAFETY DISCLOSURES EXECUTIVE OFFICERS OF THE COMPANY PART II ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ITEM 6. SELECTED FINANCIAL DATA ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 15(a)(1) Financial Statements 15(a)(2) Financial Statement Schedules 15(a)(3) Exhibits 1 1 1 1 2 3 4 4 5 6 6 9 11 11 15 16 16 16 17 29 29 29 29 30 32 32 32 32 33 33 33 33 33 34 34 34 34 34 34 35 35 35 35 35 PART I ITEM 1. General BUSINESS Pfizer Inc. is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend and significantly improve their lives through the discovery, development and manufacture of healthcare products. Our global portfolio includes medicines and vaccines, as well as many of the world's best-known consumer healthcare products. We work across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared diseases of our time. We collaborate with healthcare providers, governments and local communities to support and expand access to reliable, affordable healthcare around the world. Our revenues are derived from the sale of our products, and, to a much lesser extent, from alliance agreements, under which we co-promote products discovered by other companies (Alliance revenues). The majority of our revenues come from the manufacture and sale of biopharmaceutical products. The Company was incorporated under the laws of the State of Delaware on June 2, 1942. Unless the context requires otherwise, references to \"Pfizer,\" \"the Company,\" \"we,\" \"us\" or \"our\" in this Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (2014 Form 10-K) refer to Pfizer Inc. and its subsidiaries. References to developed markets in this 2014 Form 10-K include the United States (U.S.), Western Europe, Japan, Canada, Australia, Scandinavia, South Korea, Finland and New Zealand; and references to emerging markets in this 2014 Form 10-K include the rest of the world, including, among other countries, China, Brazil, Mexico, Russia, India and Turkey. On February 5, 2015, we announced that we have entered into a definitive merger agreement under which we agreed to acquire Hospira, Inc. (Hospira), the world's leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, for $90 per share in cash, for a total enterprise value of approximately $17 billion. The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and the approval of Hospira's shareholders, and is expected to close in the second half of 2015. On June 24, 2013, we completed the full disposition of our Animal Health business. For additional information, see the Notes to Consolidated Financial StatementsNote 2D. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures and Equity-Method Investments: Divestitures in our 2014 Financial Report (as defined below). On November 30, 2012, we completed the sale of our Nutrition business to Nestl for $11.85 billion in cash. For additional information, see the Notes to Consolidated Financial StatementsNote 2D. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures and Equity-Method Investments: Divestitures in our 2014 Financial Report. For a further discussion of our strategy and our business development initiatives, see the Overview of Our Performance, Operating Environment, Strategy and OutlookOur Strategy and Our Business Development Initiatives sections in our 2014 Financial Report. Our businesses are heavily regulated in most of the countries in which we operate. In the U.S., the principal authority regulating our operations is the U.S. Food and Drug Administration (FDA). The FDA regulates the safety and efficacy of the products we offer and our research, quality, manufacturing processes, product promotion, advertising and product labeling. Similar regulations exist in most other countries, and in many countries the government also regulates our prices. See Government Regulation and Price Constraints below. Pfizer Website This 2014 Form 10-K, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are available (free of charge) on our website (www.pfizer.com), in text format and, where applicable, in interactive data file format, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC). Throughout this 2014 Form 10-K, we \"incorporate by reference\" certain information from other documents filed or to be filed with the SEC, including our Proxy Statement for the 2015 Annual Meeting of Shareholders (2015 Proxy Statement) and the 2014 Financial Report, portions of which are filed as Exhibit 13 to this 2014 Form 10-K, and which also will be contained in Appendix A to our 2015 Proxy Statement (2014 Financial Report). The SEC allows us to disclose important information by 1 referring to it in that manner. Please refer to such information. Our 2014 Annual Report to Shareholders consists of the 2014 Financial Report and the Corporate and Shareholder Information attached to the 2015 Proxy Statement. Our 2014 Financial Report will be available on our website (www.pfizer.com) on or about February 27, 2015. Our 2015 Proxy Statement will be available on our website (www.pfizer.com) on or about March 12, 2015. We use our website (www.pfizer.com) as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC. These disclosures are included on our website (www.pfizer.com) in the \"Investors\" or \"News\" sections. Accordingly, investors should monitor these portions of our website (www.pfizer.com), in addition to following Pfizer's press releases, SEC filings and public conference calls and webcasts. Information relating to corporate governance at Pfizer, including our Corporate Governance Principles; Director Qualification Standards; Pfizer Policies on Business Conduct (for all of our employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer); Code of Business Conduct and Ethics for Members of the Board of Directors; information concerning our Directors; ways to communicate by e-mail with our Directors; Board Committees; Committee Charters; Charter of the Lead Independent Director; and transactions in Pfizer securities by Directors and Officers; as well as Chief Executive Officer and Chief Financial Officer certifications, are available on our website (www.pfizer.com). We will provide any of the foregoing information without charge upon written request to our Corporate Secretary, Pfizer Inc., 235 East 42nd Street, New York, NY 10017-5755. Information relating to shareholder services, including the Computershare Investment Program, book-entry share ownership and direct deposit of dividends, is also available on our website (www.pfizer.com). The information contained on our website does not, and shall not be deemed to, constitute a part of this 2014 Form 10-K. Pfizer's references to the URLs for websites are intended to be inactive textual references only. Commercial Operations At the beginning of our fiscal year 2014, we began managing our commercial operations through a new global commercial structure consisting of two distinct businesses: an Innovative Products business and an Established Products business. The Innovative Products business is composed of two operating segments: the Global Innovative Pharmaceutical segment (GIP) and the Global Vaccines, Oncology and Consumer Healthcare segment (VOC). The Established Products business consists of the Global Established Pharmaceutical segment (GEP). Each operating segment is led by a single manager and has responsibility for its commercial activities and for certain in-process research and development (IPR&D) projects for new investigational products and additional indications for in-line products that generally have achieved proof of concept. Each business has a geographic footprint across developed and emerging markets. Some additional information about each product grouping follows: Innovative Products Business: Global Innovative Pharmaceutical segmentGIP is focused on developing, registering and commercializing novel, value-creating medicines that significantly improve patients' lives. These therapeutic areas include inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases and women's/men's health and include leading brands, such as Xeljanz, Eliquis and Lyrica (U.S. and Japan). GIP has a pipeline of medicines in inflammation, cardiovascular/metabolic disease, neuroscience and pain, and rare diseases. Global Vaccines, Oncology and Consumer Healthcare segmentVOC focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare. Consumer Healthcare manufactures and markets several well known, over-the-counter (OTC) products. Each of the three businesses in VOC operates as a separate, global business, with distinct specialization in terms of the science and market approach necessary to deliver value to consumers and patients. Established Products Business: Global Established Pharmaceutical segmentGEP includes the brands that have lost market exclusivity and, generally, the mature, patent-protected products that are expected to lose exclusivity through 2015 in most major markets and, to a much smaller extent, generic pharmaceuticals. Additionally, GEP includes our sterile injectable products and biosimilar development portfolio. 2 We expect that the GIP and VOC biopharmaceutical portfolios of innovative, largely patent-protected, in-line products will be sustained by ongoing investments to develop promising assets and targeted business development in areas of focus to ensure a pipeline of highly-differentiated product candidates in areas of unmet medical need. The assets managed by these groups are science-driven, highly differentiated and generally require a high-level of engagement with healthcare providers and consumers. GEP is expected to generate strong consistent cash flow by providing patients around the world with access to effective, lower-cost, high-value treatments. GEP leverages our biologic development, regulatory and manufacturing expertise to seek to advance its biosimilar development portfolio. In addition, GEP may also engage in targeted business development to further enable its commercial strategies. For a further discussion of these operating segments, including prior-period information that has been conformed to the current commercial structure, as well as comparative segment information for 2014, 2013 and 2012, see the Notes to Consolidated Financial StatementsNote 18. Segment, Geographic and Other Revenue Information, including the tables therein captioned Selected Income Statement Information, Geographic Information and Significant Product Revenues, the table captioned Revenues by Segment and Geographic Area and the Analysis of Operating Segment Information section in our 2014 Financial Report, which are incorporated by reference. Biopharmaceutical Products In 2014, our biopharmaceutical business was managed through GIP, GEP and the vaccines and oncology businesses of VOC, which are discussed under Commercial Operations above. For a discussion of certain of our key biopharmaceutical products, including Lyrica, the Prevnar family of products, Enbrel, Celebrex, Lipitor, Viagra, Zyvox, Sutent, Norvasc, the Premarin family of products, Eliquis and Xeljanz, see the Analysis of the Consolidated Statements of IncomeBiopharmaceuticalSelected Product Descriptions section in our 2014 Financial Report. We have entered into collaboration and/or co-promotion agreements relating to certain biopharmaceutical products, including Aricept, Enbrel (in the U.S. and Canada), Spiriva and Rebif, each of which has expired or will expire in various markets over the next several years. For additional information, including a description of these collaboration and co-promotion agreements and their expiration dates, see the Analysis of the Consolidated Statements of IncomeBiopharmaceuticalSelected Product Descriptions and the Overview of Our Performance, Operating Environment, Strategy and OutlookOur Operating EnvironmentIndustry-Specific ChallengesIntellectual Property Rights and Collaboration/Licensing Rights sections in our 2014 Financial Report and Item 1A. Risk FactorsDependence on Key In-Line Products below. In addition, Eliquis was developed and is being commercialized in collaboration with Bristol-Myers Squibb Company (BMS). For additional information, see the Analysis of the Consolidated Statements of IncomeBiopharmaceuticalSelected Product Descriptions section in our 2014 Financial Report. Revenues from biopharmaceutical products contributed approximately 92% of our total revenues in 2014, 93% of our total revenues in 2013, and 94% of our total revenues in 2012. We recorded direct product sales of more than $1 billion for each of 10 biopharmaceutical products in 2014, 2013 and 2012. These products represented 54% of our revenues from biopharmaceutical products in 2014, 51% of our revenues from biopharmaceutical products in 2013 and 50% of our revenues from biopharmaceutical products in 2012. See Item 1A. Risk FactorsDependence on Key In-Line Products below. Worldwide revenues from biopharmaceutical products in 2014 were $45.7 billion, a decrease of 5% compared to 2013, reflecting a decrease in operational revenues of 3% and the unfavorable impact of foreign exchange of 2%. Geographically, in the U.S., revenues from biopharmaceutical products decreased 8% in 2014, compared to 2013. In our international markets, revenues from biopharmaceutical products decreased 3% in 2014, compared to 2013, which primarily reflects the unfavorable impact of foreign exchange. During 2014, international revenues from biopharmaceutical products represented 62% of total revenues from biopharmaceutical products, compared to 61% in 2013. For additional information, including a discussion of key operational revenue drivers, see the Analysis of the Consolidated Statements of IncomeBiopharmaceutical RevenuesRevenuesMajor Biopharmaceutical Products and BiopharmaceuticalSelected Product Descriptions sections in our 2014 Financial Report. 3 Consumer Healthcare Based on 2014 revenues, our Consumer Healthcare business is the fifth-largest branded multi-national, OTC, healthcare products business in the world and produces two of the ten largest selling consumer healthcare brands (Centrum and Advil) in the world. Consumer Healthcare revenues totaled $3.4 billion for 2014, an increase of 3% compared to 2013, reflecting operational revenue growth of 5%, partially offset by the unfavorable impact of foreign exchange of 2%. The Consumer Healthcare business holds strong positions in various geographic markets, with its highest revenue volume in the U.S., China, Canada, Germany, Italy and Brazil. Major categories and product lines in our Consumer Healthcare business include: Dietary Supplements: Centrum brands (including Centrum, Centrum Silver, Centrum Men's and Women's, Centrum Specialist, Centrum Flavor Burst, and Centrum Kids), Caltrate, and Emergen-C; Pain Management: Advil brands (including Advil, Advil PM, Advil Liqui-Gels, Advil Film Coated, Children's Advil, Infants' Advil and Advil Migraine), and ThermaCare; Gastrointestinal: Nexium 24HR/Nexium Control; Respiratory: Robitussin, Advil Cold & Sinus, Advil Congestion Relief, and Dimetapp; and Personal Care: ChapStick and Preparation H. In August 2012, we entered into an agreement with AstraZeneca PLC (AstraZeneca) for the exclusive, global, OTC rights for Nexium, a leading prescription drug currently approved to treat the symptoms of gastroesophageal reflux disease. In December 2011, we completed our acquisition of the consumer healthcare business of Ferrosan, a Danish company engaged in the sale of science-based consumer healthcare products, including dietary supplements and lifestyle products, primarily in the Nordic region and the emerging markets of Russia and Central and Eastern Europe. For additional information, see the Notes to Consolidated Financial StatementsNote 2A. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures, and Equity-Method Investments: Acquisitions and Note 2B. Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures, and EquityMethod Investments: Licensing Agreements in our 2014 Financial Report and the Overview of Our Performance, Operating Environment, Strategy and OutlookOur Business Development Initiatives section in our 2014 Financial Report. For additional information regarding the revenues of our Consumer Healthcare business, see the Notes to Consolidated Financial StatementsNote 18. Segment, Geographic and Other Revenue Information and the Analysis of Operating Segment InformationGlobal Vaccines, Oncology and Consumer Healthcare Operating Segment section in our 2014 Financial Report. Research and Development Innovation by our research and development (R&D) operations is very important to our success. Our goal is to discover, develop and bring to market innovative products that address major unmet medical needs. We spent $8.4 billion in 2014, $6.7 billion in 2013 and $7.5 billion in 2012 on R&D. Biopharmaceutical R&D We conduct research internally and also through contracts with third parties, through collaborations with universities and biotechnology companies and in cooperation with other pharmaceutical firms. We also seek out promising chemical and biological lead molecules and innovative technologies developed by third parties to incorporate into our discovery and development processes or projects, as well as our product lines, through collaborations, alliance and license agreements, acquisitions and other arrangements. Drug discovery and development is time-consuming, expensive and unpredictable. According to the Pharmaceutical Benchmarking Forum, out of 30 compounds entering preclinical development, only one is approved by a regulatory authority in a major market (U.S., the European Union (EU) or Japan). The process from early discovery or design to development to regulatory approval can take more than 10 years. Drug candidates can fail at any stage of the process, and candidates may not receive regulatory approval even after many years of research. 4 As of year-end 2014, we had 298 projects in R&D, ranging from discovery through registration, of which 86 programs are in Phase 1 through registration, with the remainder of the projects in pre-clinical development. At year-end 2014, our Phase 3 portfolio contained 23 programs. Development of a single compound is often pursued as part of multiple programs. While these new candidates may or may not eventually receive regulatory approval, new drug candidates entering clinical development phases are the foundation for future products. In addition to discovering and developing new products, our R&D operations seek to add value to our existing products by improving their effectiveness, enhancing ease of dosing and by discovering new indications for them. Information concerning several of our drug candidates in development, as well as supplemental filings for existing products, is set forth in the Analysis of the Consolidated Statements of IncomeProduct DevelopmentsBiopharmaceutical section in our 2014 Financial Report, which is incorporated by reference. Our competitors also devote substantial funds and resources to R&D. We also compete against numerous small biotechnology companies in developing potential drug candidates. The extent to which our competitors are successful in their research could result in erosion of the sales of our existing products and potential sales of products in development, as well as unanticipated product obsolescence. See Item 1A. Risk FactorsCompetitive Products below. 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. Our R&D priorities include delivering a pipeline of differentiated therapies with the greatest scientific and commercial promise, innovating new capabilities that can position Pfizer for long-term leadership and creating new models for biomedical collaboration that will expedite the pace of innovation and productivity. To that end, our research primarily focuses on six highpriority areas that have a mix of small molecules and large moleculesimmunology and inflammation; cardiovascular and metabolic diseases; oncology; vaccines; neuroscience and pain; and rare diseases. Another area of focus is biosimilars. For additional information regarding our R&D operations, see the Overview of Our Performance, Operating Environment, Strategy and OutlookOur StrategyResearch Operations and Costs and ExpensesResearch and Development (R&D) ExpensesDescription of Research and Development Operations sections in our 2014 Financial Report. International Operations We have significant operations outside the U.S. In 2014, for developed and emerging markets, these operations were managed through our three operating segments: GIP, GEP and VOC. A significant change effected by our new structure is the full integration of emerging markets into each business. Emerging markets are an important component of our strategy for global leadership, and our commercial structure recognizes that the demographics and rising economic power of the fastest-growing emerging markets are becoming more closely aligned with the profile found within developed markets. In 2013, our pharmaceutical operations in emerging markets were managed through our former Emerging Markets business unit and our operations in developed markets were managed together with our U.S. operations through our other pharmaceutical business units. Our Consumer Healthcare operations were managed worldwide in 2013. For additional information regarding our operating segments, see the Overview of Our Performance, Operating Environment, Strategy and OutlookOur Strategy section in our 2014 Financial Report and Commercial Operations above. Revenues from operations outside the U.S. of $30.5 billion accounted for 62% of our total revenues in 2014. Revenues exceeded $500 million in each of 13, 12 and 14 countries outside the U.S. in 2014, 2013 and 2012, respectively. The U.S. is our largest national market, comprising 38% of total revenues in 2014 and 39% of total revenues in 2013 and 2012. Japan is our second-largest national market, with approximately 9%, 10% and 12% of total revenues in 2014, 2013 and 2012, respectively. For a geographic breakdown of revenues, see the table captioned Geographic Information in the Notes to Consolidated Financial StatementsNote 18. Segment, Geographic and Other Revenue Information in our 2014 Financial Report, and the table captioned Revenues by Segment and Geographic Area in our 2014 Financial Report. Those tables are incorporated by reference. Our international operations are subject, in varying degrees, to a number of risks inherent in carrying on business in other countries. These include, among other things, currency fluctuations, capital and exchange control regulations, expropriation and other restrictive government actions. See Item 1A. Risk FactorsRisks Affecting International Operations below. Our international businesses are also subject to government-imposed constraints, including laws and regulations on pricing, reimbursement, and access to our products. See Government Regulation and Price ConstraintsOutside the United States below for a discussion of these matters. 5 Depending on the direction of change relative to the U.S. dollar, foreign currency values can increase or decrease the reported dollar value of our net assets and results of operations. While we cannot predict with certainty future changes in foreign exchange rates or the effect they will have on us, we attempt to mitigate their impact through operational means and by using various financial instruments, depending upon market conditions. For additional information, see the Notes to Consolidated Financial StatementsNote 7E. Financial Instruments: Derivative Financial Instruments and Hedging Activities in our 2014 Financial Report, as well as the Forward-Looking Information and Factors That May Affect Future ResultsFinancial Risk Management section in our 2014 Financial Report. Those sections of our 2014 Financial Report are incorporated by reference. Marketing In our global biopharmaceutical businesses, we promote our products to healthcare providers and patients. Through our marketing organizations, we explain the approved uses, benefits and risks of our products to healthcare providers, such as doctors, nurse practitioners, physician assistants, pharmacists, and the Managed Care Organizations (MCOs) that provide insurance coverage, such as hospitals, Integrated Delivery Systems, Pharmacy Benefit Managers (PBMs), Health Plans, employers and government agencies. We also market directly to consumers in the U.S. through direct-to-consumer advertising that communicates the approved uses, benefits and risks of our products while motivating people to have meaningful conversations with their doctors. In addition, we sponsor general advertising to educate the public on disease awareness, prevention and wellness, important public health issues, and our patient assistance programs. Our prescription pharmaceutical products are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies, and, in the case of Prevnar 13 in the U.S., we primarily sell directly to individual provider offices, the Centers for Disease Control and Prevention and wholesalers. We seek to gain access for our products on healthcare authority and MCO formularies, which are lists of approved medicines available to members of the MCOs. MCOs use various benefit designs, such as tiered co-pays for formulary products, to drive utilization of products in preferred formulary positions. We also work with MCOs to assist them with disease management, patient education and other tools that help their medical treatment routines. During 2014, Pfizer revenues from our three largest biopharmaceutical wholesalers in the U.S. were as follows: McKesson, Inc.13% of our total revenues (and 34% of our total U.S. revenues); Cardinal Health, Inc.10% of our total revenues (and 27% of our total U.S. revenues); and AmerisourceBergen Corporation9% of our total revenues (and 24% of our total U.S. revenues). Sales to these wholesalers were concentrated in the biopharmaceutical businesses. Our global Consumer Healthcare business utilizes its own sales and marketing organizations to promote its products, and occasionally uses distributors in smaller markets. Our Consumer Healthcare business's advertising and promotions are generally disseminated to consumers through television, print, digital and other media advertising, as well as through in-store promotion. Consumer Healthcare products are sold through a wide variety of channels, including distributors, pharmacies, retail chains and grocery and convenience stores. Our Consumer Healthcare business generates a significant portion of its sales from several large customers, the loss of any one of which could have a material adverse effect on the Consumer Healthcare business. Patents and Other Intellectual Property Rights Our products are sold around the world under brand-name, logo and certain product design trademarks that we consider, in the aggregate, to be of material importance to Pfizer. Trademark protection continues in some countries for as long as the mark is used and, in other countries, for as long as it is registered. Registrations generally are for fixed, but renewable, terms. We own or license a number of U.S. and foreign patents. These patents cover pharmaceutical and other products and their uses, pharmaceutical formulations, product manufacturing processes and intermediate chemical compounds used in manufacturing. Patents for individual products extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection is obtained. The actual protection afforded by a patent, which can 6 vary from country to country, depends upon the type of patent, the scope of its coverage and the availability of legal remedies in the country. Further, patent term extension may be available in many major countries to compensate for a regulatory delay in approval of the product. For additional information, see Government Regulation and Price ConstraintsIntellectual Property below. In the aggregate, our patent and related rights are of material importance to our businesses in the U.S. and most other countries. Based on current product sales, and considering the vigorous competition with products sold by our competitors, the patent rights we consider most significant in relation to our business as a whole, together with the year in which the basic product patent expires (including, where applicable, the additional six-month pediatric exclusivity period and/or the granted patent term extension), are those for the medicines set forth in the table below. Patent term extensions, supplementary protection certificates and pediatric exclusivity periods are not reflected in the expiration date listed in the table below, unless they have been granted by the issuing authority. In some instances, there are later-expiring patents relating to our products directed to particular forms or compositions, to methods of manufacturing, or to use of the drug in the treatment of particular diseases or conditions. However, in some cases, such patents may not protect our drug from generic or, as applicable, biosimilar competition after the expiration of the basic patent. Drug U.S. Basic Product Patent Expiration Year Major EU Basic Product Patent Expiration Year Japan Basic Product Patent Expiration Year Viagra 2012 (1) 2013 2013 (1) Enbrel (2) N/A 2015 2015 Celebrex 2014 (3) 2014 2019 Zyvox 2015 2016 2019 Lyrica 2018 2014 (4) 2022 Bosulif 2019 2019 2019 Chantix 2020 2021 2022 Inlyta 2020 2025 2025 Xeljanz 2020 N/A(5) 2025 Sutent 2021 2021 2024 Eliquis(6) 2023 2026 2026 Ibrance 2023 N/A(7) N/A(7) Prevnar 13/Prevenar 13 2026 2026 (8) 2029 Xalkori 2029 2027 2028 (1) In addition to the basic product patent covering Viagra, which expired in 2012, Viagra is covered by a U.S. method-of-treatment patent which, including the six-month pediatric exclusivity period associated with Revatio (which has the same active ingredient as Viagra), expires in 2020. However, as a result of a patent litigation settlement, Teva Pharmaceuticals USA, Inc. will be allowed to launch a generic version of Viagra in the U.S. in December 2017, or earlier under certain circumstances. The corresponding method-of-treatment patent covering Viagra in Japan expired in May 2014. (2) Pfizer does not market Enbrel in the U.S. For additional information, see the Overview of Our Performance, Operating Environment, Strategy and OutlookOur Operating EnvironmentIndustry-Specific ChallengesIntellectual Property Rights and Collaboration/Licensing Rights section in our 2014 Financial Report. In other markets, biosimilar competition will depend, to a significant extent, on the timing and implementation of regulations governing the development and approval of biosimilar products. (3) We obtained a reissue patent in the U.S. in March 2013 covering the approved uses of Celebrex. The reissue patent expires in December 2015. This patent is presently the subject of litigation between Pfizer and several generic companies. In December 2014, generic versions of Celebrex became available pursuant to settlement agreements licensing the reissue patent to several of the generic manufacturers involved in the ongoing litigation. (4) For Lyrica, regulatory exclusivity in the EU expired during 2014. (5) Xeljanz is not approved in the EU. 7 (6) Eliquis was developed and is being commercialized in collaboration with BMS. (7) Ibrance is not approved in the EU or Japan. (8) The EU patent that covers the combination of the 13 serotype conjugates of Prevenar 13 has been revoked following an opposition proceeding. This first instance decision will be appealed. There are other EU patents and pending applications covering the formulation and various aspects of the manufacturing process of Prevenar 13 that remain in force. We co-promote Aricept with Eisai. Aricept has experienced patent-based expirations in many major markets since 2010. For additional information, including a description of certain of our other co-promotion agreements and their expiration dates, see the Analysis of the Consolidated Statements of IncomeBiopharmaceuticalSelected Product Descriptions and the Overview of Our Performance, Operating Environment, Strategy and OutlookOur Operating EnvironmentIndustry-Specific ChallengesIntellectual Property Rights and Collaboration/Licensing Rights sections in our 2014 Financial Report and Item 1A. Risk FactorsDependence on Key In-Line Products below. A number of our current products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years. For example, in the U.S., we lost exclusivity for Geodon in March 2012, Revatio tablet in September 2012, Rapamune in January 2014, Detrol LA in January 2014 and Celebrex in December 2014. Pursuant to terms of a settlement agreement, certain formulations of Zyvox became subject to generic competition in the U.S. in January 2015. We expect certain other formulations of Zyvox will become subject to generic competition in the U.S. in the first half of 2015. In most major European markets, we lost exclusivity for Xalatan and Xalacom in January 2012, Detrol LA in September 2012, Viagra in June 2013, Inspra in March 2014, Lyrica in July 2014 and Celebrex in November 2014. We lost exclusivity for Lyrica in Canada in February 2013. Lipitor has lost exclusivity in all major markets and now faces multi-source generic competition in the U.S., Europe, Japan and Australia. For additional information, including a further discussion of our products experiencing, or expected to experience in 2015, patent expirations or loss of regulatory exclusivity in various markets, see the Overview of Our Performance, Operating Environment, Strategy and OutlookOur Operating EnvironmentIndustry-Specific ChallengesIntellectual Property Rights and Collaboration/Licensing Rights section in our 2014 Financial Report. Companies have filed applications with the FDA seeking approval of products that we believe infringe our patents covering, among other products, Viagra, Celebrex, Sutent, EpiPen, Toviaz and Tygacil extended-release capsules. For additional information, see the Notes to Consolidated Financial StatementsNote 17A1. Commitments and ContingenciesLegal ProceedingsPatent Litigation in our 2014 Financial Report. The expiration of a basic product patent or loss of patent protection resulting from a legal challenge normally results in significant competition from generic products against the originally patented product and can result in a significant reduction in revenues for that product in a very short period of time. In some cases, however, we can continue to obtain commercial benefits from product manufacturing trade secrets; patents on uses for products; patents on processes and intermediates for the economical manufacture of the active ingredients; patents for special formulations of the product or delivery mechanisms; and conversion of the active ingredient to OTC products. Biotechnology Products Our biotechnology products, including BeneFIX, ReFacto, Xyntha and Enbrel (we market Enbrel outside the U.S. and Canada), may face competition in the future from biosimilars (also referred to as follow-on biologics). In the U.S., such biosimilars would reference biotechnology products approved under the U.S. Public Health Service Act. Additionally, the FDA has approved a follow-on recombinant human growth hormone that referenced our biotechnology product, Genotropin, which was approved under the U.S. Federal Food, Drug and Cosmetic Act. Abbreviated legal pathways for the approval of biosimilars exist in certain international markets and, since the passage of the Patient Protection and Affordable Care Act, as amended by the Heath Care and Education Reconciliation Act (commonly referred to as the Affordable Care Act, or ACA), a framework for such approval exists in the U.S. The regulatory implementation of these ACA provisions is ongoing and expected to take several years. However, the FDA has begun to clarify its expectations for approval via the biosimilar pathway with the issuance of a number of draft guidance documents. In 2014, the FDA issued draft guidance on clinical pharmacology for biosimilars and reference product exclusivity for biologic products. Over the next several years, the FDA is expected to finalize these guidance documents and issue additional draft and final 8 guidance documents. The FDA has also begun to accept biosimilar applications for review. See Government Regulation and Price ConstraintsBiosimilars below for additional information on the ACA's approval framework for biosimilars. In Europe, the European Commission has granted marketing authorizations for several biosimilars pursuant to a set of general and product classspecific guidelines for biosimilar approvals issued over the past few years. In 2013, the European Medicines Agency (EMA) approved the first biosimilar of a monoclonal antibody. In Japan, the regulatory authority has granted marketing authorizations for certain biosimilars, including the monoclonal antibody infliximab, pursuant to a guideline for biosimilar approvals issued in 2009. If competitors are able to obtain marketing approval for biosimilars that reference our biotechnology products, our products may become subject to competition from these biosimilars, with attendant competitive pressure, and price reductions could follow. Expiration or successful challenge of applicable patent rights could trigger this competition, assuming any relevant exclusivity period has expired. However, biosimilar manufacturing is complex and biosimilars are not generic versions of the reference products. Therefore, at least initially upon approval of a biosimilar competitor, biosimilar competition with respect to biologics may not be as significant as generic competition with respect to small molecule drugs. As part of our business strategy, we are capitalizing on our expertise in biologics manufacturing, as well as our regulatory and commercial strengths, to develop biosimilar medicines. As such, a better-defined biosimilars approval pathway will assist us in pursuing approval of our own biosimilar products in the U.S. See Item 1A. Risk FactorsBiotechnology Products below. We may face more litigation with respect to the validity and/or scope of patents relating to our biotechnology products with substantial revenue. Likewise, as we enter the biosimilars area and seek to launch products, patents may be asserted against us. International One of the main limitations on our operations in some countries outside the U.S. is the lack of effective intellectual property protection for our products. Under international and U.S. free trade agreements in recent years, global protection of intellectual property rights has been improving. For additional information, see Government Regulation and Price ConstraintsIntellectual Property below. Competition Our businesses are conducted in intensely competitive and often highly regulated markets. Many of our prescription pharmaceutical products face competition in the form of branded or generic drugs that treat similar diseases or indications. The principal forms of competition include efficacy, safety, ease of use, and cost effectiveness. Though the means of competition vary among product categories and business groups, demonstrating the value of our products is a critical factor for success in all of our principal businesses. Our competitors include other worldwide research-based biopharmaceutical companies, smaller research companies with more limited therapeutic focus, generic and biosimilar drug manufacturers and consumer healthcare manufacturers. We compete with other companies that manufacture and sell products that treat diseases or indications similar to those treated by our major products. This competition affects our core product business, which is focused on applying innovative science to discover and market products that satisfy unmet medical needs and provide therapeutic improvements. Our emphasis on innovation is underscored by our multi-billion-dollar investment in R&D, as well as our business development transactions, both designed to result in a strong product pipeline. Our investment in research does not stop with drug approval; we continue to invest in further understanding the value of our products for the conditions they treat, as well as potential new applications. We seek to protect the health and well-being of patients by striving to ensure that medically sound knowledge of the benefits and risks of our medicines is understood and communicated to patients, physicians and global health authorities. We also seek to continually enhance the organizational effectiveness of all of our biopharmaceutical functions, including coordinating support for our salespersons' efforts to accurately and ethically launch and promote our products to our customers. Operating conditions have become more challenging under the mounting global pressures of competition, industry regulation and cost containment. We continue to take measures to evaluate, adapt and improve our organization and business practices to better meet customer and public needs. We believe that we have taken an industry-leading role in evolving our approaches to U.S. direct-to-consumer advertising; interactions with, and payments to, healthcare professionals; and medical 9 education grants. We also continue to sponsor programs to address patient affordability and access barriers, as we strive to advance fundamental health system change through support for better healthcare solutions. Our Consumer Healthcare business faces competition from OTC business units in other major pharmaceutical and consumer packaged goods companies, as well as retailers who carry their own private label brands. Our competitive position is affected by several factors, including, among others, the amount and effectiveness of our and our competitors' promotional resources; customer acceptance; product quality; our and our competitors' introduction of new products, ingredients, claims, dosage forms, or other forms of innovation; and pricing, regulatory and legislative matters (such as product labeling, patient access and prescription to OTC switches). Our vaccines business may face competition from the introduction of next generation vaccines. For example, Prevnar 13 may face competition in the form of alternative 13-valent or additional valent next-generation pneumococcal conjugate vaccines prior to the expiration of its patents. Managed Care Organizations The evolution of managed care in the U.S. has been a major factor in the competitive makeup of the healthcare marketplace. Approximately 281 million people in the U.S. now have some form of health insurance coverage. Due to the expansion of health insurance coverage (see Government Regulation and Price ConstraintsIn the United States below), both the marketing of prescription drugs to consumers and the entities that manage this expanded coverage in the U.S. continue to grow in importance. The influence of MCOs has increased in recent years due to the growing number of patients receiving coverage through MCOs. At the same time, those organizations have been consolidating into fewer, even larger entities. This consolidation enhances both their ability to negotiate, as well as their importance to Pfizer. The growth of MCOs has increased pressure on drug prices as well as revenues. One objective of MCOs is to contain and, where possible, reduce healthcare expenditures. MCOs typically negotiate prices with pharmaceutical providers by using formularies (which are lists of approved medicines available to members of the MCOs), clinical protocols (requiring prior authorization for a branded product if a generic product is available or requiring the patient to first fail on one or more generic products before permitting access to a branded medicine), volume purchasing, long-term contracts and their ability to influence volume and market share of prescription drugs. In addition, by placing branded medicines on higher-tier status in their formularies (leading to higher patient co-pays) or non-preferred tier status, MCOs transfer a portion of the cost of the medicine to the patient, resulting in significant out-of-pocket expenses for the patient, especially for chronic treatments. This financial disincentive is a tool for MCOs to manage drug costs and channel patients to medicines preferred by the MCOs. Due to their generally lower cost, generic medicines typically are placed in lowest cost tiers of MCO formularies. The breadth of the products covered by formularies can vary considerably from one MCO to another, and many formularies include alternative and competitive products for treatment of particular medical problems. Exclusion of a product from a formulary or other MCO-implemented restrictions can significantly impact drug usage in the MCO patient population. Consequently, pharmaceutical companies compete to gain access to formularies for their products. Unique product features, such as greater efficacy, better patient ease of use, or fewer side effects, are generally beneficial to achieving access to formularies. However, lower overall cost of therapy is also an important factor. We have been generally, although not universally, successful in having our major products included on MCO formularies. MCOs also emphasize primary and preventive care, out-patient treatment and procedures performed at doctors' offices and clinics as another way to manage costs. Hospitalization and surgery, typically the most expensive forms of treatment, are carefully managed. Since the use of certain drugs can reduce the need for hospitalization, professional therapy, or even surgery, such drugs can become favored first-line treatments for certain diseases. The ACA has accelerated payment reform by distributing risk across MCOs and other stakeholders in care delivery with the intent of improving quality while reducing costs, which creates pressure on MCOs to tie reimbursement to defined outcomes. 10 Generic Products One of the biggest competitive challenges that we face is from generic pharmaceutical manufacturers. Upon the expiration or loss of patent protection for a product, especially a small molecule product, we can lose the major portion of revenues for that product in a very short period of time. Several such competitors make a regular practice of challenging our product patents before their expiration. Unlike us, generic competitors often operate without large R&D expenses, as well as without costs of conveying medical information about products to the medical community. In addition, the FDA approval process exempts generics from costly and time-consuming clinical trials to demonstrate their safety and efficacy, allowing generic manufacturers to rely on the safety and efficacy data of the innovator product. Generic products need only demonstrate a level of availability in the body equivalent to that of the innovator product. This means that generic competitors can market a competing version of our product after the expiration or loss of our patent and often charge much less. In addition, our patent-protected products can face competition in the form of generic versions of competitors' branded products that lose their market exclusivity. As noted above, MCOs that focus primarily on the immediate cost of drugs often favor generics over brand-name drugs. Many governments also encourage the use of generics as alternatives to brand-name drugs in their healthcare programs, including Medicaid in the U.S. Laws in the U.S. generally allow, and in some cases require, pharmacists to substitute, for brand-name drugs, generic drugs that have been rated under government procedures to be chemically and therapeutically equivalent to brand-name drugs. In a small subset of states, prescribing physicians are able to expressly prevent such substitution. In the U.S., Pfizer's Greenstone subsidiary and Pfizer Injectables sell generic versions of Pfizer's, as well as certain competitors', solid oral dose and sterile injectable pharmaceutical products, respectively, upon loss of exclusivity, as appropriate. Raw Materials Raw materials essential to our businesses are purchased worldwide in the ordinary course of business from numerous suppliers. In general, these materials are available from multiple sources. No serious shortages or delays of raw materials were encountered in 2014, and none are expected in 2015. We have successfully secured the materials necessary to meet our requirements where there have been short-term imbalances between supply and demand, but generally at higher prices than those historically paid. Government Regulation and Price Constraints In the United States General. Pharmaceutical companies are subject to extensive laws and regulations by national, state and local agencies in the countries in which they do business. Of particular importance in the U.S. is the FDA, which has jurisdiction over our biopharmaceutical products and administers requirements covering the testing, approval, safety, effectiveness, manufacturing, labeling, marketing, advertising and post-marketing surveillance of these products. The FDA also regulates our Consumer Healthcare products. Other federal agencies, including the U.S. Drug Enforcement Administration, also regulate some of our products. Before any of our biopharmaceutical products may be marketed in the U.S., the FDA needs to approve a New Drug Application or Biologics License Application for that product. The steps required before the FDA will approve an application include multiple stages of clinical trials conducted by the study sponsor, sponsor submission of the application to the FDA for review, the FDA's review of the data to assess the drug's safety and effectiveness, and the FDA's inspection of the facilities where the product will be manufactured. The marketing practices of all U.S. pharmaceutical companies are subject to federal and state healthcare laws that are intended to protect the integrity of government healthcare programs. The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) oversees compliance with applicable federal healthcare laws, including the federal anti-kickback statute, which criminalizes the offering of something of value to induce the recommendation, order or purchase of products reimbursed under a federal healthcare program, and false claim laws. The Federal Trade Commission also has the authority to regulate the advertising of consumer healthcare products, including OTC drugs and dietary supplements. Many of our activities are also subject to the jurisdiction of the SEC. Additionally, the U.S. Foreign Corrupt Practices Act (FCPA) prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad. The scope of the FCPA includes interactions with certain healthcare professionals in many countries. Other countries 11 have enacted similar anti-corruption laws and/or regulations. Individual states, acting through their attorneys general, have become active as well, seeking to regulate the marketing of prescription drugs under state consumer protection and false advertising laws. Our business has been and will continue to be subject to these and various other U.S. laws and regulations. Failure to comply with these laws and regulations could subject us to administrative and legal proceedings and actions by these various governmental bodies. See the Notes to Consolidated Financial StatementsNote 17. Commitments and Contingencies in our 2014 Financial Report. Such actions may involve product seizures and other civil and criminal sanctions. Healthcare Reform. In March 2010, the ACA was enacted in the U.S. The principal provisions affecting the biopharmaceutical industry provide for the following: a minimum rebate of 23.1% on branded prescription drugs sold to Medicaid beneficiaries; extension of Medicaid prescription drug rebates to drugs dispensed to enrollees in certain Medicaid managed care organizations; discounts on branded prescription drug sales to Medicare Part D participants who are in the Medicare \"coverage gap\"; and a fee payable to the federal government (which is not deductible for U.S. income tax purposes) based on our calendar-year share relative to other companies of branded prescription drug sales to specified government programs (effective January 1, 2011, with the total fee to be paid each year by the pharmaceutical industry increasing annually through 2018). The ACA included a coverage expansion that took effect in 2014. Health Insurance Exchanges were created by the ACA to provide an opportunity for individuals without access to employer or other government sponsored coverage to purchase insurance from private health plans offering coverage compliant with ACA mandated provisions. States could choose to operate the Health Insurance Exchange with a federal grant, or defer operations to the federal government. Newly eligible patients enrolled either in Medicaid or in a Health Insurance Exchange plan. The Congressional Budget Office estimated that approximately 7 million Americans gained Medicaid coverage, and HHS reported that 6.7 million Americans were ultimately enrolled in Health Insurance Exchange plans in 2014. The ACA specifies certain benefits and services that must be covered for health insurers to qualify to participate in the Health Insurance Exchanges, including prescription drugs. In general, health plans in the Health Insurance Exchange offer benefits that are more restrictive than the typical large employer, but more comprehensive than most catastrophic health insurance plans and some other limited policies available in the individual insurance marketplace. This means that there are high deductibles and co-pays, increased use of co-insurance, fewer medicines on formularies and restricted networks of physicians and hospitals. Because of these factors, Health Insurance Exchange enrollment has had only a negligible impact on Pfizer's 2014 revenues. The coverage expansion included funding for increased Medicaid enrollment. Twenty-seven states and the District of Columbia opted to expand Medicaid eligibility in 2014. Because of the substantial mandatory rebates paid by pharmaceutical companies to the Medicaid program, and the formulary restrictions that limit access to brand name drugs in many states, the Medicaid expansion has also had only a negligible impact on Pfizer's 2014 revenues. Changes in Disclosure of Relationships with U.S. Physicians and Teaching Hospitals. The ACA requires that biopharmaceutical and medical device manufacturers record transfers of value made to licensed U.S. physicians and teaching hospitals and to initially disclose such data to HHS by March 2014. Information provided by companies was aggregated and posted on the Open Payments website in September 2014, which is managed by the Centers for Medicare and Medicaid Services, the agency responsible for implementing disclosure provisions of the ACA. In addition to civil penalties for failure to report transfers of value to physicians or teaching hospitals, there will be criminal penalties if a manufacturer intentionally makes false statements or excludes information in such reports. Increased access to such data by fraud and abuse investigators, industry critics and media will likely draw attention to our collaborations with reported entities and will importantly provide opportunities to underscore the critical nature of our collaborations for developing new medicines and exchanging scientific information. This national payment transparency effort, coupled with industry commitment to uphold voluntary codes of conduct (such as the Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals and PhRMA Guiding Principles Direct to Consumer Advertisements About Prescription Medicines) and rigorous internal training and compliance efforts, will complement existing laws and regulations to help ensure ethical collaboration and truthful product communications. 12 Biosimilars. The ACA also created a framework for the approval of biosimilars (also known as follow-on biologics) following the expiration of 12 years of exclusivity for the innovator biologic, with a potential six-month pediatric extension. Under the ACA, biosimilar applications may not be submitted until four years after the approval of the reference, innovator biologic. The FDA is responsible for implementation of the legislation, which will require the FDA to address such key topics as: the type and extent of data needed to establish biosimilarity; the data required to achieve interchangeability compared to biosimilarity; the naming convention for biosimilars; the tracking and tracing of adverse events; and the acceptability of data using a non-U.S.-licensed comparator to demonstrate biosimilarity and/or interchangeability with a U.S.-licensed reference product. In February 2012, the FDA released three draft guidance documents, in which it clarified that biosimilar applicants may use a non-U.S.-licensed comparator in certain studies to demonstrate biosimilarity to a U.S.-licensed reference product. In 2014, the FDA issued draft guidance on clinical pharmacology for biosimilars and reference product exclusivity for biologic products. Over the next several years, the FDA is expected to finalize these guidance documents and issue additional draft and final documents impacting biosimilars. Further clarity may also be provided as the FDA begins to review biosimilar applications, the first four of which were filed by other companies pursuant to the ACA pathway in 2014. Medicaid and Related Matters. The majority of states use preferred drug lists to restrict access to certain medicines in Medicaid. Restrictions exist for some Pfizer products in certain states. Access in the Medicaid managed care program is typically determined by the health plans providing coverage for Medicaid recipients contracting for the provision of services in the state. Given certain states' current and potential ongoing fiscal crises, a growing number of states are considering a variety of cost-control strategies, including capitated managed care plans that typically contain cost by restricting access to certain treatm