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What changed in Amgen's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Amgen's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+637 added−621 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-09)

Top changes in Amgen's 2023 10-K

637 paragraphs added · 621 removed · 470 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

149 edited+66 added−52 removed94 unchanged
Biggest changeWe may conduct nonregistrational clinical trials for various reasons, including to evaluate real-world outcomes or to collect additional safety information with regard to the use of products. 17 Molecule Investigational indication Phase 3 programs AMJEVITA Interchangeability Bemarituzumab GEJ adenocarcinoma BLINCYTO Ph-negative B-cell precursor acute lymphoblastic leukemia EVENITY Male osteoporosis KYPROLIS Weekly dosing for relapsed multiple myeloma LUMAKRAS/LUMYKRAS Advanced colorectal cancer Nplate Chemotherapy-induced thrombocytopenia Olpasiran Cardiovascular disease Otezla Genital psoriasis; Palmoplantar pustulosis Repatha Cardiovascular disease Rocatinlimab Atopic dermatitis TEZSPIRE Chronic rhinosinusitis with nasal polyps; Eosinophilic esophagitis; Severe asthma ABP 654 Investigational biosimilar to STELARA (ustekinumab) ABP 938 Investigational biosimilar to EYLEA (aflibercept) ABP 959 Investigational biosimilar to SOLIRIS (eculizumab) Phase 2 programs Efavaleukin alfa Systemic lupus erythematosus; Ulcerative colitis LUMAKRAS/LUMYKRAS NSCLC monotherapy; Other solid tumors with KRAS G12C mutations Ordesekimab Celiac disease Rozibafusp alfa Systemic lupus erythematosus Tarlatamab Small cell lung cancer TEZSPIRE Chronic obstructive pulmonary disease; Chronic spontaneous urticaria AMG 133 Obesity Phase 1 programs Acapatamab Prostate cancer Bemarituzumab NSCLC and other tumors Emirodatamab Acute myeloid leukemia Latikafusp Solid tumors Tarlatamab Neuroendocrine prostate cancer AMG 104 Asthma AMG 119 Small-cell lung cancer AMG 176 Hematologic malignancies AMG 193 Solid tumors AMG 199 Solid tumors AMG 340 Prostate cancer AMG 404 Solid tumors AMG 509 Prostate cancer AMG 609 Nonalcoholic steatohepatitis AMG 650 Solid tumors AMG 651 Colorectal cancer AMG 786 Obesity AMG 794 Solid tumors AMG 994 Solid tumors 18 Phase 3 Clinical trials investigate the short- and long-term safety and efficacy of our product candidates, compared to commonly used treatments, in a large number of patients who have the disease or condition under study.
Biggest changeWe may conduct nonregistrational clinical trials for various reasons, including to evaluate real-world outcomes or to collect additional safety information with regard to the use of products. 17 Molecule Investigational indication Phase 3 programs AMJEVITA Interchangeability Bemarituzumab GEJ adenocarcinoma BLINCYTO Ph-negative B-cell precursor acute lymphoblastic leukemia Dazodalibep Sjögren’s Syndrome EVENITY Male osteoporosis LUMAKRAS/LUMYKRAS Advanced colorectal cancer; NSCLC Nplate Chemotherapy-induced thrombocytopenia Olpasiran Cardiovascular disease Otezla Palmoplantar pustulosis Repatha Cardiovascular disease Rocatinlimab Atopic dermatitis Tarlatamab Small cell lung cancer TEPEZZA Active TED in Japan; Chronic/Low CAS TED in Japan TEZSPIRE Chronic rhinosinusitis with nasal polyps; Eosinophilic esophagitis; Severe asthma UPLIZNA IgG4-related disease; Myasthenia gravis Wezlana Investigational biosimilar to STELARA (ustekinumab) ABP 206 Investigational biosimilar to OPDIVO (nivolumab) ABP 938 Investigational biosimilar to EYLEA (aflibercept) ABP 959 Investigational biosimilar to SOLIRIS (eculizumab) Phase 2 programs Bemarituzumab Other tumors Daxdilimab Dermatomyositis or anti-synthetase inflammatory myositis; discoid lupus erythematosus Efavaleukin alfa Ulcerative colitis Fipaxalparant Diffuse cutaneous systemic sclerosis; idiopathic pulmonary fibrosis LUMAKRAS/LUMYKRAS Other solid tumors with KRAS G12C mutations Maridebart cafraglutide Obesity Ordesekimab Celiac disease TEZSPIRE Chronic obstructive pulmonary disease; Chronic spontaneous urticaria Phase 1 programs Bemarituzumab NSCLC Tarlatamab Neuroendocrine prostate cancer TEPEZZA Subcutaneous administration for TED Xaluritamig Prostate cancer AMG 104 Asthma AMG 193 Solid tumors AMG 305 Solid tumors AMG 329 Autoimmune disease AMG 355 Solid tumors AMG 651 Solid tumors AMG 786 Obesity AMG 794 Solid tumors 18 Phase 3 Clinical trials investigate the short- and long-term safety and efficacy of our product candidates, compared to commonly used treatments, in a large number of patients who have the disease or condition under study.
For example, in the EU, with limited exceptions, medical devices placed on the market must bear the Conformité Européenne marking to indicate their conformity with legal requirements. Postapproval Phase After approval, we continue to monitor adverse events and product complaints reported following the use of our products through routine postmarketing surveillance and studies when applicable.
For example, in the EU, with limited exceptions, medical devices placed on the market must bear the Conformité Européenne marking to indicate their conformity with legal requirements. 15 Postapproval Phase After approval, we continue to monitor adverse events and product complaints reported following the use of our products through routine postmarketing surveillance and studies when applicable.
Further, our expertise in the manufacture of biologics positions us well for leadership in the global biosimilars market. For additional information regarding manufacturing facilities, see Item 2. Properties. We have been innovating our manufacturing facilities designed to extend our manufacturing advantage by optimizing our manufacturing network and/or by mitigating risks while continuing to ensure adequate supply of our products.
Further, our expertise in the manufacture of biologics positions us well for leadership in the global biosimilars market. For additional information regarding manufacturing facilities, see Item 2. Properties. 11 We have been innovating our manufacturing facilities designed to extend our manufacturing advantage by optimizing our manufacturing network and/or by mitigating risks while continuing to ensure adequate supply of our products.
Otezla is an oral therapy approved for the treatment of adults with plaque psoriasis across all severities (United States and Japan) and moderate-to-severe plaque psoriasis (other global markets including Europe), for adults with active psoriatic arthritis and for adults with oral ulcers associated with Behçet’s disease. XGEVA We market XGEVA in many countries around the world.
Otezla is an oral therapy approved for the treatment of adults with plaque psoriasis across all severities (in the United States, Japan and Australia) and moderate-to-severe plaque psoriasis (in other global markets, including Europe), for adults with active psoriatic arthritis and for adults with oral ulcers associated with Behçet’s disease. XGEVA We market XGEVA in many countries around the world.
The reference-product primary conditions are wet age-related macular degeneration (AMD), macular edema following retinal vein occlusion, diabetic macular edema and diabetic retinopathy. 21 ABP 959 ABP 959, a biosimilar candidate to SOLIRIS, is a monoclonal antibody that specifically binds to the complement protein C5. It is being investigated in a phase 3 study for biosimilarity to SOLIRIS.
The reference-product primary conditions are wet age-related macular degeneration (AMD), macular edema following retinal vein occlusion, diabetic macular edema and diabetic retinopathy. ABP 959 ABP 959, a biosimilar candidate to SOLIRIS, is a monoclonal antibody that specifically binds to the complement protein C5. It is being investigated in a phase 3 study for biosimilarity to SOLIRIS.
For product sales outside China, Amgen will also pay royalties to BeiGene. AstraZeneca plc We are in a collaboration with AstraZeneca for the development and commercialization of TEZSPIRE. Under our collaboration, both companies share global costs, profits and losses equally after payment by AstraZeneca of a mid-single-digit royalty to Amgen.
For product sales outside China, Amgen will also pay royalties to BeiGene. 22 AstraZeneca plc We are in a collaboration with AstraZeneca for the development and commercialization of TEZSPIRE. Under our collaboration, both companies share global costs, profits and losses equally after payment by AstraZeneca of a mid-single-digit royalty to Amgen.
Regulatory review is led by one member state (the reference-member state), and its assessment—based on safety, quality and efficacy—is reviewed and approved (assuming there are no concerns that the product poses a serious risk to public health) by the other member states from which the applicant is seeking approval (the concerned-member states).
Regulatory review is led by one member state (the reference-member state), and its assessment—based on safety, quality and efficacy—is reviewed and approved (assuming there are no concerns that the product poses a serious risk to public health) by the other member states 14 from which the applicant is seeking approval (the concerned-member states).
Other countries have enacted similar anticorruption laws and/or regulations. Failure by our employees, agents, contractors, vendors, licensees, partners or collaborators to comply with the FCPA and other anticorruption laws and/or regulations could result in significant civil or criminal penalties. 15 We are subject to various laws and regulations globally with regard to privacy and data protection.
Other countries have enacted similar anticorruption laws and/or regulations. Failure by our employees, agents, contractors, vendors, licensees, partners or collaborators to comply with the FCPA and other anticorruption laws and/or regulations could result in significant civil or criminal penalties. We are subject to various laws and regulations globally with regard to privacy and data protection.
We expect our North Carolina facility’s carbon, waste and water footprints to be substantially lower than those at a traditional drug substance manufacturing plant, and we expect lower footprints per unit produced as well at our Ohio facility compared with existing similar facilities. See Item 1A.
We expect our North Carolina facility’s carbon, waste and water footprints to be substantially lower than those at a traditional drug substance 12 manufacturing plant, and we expect lower footprints per unit produced as well at our Ohio facility compared with existing similar facilities. See Item 1A.
The FDA monitors the progress of each trial conducted under an IND and may, at its discretion, reevaluate, alter, suspend or terminate the testing based on data accumulated to that point and the FDA’s risk–benefit assessment with regard to the patients enrolled in the trial.
The FDA monitors the progress of each trial conducted under an IND and may, at its discretion, reevaluate, alter, suspend or terminate the testing based on data accumulated to that point and the FDA’s risk–benefit assessment with regard to the 13 patients enrolled in the trial.
Risk Factors for a discussion of the factors that could adversely impact our manufacturing operations and the global supply of our products. 12 Government Regulation Regulation by government authorities in the United States and other countries is a significant factor in the production and marketing of our products and our ongoing R&D activities.
Risk Factors for a discussion of the factors that could adversely impact our manufacturing operations and the global supply of our products. Government Regulation Regulation by government authorities in the United States and other countries is a significant factor in the production and marketing of our products and our ongoing R&D activities.
Risk Factors— We currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future . 13 Regulation of Product Marketing and Promotion . The FDA regulates the marketing and promotion of drug products.
Risk Factors— We currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future . Regulation of Product Marketing and Promotion . The FDA regulates the marketing and promotion of drug products.
Our Employee Resource Groups promote leadership, development and belonging for members while also working to impact our business by leading business initiatives and providing diverse perspectives and experience.
Our Employee Resource Groups promote leadership, development and belonging for members while also working to positively impact our business by leading business initiatives and providing diverse perspectives and experience.
(These website addresses are not intended to function as hyperlinks, and the information contained in our website and in the SEC’s website is not intended to be a part of this filing.)
(These website addresses are not intended to function as hyperlinks, and the information contained in our website and in the SEC’s website is not intended to be a part of this filing.) 28
Patents for products already approved for one or more indications in the United States or the EU but that are currently undergoing phase 3 clinical trials for additional indications have been previously described. See Marketing, Distribution and Selected Marketed Products—Patents. Molecule Territory General subject matter Estimated expiration* Bemarituzumab U.S. Polypeptides 2029 Europe Polypeptides 2029 Olpasiran U.S.
Patents for products already approved for one or more indications in the United States or the EU but that are currently undergoing phase 3 clinical trials for additional indications have been previously described. See Marketing, Distribution and Selected Marketed Products—Patents. Molecule Territory General subject matter Estimated expiration* Bemarituzumab U.S. Polypeptides 2029 Europe Polypeptides 2029 Dazodalibep U.S.
The way we approach our business is guided by our Amgen Values: Amgen Values Be Science-Based Compete Intensely and Win Create Value for Patients, Staff and Stockholders Be Ethical Trust and Respect Each Other Ensure Quality Work in Teams Collaborate, Communicate and Be Accountable Our staff are also guided by the Company’s Code of Conduct, which is designed to help every person who does business on our behalf worldwide (including all staff, management, consultants, contract workers and temporary workers) to understand what is expected of them.
The way we approach our business is guided by the Amgen Values: Amgen Values Be Science-Based Compete Intensely and Win Create Value for Patients, Staff and Stockholders Be Ethical Trust and Respect Each Other Ensure Quality Work in Teams Collaborate, Communicate and Be Accountable Our staff are also guided by, and receive annual training on, the Company’s Code of Conduct, which is designed to help every person who does business on our behalf worldwide (including all staff, management, consultants, contract workers and temporary workers) to understand what is expected of them.
We have major R&D centers in Thousand Oaks and San Francisco, California; Iceland; and the United Kingdom, as well as smaller research centers and development facilities globally. See Item 2. Properties. Our clinical trial activities are conducted by both our internal staff and third-party contract clinical trial service providers.
We have major R&D centers in Thousand Oaks and San Francisco, California, and Deerfield, Illinois; Iceland; and the United Kingdom, as well as smaller research centers and development facilities globally. See Item 2. Properties. Our clinical trial activities are conducted by both our internal staff and third-party contract clinical trial service providers.
For example, following loss of exclusivity of patents directed to cinacalcet, the active ingredient in our small molecule calcimimetic Sensipar, we lost a significant share of the market and corresponding revenues in a very short period of time. See Part IV—Note 19, Contingencies and commitments, to the Consolidated Financial Statements.
For example, following loss of exclusivity of patents directed to cinacalcet, the active ingredient in our small molecule calcimimetic Sensipar, we lost a significant share of the market and corresponding revenues in a very short period of time. See Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements.
This final product assembly and packaging plant will support the growing demand for Amgen’s medicines in the United States and will use state-of-the-art technologies. In March 2022, we broke ground for our new multi-product drug substance manufacturing facility in Holly Springs, North Carolina.
This final product assembly and packaging plant will support the growing demand for Amgen’s medicines and will use state-of-the-art technologies. In March 2022, we broke ground for our new multi-product drug substance manufacturing facility in Holly Springs, North Carolina.
We monitor the financial condition of our larger customers and limit our credit exposure by setting credit limits and, in certain circumstances, by requiring letters of credit or obtaining credit insurance. 3 Our products are marketed around the world, with the United States as our largest market.
We monitor the financial condition of our larger customers and limit our credit exposure by setting credit limits and, in certain circumstances, by requiring letters of credit or obtaining credit insurance. 2 Our products are marketed around the world, with the United States as our largest market.
Our 2021 Consolidated EEO-1 Report can be viewed on our website at www.amgen.com (the website address is not intended to function as a hyperlink, and the information contained in our website is not intended to be a part of this filing).
Our 2022 Consolidated EEO-1 Report can be viewed on our website at www.amgen.com (the website address is not intended to function as a hyperlink, and the information contained in our website is not intended to be a part of this filing).
Bradway, age 60, has served as a director of the Company since 2011 and Chairman of the Board of Directors since 2013. Mr. Bradway has been the Company’s President since 2010 and Chief Executive Officer since 2012. From 2010 to 2012, Mr. Bradway served as the Company’s President and Chief Operating Officer. Mr.
Bradway, age 61, has served as a director of the Company since 2011 and Chairman of the Board of Directors since 2013. Mr. Bradway has been the Company’s President since 2010 and Chief Executive Officer since 2012. From 2010 to 2012, Mr. Bradway served as the Company’s President and Chief Operating Officer. Mr.
To support the development of our staff, we provide a variety of programs, including leadership development programs, classroom-based and virtual instructor-led courses, and self-paced learning options as well as mentoring, networking and coaching opportunities. 23 Our benefit programs are also generally broad-based, promote health and overall well-being and emphasize saving for retirement.
To support the development of our staff, we provide a variety of programs, including leadership development programs, classroom-based and virtual instructor-led courses, and self-paced learning options as well as mentoring, networking and coaching opportunities. 24 Our benefit programs are generally broad-based, promote health and overall well-being and emphasize saving for retirement.
Such measures include, but are not limited to, more-limited benefit plan designs, higher patient co-pays or coinsurance obligations, limitations on patients’ use of commercial manufacturer co-pay payment assistance programs (including through co-pay accumulator adjustment or maximization programs), stricter utilization management criteria before a patient may get access to a drug, higher-tier formulary placement that increases the level of patient out-of-pocket costs and formulary exclusion, which effectively encourages patients and providers to seek alternative treatments or pay 100% of the cost of a drug.
Such measures include, but are not limited to, more-limited benefit plan designs, higher patient co-pays or coinsurance obligations, limitations on patients’ use of commercial manufacturer co-pay payment assistance programs (including through co-pay accumulator adjustment or maximization programs), stricter utilization management criteria (such as prior authorization and step therapy) before a patient may get access to a drug, higher-tier formulary placement that increases the level of patient out-of-pocket costs and formulary exclusion, which effectively encourages patients and providers to seek alternative treatments or pay 100% of the cost of a drug.
Biologics/drugs and devices each have their own regulatory requirements, and combination products may have additional requirements. A number of our marketed products meet this definition and are regulated under this framework, and we expect that a number of our pipeline product candidates will be evaluated for regulatory approval under this framework as well.
Biologics/drugs and devices each have their own regulatory requirements, and combination products may have additional requirements. A number of our marketed products meet this definition and are regulated under this framework, and we expect that a number of our pipeline product candidates will be evaluated for regulatory approval under this framework as well. Regulation of Orphan Medicines.
Bradway has been a director of The Boeing Company, an aerospace company and manufacturer of commercial airplanes, defense, space and securities systems, since 2016. He has served on the board of trustees of the University of Southern California since 2014. From 2011 to 2017, Mr. Bradway was a director of Norfolk Southern Corporation, a transportation company. Mr.
Bradway has been a director of The Boeing Company, an aerospace company and manufacturer of commercial airplanes, defense, space and securities systems, since 2016. He has served on the board of trustees of the University of Southern California since 2014. From 2011 to 2017, Mr. Bradway was a director of Norfolk Southern Corporation, a transportation company. Dr. James E.
The results of preclinical and clinical trials are submitted to the FDA in the form of either a Biologics License Application for biologic products or a New Drug Application for small molecule products. We are not permitted to market or promote a new product until the FDA has approved our marketing application. Approval of Biosimilars .
The results of preclinical and clinical trials are submitted to the FDA in the form of either a BLA for biologic products or a New Drug Application for small molecule products. We are not permitted to market or promote a new product until the FDA has approved our marketing application. Approval of Biosimilars .
Other U.S. employee benefits include medical plans, dental plans, adoption assistance, paid parental leave programs, access to childcare, employee assistance programs, employee stock purchase plan, flexible spending accounts, life, long-term care and business travel accident insurance, short and long-term disability benefits, wellness benefits and work-life resources and referrals.
Other U.S. employee benefits include adoption assistance, paid parental leave programs, access to childcare, employee assistance programs, employee stock purchase plan, flexible spending accounts, life, long-term care and business travel accident insurance, short and long-term disability benefits, wellness benefits and work-life resources and referrals.
Global development costs and commercialization profits and losses related to the collaboration are shared equally. Amgen manufactures and supplies EVENITY worldwide. For financial information about our significant collaborative arrangements, see Part IV—Note 8, Collaborations, to the Consolidated Financial Statements. 22 Human Capital Resources Overview Amgen’s approach to human capital resource management starts with our mission to serve patients.
Global development costs and commercialization profits and losses related to the collaboration are shared equally. Amgen manufactures and supplies EVENITY worldwide. For financial information about our significant collaborative arrangements, see Part IV—Note 9, Collaborations, to the Consolidated Financial Statements. 23 Human Capital Resources Overview Amgen’s approach to human capital resource management starts with our mission to serve patients.
Compensation, Benefits and Development Our approach to employee compensation and benefits is designed to deliver cash, equity and benefit programs that are competitive with those offered by leading companies in the biotechnology and pharmaceutical industries, and to attract, motivate and retain talent with a focus on encouraging performance, promoting accountability and adherence to Company values and alignment with the interests of the Company’s shareholders.
Compensation, Benefits and Development Our approach to employee compensation and benefits is designed to deliver cash, equity and benefit programs that are competitive with those offered by leading companies in the biotechnology and pharmaceutical industries, and to attract, motivate and retain talent with a focus on encouraging performance, promoting accountability and adherence to the Amgen Values and alignment with the interests of the Company’s stockholders.
We remain focused on supporting our active clinical sites in their providing care for patients and in our providing investigational drug supply. For the years ended December 31, 2022, 2021 and 2020, our R&D expenses were $4.4 billion, $4.8 billion and $4.2 billion, respectively.
We remain focused on supporting our active clinical sites in their providing care for patients and in our providing investigational drug supply. For the years ended December 31, 2023, 2022 and 2021, our R&D expenses were $4.8 billion, $4.4 billion and $4.8 billion, respectively.
For additional information regarding our equity investment in BeiGene, see Part IV—Note 9, Investments, to the Consolidated Financial Statements.
For additional information regarding our equity investment in BeiGene, see Part IV—Note 10, Investments, to the Consolidated Financial Statements.
The decentralized procedure leads to a series of single national approvals in all relevant countries. In the centralized procedure , which is required of all products derived from biotechnology, a company submits a single Marketing Authorisation Application to the EMA, which conducts an evaluation of the dossier, drawing upon its scientific resources across Europe.
The decentralized procedure leads to a series of single national approvals in all relevant countries. In the centralized procedure , which is required of all products derived from biotechnology, a company submits a single MAA to the EMA, which conducts an evaluation of the dossier, drawing upon its scientific resources across Europe.
The FDA may also review industry-sponsored scientific and educational activities that make representations regarding product safety or efficacy in a promotional context. The FDA may take enforcement action against a company for promoting unapproved uses of a product or for other violations of the FDA’s advertising and labeling laws and regulations.
The FDA may also review industry-sponsored scientific and educational activities that make representations regarding product safety or efficacy in a promotional context. The FDA may take enforcement action against a company for violations of the FDA’s advertising and labeling laws and regulations.
UCB We are in a collaboration with UCB for the development and commercialization of EVENITY. Under our collaboration, UCB has rights to lead commercialization for EVENITY in most countries in Europe and China (excluding Hong Kong). Amgen, as the principal, leads commercialization for EVENITY and recognizes product sales in all other territories, including the United States.
UCB We are in a collaboration with UCB for the development and commercialization of EVENITY. Under our collaboration, UCB has rights to lead commercialization for EVENITY in most countries in Europe. Amgen, as the principal, leads commercialization for EVENITY and recognizes product sales in all other territories, including the United States.
As of December 31, 2022, Amgen had approximately 25,200 staff members in over 50 countries, and we have had relatively low global turnover rates compared to available industry information. We also supplement our workforce with independent contractors, contingent workers and temporary workers, as needed. Outside of the United States, some of our employees are represented by unions or works councils.
As of December 31, 2023, Amgen had approximately 26,700 staff members in over 50 countries, and we have had relatively low global turnover rates compared to available industry information. We also supplement our workforce with independent contractors, contingent workers and temporary workers, as needed. Outside of the United States, some of our employees are represented by unions or works councils.
Research and Development and Selected Product Candidates We focus our R&D on novel human therapeutics for the treatment of serious illness. We capitalize on our strengths in human genetics, novel biology and protein engineering. We leverage our biologic expertise and seek to choose the optimal modality for a drug target and disease.
See Reimbursement section above. 16 Research and Development and Selected Product Candidates We focus our R&D on novel human therapeutics for the treatment of serious illness. We capitalize on our strengths in human genetics, novel biology and protein engineering. We leverage our biologic expertise and seek to choose the optimal modality for a drug target and disease.
Health regulators, including the FDA, have authority to mandate labeling changes to products at any point in a product’s life cycle based on new safety information or as part of an evolving label change to a particular class of products.
Health regulators, including the FDA, have authority to mandate labeling changes to products at any point based on new safety information or as part of an evolving label change to a particular class of products.
We consider our staff relations to be good, supported by regular assessments of staff engagement surveys on a wide range of topics (including flexible work environments, diversity, inclusion and belonging, and maintaining a culture of compliance). We discuss the results of these surveys with our workforce and our Board of Directors.
We consider our staff relations to be good, supported by regular assessments of staff engagement surveys on a wide range of topics (including flexible work environments, career development, and maintaining a culture of compliance). We discuss the results of these surveys with our workforce and our Board of Directors.
We continue to pursue ways of increasing the value of our medicines through innovations during their life cycles, which can include expanding the disease areas for which our products are indicated and finding new methods to make the delivery of our medicines easier and less costly. Such activities can offer important opportunities for differentiation.
We continue to pursue ways of increasing the value of our medicines through innovations, which can include expanding the disease areas for which our products are indicated and finding new methods to make the delivery or manufacture of our medicines easier and less costly. Such activities can offer important opportunities for differentiation.
All staff also participate in a regular performance measurement process through which staff receive performance and development feedback, and pay is aligned to performance. The Amgen Values and leadership behaviors are an integral part of the performance assessments of our staff members, and these evaluations serve as an important information tool and basis for compensation decisions.
All staff participate in a regular performance measurement process through which staff receive performance and development feedback, and pay is aligned to performance. The Amgen Values and Leadership Attributes (Inspire, Accelerate, Integrate and Adapt) are an integral part of the performance assessments of our staff members, and these evaluations serve as an important information tool and basis for compensation decisions.
Comparable programs and benefits are available globally, with the same health and well-being intent, consistent with statutory requirements. Our Compensation and Management Development Committee provides oversight of our compensation plans, policies and programs. Safety and Wellness and Our Response to the Evolving COVID-19 Pandemic Creating a safe and healthy workplace for our staff is an important priority at Amgen.
Comparable programs and benefits are available globally, with the same health and well-being intent, and consistent with local statutory requirements. Our Compensation and Management Development Committee provides oversight of our compensation plans, policies and programs. Safety and Wellness Creating a safe and healthy workplace for our staff is an important priority at Amgen.
Failure to comply with these laws could result in significant penalties. Our business has been and will continue to be subject to various other U.S. and foreign laws, rules and regulations, including provisions of the IRA. See Reimbursement section above.
Failure to comply with these current and future laws could result in significant penalties. Our business has been and will continue to be subject to various other U.S. and foreign laws, rules and regulations, including provisions of the IRA.
Aranesp is also indicated for the treatment of anemia due to concomitant myelosuppressive chemotherapy in certain patients with nonmyeloid malignancies and when chemotherapy will be used for at least two months after starting Aranesp. Nplate We market Nplate in many countries around the world.
Aranesp is also indicated for the treatment of anemia due to concomitant myelosuppressive chemotherapy in certain patients with nonmyeloid malignancies and when chemotherapy will be used for at least two months after starting Aranesp. 4 EVENITY Together with our collaboration partners, we market EVENITY in many countries around the world.
ENBREL was launched in 1998 and is used primarily in indications for the treatment of adult patients with moderately to severely active rheumatoid arthritis, patients with chronic moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy and patients with active psoriatic arthritis. Prolia We market Prolia in many countries around the world.
ENBREL was launched in 1998 and is used primarily in indications for the treatment of adult patients with moderately to severely active rheumatoid arthritis, patients with chronic moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy and patients with active psoriatic arthritis.
KYPROLIS was launched in 2012 and is indicated in combination with (i) dexamethasone, (ii) lenalidomide plus dexamethasone and (iii) DARZALEX plus dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma who have received one to three prior lines of therapy.
KYPROLIS was launched in 2012 and is indicated in combination with (i) dexamethasone, (ii) lenalidomide plus dexamethasone, (iii) daratumumab plus dexamethasone, (iv) daratumumab plus hyaluronidase-fihj plus dexamethasone, and (v) isatuximab plus dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma who have received one to three prior lines of therapy.
With regard to our clinical trial activities, we are continuously monitoring COVID-19 infection rates, including changes from new variants; we are working to mitigate effects on future study enrollment in our clinical trials; and we are evaluating the impact in all relevant countries.
With regard to our clinical trial activities, we are continuously monitoring the possible impacts from health-related events, including changes from new COVID-19 variants; we are working to mitigate effects on future study enrollment in our clinical trials; and we are evaluating the impact in all relevant countries.
The majority of our staff members are also eligible for the grant of equity awards under our long-term incentive program that are designed to align the interests of our staff members with those of our shareholders. For senior level staff, a significant proportion of equity award value is based on company performance.
The majority of our staff members are also eligible for equity award grants under our long-term incentive program that are designed to align the interests of our staff members with those of our stockholders. For senior level staff, a significant proportion of equity award value is dependent on Company performance.
In the United States, it is used primarily in the indication for the treatment of postmenopausal women with osteoporosis at high risk of fracture, defined as a history of osteoporotic fracture, or multiple risk factors for fracture; or in patients who have failed or are intolerant to other available osteoporosis therapy.
EVENITY was launched in the United States and Japan in 2019. In the United States, it is used in the indication for the treatment of osteoporosis in postmenopausal women at high risk for fracture, defined as a history of osteoporotic fracture, or multiple risk factors for fracture; or patients who have failed or are intolerant to other available osteoporosis therapy.
This plant expands our capacity to manufacture certain products for U.S. and global markets, as we receive regulatory approval in those markets. In November 2021, we broke ground for our newest biomanufacturing plant located in New Albany, Ohio.
This plant expands our capacity to manufacture certain products for U.S. and global markets, as we receive regulatory approval in those markets. In November 2021, we broke ground for our newest biomanufacturing plant located in New Albany, Ohio, which received FDA licensure for commercial production in January 2024.
It is being evaluated in phase 3 studies as a treatment for severe asthma and chronic rhinosinusitis with nasal polyps. It is also being investigated in phase 2 studies as a treatment for chronic obstructive pulmonary disease and chronic spontaneous urticaria. TEZSPIRE is being developed jointly in collaboration with AstraZeneca.
It is being evaluated in phase 3 studies as a treatment for severe asthma, chronic rhinosinusitis with nasal polyps and eosinophilic esophagitis. It is also being investigated in phase 2 studies as a treatment for chronic obstructive pulmonary disease and chronic spontaneous urticaria.
Repatha was launched in 2015 and is indicated to reduce the risks of myocardial infarction, stroke and coronary revascularization in adults with established CV disease. Repatha is also indicated to reduce low-density lipoprotein cholesterol (LDL-C) in adults with primary hyperlipidemia, including heterozygous familial hypercholesterolemia (HeFH). KYPROLIS We market KYPROLIS primarily in the United States and Europe.
Repatha was launched in 2015 and is indicated to reduce the risks of myocardial infarction, stroke and coronary revascularization in adults with established CV disease. Repatha is also indicated to reduce low-density lipoprotein cholesterol (LDL-C) in adults with primary hyperlipidemia, including heterozygous familial hypercholesterolemia (HeFH). Nplate We market Nplate in many countries around the world.
Further, we continue to incorporate diversity, inclusion and belonging considerations into our business operations, including clinical trial design, procurement and site selection. Each of Amgen’s Employee Resource Groups is sponsored by senior executive leadership.
Further, we continue to incorporate diversity, inclusion and belonging considerations into our business operations, including clinical trial design and procurement, to broaden access to patients and suppliers to the benefit of our business. Each of Amgen’s Employee Resource Groups is sponsored by senior executive leadership.
Methods of treatment 4/9/2033 U.S. Formulation and methods of using formulation 5/11/2031 Europe Antibodies (1) 4/28/2026 Europe Methods of treatment 4/18/2032 Europe Formulation and methods of using formulation 5/11/2031 BLINCYTO ® (blinatumomab) U.S. Pharmaceutical compositions and bifunctional polypeptides 4/6/2030 U.S. Method of administration 9/28/2027 Europe Bifunctional polypeptides (1) 11/26/2024 Europe Method of administration 11/6/2029 Aimovig ® (erenumab-aooe) U.S.
Formulation and methods of using formulation 5/11/2031 Europe Antibodies (1) 4/28/2026 Europe Methods of treatment 4/18/2032 Europe Formulation and methods of using formulation 5/11/2031 BLINCYTO ® (blinatumomab) U.S. Pharmaceutical compositions and bifunctional polypeptides 4/6/2030 U.S. Method of administration 9/28/2027 Europe Bifunctional polypeptides (1) 11/26/2024 Europe Method of administration 11/6/2029 TEZSPIRE ® (tezepelumab-ekko) U.S. Polypeptides (2) 2/3/2029 U.S.
Our industry exists in a complex regulatory and reimbursement environment. The unique demands of our industry, together with the challenges of running an enterprise focused on the discovery, development, manufacture and commercialization of innovative medicines, requires a highly engaged and committed workforce.
Our industry is subject to a co mplex regulatory and reimbursement environment. The unique demands of our industry, together with the challenges of running an enterprise focused on the discovery, development, manufacture and commercialization of innovative medicines, requires a highly engaged and committed workforce.
Compounds and pharmaceutical compositions (3) 2/3/2031 (1) A European patent with this subject matter may also be entitled to supplemental protection in one or more countries in Europe, and the length of any such extension will vary by country.
CD19 antibodies and pharmaceutical compositions (2) 3/7/2030 Europe CD19 antibodies, pharmaceutical compositions and methods of treatment (1) 9/7/2027 (1) A European patent with this subject matter may also be entitled to supplemental protection in one or more countries in Europe, and the length of any such extension will vary by country.
It is also approved as a single agent for patients with relapsed or refractory multiple myeloma who have received one or more previous therapies. 5 Neulasta We market Neulasta, a pegylated protein based on the filgrastim molecule, primarily in the United States and Europe.
It is also approved as a single agent for patients with relapsed or refractory multiple myeloma who have received one or more previous therapies. Aranesp We market Aranesp primarily in the United States and Europe.
For 2022, our Compensation and Management Development Committee oversaw our labor and employment policies, programs and initiatives, including those relating to diversity, inclusion and belonging. 25 Information about Our Executive Officers The executive officers of the Company as of February 9, 2023, are set forth below. Mr. Robert A.
Our Compensation and Management Development Committee oversees our labor and employment policies, programs and initiatives, including those relating to diversity, inclusion and belonging. 26 Information about Our Executive Officers The executive officers of the Company as of February 14, 2024, are set forth below. Mr. Robert A.
We provide negotiated rebates to healthcare providers, private payers, government payers and PBMs. In addition, we are required to (i) provide rebates or discounts on our products that are reimbursed through certain government programs, including Medicare and Medicaid, and (ii) provide discounts to qualifying healthcare providers under the federal 340B Drug Pricing Program.
In addition, we are required to (i) provide rebates or discounts on our products that are reimbursed through certain government programs, including Medicare and Medicaid, and (ii) provide discounts to qualifying healthcare providers under the federal 340B Drug Pricing Program. Both private and some government payers use formularies to manage access to and utilization of drugs.
Amgen operates in one business segment: human therapeutics. Significant Developments Following is a summary of significant developments affecting our business that have occurred and that we have reported since the filing of our Annual Report on Form 10-K for the year ended December 31, 2021.
Significant Developments Following is a summary of significant developments affecting our business that have occurred and that we have reported since the filing of our Annual Report on Form 10-K for the year ended December 31, 2022.
As a result, payers are becoming more restrictive regarding the use of biopharmaceutical products and are scrutinizing the prices of these products while requiring a higher level of clinical evidence to support the benefits such products bring to patients and the broader healthcare system.
As a result, payers are becoming more restrictive regarding the use of biopharmaceutical products and are scrutinizing the prices of these products while requiring a higher level of clinical evidence to support the benefits such products bring to patients and the broader healthcare system. These pressures become intensified when our products become subject to competition, including from biosimilars.
We also provide annual incentive programs to reward our staff in alignment with achievement of Company-wide goals that are established annually and designed to drive aspects of our strategic priorities that support and advance our strategy across our Company.
We also provide annual incentive programs to reward our staff in alignment with achievement of Company-wide goals that are established annually and designed to drive aspects of our strategic priorities that support and advance our strategy across our Company and are intended to positively position us for both near- and long-term success.
XGEVA was launched in 2010 and is used primarily in the indication for prevention of skeletal-related events (pathological fracture, radiation to bone, spinal cord compression or surgery to bone) in patients with bone metastases from solid tumors and multiple myeloma. Aranesp We market Aranesp primarily in the United States and Europe.
XGEVA was launched in 2010 and is used primarily in the indication for prevention of skeletal-related events (pathological fracture, radiation to bone, spinal cord compression or surgery to bone) in patients with bone metastases from solid tumors and multiple myeloma. Repatha We market Repatha, a PCSK9 inhibitor, in many countries around the world.
In many markets around the world, these payers, including government health systems, private health insurers and other organizations, remain focused on reducing the cost of healthcare; and their efforts have intensified as a result of rising healthcare costs, economic pressures and broader challenges generated by the COVID-19 pandemic. Drugs remain heavily scrutinized for cost containment.
In many markets around the world, these payers, including government health systems, private health insurers and other organizations, remain focused on reducing the cost of healthcare; and their efforts have intensified, in part, as a result of uncertain macroeconomic conditions, rising healthcare costs and pressures on healthcare budgets. Drugs remain heavily scrutinized for cost containment.
We expect that countries will continue taking aggressive actions to seek to reduce expenditures on drugs and biologics. Similarly, fiscal constraints may also affect the extent to which countries are willing to approve new and innovative therapies and/or allow access to new technologies.
We expect that countries will continue taking aggressive actions to seek to reduce expenditures on drugs and biologics. Similarly, fiscal constraints may also affect the extent to which countries are willing to approve new and innovative therapies and/or allow access to new technologies. The EU is currently undergoing a review and possible revision of its pharmaceutical legislation.
Diversity, Inclusion and Belonging We believe that a diverse and inclusive culture fosters innovation, which supports our ability to serve patients. Further, we also believe our global presence is strengthened by having a workforce that reflects the diversity of the patients we serve.
Our CRCC provides general oversight of our safety programs and initiatives. Culture We believe that a diverse and inclusive culture fosters innovation, which supports our ability to serve patients. Further, we also believe our global presence is strengthened by having a workforce that reflects the diversity of the patients we serve (1) .
Grygiel held several management positions at Mylan Pharmaceuticals, Inc. Ms. Rachna Khosla, age 50, became Senior Vice President, Business Development, in 2021. Ms. Khosla joined the Company in 2013 as Corporate Development Director. From 2018 to 2021, Ms. Khosla was Vice President, Business Development, and from 2016 to 2018, was Executive Director, Business Development. Prior to joining the Company, Ms.
Grygiel served as Vice President, Compliance, Corporate & International, at Allergan, Inc. (Allergan). Prior to Allergan, Ms. Grygiel held several management positions at Mylan Pharmaceuticals, Inc. Ms. Rachna Khosla, age 51, became Senior Vice President, Business Development, in 2021. Ms. Khosla joined the Company in 2013 as Corporate Development Director. From 2018 to 2021, Ms.
See also Government Regulation—Regulation in the United States—Approval of Biosimilars. Although competitor biosimilars compete on price, we believe many patients, providers and payers will continue to place high value on the reputation, supply reliability and safety of our products.
Although biosimilars compete on price, we believe many patients, providers and payers will continue to place high value on the reputation, supply reliability and safety of our products.
The regulatory process in these countries may include manufacturing/testing facility inspections, testing of drug product upon importation and other domestic requirements. 14 In Asia Pacific, a number of countries such as China, Japan, South Korea and Taiwan may require local clinical-trial data for bridging purposes as part of the drug registration process in addition to global clinical trials, which can add to overall drug development and registration timelines.
In Asia Pacific, a number of countries such as China, Japan, South Korea and Taiwan may require local clinical-trial data for bridging purposes as part of the drug registration process in addition to global clinical trials, which can add to overall drug development and registration timelines.
The Infrastructure Investment and Jobs Act, signed into law on November 15, 2021, requires manufacturers of certain Part B–covered drugs packaged in single-use containers to give refunds to the government starting in 2023 for discarded amounts. In many countries other than the United States, government-sponsored healthcare systems are the primary payers for drugs and biologics.
The Infrastructure Investment and Jobs Act, signed into law on November 15, 2021, requires manufacturers of certain Part B–covered drugs packaged in single-use containers to give refunds to the government starting in 2023 for discarded amounts.
For example, supplementary protection certificates have been issued related to the indicated products for patents in at least the following countries: • denosumab — France, Germany, Italy, Spain and the United Kingdom, expiring in 2025 • apremilast — France, Germany, Italy, Spain and the United Kingdom expiring in 2028 • carfilzomib — France, Germany, Italy, Spain and the United Kingdom expiring in 2030 • evolocumab — France, Spain and the United Kingdom, expiring in 2030 • romiplostim — France, Germany, Italy, Spain and the United Kingdom, expiring in 2024 • romosozumab — France, Italy, Spain and the United Kingdom, expiring in 2031 • blinatumomab — France, Germany, Italy and Spain, expiring in 2029 • erenumab — France, Italy, Spain and the United Kingdom, expiring in 2033 • etelcalcetide — France, Germany, Italy, Spain and the United Kingdom, expiring in 2031 (2) U.S.
For example, supplementary protection certificates have been issued related to the indicated products for patents in at least the following countries: • denosumab — France, Germany, Italy, Spain and the United Kingdom, expiring in 2025 6 • apremilast — France, Germany, Italy, Spain and the United Kingdom expiring in 2028 • carfilzomib — France, Germany, Italy, Spain and the United Kingdom expiring in 2030 • evolocumab — France, expiring in 2030 and Spain and the United Kingdom, expiring in 2031 • romiplostim — France, Germany, Italy, Spain and the United Kingdom, expiring in 2024 • romosozumab — France, Germany, Italy, Spain and the United Kingdom, expiring in 2031 • blinatumomab — France, Germany, Italy and Spain, expiring in 2029 • erenumab — France, Italy, Spain and the United Kingdom, expiring in 2033 • etelcalcetide — France, Germany, Italy, Spain and the United Kingdom, expiring in 2031 • tezepelumab — France and Italy, expiring in 2033 • inebilizumab — Italy and Spain, expiring in 2032 (2) A patent with this subject matter may be entitled to patent term extension in the United States.
Our product sales to three large wholesalers, McKesson Corporation, AmerisourceBergen Corporation and Cardinal Health, Inc., each individually accounted for more than 10% of total revenues for each of the years 2022, 2021 and 2020. On a combined basis, these wholesalers accounted for 82%, 82% and 83% of worldwide gross revenues for 2022, 2021 and 2020, respectively.
(formerly AmerisourceBergen) and Cardinal Health, Inc., each individually accounted for more than 10% of total revenues for each of the years 2023, 2022 and 2021. On a combined basis, these wholesalers accounted for 79%, 82% and 82% of worldwide gross revenues for 2023, 2022 and 2021, respectively.
In Europe, Prolia is used primarily for the treatment of osteoporosis in postmenopausal women at increased risk of fracture. Otezla We market Otezla, a small molecule that inhibits phosphodiesterase 4 (PDE4), in many countries around the world. Otezla was acquired from Bristol Myers Squibb Company in November 2019 after their acquisition of Celgene.
Otezla We market Otezla, a small molecule that inhibits phosphodiesterase 4 (PDE4), in many countries around the world. Otezla was acquired from Bristol Myers Squibb Company in November 2019 after their acquisition of Celgene.
Companies have launched biosimilar versions of EPOGEN, NEUPOGEN and Neulasta and have approved biosimilars for ENBREL. Once multiple biosimilar versions of one of our originator products have launched, competition has intensified rapidly, resulting in greater net price declines for both reference and biosimilar products and a greater effect on product sales.
Once multiple biosimilar versions of one of our originator products have launched, competition has intensified rapidly, resulting in greater net price declines for both the reference and the biosimilar products and a greater effect on product sales. See also Government Regulation—Regulation in the United States—Approval of Biosimilars.
To support our clinical trials, we manufacture product candidates primarily at our California facilities. We also use third-party contract manufacturers to supplement the capacity or capability of our overall clinical manufacturing network. See Item 1A.
To support our clinical trials, we manufacture product candidates primarily at our California facilities. We also use third-party contract manufacturers to supplement the capacity or capability of our overall clinical manufacturing network. See Item 1A. Risk Factors for a discussion of the factors that could adversely impact our manufacturing operations and the global supply of our products.
ABP 938 ABP 938, a biosimilar candidate to EYLEA, is a vascular endothelial growth factor receptor (VEGFR) Fc fusion protein. It is being investigated in a phase 3 study for biosimilarity to EYLEA.
ABP 206 ABP 206, a biosimilar candidate to OPDIVO, is a monoclonal antibody that binds to the receptor protein called programmed death protein 1 (PD-1). ABP 938 ABP 938, a biosimilar candidate to EYLEA, is a vascular endothelial growth factor receptor (VEGFR) Fc fusion protein. It is being investigated in a phase 3 study for biosimilarity to EYLEA.
Risk Factors for a discussion of the factors that could adversely impact our manufacturing operations and the global supply of our products. 11 Distribution We operate distribution centers in Puerto Rico, Kentucky, California and the Netherlands for worldwide distribution of the majority of our commercial and clinical products. We also use third-party distributors to supplement distribution of our products worldwide.
Distribution We operate distribution centers in Puerto Rico, Kentucky, California and the Netherlands for worldwide distribution of the majority of our commercial and clinical products. We also use third-party distributors to supplement distribution of our products worldwide.
Nplate was launched in 2008 and is indicated to treat thrombocytopenia in patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to corticosteroids, immunoglobulins or splenectomy. Repatha We market Repatha, a PCSK9 inhibitor, in many countries around the world.
Nplate was launched in 2008 and is indicated to treat thrombocytopenia in patients with immune thrombocytopenia (ITP) who have had an insufficient response to corticosteroids, immunoglobulins or splenectomy. KYPROLIS We market KYPROLIS primarily in the United States and Europe.
Business Relationships From time to time, we enter into business relationships, including joint ventures and collaborative arrangements, for the R&D, manufacture and/or commercialization of products and/or product candidates.
The reference-product primary conditions are paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Business Relationships From time to time, we enter into business relationships, including joint ventures and collaborative arrangements, for the R&D, manufacture and/or commercialization of products and/or product candidates.
It is being investigated for the treatment of advanced gastroesophageal junction (GEJ) adenocarcinoma. 19 BLINCYTO BLINCYTO is an anti-CD19 x anti-CD3 BiTE ® molecule. It is being investigated in newly diagnosed adults aged 40 and older with Ph negative B-Cell precursor acute lymphoblastic leukemia (ALL). Efavaleukin alfa Efavaleukin alfa is an interleukin (IL)-2 mutein Fc fusion protein.
It is being investigated for the treatment of advanced gastroesophageal junction (GEJ) adenocarcinoma and advanced solid tumors other than advanced squamous NSCLC. BLINCYTO BLINCYTO is an anti-CD19 x anti-CD3 BiTE ® molecule. It is being investigated in newly diagnosed adults aged 40 and older with Ph negative B-cell precursor ALL.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, in August 2022, the IRA was enacted and includes provisions requiring that: (1) beginning in 2026, mandatory price setting be introduced in Medicare for certain drugs paid for under Parts B and D, whereby manufacturers must accept a price established by the government or face penalties on all U.S. sales (starting with 10 drugs in 2026, adding 15 in 2027 and 2028, and adding 20 in 2029 and subsequent years such that by 2031 approximately 100 drugs could be subject to such set prices); (2) starting in 2024, Medicare Part D be redesigned to cap beneficiary out-of-pocket costs and, beginning January 1, 2025, Federal reinsurance be reduced in the catastrophic phase (resulting in a shift and increase of such costs to Part D plans and manufacturers, including by requiring manufacturer discounts on certain drugs); and (3) beginning October 1, 2022, manufacturers will owe rebates on drugs reimbursed under Medicare Part D if price increases outpace inflation, and beginning January 1, 2023, will owe rebates on drugs reimbursed under Medicare Part B if price increases outpace inflation.
Biggest changeFor example, in 2022, the IRA was enacted and includes provisions requiring that beginning in 2026, mandatory price setting be introduced in Medicare for certain drugs paid for under Parts B and D, whereby manufacturers must accept a price established by the government or face penalties on all U.S. sales (starting with ten drugs in 2026, adding 15 in 2027 and 2028, and adding 20 in 2029 and subsequent years such that by 2031 approximately 100 drugs could be subject to such set prices).
While we did not experience any significant adverse effects as a result of these vulnerabilities, there can be no assurance that we will timely identify and address any future vulnerabilities. Our systems are also subject to frequent perimeter network reconnaissance and scanning, phishing and other cyberattacks.
While we did not experience any significant adverse effects as a result of these vulnerabilities, there can be no assurance that we will timely identify and address future vulnerabilities. Our systems are also subject to frequent perimeter network reconnaissance and scanning, phishing and other cyberattacks.
For example, in December 2021, a remote code execution vulnerability was discovered in a widely used software library that is used in a variety of commercially available software and services.
For example, in December 2021, a remote code execution vulnerability was discovered in a software library that is widely used in a variety of commercially available software and services.
Each of CVS, Express Scripts and United Health Group (among the top five integrated health plans and PBMs), each have Rebate Management Organizations that further increase their leverage to negotiate deeper discounts.
Each of CVS, Express Scripts and United Health Group (among the top five integrated health plans and PBMs), have Rebate Management Organizations that further increase their leverage to negotiate deeper discounts.
See Our sales depend on coverage and reimbursement from government and commercial third-party payers, and pricing and reimbursement pressures have affected, and are likely to continue to affect, our profitability.
See Our sales depend on coverage and reimbursement from government and commercial third-party payers, and pricing and reimbursement pressures have affected, and are likely to continue to affect, our profitability.
For example, early in 2020, there were significant disruptions in the commercial paper market and several borrowers were unable to obtain funding at normal rates or maturities, which resulted in a significant increase in draws of corporate credit lines with banks.
For example, in early 2020, there were significant disruptions in the commercial paper market and several borrowers were unable to obtain funding at normal rates or maturities, which resulted in a significant increase in draws of corporate credit lines with banks.
These distributors, in turn, sell our products to their customers, which include physicians or their clinics, dialysis centers, hospitals and pharmacies. Similarly, as discussed above, there has been significant consolidation in the health insurance industry, including that a small number of PBMs now oversee a substantial percentage of total covered lives in the United States.
These distributors, in turn, sell our products to their customers, which include physicians or their clinics, dialysis centers, hospitals and pharmacies. Similarly, as discussed above, there has been significant consolidation in the health insurance industry, including that a small number of PBMs now oversee a 42 substantial percentage of total covered lives in the United States.
In addition, antitrust scrutiny by regulatory agencies and changes to regulatory approval process in the U.S. and foreign jurisdictions may cause approvals to take longer than anticipated to obtain, not be obtained at all, or contain burdensome conditions, which may jeopardize, delay or reduce the anticipated benefits of acquisitions to us and could impede the execution of our business strategy.
Antitrust scrutiny by regulatory agencies and changes to regulatory approval process in the U.S. and foreign jurisdictions may cause approvals to take longer than anticipated to obtain, not be obtained at all, or contain burdensome conditions, which may jeopardize, delay or reduce the anticipated benefits of acquisitions to us and could impede the execution of our business strategy.
For example, after an imbalance in positively adjudicated CV serious adverse events was observed in one of the phase 3 clinical trials for EVENITY but not in another, larger phase 3 study, in April 2019 the FDA approved EVENITY for the 44 treatment of osteoporosis in postmenopausal women at high risk for fracture, along with a post-marketing requirement.
For example, after an imbalance in positively adjudicated CV serious adverse events was observed in one of the phase 3 clinical trials for EVENITY but not in another, larger phase 3 study, in April 2019 the FDA approved EVENITY for the treatment of osteoporosis in postmenopausal women at high risk for fracture, along with a post-marketing requirement.
Further, as a result of clinical trials, including sub-analyses or meta-analyses of earlier clinical trials (a meta-analysis involves the use of various statistical methods to combine results from previous separate but related studies) performed by us or others, concerns may arise about the sufficiency of the data or studies underlying a product’s approved label.
Further, as a result of clinical trials, including sub-analyses or meta-analyses of earlier clinical trials (a meta-analysis involves the use of various statistical methods to combine results from previous separate but related studies) performed by us or others, concerns may arise about the 46 sufficiency of the data or studies underlying a product’s approved label.
A subsequent extended shutdown could result in reductions or delays of FDA’s activities, including with respect to our ongoing clinical programs, our manufacturing of our products and product candidates and our product approvals. Regulatory authorities have questioned, and may in the future question, the sufficiency for approval of the endpoints we select for our clinical trials.
A subsequent extended shutdown could result in reductions or delays of FDA’s activities, including with respect to our ongoing clinical programs, our manufacturing of our products and product candidates and our product approvals. 45 Regulatory authorities have questioned, and may in the future question, the sufficiency for approval of the endpoints we select for our clinical trials.
We seek innovation through significant investment in both internal R&D and external transactions, including collaborations, partnerships, alliances, licenses, joint ventures, mergers and acquisitions (collectively, acquisition activity). Acquisition activities may be subject to regulatory approvals or other requirements that are not within our control.
We seek innovation through significant investment in both internal R&D and external transactions, including collaborations, partnerships, alliances, licenses, joint ventures, mergers and acquisitions (collectively, acquisition activity). 35 Acquisition activities may be subject to regulatory approvals or other requirements that are not within our control.
In September 2022, Hurricane Fiona caused further damage to the island’s utility infrastructure which again resulted in widespread power outages and water supply issues. Although these events did not directly have a material effect on our business, they have resulted in disruptions to our third-party suppliers on the island.
In September 2022, Hurricane Fiona caused further damage to the island’s utility infrastructure which again resulted in widespread power outages and water supply issues. Although these events did not directly have a material effect on our 48 business, they have resulted in disruptions to our third-party suppliers on the island.
Further, pressures on healthcare budgets from the pandemic, the economic downturn and inflation continue and are likely to increase across the markets we serve. Payers are increasingly focused on costs, which have resulted, and are expected to continue to result, in lower reimbursement rates for our products or narrower populations for which payers will reimburse.
Further, pressures on healthcare budgets from the economic downturn and inflation continue and are likely to increase across the markets we serve. Payers are increasingly focused on costs, which have resulted, and are expected to continue to result, in lower reimbursement rates for our products or narrower populations for which payers will reimburse.
See Our intellectual property positions may be challenged, invalidated or circumvented, or we may fail to prevail in current and future intellectual property litigation. The U.S. biosimilar pathway includes the option for biosimilar products that meet certain criteria to be approved as interchangeable with their reference products.
See Our 41 intellectual property positions may be challenged, invalidated or circumvented, or we may fail to prevail in current and future intellectual property litigation. The U.S. biosimilar pathway includes the option for biosimilar products that meet certain criteria to be approved as interchangeable with their reference products.
We also operated on backup generators for a few weeks after the early 2020 earthquakes in Puerto Rico. In 2021, the baseload power generation units of the Puerto Rico Electric Power Authority malfunctioned due to the 46 lack of adequate maintenance for over a decade, leading to selective outages across the island.
We also operated on backup generators for a few weeks after the early 2020 earthquakes in Puerto Rico. In 2021, the baseload power generation units of the Puerto Rico Electric Power Authority malfunctioned due to the lack of adequate maintenance for over a decade, leading to selective outages across the island.
As a result, our products have been competing and may continue to compete, and our product candidates may compete, against products or product candidates that offer higher rebates or discounts, lower prices, equivalent or superior efficacy, better safety profiles, easier administration, earlier market availability or other competitive 37 features.
As a result, our products have been competing and may continue to compete, and our product candidates may compete, against products or product candidates that offer higher rebates or discounts, lower prices, equivalent or superior efficacy, better safety profiles, easier administration, earlier market availability or other competitive features.
We are dependent on the sustained cooperation and effort of those third-party companies to supply and/or market the devices and, in some cases, to conduct the studies required for approval or clearance by the applicable regulatory agencies. We are also dependent on those third-party companies continuing to meet applicable regulatory or other requirements.
We are dependent on the sustained cooperation and effort of those third-party companies to supply and/or market the devices and, in some cases, to conduct the studies required for approval or clearance by the applicable regulatory agencies. We are also dependent on those 47 third-party companies continuing to meet applicable regulatory or other requirements.
Hurricanes Maria and Fiona, the 2020 earthquakes, the COVID-19 pandemic and the ILA strike have also placed greater stress on the island’s already challenged economy. Beginning in 2016, the government of Puerto Rico defaulted on its roughly $72 billion of debt. In response, the U.S.
Hurricanes Maria and Fiona, the 2020 earthquakes, the COVID-19 pandemic and the ILA strike have placed greater stress on the island’s already challenged economy. Beginning in 2016, the government of Puerto Rico defaulted on its roughly $72 billion of debt. In response, the U.S.
Moreover, if we lose or settle current or future litigations at certain stages or entirely, we could be subject to competition and/or significant liabilities, be required to enter into third-party licenses for the infringed product or technology or be required to cease using the technology or product in dispute.
Moreover, if we lose or settle current or future litigations at certain stages or entirely, we could be subject to competition and/or significant liabilities, be required to enter into third-party licenses for the infringed product or technology or be required to 40 cease using the technology or product in dispute.
For example, in 2017, a pharmaceutical company experienced a cyberattack involving virulent malware that significantly disrupted its operations, including its research and sales operations and the production of some of its medicines and vaccines. As a result of the cyberattack, its orders and sales for certain products in certain markets were negatively affected.
For example, in 2017, a pharmaceutical company experienced a cyberattack involving virulent malware that significantly disrupted its operations, including its research and sales operations and the production of some of its medicines and vaccines. As a result of the cyberattack, its orders and sales for certain products were negatively affected.
The COVID-19 pandemic has also resulted in disruptions to activities on the island. In March 2020, the Governor of Puerto Rico issued Executive Orders requiring the lockdown of businesses and government facilities, imposing restrictions on business operations and a curfew on residents in response to COVID-19.
The COVID-19 pandemic also resulted in disruptions to activities on the island. In March 2020, the Governor of Puerto Rico issued Executive Orders requiring the lockdown of businesses and government facilities, imposing restrictions on business operations and a curfew on residents in response to COVID-19.
In the CV setting, a heart disease therapeutic candidate may be evaluated for its ability to reduce LDL-C levels, as an elevated LDL-C level has been a surrogate endpoint for CV events such as death, heart attack and stroke.
In the cardiovascular (CV) setting, a heart disease therapeutic candidate may be evaluated for its ability to reduce LDL-C levels, as an elevated LDL-C level has been a surrogate endpoint for CV events such as death, heart attack and stroke.
Further quality issues that result in 47 unexpected additional demand for certain components have resulted in shortages and in the future may lead to shortages of required raw materials or components (such as we have experienced with EPOGEN glass vials).
Further quality issues that result in unexpected additional demand for certain components have resulted in shortages and in the future may lead to shortages of required raw materials or components (such as we have experienced with EPOGEN glass vials).
While we have achieved most of our goals set in prior years, whether we can achieve our current and future ESG goals continues to be uncertain and remains subject to numerous risks, including evolving regulatory requirements and social expectations affecting ESG practices, our ability to recruit, develop and retain a diverse workforce, the availability of suppliers and collaboration partners that can meet our ESG goals, the effects of the organic growth of our business and potential 49 acquisitions of other businesses on our ESG performance, and the availability and cost of technologies or resources, such as carbon credits, that support our goals.
While we have achieved most of our goals set in prior years, whether we can achieve our current and future ESG goals continues to be uncertain and remains subject to numerous risks, including evolving regulatory requirements and social expectations affecting ESG practices, our ability to recruit, develop and retain a diverse workforce, the availability of suppliers and collaboration partners that can meet our environmental goals, the effects of the organic growth of our business and potential acquisitions of other businesses on our ESG performance, and the availability and cost of technologies or resources, such as carbon credits, that support our goals.
Economic conditions may also adversely affect the ability of our distributors, customers and suppliers to obtain the liquidity required to buy inventory or raw materials and to perform their obligations under agreements with us, which could disrupt our operations.
Economic conditions may also adversely affect the ability of our distributors, customers and suppliers to 52 obtain the liquidity required to buy inventory or raw materials and to perform their obligations under agreements with us, which could disrupt our operations.
In addition, competitors have been, and may continue to be, able to invalidate, design around or otherwise circumvent our patents and sell competing products. 38 We currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future.
In addition, competitors have been, and may continue to be, able to invalidate, design around or otherwise circumvent our patents and sell competing products. We currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future.
Policy reforms advanced by Congress or the Administration that refine the role of PBMs in the U.S. marketplace could have downstream implications or consequences for our business and how we interact with these entities.
Policy reforms advanced by Congress or the Administration that refine the role of PBMs in the U.S. marketplace could have downstream implications or 32 consequences for our business and how we interact with these entities.
Additionally, the views of regulatory agencies relating to the requirements for accelerated approval may change over time, and trial designs that were sufficient to support accelerated approvals for some oncology products may not be considered sufficient 42 for later candidates.
Additionally, the views of regulatory agencies relating to the requirements for accelerated approval may change over time, and trial designs that were sufficient to support accelerated approvals for some oncology products may not be considered sufficient for later candidates.
Business—Business Relationships. 45 Failures by these parties to meet their contractual, regulatory, or other obligations to us or any disruption in the relationships between us and these third parties, could have a material adverse effect on our pharmaceutical pipeline and business.
Failures by these parties to meet their contractual, regulatory, or other obligations to us or any disruption in the relationships between us and these third parties, could have a material adverse effect on our pharmaceutical pipeline and business.
Changes in credit ratings issued by nationally recognized credit-rating agencies could adversely affect our ability to obtain capital market financing and the cost of such financing and have an adverse effect on the market price of our securities.
Changes in credit ratings issued by nationally recognized credit-rating agencies could also adversely affect our ability to obtain capital and credit market financing and the cost of such financing and have an adverse effect on the market price of our securities.
In 2022, Okta, Inc., a provider of software that helps companies manage user authentication, disclosed that several hundred of its corporate customers were vulnerable to a security breach that allowed 30 attackers to access Okta’s internal network.
In 2022, Okta, Inc., a provider of software that helps companies manage user authentication, disclosed that several hundred of its corporate customers were vulnerable to a security breach that allowed attackers to access Okta’s internal network.
In 2022 we identified a number of security vulnerabilities introduced into our information systems as a result of flaws that we subsequently identified in software that we purchased and installed, and these flaws required that we apply emergency patches to certain of our systems.
In 2022, we identified a number of security vulnerabilities introduced into our information systems as a result of flaws that we subsequently identified in software that we had purchased and installed, and these flaws required that we apply emergency patches to certain of our systems.
If the FDA were to decide that umbrella exclusivity does not apply to biological reference products or were to make other changes to the exclusivity period, 39 this could expose us to biosimilar competition at an earlier time.
If the FDA were to decide that umbrella exclusivity does not apply to biological reference products or were to make other changes to the exclusivity period, this could expose us to biosimilar competition at an earlier time.
If we are at any time unable to provide an uninterrupted supply of our products to patients, we may lose patients and physicians may elect to prescribe competing therapeutics instead of our products, which could have a material adverse effect on our product sales, business and results of operations. 48 Our manufacturing processes, those of our third-party contract manufacturers and those of certain of our third-party service providers must undergo regulatory approval processes and are subject to continued review by the FDA and other regulatory authorities.
If we are at any time unable to provide an uninterrupted supply of our products to patients, we may lose patients and physicians may elect to prescribe competing therapeutics instead of our products, which could have a material adverse effect on our product sales, business and results of operations. 50 Our manufacturing processes, those of our third-party contract manufacturers and those of certain of our third-party service providers must undergo regulatory approval processes and are subject to continued review by the FDA and other regulatory authorities.
Product candidates, including biosimilar product candidates, or new indications for existing products (collectively, product candidates) that appear promising in the early phases of development have failed to reach the market for a number of reasons, such as: • the product candidate did not demonstrate acceptable clinical trial results even though it achieved its primary endpoints and/or demonstrated positive preclinical or early clinical trial results, for reasons that could include changes in the standard of care of medicine or expectations of health authorities; • the product candidate was not effective or not more effective than currently available or potentially competitive therapies in treating a specified condition or illness; • the product candidate was not cost effective in light of existing or potentially competitive therapeutics; • the product candidate had harmful side effects in animals or humans; • the necessary regulatory bodies, such as the FDA or EMA, did not approve the product candidate for an intended use; • reimbursement for the product candidate is limited despite regulatory approval; • the product candidate was not economical for us to manufacture and commercialize; • other parties had or may have had proprietary rights relating to our product candidate, such as patent rights, and did not let us sell it on reasonable terms, or at all; • we and certain of our licensees, partners, contracted organizations or independent investigators failed to effectively conduct clinical development or clinical manufacturing activities; • the pathway to regulatory approval or reimbursement for product candidates was uncertain or not well-defined; • the biosimilar product candidate failed to demonstrate the requisite biosimilarity to the applicable reference product, or was otherwise determined by a regulatory authority to not meet applicable standards for approval; and • a companion diagnostic device that is required with the use of a product candidate is not approved by the necessary regulatory authority.
Product candidates, including biosimilar product candidates, or new indications for existing products (collectively, product candidates) that appear promising in the early phases of development have failed to reach the market for a number of reasons, such as: • the product candidate did not demonstrate acceptable clinical trial results even though it achieved its primary endpoints and/or demonstrated positive preclinical or early clinical trial results, for reasons that could include changes in the standard of care of medicine or expectations of health authorities; • the product candidate was not effective or not more effective than currently available or potentially competitive therapies in treating a specified condition or illness; • the product candidate was not cost effective in light of existing or potentially competitive therapeutics; • the product candidate had harmful side effects in animals or humans; • the necessary regulatory bodies, such as the FDA or EMA, did not approve the product candidate for an intended use; • reimbursement for the product candidate is limited despite regulatory approval; • the product candidate was not economical for us to manufacture and commercialize; • the patient population size is smaller than anticipated; • other parties had or may have had proprietary rights relating to our product candidate, such as patent rights, and did not let us sell it on reasonable terms, or at all; • we and certain of our licensees, partners, contracted organizations or independent investigators failed to effectively conduct clinical development or clinical manufacturing activities; • the pathway to regulatory approval or reimbursement for product candidates was uncertain or not well-defined; • the biosimilar product candidate failed to demonstrate the requisite biosimilarity to the applicable reference product, or was otherwise determined by a regulatory authority to not meet applicable standards for approval; and • a companion diagnostic device that is required with the use of a product candidate is not approved by the necessary regulatory authority.
One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely examined by tax authorities in those jurisdictions.
One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and foreign jurisdictions. Our income tax returns are routinely examined by tax authorities in those jurisdictions.
A breakdown of our information technology systems, cyberattack or information security breach could compromise the confidentiality, integrity and availability of our information technology systems, network-connected control systems and/or our data, interrupt the operation of our business and/or affect our reputation.
A breakdown of our information technology systems, cyberattack or information security breach could significantly compromise the confidentiality, integrity and availability of our information technology systems, network-connected control systems and/or our data, interrupt the operation of our business and/or affect our reputation.
While we maintain cyber-liability insurance, our insurance is not sufficient to cover us against all losses that could potentially result from a service interruption, breach of our systems or loss of our critical or sensitive data. 31 We are also subject to various laws and regulations globally regarding privacy and data protection, including laws and regulations relating to the collection, storage, handling, use, disclosure, transfer and security of personal data.
While we maintain cyber-liability insurance, our insurance is not sufficient to cover us against all losses that could potentially result from a service interruption, breach of our systems or loss of our critical or sensitive data. 38 We are also subject to various laws and regulations globally regarding privacy and data protection, including laws and regulations relating to the collection, storage, handling, use, disclosure, transfer and security of personal data.
Attacks such as those experienced by governmental entities (including those that approve and/or regulate our products, such as the EMA) and other multi-national companies, including some of our peers, could leave us unable to utilize key business systems or access or protect important data and could have a material adverse effect on our ability to operate our business, including developing, gaining regulatory approval for, manufacturing, selling and/or distributing our products.
Attacks such as those experienced by government entities (including those that approve and/or regulate our products, such as the EMA) and other multi-national companies, including some of our peers, could leave us unable to utilize key business systems or access or protect important data, and could have a material adverse effect on our ability to operate our business, including developing, gaining regulatory approval for, manufacturing, selling and/or distributing our products.
We may experience similar or other shortages in the future resulting in delayed shipments, supply constraints, clinical trial delays, contract disputes and/or stock-outs of our products.
We may experience similar or 49 other shortages in the future resulting in delayed shipments, supply constraints, clinical trial delays, contract disputes and/or stock-outs of our products.
CMS policy changes and demonstration projects to test new care, delivery and payment models can also significantly affect how drugs, including our products, are covered and reimbursed.
Other CMS policy changes and demonstration projects to test new care, delivery and payment models can also significantly affect how drugs, including our products, are covered and reimbursed.
This high degree of 34 consolidation among insurers and PBMs and other payers, including through integrated healthcare delivery systems and/or with specialty or mail-order pharmacies and pharmacy retailers, has increased the negotiating leverage such entities have over us and other biopharmaceutical manufacturers and has resulted in greater price discounts, rebates and service fees realized by those payers from our business.
This high degree of consolidation among insurers, PBMs and other payers, including integrated healthcare delivery systems and/or with specialty or mail-order pharmacies and pharmacy retailers, has increased the negotiating leverage such entities have over us and other biopharmaceutical manufacturers and has resulted in greater price discounts, rebates and service fees realized by those payers from our business.
We and certain of our subsidiaries are involved in legal proceedings. See Part IV—Note 19, Contingencies and commitments, to the Consolidated Financial Statements. Civil and criminal litigation is inherently unpredictable, and the outcome can result in costly verdicts, fines and penalties, exclusion from federal healthcare programs and/or injunctive relief that affect how we operate our business.
We and certain of our subsidiaries are involved in legal proceedings. See Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements. Civil and criminal litigation is inherently unpredictable, and the outcome can result in costly verdicts, fines and penalties, exclusion from federal healthcare programs and/or injunctive relief that affect how we operate our business.
Delays and complications in 41 planned clinical trials can result in increased development costs, associated delays in regulatory approvals and in product candidates reaching the market and revisions to existing product labels.
Delays and complications in planned clinical trials can result in increased development costs, associated delays in regulatory approvals and in product candidates reaching the market and revisions to existing product labels.
We have certain assets, including equity investments, that are exposed to market fluctuations that could, in a sustained 50 or recurrent series of market disruptions, result in impairments.
We have certain assets, including equity investments, that are exposed to market fluctuations that could, in a sustained or recurrent series of market disruptions, result in impairments.
Further, failures or difficulties in integrating or retaining new personnel or in integrating the operations of the businesses, products or assets we acquire (including related technology, commercial operations, compliance programs, manufacturing, distribution and general business operations and procedures and ESG activities) may affect our ability to realize the benefits of the transaction and grow our business and may result in us incurring asset impairment or restructuring charges.
Further, failures or difficulties in integrating or retaining new personnel or in integrating the operations of the businesses, products or assets we acquire (including related technology, research, development and commercial operations, compliance programs, manufacturing, distribution and general business operations and procedures and ESG activities) may affect our ability to realize the benefits of the transaction and grow our business and may result in us incurring asset impairment or restructuring charges.
See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, Income Taxes, and Part IV—Note 6, Income taxes, to the Consolidated Financial Statements.
See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, Income Taxes, and Part IV—Note 7, Income taxes, to the Consolidated Financial Statements.
Cyberattackers are also increasingly exploiting vulnerabilities in commercially available software from shared or open-source code. We rely on third party commercial software that may have such vulnerabilities, but as use of open-source code is frequently not disclosed, our ability to fully assess this risk to our systems is limited.
Cyberattackers are also increasingly exploiting vulnerabilities in commercially available software from shared or open-source code. We rely on third party commercial software that have had and may have such vulnerabilities, but as use of open-source code is frequently not disclosed, our ability to fully assess this risk to our systems is limited.
Failure to obtain coverage and reimbursement for our products, a deterioration in their existing coverage and reimbursement or a decline in the timeliness or certainty of payment by payers to physicians and other providers has negatively affected, and may further negatively affect, the ability or willingness of healthcare providers to prescribe our products for their patients and otherwise negatively affect the use of our products or the prices we realize for them.
Failure to obtain coverage and reimbursement for our products, a deterioration in their existing coverage and reimbursement or a decline in the timeliness or certainty of payment by payers to hospitals and other providers has negatively affected, and may further negatively affect, the ability or willingness of healthcare providers to prescribe our products for their patients and otherwise negatively affect the use of our products or the prices we realize for them.
Certain of our distributors, customers and payers have substantial purchasing leverage, due to the volume of our products they purchase or the number of patient lives for which they provide coverage. The substantial majority of our U.S. product sales is made to three pharmaceutical product wholesaler distributors: McKesson Corporation, AmerisourceBergen Corporation and Cardinal Health, Inc.
Certain of our distributors, customers and payers have substantial purchasing leverage, due to the volume of our products they purchase or the number of patient lives for which they provide coverage. The substantial majority of our U.S. product sales is made to three pharmaceutical product wholesaler distributors: McKesson Corporation, Cencora, Inc. (formerly AmerisourceBergen Corporation) and Cardinal Health, Inc.
These include legislation promulgated by the IRA that enables the U.S. government to set prices for certain drugs in Medicare, redesigns Medicare Part D benefits to shift a greater portion of the costs to manufacturers and enables the U.S. government to impose penalties if drug prices are increased at a rate faster than inflation.
These include the IRA legislation that enables the U.S. government to set prices for certain drugs in Medicare, redesigns Medicare Part D benefits to shift a greater portion of the costs to manufacturers and enables the U.S. government to impose penalties if drug prices are increased at a rate faster than inflation.
The current inflationary environment related to increased aggregate demand, supply chain constraints and the effects from the armed conflict in Ukraine (including the effects of the sanctions that were implemented in response to the conflict and the resulting impacts on the commodity market and supply chains) have also increased our operating expenses and may continue to affect our operating expenses.
The current inflationary environment related to increased aggregate demand, supply chain constraints and the effects from the armed conflict in Ukraine (including the effects of the sanctions that were implemented in response to the conflict and the resulting impacts on the commodity market and supply chains) and the Middle East have also increased our operating expenses and may continue to affect our operating expenses.
Although the Medicare Administrative Contractors subsequently removed TEZSPIRE from their exclusion lists, these exclusions, if reintroduced and/or implemented, would result in Medicare beneficiaries with severe asthma losing access to TEZSPIRE coverage under Medicare Part B and potentially also under Medicare Advantage. —Government and commercial payer actions outside the United States have affected and will continue to affect access to and sales of our products Outside the United States, we expect countries will also continue to take actions to reduce their drug expenditures.
Although the Medicare Administrative Contractors subsequently removed TEZSPIRE from their exclusion lists, these exclusions, if reintroduced and/or implemented, would result in Medicare beneficiaries with severe asthma losing access to TEZSPIRE coverage under Medicare Part B and potentially also under Medicare Advantage. —Government and commercial payer actions outside the United States have affected and will continue to affect access to and sales of our products Outside the United States, we expect countries will also continue to take actions to reduce their drug expenditures and to reduce intellectual property protections.
Companies pursuing development of biosimilar versions of our products have challenged and may continue to challenge our patents well in advance of the expiration of our material patents. For examples of and information related to our biosimilars and generics patent litigation, see Part IV—Note 19, Contingencies and commitments, to the Consolidated Financial Statements.
Companies pursuing development of biosimilar versions of our products have challenged and may continue to challenge our patents well in advance of the expiration of our material patents. For examples of and information related to our biosimilars and generics patent litigation, see Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements.
For examples of and information related to our patent litigation, see Part IV—Note 19, Contingencies and commitments, to the Consolidated Financial Statements. Certain of the existing patents on our products have expired or will soon expire. See Item 1. Business—Marketing, Distribution and Selected Marketed Products—Patents.
For examples of and information related to our patent litigation, see Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements. Certain of the existing patents on our products have expired or will soon expire. See Item 1. Business—Marketing, Distribution and Selected Marketed Products—Patents.
Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions.
See Our efforts to collaborate with or acquire other companies, products, or technology, and to integrate the 36 operations of companies or to support the products or technology we have acquired, may not be successful, and may result in unanticipated costs, delays or failures to realize the benefits of the transactions .
Such health technology assessment organizations have 35 recommended, and may in the future recommend, reimbursement for certain of our products for a narrower indication than was approved by applicable regulatory agencies or may recommend against reimbursement entirely.
Such health technology assessment organizations have recommended, and may in the future recommend, reimbursement for certain of our products for a narrower indication than was 33 approved by applicable regulatory agencies or may recommend against reimbursement entirely.
Such recommendations or guidelines may affect our reputation, and any recommendations or guidelines that result in decreased use, dosage or reimbursement of our products could have a material adverse effect on our product sales, business and results of operations.
These and other such recommendations or guidelines may affect our reputation, and any recommendations or guidelines that result in decreased use, dosage or reimbursement of our products could have a material adverse effect on our product sales, business and results of operations.
The value of our investments may also be adversely affected by interest rate fluctuations, inflation, downgrades in credit ratings, illiquidity in the capital markets and other factors that may result in other-than-temporary declines in the value of our investments.
The value of our investments may also be adversely affected by interest rate fluctuations, inflation, downgrades in credit ratings, illiquidity in the capital markets, geopolitical events and other factors that may result in other-than-temporary declines in the value of our investments.
To the extent that governments adopt more permissive regulatory approval standards and competitors are able to obtain broader or expedited marketing approval for biosimilars and generics, the rate of increased competition for our products could accelerate. In the EU, biosimilars are evaluated for marketing authorization pursuant to a set of general and product class-specific guidelines.
To the extent that governments adopt more permissive regulatory approval standards and competitors are able to obtain broader or expedited marketing approval for biosimilars and generics, the rate of increased competition for our products would likely accelerate. In the EU, biosimilars are evaluated for marketing authorization pursuant to a set of general and product class-specific guidelines.
For example, a therapeutic oncology product candidate may be evaluated for its ability to reduce or eliminate minimal residual disease (MRD), or to extend the length of time during and after the treatment that a patient lives without the disease worsening, measured by PFS.
For example, a therapeutic oncology product candidate may be evaluated for its ability to reduce or eliminate minimal residual disease (MRD), or to extend the length of time during and after the treatment that a patient lives without the disease worsening, measured by progression-free survival (PFS).
These and other challenges may arise in connection with our acquisitions of Otezla, Five Prime, Teneobio, ChemoCentryx, Horizon and/or our collaborations with BeiGene and KKC, or with other acquisition activities, which could have a material adverse effect on our business, results of operations and stock price.
These and other challenges may arise in connection with our acquisitions of Otezla, Five Prime, Teneobio, ChemoCentryx, Horizon and/or our collaborations with BeiGene and Kyowa Kirin, or with other acquisition activities, which could have a material adverse effect on our business, results of operations and stock price.
Our ability to adequately and timely manufacture and supply our products (and product candidates to support our clinical trials) is dependent on the uninterrupted and efficient operation of our facilities and those of our third-party contract manufacturers, which may be affected by: • capacity of manufacturing facilities; • contamination by microorganisms or viruses, or foreign particles from the manufacturing process; • natural or other disasters, including hurricanes, earthquakes, volcanoes or fires; • labor disputes or shortages, including the effects of health emergencies (such as novel viruses or pandemics such as the one we are currently experiencing with COVID-19) or natural disasters; • compliance with regulatory requirements; • changes in forecasts of future demand; • timing and actual number of production runs and production success rates and yields; • updates of manufacturing specifications; • contractual disputes with our suppliers and contract manufacturers; • timing and outcome of product quality testing; • power failures and/or other utility failures; • cyberattacks on supplier systems; • breakdown, failure, substandard performance or improper installation or operation of equipment (including our information technology systems and network-connected control systems or those of our contract manufacturers or third-party service providers); • delays in the ability of the FDA or foreign regulatory agencies to provide us necessary reviews, inspections and approvals, including as a result of a subsequent extended U.S. federal or other government shutdowns; and/or • geopolitical conflicts.
Our ability to adequately and timely manufacture and supply our products (and product candidates to support our clinical trials) is dependent on the uninterrupted and efficient operation of our facilities and those of our third-party contract manufacturers, which may be affected by: • capacity of manufacturing facilities; • contamination by microorganisms or viruses, or foreign particles from the manufacturing process; • natural or other disasters, including hurricanes, earthquakes, volcanoes or fires; • labor disputes or shortages, including the effects of health emergencies (such as novel viruses or pandemics) or natural disasters; • compliance with regulatory requirements; • changes in forecasts of future demand; • timing and actual number of production runs and production success rates and yields; • updates of manufacturing specifications; • contractual disputes with our suppliers and contract manufacturers; • timing and outcome of product quality testing; • power failures and/or other utility failures; • cyberattacks on supplier systems; • breakdown, failure, substandard performance or improper installation or operation of equipment (including our information technology systems and network-connected control systems or those of our contract manufacturers or third-party service providers); • delays in the ability of the FDA or foreign regulatory agencies to provide us necessary reviews, inspections and approvals, including as a result of a subsequent extended U.S. federal or other government shutdowns; and/or • geopolitical conflicts (such as the ongoing conflicts in Ukraine and the Middle East).
For example, in the United States, as of the beginning of 2023, the top five integrated health plans and PBMs controlled about 92% of all pharmacy prescriptions.
For example, in the United States, as of the beginning of 2024, the top five integrated health plans and PBMs controlled about 92% of all pharmacy prescriptions.
For example, we have collaborations with third parties under which we share development rights, obligations and costs and/or commercial rights and obligations. See Item 1.
For example, we have collaborations with third parties under which we share development rights, obligations and costs and/or commercial rights and obligations. See Item 1. Business—Business Relationships.
This conflict may also precipitate or amplify the other risks described herein, including risks relating to cybersecurity, global economic conditions, clinical trials and supply chains, which could adversely affect our business, operations and financial condition and results. As we expand internationally, we are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar.
T hese conflicts may also precipitate or amplify the other risks described herein, including risks relating to cybersecurity, global economic conditions, clinical trials and supply chains, which could adversely affect our business, operations and financial condition and results. As we expand internationally, we are subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar.
In addition, we have faced, and may in the future face, patent litigation involving claims that the biosimilar product candidates we are working to develop infringe the patents of other companies, including those that manufacture, market or sell the applicable reference products or who are developing or have developed other biosimilar versions of such products.
In addition, we have faced, and may in the future face, patent litigation involving claims that our biosimilar product candidates infringe the patents of other companies, including those that manufacture, market or sell the applicable reference products or who are developing or have developed other biosimilar versions of such products.
In addition, we currently perform a substantial majority of our commercial manufacturing activities at our facility in the U.S. territory of Puerto Rico. In recent years, Puerto Rico has been affected by a number of natural disasters, including Hurricane Maria (2017), earthquakes (2020) and Hurricane Fiona (2022).
In addition, we currently perform a substantial majority of our commercial manufacturing activities at our facility in the U.S. territory of Puerto Rico. In recent years, Puerto Rico has been affected by a number of natural disasters, including Hurricanes Maria (2017) and Fiona (2022), as well as earthquakes (2020).
Among the reasons we may be unable to obtain these raw materials, medical devices and components include: • regulatory requirements or action by regulatory agencies or others; • adverse financial or other strategic developments at or affecting the supplier, including bankruptcy; • unexpected demand for or shortage of raw materials, medical devices or components; • failure to comply with our quality standards which results in quality and product failures, product contamination and/or recall; • a material shortage, contamination, recall and/or restrictions on the use of certain biologically derived substances or other raw materials; • discovery of previously unknown or undetected imperfections in raw materials, medical devices or components; • cyberattacks on supplier systems; • natural or other disasters, including hurricanes, earthquakes, volcanoes or fires; • labor disputes or shortages, including from the effects of health emergencies (such as novel viruses or pandemics such as the one we are currently experiencing with COVID-19) or natural disasters; and • geopolitical conflicts.
Among the reasons we may be unable to obtain these raw materials, medical devices and components include: • regulatory requirements or action by regulatory agencies or others; • adverse financial or other strategic developments at or affecting the supplier, including bankruptcy; • unexpected demand for or shortage of raw materials, medical devices or components; • failure to comply with our quality standards which results in quality and product failures, complaints, product contamination and/or recall; • a material shortage, contamination, recall and/or restrictions on the use of certain biologically derived substances or other raw materials; • discovery of previously unknown or undetected imperfections in raw materials, medical devices or components; • cyberattacks on supplier systems; • natural or other disasters, including hurricanes, earthquakes, volcanoes or fires; • labor disputes (such as strikes) or shortages, including from the effects of health emergencies (such as novel viruses or pandemics) or natural disasters; and • geopolitical conflicts (such as the ongoing conflicts in Ukraine and the Middle East).
For example, CMS finalized a policy for plan years starting on or after January 1, 2021 that has caused commercial payers to more widely adopt co-pay accumulator adjustment programs.
For example, CMS finalized a policy for plan years starting on or after January 1, 2021 that has caused commercial payers to more widely adopt co-pay accumulator adjustment programs. While the U.S.
Further, we cannot predict the extent to which any potential legislative or policy initiatives would affect the biosimilar pathway or have a material adverse effect on our development of biosimilars or on our marketed biosimilars.
Further, we cannot predict the extent to which any potential legislative or policy initiatives would affect the biosimilar pathway or have a material adverse effect on our development of biosimilars, on our marketed biosimilars or on our pursuit of interchangeability designations for any biosimilar.
Alternatively, we may be required to change the product’s labeled indications or even withdraw the product from the market. Regulatory authorities can also impose post-marketing pediatric study requirements. Failure to fulfill such requirements may result in regulatory or enforcement action, including financial penalties or the invalidation of a product’s marketing authorization.
Alternatively, we may be required to change the product’s labeled indications, conduct an additional confirmatory clinical trial, or even withdraw the product from the market. Regulatory authorities can also impose post-marketing pediatric study requirements. Failure to fulfill such requirements may result in regulatory or enforcement action, including financial penalties or the invalidation of a product’s marketing authorization.
Regulatory agencies periodically perform inspections of our pharmacovigilance processes, including our adverse event reporting. In the United States, for our products with approved REMS (see Item 1. Business—Government Regulation—Postapproval Phase), we are required to submit periodic assessment reports to the FDA to demonstrate that the goals of the REMS are being met.
Regulatory agencies periodically perform inspections of our pharmacovigilance processes, including our adverse event reporting. In the United States, for our products with approved Risk Evaluation and Mitigation Strategies (REMS, see Part I, Item 1. Business—Government Regulation—Postapproval Phase), we are required to submit periodic assessment reports to the FDA to demonstrate that the goals of the REMS are being met.
Risks Related to Competition • Our products face substantial competition and our product candidates are also likely to face substantial competition. 27 • Our intellectual property positions may be challenged, invalidated or circumvented, or we may fail to prevail in current and future intellectual property litigation. • We currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future. • Concentration of sales at certain of our wholesaler distributors and consolidation of private payers may negatively affect our business.
Risks Related to Competition • Our products face substantial competition and our product candidates are also likely to face substantial competition. • Our intellectual property positions may be challenged, invalidated or circumvented, or we may fail to prevail in current and future intellectual property litigation. • We currently face competition from biosimilars and generics and expect to face increasing competition from biosimilars and generics in the future. • Concentration of sales at certain of our wholesaler distributors, and consolidation of private payers, such as insurers, and PBMs has negatively affected, and may continue to negatively affect, our business.
However, there can be no assurances that our efforts will detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks and/or breaches of our systems that could adversely affect our business and operations and/or result in the loss or exposure of critical, proprietary, private, confidential or otherwise sensitive data, which could result in material financial, legal, business or reputational harm to us or negatively affect our stock price.
Even though we continue to invest in the monitoring, protection and resilience of our critical and/or sensitive data and systems, there can be no assurances that our efforts will detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks and/or breaches of our systems that could adversely affect our business and operations and/or result in the loss or exposure of critical, proprietary, private, confidential or otherwise sensitive data, which could result in material financial, legal business or reputational harm to us or negatively affect our stock price.
Further, we rely on commercial transportation, including air and sea freight, for the distribution of our products to our customers, which has been negatively affected by the ongoing COVID-19 pandemic and may be negatively affected by natural disasters or geopolitical security threats.
Further, we rely on commercial transportation, including air and sea freight, for the distribution of our products to our customers, which has been negatively affected by the COVID-19 pandemic, labor unrest, natural disasters and geopolitical security threats.
Our international business, including in China and emerging market countries, may be especially vulnerable to periods of global and local political, legal, regulatory and financial instability, including issues of geopolitical relations, the imposition of international sanctions in response to certain state actions and/or sovereign debt issues.
Our international business, including in China and emerging market countries, may be especially vulnerable to periods of global and local political, legal, regulatory and financial instability, including issues of geopolitical relations, the imposition of international sanctions in response to certain state actions and/or sovereign debt issues, and management of health policy in response to pressures such as global pandemics.
For example, in the second quarter of 2022, several Medicare Administrative Contractors issued notice, in contravention of TEZSPIRE’s FDA approved labeling, that TEZSPIRE would be added to their “self-administered drug” exclusion lists.
For example, in the second quarter of 2022, several Medicare Administrative Contractors issued notice that TEZSPIRE would be added to their “self-administered drug” exclusion lists.
Other expenditure control practices, including but not limited to the use of revenue clawbacks, rebates and percentage caps on price increases, are used in various foreign jurisdictions as well.
Other expenditure control practices, including but not limited to the use of revenue clawbacks, rebates and caps on product sales, are used in various foreign jurisdictions as well.

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Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−1 removed0 unchanged
Biggest changeThere are no material encumbrances on our owned properties. We believe our facilities are suitable for their intended uses and, in conjunction with our third-party contract manufacturing agreements, provide adequate capacity and are sufficient to meet our expected needs. See Item 1A.
Biggest changeWe believe our facilities are suitable for their intended uses and, in conjunction with our third-party contract manufacturing agreements, provide adequate capacity and are sufficient to meet our expected needs. See Item 1A. Risk Factors for a discussion of the factors that could adversely impact our manufacturing operations and the global supply of our products. See Item 1.
Location: Manufacturing Administrative R&D Sales & marketing Warehouse Distribution center Thousand Oaks, CA* P P P P P P San Francisco, CA P Louisville, KY P P Cambridge, MA P Juncos, Puerto Rico P P P P West Greenwich, RI P P P Tampa, FL P Other U.S. cities P P * Corporate headquarters ROW Location: Manufacturing Administrative R&D Sales & marketing Warehouse Distribution center Brazil P P P P P Canada P P P China P P Denmark P P P Germany P P P Iceland P P Ireland P P P P P Japan P P Netherlands P P P P P Singapore P P P P Switzerland P P United Kingdom P P P Other countries P P P P Excluded from the information above are (i) undeveloped land and leased properties that have been abandoned and (ii) certain buildings we still own but that are no longer used in our business.
Location: Manufacturing Administrative R&D Sales & marketing Warehouse Distribution center Thousand Oaks, CA* P P P P P P San Francisco, CA P Deerfield, IL P P P Louisville, KY P P Cambridge, MA P Juncos, Puerto Rico P P P P West Greenwich, RI P P P Tampa, FL P P Other U.S. cities P P ____________ * Corporate headquarters ROW Location: Manufacturing Administrative R&D Sales & marketing Warehouse Distribution center Brazil P P P Canada P P P China P P Denmark P P P France P P Germany P P P Iceland P P Ireland P P P P P Japan P P Netherlands P P P P P Singapore P P P P Switzerland P P United Kingdom P P P Other countries P P P P Excluded from the information above are (i) undeveloped land and leased properties that have been abandoned and (ii) certain buildings we still own but that are no longer used in our business.
Item 2. PROPERTIES As of December 31, 2022, we owned or leased approximately 150 properties. The locations and primary functions of significant properties are summarized in the following tables: U.S.
Item 2. PROPERTIES As of December 31, 2023, we owned or leased approximately 160 properties, including properties acquired from Horizon in Deerfield, Illinois and Ireland. The locations and primary functions of significant properties are summarized in the following tables: U.S.
Removed
Risk Factors for a discussion of the factors that could adversely impact our manufacturing operations and the global supply of our products. See Item 1. Business—Manufacturing, Distribution and Raw Materials.
Added
Additionally, in January 2024 our U.S. manufacturing facility in New Albany, Ohio received licensure from the FDA for commercial production, and our facility in Holly Springs, North Carolina is currently under construction. There are no material encumbrances on our owned properties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS Certain of the legal proceedings in which we are involved are discussed in Part IV—Note 19, Contingencies and commitments, to the Consolidated Financial Statements and are hereby incorporated by reference. Item 4. MINE SAFETY DISCLOSURES Not applicable. 52 PART II
Biggest changeItem 3. LEGAL PROCEEDINGS Certain of the legal proceedings in which we are involved are discussed in Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements and are hereby incorporated by reference. Item 4. MINE SAFETY DISCLOSURES Not applicable. 57 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 77 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 77 Item 9A. CONTROLS AND PROCEDURES 78
Biggest changeFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 82 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 82 Item 9A. CONTROLS AND PROCEDURES 83 Item 9B. OTHER INFORMATION 85
Item 4. MINE SAFETY DISCLOSURES 52 PART II 53 Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 53 Item 6. RESERVED 54 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 55 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 75 Item 8.
Item 4. MINE SAFETY DISCLOSURES 57 PART II 58 Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 58 Item 6. RESERVED 59 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 60 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 80 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock repurchase program During the three months and year ended December 31, 2022, we had one outstanding stock repurchase program, under which the repurchasing activity was as follows: Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced program Maximum dollar value that may yet be purchased under the program (2) October 1 - October 31 — — $ 6,979,263,848 November 1 - November 30 — — $ 6,979,263,848 December 1 - December 31 — — $ 6,979,263,848 — — January 1 - December 31 (3) 26,147,900 $ 241.32 26,147,900 (1) Average price paid per share includes related expenses.
Biggest changeTotal number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced program Maximum dollar value that may yet be purchased under the program October 1 - October 31 — — $ 6,979,263,848 November 1 - November 30 — — $ 6,979,263,848 December 1 - December 31 — — $ 6,979,263,848 — — January 1 - December 31 — — Dividends For the years ended December 31, 2023 and 2022, we paid quarterly dividends.
Performance graph The following graph shows the value of an investment of $100 on December 31, 2017, in each of Amgen common stock, the Amex Biotech Index, the Amex Pharmaceutical Index and Standard & Poor’s 500 Index. All values assume reinvestment of the pretax value of dividends and are calculated as of December 31 of each year.
Performance graph The following graph shows the value of an investment of $100 on December 31, 2018, in each of Amgen common stock, the Amex Biotech Index, the Amex Pharmaceutical Index and Standard & Poor’s 500 Index. All values assume reinvestment of the pretax value of dividends and are calculated as of December 31 of each year.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common stock Our common stock trades on the NASDAQ Global Select Market under the symbol AMGN. As of February 6, 2023, there were approximately 4,838 holders of record of our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common stock Our common stock trades on the NASDAQ Global Select Market under the symbol AMGN. As of February 9, 2024, there were approximately 4,614 holders of record of our common stock.
Additional information required by this item is incorporated herein by reference to Part IV—Note 16, Stockholders’ equity, to the Consolidated Financial Statements. Securities Authorized for Issuance Under Existing Equity Compensation Plans Information about securities authorized for issuance under existing equity compensation plans is incorporated by reference from Part III, Item 12—Securities Authorized for Issuance Under Existing Equity Compensation Plans.
Securities Authorized for Issuance Under Existing Equity Compensation Plans Information about securities authorized for issuance under existing equity compensation plans is incorporated by reference from Part III, Item 12—Securities Authorized for Issuance Under Existing Equity Compensation Plans.
The historical stock price performance of the Company’s common stock shown in the performance graph is not necessarily indicative of future stock price performance. 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Amgen (AMGN) $100.00 $115.08 $146.87 $143.93 $145.19 $174.94 Amex Biotech (BTK) $100.00 $100.26 $120.75 $137.14 $132.31 $127.01 Amex Pharmaceutical (DRG) $100.00 $107.45 $127.20 $138.31 $170.64 $183.88 Standard & Poor’s 500 (SPX) $100.00 $95.63 $125.73 $148.86 $191.54 $156.74 53 The material in the above performance graph is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made on, before or after the date of this filing and irrespective of any general incorporation language in such filing.
The historical stock price performance of the Company’s common stock shown in the performance graph is not necessarily indicative of future stock price performance. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Amgen (AMGN) $100.00 $127.62 $125.07 $126.16 $152.01 $172.55 Amex Biotech (BTK) $100.00 $120.43 $136.78 $131.96 $126.68 $130.31 Amex Pharmaceutical (DRG) $100.00 $118.39 $128.73 $158.82 $171.14 $184.35 Standard & Poor’s 500 (SPX) $100.00 $131.48 $155.65 $200.29 $163.90 $207.07 58 The material in the above performance graph is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made on, before or after the date of this filing and irrespective of any general incorporation language in such filing.
Dividends For the years ended December 31, 2022 and 2021, we paid quarterly dividends. We expect to continue to pay quarterly dividends, although the amount and timing of any future dividends are subject to approval by our Board of Directors.
We expect to continue to pay quarterly dividends, although the amount and timing of any future dividends are subject to approval by our Board of Directors. Additional information required by this item is incorporated herein by reference to Part IV—Note 17, Stockholders’ equity, to the Consolidated Financial Statements.
Removed
(2) In October 2022, our Board of Directors increased the amount authorized under the stock repurchase program by an additional $2.4 billion. (3) Includes the impact of ASR agreements entered into with third-party financial institutions under which a total of 24,784,400 shares of common stock were delivered at an average price of approximately $242.09 per share.
Added
Stock repurchase program During the year ended December 31, 2023, we had one outstanding stock repurchase program, under which we had no repurchase activity.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeEVENITY Total EVENITY sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2022 Change Year ended December 31, 2021 Change Year ended December 31, 2020 EVENITY — U.S. $ 533 61 % $ 331 73 % $ 191 EVENITY — ROW 254 28 % 199 25 % 159 Total EVENITY $ 787 48 % $ 530 51 % $ 350 The increases in global EVENITY sales for 2022 and 2021 were driven by volume growth across our markets. 62 Other products Other product sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2022 Change Year ended December 31, 2021 Change Year ended December 31, 2020 MVASI — U.S. $ 602 (27) % $ 826 26 % $ 656 MVASI — ROW 299 (12) % 340 * 142 Vectibix — U.S. 396 14 % 347 1 % 342 Vectibix — ROW 497 (6) % 526 12 % 469 BLINCYTO — U.S. 336 21 % 278 20 % 231 BLINCYTO — ROW 247 27 % 194 31 % 148 EPOGEN — U.S. 506 (3) % 521 (13) % 598 AMGEVITA — ROW 460 5 % 439 33 % 331 Aimovig — U.S. 398 27 % 313 (17) % 378 Aimovig — ROW 16 * 4 NM — Parsabiv — U.S. 253 69 % 150 (75) % 605 Parsabiv— ROW 129 (1) % 130 17 % 111 KANJINTI — U.S. 257 (46) % 479 1 % 475 KANJINTI — ROW 59 (37) % 93 1 % 92 LUMAKRAS — U.S. 222 * 82 NM — LUMYKRAS — ROW 63 * 8 NM — TEZSPIRE — U.S. 170 NM — NM — NEUPOGEN — U.S. 87 (14) % 101 (30) % 144 NEUPOGEN — ROW 57 (15) % 67 (17) % 81 Sensipar — U.S. 10 67 % 6 (93) % 92 Sensipar/Mimpara — ROW 54 (31) % 78 (60) % 196 TAVNEOS — U.S.
Biggest changeOther products Other product sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2023 Change Year ended December 31, 2022 Change Year ended December 31, 2021 Neulasta — U.S. $ 710 (26) % $ 959 (37) % $ 1,514 Neulasta — ROW 138 (17) % 167 (24) % 220 MVASI — U.S. 511 (15) % 602 (27) % 826 MVASI — ROW 289 (3) % 299 (12) % 340 AMJEVITA — U.S. 126 NM — NM — AMGEVITA — ROW 500 9 % 460 5 % 439 TEZSPIRE — U.S. 567 * 170 NM — Parsabiv — U.S. 228 (10) % 253 69 % 150 Parsabiv— ROW 134 4 % 129 (1) % 130 Aimovig — U.S. 303 (24) % 398 27 % 313 Aimovig — ROW 20 25 % 16 * 4 LUMAKRAS — U.S. 197 (11) % 222 * 82 LUMYKRAS — ROW 83 32 % 63 * 8 EPOGEN — U.S. 226 (55) % 506 (3) % 521 KANJINTI — U.S. 109 (58) % 257 (46) % 479 KANJINTI — ROW 50 (15) % 59 (37) % 93 TAVNEOS — U.S.
In 2017, we received an RAR and a modified RAR from the IRS for the years 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico.
In 2017, we received an RAR and a modified RAR from the IRS for the years 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico.
Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for the years 2010–2012 that we received in May and July 2021, which seek to increase our U.S. taxable income for the years 2010–2012 by an amount that would result in additional federal tax of approximately $3.6 billion plus interest.
Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for the years 2010–2012 that we received in May and July 2021, which seek to increase our U.S. taxable income for the years 2010–2012 by an amount that would result in additional federal tax of approximately $3.6 billion plus interest.
We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution. In July 2022, we filed a petition in the U.S.
We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution. In July 2022, we filed a petition in the U.S.
Any additional tax that could be imposed for the years 2013–2015 would be reduced by up to approximately $2.2 billion of repatriation tax previously accrued on our foreign earnings. We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit. We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process.
Any additional tax that could be imposed for the years 2013–2015 would be reduced by up to approximately $2.2 billion of repatriation tax previously accrued on our foreign earnings. We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit. We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process.
These models require the use of significant estimates and assumptions, including but not limited to: • determining the timing and expected costs to complete in-process projects, taking into account the stage of completion at the acquisition date; • projecting the probability and timing of obtaining marketing approval from the FDA and other regulatory agencies for product candidates; • estimating the timing of and future net cash flows from product sales resulting from completed products and in-process projects; and 73 • developing appropriate discount rates to calculate the present values of the cash flows.
These models require the use of significant estimates and assumptions, including but not limited to: • determining the timing and expected costs to complete in-process projects, taking into account the stage of completion at the acquisition date; • projecting the probability and timing of obtaining marketing approval from the FDA and other regulatory agencies for product candidates; • estimating the timing of and future net cash flows from product sales resulting from completed products and in-process projects; and • developing appropriate discount rates to calculate the present values of the cash flows.
We continue to believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and 66 uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our consolidated financial statements.
We continue to believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our consolidated financial statements.
We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our consolidated financial statements.
We continue to believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our consolidated financial statements.
The timing and amount of future dividends and stock repurchases will vary based on a number of factors, including future capital requirements for strategic transactions, availability of financing on acceptable terms, debt service requirements, our credit rating, changes to applicable tax laws or corporate laws, changes to our business model and periodic determination by our Board of Directors that cash dividends and/or stock repurchases are in the best interests of stockholders and are in compliance with applicable laws and the Company’s agreements.
The timing and amount of future dividends and stock repurchases will vary based on a number of factors, including future capital requirements for strategic transactions, debt levels and debt service requirements, our credit rating, availability of financing on acceptable terms, changes to applicable tax laws or corporate laws, changes to our business model and periodic determination by our Board of Directors that cash dividends and/or stock repurchases are in the best interests of stockholders and are in compliance with applicable laws and the Company’s agreements.
As we sell products, we estimate the amount of rebate we will pay based on the product sold, contractual terms, estimated patient population, historical experience and wholesaler inventory levels; and we accrue these rebates in the period the related sales are recorded. We then adjust the rebate accruals as more information becomes available and to reflect 71 actual claims experience.
As we sell products, we estimate the amount of rebate we will pay based on the product sold, contractual terms, estimated patient population, historical experience and wholesaler inventory levels; and we accrue these rebates in the period the related sales are recorded. We then adjust the rebate accruals as more information becomes available and to reflect actual claims experience.
We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution. In July 2021, we filed a petition in the U.S.
We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS 77 appeals office but were unable to reach resolution. In July 2021, we filed a petition in the U.S.
The carrying values of our long-term borrowings are net of fair value adjustments for interest rate swaps and unamortized discounts, premiums and offering costs. As of December 31, 2022, S&P, Moody’s and Fitch assigned credit ratings to our outstanding senior notes of BBB+, Baa1 and BBB+, respectively, which are considered investment grade.
The carrying values of our long-term borrowings are net of fair value adjustments for interest rate swaps and unamortized discounts, premiums and offering costs. As of December 31, 2023, S&P, Moody’s and Fitch assigned credit ratings to our outstanding senior notes of BBB+, Baa1 and BBB, respectively, which are considered investment grade.
For 2023, we expect ENBREL to follow the historical pattern of lower sales in the first quarter relative to subsequent quarters due to the impact of benefit plan changes, insurance reverification and increased co-pay expenses as U.S. patients work through deductibles. In addition, for 2023, we expect further declines in net selling price.
For 2024, we expect ENBREL to follow the historical pattern of lower sales in the first quarter relative to subsequent quarters due to the impact of benefit plan changes, insurance reverification and increased co-pay expenses as U.S. patients work through deductibles. In addition, for 2024, we expect further declines in net selling price.
To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that effectively converted a fixed-rate interest coupon for certain of our debt issuances to a floating, LIBOR-based coupon over the lives of the respective notes. These interest rate swap contracts qualify and are designated as fair value hedges.
To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that effectively converted a fixed-rate interest coupon for certain of our debt issuances to a floating, SOFR-based coupon over the lives of the respective notes. These interest rate swap contracts qualify and are designated as fair value hedges.
As part of this new law, eligible businesses will be subject to incremental income and withholding taxes in lieu of payment of the Puerto Rico Excise Tax. In order to qualify for the alternative fixed tax rate, our current tax grant with the Puerto Rico government was amended in December 2022.
As part of this new law, eligible businesses will be subject to incremental income and withholding taxes in lieu of payment of the Puerto Rico excise tax. In order to qualify for the alternative income tax, our current tax grant with the Puerto Rico government was amended in December 2022.
For information on these obligations, see Part IV—Note 13, Leases, to the Consolidated Financial Statements. Under the 2017 Tax Act, we elected to pay in eight annual installments the repatriation tax related primarily to prior indefinitely invested earnings of our foreign operations.
For information on these obligations, see Part IV—Note 14, Leases, to the Consolidated Financial Statements. Under the 2017 Tax Act, we elected to pay in eight annual installments the repatriation tax related primarily to prior indefinitely invested earnings of our foreign operations.
We have purchase obligations of $3.5 billion primarily related to (i) R&D commitments (including those related to clinical trials) for new and existing products, (ii) capital expenditures and (iii) open purchase orders for the acquisition of goods and services in the ordinary course of business.
We have purchase obligations of $4.3 billion primarily related to (i) R&D commitments (including those related to clinical trials) for new and existing products, (ii) capital expenditures and (iii) open purchase orders for the acquisition of goods and services in the ordinary course of business.
In February 2020, we filed a shelf registration statement with the SEC that allows us to issue unspecified amounts of debt securities; common stock; preferred stock; warrants to purchase debt securities, common stock, preferred stock or depositary shares; rights to purchase common stock or preferred stock; securities purchase contracts; securities purchase units; and depositary shares.
In February 2023, we filed a shelf registration statement with the SEC that allows us to issue unspecified amounts of debt securities; common stock; preferred stock; warrants to purchase debt securities, common stock, preferred stock or depositary shares; rights to purchase common stock or preferred stock; securities purchase contracts; securities purchase units; and depositary shares.
Capital allocation Consistent with the objective to optimize our capital structure, we deploy our accumulated cash balances in a strategic manner and consider a number of alternatives, including investments in innovation, both internally and externally, strategic transactions (including those that expand our portfolio of products in areas of therapeutic interest), repayment of debt, payment of dividends and stock repurchases.
Capital allocation Consistent with the objective to optimize our capital structure, we deploy our accumulated cash balances in a strategic manner and consider a number of alternatives, including investments in innovation both internally and externally (including investments that expand our portfolio of products in areas of therapeutic interest), capital expenditures, repayment of debt, payment of dividends and stock repurchases.
We believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital, capital expenditure and debt service requirements, our plans to pay dividends and repurchase stock, and other business initiatives we plan to strategically pursue, including acquisitions and licensing activities.
We believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital, capital expenditure and debt service requirements as well as our plans to reduce debt, pay dividends and repurchase stock, and other business initiatives we plan to strategically pursue, including acquisitions and licensing activities.
We describe our legal proceedings and other matters that are significant or that we believe could become significant in Part IV—Note 19, Contingencies and commitments, to the Consolidated Financial Statements.
We describe our legal proceedings and other matters that are significant or that we believe could become significant in Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements.
In addition, our revolving credit agreement, bridge credit agreement and term loan credit agreement include a financial covenant that requires us to maintain a specified minimum interest coverage ratio of (i) the sum of consolidated net income, interest expense, provision for income taxes, depreciation expense, amortization expense, unusual or nonrecurring charges and other noncash items (Consolidated EBITDA) to (ii) Consolidated Interest Expense, each as defined and described in the respective agreements.
In addition, our revolving credit agreement and term loan credit agreement include a financial covenant that requires us to maintain a specified minimum interest coverage ratio of (i) the sum of consolidated net income, interest expense, provision for income taxes, depreciation expense, amortization expense, unusual or nonrecurring charges and other noncash items (consolidated earnings before interest, taxes, depreciation and amortization) to (ii) Consolidated Interest Expense, each as defined and described in the respective agreements.
In addition, the timing and amount of stock repurchases may also be affected by our overall level of cash, stock price and blackout periods, during which we are restricted from repurchasing stock. The manner of stock repurchases may include block purchases, tender offers, accelerated share repurchases and market transactions.
In addition, the timing and amount of stock repurchases may also be affected by our overall level of cash, stock price and blackout periods, during which we are restricted from repurchasing stock. The manner of stock repurchases may include block purchases, tender offers, ASRs and market transactions.
In response, on June 30, 2022, the U.S. territory of Puerto Rico enacted Act 52-2022, which provides for an alternate fixed tax rate on industrial development income that the U.S. Treasury confirmed will be creditable under federal law.
In response, on June 30, 2022, the U.S. territory of Puerto Rico enacted Act 52-2022, which provides for an alternative income tax rate on industrial development income that the U.S. Treasury confirmed will be creditable under federal law.
Risk Factors— Global economic conditions may negatively affect us and may magnify certain risks that affect our business . Financing arrangements To help meet our liquidity requirements, we have entered into various financing arrangements. The noncurrent portions of our long-term borrowings as of December 31, 2022 and 2021, were $37.4 billion and $33.2 billion, respectively.
Risk Factors— Global economic conditions may negatively affect us and may magnify certain risks that affect our business . Financing arrangements To help meet our liquidity requirements, we have entered into various financing arrangements. The noncurrent portions of our long-term borrowings as of December 31, 2023 and 2022, were $63.2 billion and $37.4 billion, respectively.
Generally, we would be charged interest for any amounts borrowed under this facility, based on our current credit rating, at (i) SOFR plus 1.125% or (ii) the highest of (A) the syndication agent bank base commercial lending rate, (B) the overnight federal funds rate plus 0.50% or (C) one-month SOFR plus 1.1%.
Generally, we would be charged interest for any amounts borrowed under this facility, based on our current credit rating, at (i) SOFR plus 1.01% or (ii) the highest of (A) the administrative agent bank base commercial lending rate, (B) the overnight federal funds rate plus 0.50% or (C) one-month SOFR plus 1.1%.
For information on scheduled debt maturities and payments under derivative contracts associated with our long-term debt obligations, see Part IV—Note 15, Financing arrangements, and Note 18, Derivative instruments, to the Consolidated Financial Statements. We are obligated to make payments for operating leases, including rental commitments on abandoned leases and leases that have not yet commenced.
For information on scheduled debt maturities and payments under derivative contracts associated with our long-term debt obligations, see Part IV—Note 16, Financing arrangements, and Note 19, Derivative instruments, to the Consolidated Financial Statements. We are obligated to make payments for operating leases, including rental commitments on abandoned leases and leases that have not yet commenced.
For information on the remaining scheduled repatriation tax installments, see Part IV—Note 19, Contingencies and commitments—Commitments—U.S. repatriation tax, to the Consolidated Financial Statements.
For information on the remaining scheduled repatriation tax installments, see Part IV—Note 20, Contingencies and commitments—Commitments—U.S. repatriation tax, to the Consolidated Financial Statements.
Tax Court to contest a Notice for the years 2013–2015 that we received in April 2022 that seeks to increase our U.S. taxable income for the years 2013–2015 by an amount that would result in additional federal tax of approximately $5.1 billion, plus interest. In addition, the Notice asserts penalties of approximately $2.0 billion.
Tax Court to contest a Notice for the years 2013–2015 that we previously reported receiving in April 2022 that seeks to increase our U.S. taxable income for the years 2013–2015 by an amount that would result in additional federal tax of approximately $5.1 billion, plus interest. In addition, the Notice asserts penalties of approximately $2.0 billion.
The impact of unfavorable changes to foreign currency exchange rates will be partially offset by corresponding decreases in our international operating expenses.
The impact of changes to foreign currency exchange rates will be partially offset by corresponding changes in our international operating expenses.
Income taxes The decrease in our effective tax rate for 2022 compared with 2021 was primarily due to the nondeductible IPR&D expense arising from the acquisition of Five Prime in the prior year, partially offset by a nondeductible loss on a nonstrategic divestiture in 2022 and net unfavorable items as compared to the prior year.
The decrease in our effective tax rate for 2022 compared with 2021 was primarily due to the nondeductible IPR&D expense arising from the acquisition of Five Prime in the prior year, partially offset by a nondeductible loss on the divestiture of Gensenta in 2022 and net unfavorable items as compared to the prior year.
As of both December 31, 2022 and 2021, we had interest rate swap contracts with aggregate notional amount of $6.7 billion.
As of both December 31, 2023 and 2022, we had interest rate swap contracts with aggregate notional amount of $6.7 billion.
For 2023, we expect that net selling prices will continue to decline at a portfolio level driven by increased competition.
For 2024, we expect that net selling prices will continue to decline at a portfolio level driven by increased competition.
These payments are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring, and any resulting cash requirements are managed through our operational budgeting processes. Except with respect to the fair value of the contingent consideration of approximately $0.3 billion, these obligations are not recorded on our Consolidated Balance Sheets.
These payments are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring, and any resulting cash requirements are managed through our operational budgeting processes. Except with respect to the fair value of the contingent consideration of approximately $96 million, these obligations are not recorded on our Consolidated Balance Sheets.
Other operating expenses for 2021 primarily consisted of expenses related to cost-savings initiatives and a legal judgment. Other operating expenses for 2020 primarily consisted of legal settlement expenses.
Other operating expenses for 2021 primarily consisted of expenses related to cost-savings initiatives and a legal judgment.
In addition to the purchase obligations noted above, we are contractually obligated to pay additional amounts that in the aggregate are significant, upon the achievement of various development, regulatory and commercial milestones for agreements we have entered into with third parties, including contingent consideration incurred in the acquisitions of Teneobio and K-A.
In addition to the purchase obligations noted above, we are contractually obligated to pay additional amounts that in the aggregate are significant, upon the achievement of various development, regulatory and commercial milestones for agreements we have entered into with third parties, including contingent consideration incurred in the acquisitions of Teneobio and Kirin-Amgen, Inc.
See Part IV—Note 6, Income taxes, to the Consolidated Financial Statements. 70 Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements.
See Part IV—Note 7, Income taxes, to the Consolidated Financial Statements. 75 Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements.
See Part IV—Note 9, Investments; Note 15, Financing arrangements; and Note 16, Stockholders’ equity, to the Consolidated Financial Statements. Capital requirements We have material cash requirements to pay third parties under various contractual obligations discussed below.
See Part IV—Note 10, Investments; Note 16, Financing arrangements; and Note 17, Stockholders’ equity, to the Consolidated Financial Statements. Capital requirements We have material cash requirements to pay third parties under various contractual obligations discussed below.
As of December 31, 2022, the maximum amount that may be payable in the future for agreements we have entered into with third parties is $5.6 billion. We have recorded liabilities for UTBs that, because of their nature, have a high degree of uncertainty regarding the timing of future cash payment and other events that extinguish these liabilities.
As of December 31, 2023, the maximum amount that may be payable in the future for agreements we have entered into with third parties is $8.3 billion. We have recorded liabilities for UTBs that, because of their nature, have a high degree of uncertainty regarding the timing of future cash payment and other events that extinguish these liabilities.
Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Our significant accounting policies are included in Part IV—Note 1, Summary of significant accounting policies.
Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Our significant accounting policies are included in Part IV—Note 1, Summary of significant accounting policies, to the Consolidated Financial Statements.
As of December 31, 2022, we had a commercial paper program that allows us to issue up to $2.5 billion of unsecured commercial paper to fund our working-capital needs. During 2022, 2021 and 2020, we did not issue any commercial paper. No commercial paper was outstanding as of December 31, 2022 and 2021.
As of December 31, 2023, we had a commercial paper program that allows us to issue up to $2.5 billion of unsecured commercial paper to fund our working-capital needs. During 2023, 2022 and 2021, we did not issue any commercial paper.
Future sales of our products will depend in part on the factors discussed in the Overview, Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Competition, in Part I, Item 1A. Risk Factors, and any additional factors discussed in the individual product sections below. In addition, for a list of our products’ significant competitors, see Part I, Item 1.
Business—Marketing, Distribution and Selected Marketed Products—Competition, in Part I, Item 1A. Risk Factors, and any additional factors discussed in the individual product sections below. In addition, for a list of our products’ significant competitors, see Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Competition.
The increase in the total sales deductions balance as of December 31, 2022, compared with December 31, 2021, was primarily driven by the impact of higher U.S. chargeback and commercial rebate discount rates and an increase in gross sales, partially offset by timing of payments.
The increase in the total sales deductions balance as of December 31, 2023, compared with December 31, 2022, was primarily driven by the impact of higher U.S. chargeback and commercial rebate discount rates, an increase in gross sales and Horizon integrated beginning balances, partially offset by timing of payments.
The Board of Directors declared quarterly cash dividends of $1.94, $1.76 and $1.60 per share of common stock paid in 2022, 2021 and 2020, respectively, an increase of 10% over the prior year in both 2022 and 2021.
The Board of Directors declared quarterly cash dividends of $2.13, $1.94 and $1.76 per share of common stock paid in 2023, 2022 and 2021, respectively, an increase of 10% over the prior year in both 2023 and 2022.
These cross-currency swap contracts qualify and are designated as cash flow hedges. As of both December 31, 2022 and 2021, we had cross-currency swap contracts with aggregate notional amount of $3.4 billion.
These cross-currency swap contracts qualify and are designated as cash flow hedges. As of both December 31, 2023 and 2022, we had cross-currency swap contracts with aggregate notional amount of $2.7 billion and $3.4 billion, respectively.
We were in compliance with all applicable covenants under these arrangements as of December 31, 2022. These financing arrangements are more fully discussed in Part IV—Note 15, Financing arrangements, and Note 18, Derivative instruments, to the Consolidated Financial Statements.
We were in compliance with all applicable covenants under these arrangements as of December 31, 2023. These financing arrangements are more fully discussed in Part IV—Note 16, Financing arrangements, and Note 19, Derivative instruments, to the Consolidated Financial Statements.
With regard to our clinical trial activities, we are continuously monitoring COVID-19 infection rates, including changes from new variants; we are working to mitigate effects on future study enrollment in our clinical trials; and we are evaluating the impact in all relevant countries.
With regard to our clinical trial activities, we are continuously monitoring the possible impacts from health-related events, including changes from new COVID-19 variants; we are working to mitigate effects on future study enrollment in our clinical trials; and we are evaluating the impact in all relevant countries.
We intend to continue investing in our business while returning capital to stockholders through the payment of cash dividends and stock repurchases, thereby reflecting our confidence in the future cash flows of our business and our desire to optimize our cost of capital.
We intend to continue investing in our business while reducing our debt and returning capital to stockholders through the payment of cash dividends and stock repurchases. This reflects our desire to optimize our cost of capital and our confidence in the future cash flows of our business.
Cash flows Our summarized cash flow activity was as follows (in millions): Years ended December 31, 2022 2021 2020 Net cash provided by operating activities $ 9,721 $ 9,261 $ 10,497 Net cash (used in) provided by investing activities $ (6,044) $ 733 $ (5,401) Net cash used in financing activities $ (4,037) $ (8,271) $ (4,867) Operating Cash provided by operating activities has been and is expected to continue to be our primary recurring source of funds.
Cash flows Our summarized cash flow activity was as follows (in millions): Years ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 8,471 $ 9,721 $ 9,261 Net cash (used in) provided by investing activities $ (26,204) $ (6,044) $ 733 Net cash provided by (used in) financing activities $ 21,048 $ (4,037) $ (8,271) Operating Cash provided by operating activities has been and is expected to continue to be our primary recurring source of funds.
We also market a number of other products, including MVASI, Vectibix, BLINCYTO, EPOGEN, AMGEVITA, Aimovig, Parsabiv, KANJINTI, LUMAKRAS/LUMYKRAS, TEZSPIRE, NEUPOGEN, Sensipar/Mimpara and TAVNEOS. For additional information about our products, see Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products. Our strategy includes integrated activities intended to strengthen our competitive position in the industry.
We also market a number of other products, including but not limited to Neulasta, MVASI, AMJEVITA/AMGEVITA, TEZSPIRE, Parsabiv, Aimovig, LUMAKRAS/LUMYKRAS, EPOGEN, KANJINTI, TAVNEOS, RAVICTI, UPLIZNA and PROCYSBI. For additional information about our products, see Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products. Our strategy includes integrated activities intended to strengthen our competitive position in the industry.
We believe our estimates for uncertain tax positions are appropriate and sufficient for any assessments that may result from examinations of our tax returns. We recognize both accrued interest and penalties, when appropriate, related to UTBs in income tax expense.
We believe our estimates for uncertain tax positions are appropriate and sufficient for any assessments that may result from examinations of our tax returns. We recognize both accrued interest and penalties, when appropriate, related to UTBs in income tax expense. See Part IV—Note 7, Income taxes, to the Consolidated Financial Statements.
ENBREL Total ENBREL sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2022 Change Year ended December 31, 2021 Change Year ended December 31, 2020 ENBREL — U.S. $ 4,044 (7) % $ 4,352 (10) % $ 4,855 ENBREL — Canada 73 (35) % 113 (20) % 141 Total ENBREL $ 4,117 (8) % $ 4,465 (11) % $ 4,996 The decrease in ENBREL sales for 2022 was primarily driven by unfavorable changes to estimated sales deductions, lower volume and lower net selling price.
ENBREL Total ENBREL sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2023 Change Year ended December 31, 2022 Change Year ended December 31, 2021 ENBREL — U.S. $ 3,650 (10) % $ 4,044 (7) % $ 4,352 ENBREL — Canada 47 (36) % 73 (35) % 113 Total ENBREL $ 3,697 (10) % $ 4,117 (8) % $ 4,465 The decrease in ENBREL sales for 2023 was driven by lower net selling price, lower inventory and unfavorable changes to estimated sales deductions.
Under this shelf registration statement, all of the securities available for issuance may be offered from time to time with terms to be determined at the time of issuance. This shelf registration statement expires in February 2023, and our Board has approved a new shelf registration statement to replace it. Certain of our financing arrangements contain nonfinancial covenants.
Under this shelf registration statement, all of the securities available for issuance may be offered from time to time, with terms to be determined at the time of issuance. This shelf registration statement expires in February 2026. Certain of our financing arrangements contain nonfinancial covenants.
Cash provided by investing activities during 2021 was primarily due to net cash inflows related to marketable securities of $4.3 billion, partially offset by cash used in the acquisitions of Teneobio and Five Prime of $2.5 billion.
Cash provided by investing activities during 2021 was primarily due to net cash inflows related to marketable securities of $4.3 billion, partially offset by cash used in the acquisitions of Teneobio and Five Prime of $2.5 billion. Capital expenditures were $1.1 billion, $936 million and $880 million in 2023, 2022 and 2021, respectively.
ROW Otezla sales for 2022 were impacted by unfavorable changes to foreign currency exchange rates. For 2023, we expect Otezla to follow the historical pattern of lower sales in the first quarter relative to subsequent quarters due to the impact of benefit plan changes, insurance reverification and increased co-pay expenses as U.S. patients work through deductibles.
For 2024, we expect Otezla to follow the historical pattern of lower sales in the first quarter relative to subsequent quarters due to the impact of benefit plan changes, insurance reverification and increased co-pay expenses as U.S. patients work through deductibles.
Otezla Total Otezla sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2022 Change Year ended December 31, 2021 Change Year ended December 31, 2020 Otezla — U.S. $ 1,886 5 % $ 1,804 1 % $ 1,790 Otezla — ROW 402 (10) % 445 10 % 405 Total Otezla $ 2,288 2 % $ 2,249 2 % $ 2,195 The increase in global Otezla sales for 2022 was primarily driven by volume growth, partially offset by lower net selling price.
Otezla Total Otezla sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2023 Change Year ended December 31, 2022 Change Year ended December 31, 2021 Otezla — U.S. $ 1,777 (6) % $ 1,886 5 % $ 1,804 Otezla — ROW 411 2 % 402 (10) % 445 Total Otezla $ 2,188 (4) % $ 2,288 2 % $ 2,249 The decrease in global Otezla sales for 2023 was driven by lower net selling price and inventory, partially offset by volume growth.
Further, the first quarter of a year historically represents the lowest product sales quarter for the year, in part due to plan changes, insurance reverifications and higher co-pay expenses as U.S. patients work through deductibles, particularly for products acquired through pharmacy benefit programs. As a result of uncertain macroeconomic conditions, we expect volatility around foreign currency exchange rates to continue.
Further, the first quarter of a year historically represents the lowest product sales quarter for the year, in part due to plan changes, insurance reverifications and higher co-pay expenses as U.S. patients work through deductibles, particularly for products acquired through pharmacy benefit programs.
Includes clinical trials designed to gather information on product safety (certain of which may be required by regulatory authorities) and their product characteristics after regulatory approval has been obtained, as well as the costs of obtaining regulatory approval of a product in a new market after approval in either the United States or the EU has been obtained 64 R&D expense by category was as follows (in millions): Years ended December 31, 2022 2021 2020 Research and early pipeline $ 1,611 $ 1,670 $ 1,405 Later-stage clinical programs 1,627 1,726 1,365 Marketed products 1,196 1,423 1,437 Total R&D expense $ 4,434 $ 4,819 $ 4,207 The decrease in R&D expense for 2022 was driven by higher business development activity in 2021 included in later-stage clinical programs and research and early pipeline and lower marketed products support, partially offset by higher later-stage clinical programs support and research and early pipeline spend.
Includes clinical trials designed to gather information on product safety (certain of which may be required by regulatory authorities) and their product characteristics after regulatory approval has been obtained, as well as the costs of obtaining regulatory approval of a product in a new market after approval in either the United States or the EU has been obtained 69 R&D expense by category was as follows (in millions): Years ended December 31, 2023 2022 2021 Research and early pipeline $ 1,584 $ 1,611 $ 1,670 Later-stage clinical programs 1,898 1,627 1,726 Marketed products 1,302 1,196 1,423 Total R&D expense $ 4,784 $ 4,434 $ 4,819 The increase in R&D expense for 2023 was driven by higher spend in later-stage clinical programs and marketed products support, including spend from programs acquired from the Horizon acquisition.
Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise. 55 Overview Amgen is a biotechnology company committed to unlocking the potential of biology for patients suffering from serious illnesses.
Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise. 60 Overview Amgen Inc.
The increase in global Otezla sales for 2021 was driven by volume growth, partially offset by lower net selling price and unfavorable changes to inventory. For a discussion of ongoing litigation related to Otezla, see Part IV—Note 19, Contingencies and commitments, to the Consolidated Financial Statements.
The increase in global Prolia sales for 2022 was driven by volume growth and higher net selling price, partially offset by unfavorable changes to foreign currency exchange rates. 64 For a discussion of ongoing litigation related to Prolia, see Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements.
Nplate sales for 2022 included a $207 million order in the fourth quarter from the U.S. government. The increase in global Nplate sales for 2021 was primarily driven by volume growth.
The increase in global Nplate sales for 2022 was driven by volume growth, including a U.S. government order of $207 million.
Each bank that is a party to the agreement has an initial commitment term of five years. This term may be extended for up to two additional one-year periods with the agreement of the banks. Annual commitment fees for this agreement are 0.1% of the unused portion of the facility based on our current credit rating.
This term may be extended for up to two additional one-year periods with the agreement of the banks. Annual commitment fees for this agreement are 0.09% of the unused portion of the facility based on our current credit rating.
(2) Carbon neutrality goal refers to Scope 1 and 2. 57 Selected Financial Information The following is an overview of our results of operations (in millions, except percentages and per-share data): Year ended December 31, 2022 Change Year ended December 31, 2021 Product sales: U.S. $ 17,743 3 % $ 17,286 ROW 7,058 1 % 7,011 Total product sales 24,801 2 % 24,297 Other revenues 1,522 (10) % 1,682 Total revenues $ 26,323 1 % $ 25,979 Operating expenses $ 16,757 (9) % $ 18,340 Operating income $ 9,566 25 % $ 7,639 Net income $ 6,552 11 % $ 5,893 Diluted EPS $ 12.11 18 % $ 10.28 Diluted shares 541 (6) % 573 In the following discussion of changes in product sales, any reference to volume growth or decline refers to changes in the purchases of our products by healthcare providers (such as physicians or their clinics), dialysis centers, hospitals and pharmacies.
Selected Financial Information The following is an overview of our results of operations (in millions, except percentages and per-share data): Year ended December 31, 2023 Change Year ended December 31, 2022 Product sales: U.S. $ 19,272 9 % $ 17,743 ROW 7,638 8 % 7,058 Total product sales 26,910 9 % 24,801 Other revenues 1,280 (16) % 1,522 Total revenues $ 28,190 7 % $ 26,323 Operating expenses $ 20,293 21 % $ 16,757 Operating income $ 7,897 (17) % $ 9,566 Net income $ 6,717 3 % $ 6,552 Diluted EPS $ 12.49 3 % $ 12.11 Diluted shares 538 (1) % 541 In the following discussion of changes in product sales, any reference to volume growth or decline refers to changes in the purchases of our products by healthcare providers (such as physicians or their clinics), dialysis centers, hospitals and pharmacies.
While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows.
While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows. 78 Valuation of assets and liabilities in connection with acquisitions We have acquired and continue to acquire intangible assets in connection with business combinations and asset acquisitions.
A majority of the increase in expenditures relates to expansion of manufacturing capacity to enable supply of products and product candidates. 69 Financing Cash used in financing activities during 2022 was primarily due to payments to repurchase our common stock of $6.4 billion and dividends paid of $4.2 billion, partially offset by proceeds from the issuance of debt of $6.9 billion.
Cash used in financing activities during 2022 was primarily due to payments to repurchase our common stock of $6.4 billion and dividends paid of $4.2 billion, partially offset by proceeds from the issuance of debt of $6.9 billion.
During 2022, we repurchased $6.3 billion of common stock, including $6.0 billion under ASR agreements and had cash settlements for stock repurchases of $6.4 billion. In 2021, we repurchased and had cash settlements of $5.0 billion of common stock. In 2020, we repurchased and had cash settlements of $3.5 billion of common stock.
During 2022, we repurchased $6.3 billion of common stock, including $6.0 billion under ASR agreements and had cash settlements for stock repurchases of $6.4 billion. In 2021, we repurchased and had cash settlements of $5.0 billion of common stock. As of December 31, 2023, $7.0 billion remained available under the stock repurchase program.
Cash flows from operating activities totaled $9.7 billion, which supported investment in our business while returning capital to shareholders through the payment of cash dividends and stock repurchases. For 2022, we increased our quarterly cash dividend by 10% to $1.94 per share of common stock.
Cash flows from operating activities totaled $8.5 billion, which supported investment in our business, including our Horizon acquisition, while returning capital to shareholders through the payment of cash dividends. For 2023, we increased our quarterly cash dividend by 10% to $2.13 per share of common stock.
Discounted cash flow models are typically used to determine the fair values of these intangible assets for purposes of allocating consideration paid to the net assets acquired in an acquisition. See Part IV—Note 2, Acquisitions and divestitures, to the Consolidated Financial Statements.
These intangible assets consist primarily of technology associated with currently marketed human therapeutic products and IPR&D product candidates. Discounted cash flow models are typically used to determine the fair values of these intangible assets for purposes of allocating consideration paid to the net assets acquired in an acquisition. See Part IV—Note 3, Acquisitions and divestitures, to the Consolidated Financial Statements.
Financial Condition, Liquidity and Capital Resources Selected financial data was as follows (in millions): December 31, 2022 2021 Cash, cash equivalents and marketable securities $ 9,305 $ 8,037 Total assets $ 65,121 $ 61,165 Current portion of long-term debt $ 1,591 $ 87 Long-term debt $ 37,354 $ 33,222 Stockholders’ equity $ 3,661 $ 6,700 Cash, cash equivalents and marketable securities Our balance of cash, cash equivalents and marketable securities was $9.3 billion at December 31, 2022.
Financial Condition, Liquidity and Capital Resources Selected financial data was as follows (in millions): December 31, 2023 2022 Cash, cash equivalents and marketable securities $ 10,944 $ 9,305 Total assets $ 97,154 $ 65,121 Current portion of long-term debt $ 1,443 $ 1,591 Long-term debt $ 63,170 $ 37,354 Stockholders’ equity $ 6,232 $ 3,661 Cash, cash equivalents and marketable securities Our balance of cash, cash equivalents and marketable securities was $10.9 billion on December 31, 2023.
Nplate Total Nplate sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2022 Change Year ended December 31, 2021 Change Year ended December 31, 2020 Nplate — U.S. $ 848 50 % $ 566 17 % $ 485 Nplate — ROW 459 — % 461 26 % 365 Total Nplate $ 1,307 27 % $ 1,027 21 % $ 850 The increase in global Nplate sales for 2022 was driven by volume growth.
Nplate Total Nplate sales by geographic region were as follows (dollar amounts in millions): Year ended December 31, 2023 Change Year ended December 31, 2022 Change Year ended December 31, 2021 Nplate — U.S. $ 996 17 % $ 848 50 % $ 566 Nplate — ROW 481 5 % 459 — % 461 Total Nplate $ 1,477 13 % $ 1,307 27 % $ 1,027 The increase in global Nplate sales for 2023 was primarily driven by volume growth, including U.S. government orders totaling $286 million.
Any additional tax that could be imposed for the years 2010–2012 would be reduced by up to approximately $900 million of repatriation tax previously accrued on our foreign earnings. 72 In 2020, we received an RAR and a modified RAR from the IRS for the years 2013–2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico similar to those proposed for the years 2010–2012.
In 2020, we received an RAR and a modified RAR from the IRS for the years 2013–2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico similar to those proposed for the years 2010–2012.
Acquired in-process research and development The Acquired IPR&D expense in 2021 was related to the bemarituzumab program, which was acquired as part of the Five Prime acquisition in 2021. See Part IV—Note 2, Acquisitions and divestitures, to the Consolidated Financial Statements. Selling, general and administrative The increase in SG&A expense for 2022 was primarily driven by higher acquisition-related expenses.
Acquired in-process research and development The Acquired IPR&D expense in 2021 was related to the bemarituzumab program, which was acquired as part of the Five Prime acquisition in 2021. See Part IV—Note 3, Acquisitions and divestitures, to the Consolidated Financial Statements.
The two cases were consolidated in U.S. Tax Court on December 19, 2022. We are currently under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period. In addition, we are under examination by a number of state and foreign tax jurisdictions.
The two cases were consolidated in the U.S. Tax Court on December 19, 2022. On February 10, 2023, the U.S. Tax Court entered an order setting a trial date of November 4, 2024. We are currently under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period.
Rebates include primarily amounts paid to payers and providers in the United States, including those paid to state Medicaid programs, and are based on contractual arrangements or statutory requirements that vary by product, by payer and by individual payer plans.
Sales deductions are substantially product specific and therefore, for any given year, can be affected by the mix of products sold. 76 Rebates include primarily amounts paid to payers and providers in the United States, including those paid to state Medicaid programs, and are based on contractual arrangements or statutory requirements that vary by product, by payer and by individual payer plans.
However, the cumulative decrease in diagnoses over the course of the pandemic has suppressed the volume of new patients starting treatment, which continues to impact our business. Given the unpredictable nature of the pandemic, there could be intermittent disruptions in physician–patient interactions, and as a result, we may experience quarter-to-quarter variability.
Furthermore, our product sales were affected by reduced demand as a result of the COVID-19 pandemic, and the cumulative decrease in diagnoses over the course of the pandemic suppressed the volume of new patients starting treatment, which continues to impact the business. Given the unpredictable nature of future virus surges, there could be future intermittent disruptions in physician–patient interactions.
The increase in global Repatha sales for 2021 was driven by volume growth, partially offset by lower net selling price.
The increase in global Repatha sales for 2022 was driven by volume growth, partially offset by lower net selling price and unfavorable changes to foreign currency exchange rates.
We must develop new products to achieve revenue growth and to offset revenue losses from when products lose their exclusivity or when competing products are launched. Certain of our products face increasing pressure from competition, including biosimilars and generics. For additional information, including information on the expirations of patents for various products, see Part I, Item 1.
We must grow sales from existing and new products to achieve revenue growth and to offset revenue losses from when products lose their exclusivity or when competing products are launched. Certain of our products face increasing pressure from competition, including biosimilars and generics.
In December 2022, the Board of Directors declared a cash dividend of $2.13 per share of common stock for the first quarter of 2023, an increase of 10% for this period, to be paid in March 2023. We also returned capital to stockholders through our stock repurchase program.
In December 2023, the Board 72 of Directors declared a cash dividend of $2.25 per share of common stock for the first quarter of 2024, an increase of 6% for this period, to be paid in March 2024. During 2023, we did not repurchase any of our common stock.
The two cases were consolidated in U.S. Tax Court on December 19, 2022. We are currently under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period. In addition, we have examinations by a number of state and foreign tax jurisdictions.
The two cases were consolidated in the U.S. 71 Tax Court on December 19, 2022. On February 10, 2023, the U.S. Tax Court entered an order setting a trial date of November 4, 2024. We are currently under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period.
Business—Marketing, Distribution and Selected Marketed Products—Patents, and Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Competition. We devote considerable resources to R&D activities, but successful product development in the biotechnology industry is highly uncertain. We also face increasing regulatory scrutiny of safety and efficacy both before and after products launch.
For additional information, including information on the expirations of patents for various products, see Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Patents, and Part I, Item 1. Business—Marketing, Distribution and Selected Marketed Products—Competition. We devote considerable resources to R&D activities, but successful product development in the biotechnology industry is highly uncertain.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 100 basis point adverse movement in interest rates relative to interest rates as of December 31, 2022 and 2021, would have resulted in reductions in the fair values of our cross-currency swap contracts of approximately $90 million and $170 million, respectively. 75 Foreign-currency-sensitive financial instruments Our international operations are affected by fluctuations in the value of the U.S. dollar compared with foreign currencies, predominantly the euro.
Biggest changeA hypothetical 100 basis point adverse movement in interest rates relative to interest rates as of December 31, 2023 and 2022, would have resulted in reductions in the fair values of our cross-currency swap contracts of approximately $100 million and $90 million, respectively.
With regard to foreign currency forward contracts that were open as of December 31, 2022, a hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2022, would have resulted in a reduction in fair value of these contracts of approximately $1.1 billion on this date and in the ensuing year, a reduction in income of approximately $590 million.
With regard to contracts that were open as of December 31, 2022, a hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2022, would have resulted in a reduction in fair value of these contracts of approximately $1.1 billion on this date and in the ensuing year, a reduction in income of $590 million.
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2022, would have resulted in an increase in fair value of this debt of approximately $580 million on this date and a reduction in income in the ensuing year of approximately $600 million.
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2022, would have resulted in an increase in fair value of this debt of $580 million on this date and a reduction in income in the ensuing year of $600 million.
In addition, we have an investment policy that limits investments to certain types of debt and money market instruments issued by institutions with investment-grade credit ratings and places restriction on maturities and concentrations by asset class and issuer.
In addition, we have an investment policy that limits 81 investments to certain types of debt and money market instruments issued by institutions with investment-grade credit ratings and places restriction on maturities and concentrations by asset class and issuer.
Except as noted below, we also assumed a hypothetical 20% change in foreign currency exchange rates against the U.S. dollar based on its position relative to other currencies as of December 31, 2022 and 2021. Interest-rate-sensitive financial instruments Our portfolio of available-for-sale investments as of December 31, 2022 and 2021, was composed almost entirely of U.S.
Except as noted below, we also assumed a hypothetical 20% change in foreign currency exchange rates against the U.S. dollar based on its position relative to other currencies as of December 31, 2023 and 2022. Interest-rate-sensitive financial instruments Our portfolio of available-for-sale investments as of December 31, 2023 and 2022, was composed almost entirely of U.S.
With regard to these foreign currency forward contracts that were open as of December 31, 2022 and 2021, a hypothetical 5% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates on these dates would not have a material effect on the fair values of these contracts or related income in the respective ensuing years.
With regard to these foreign currency forward contracts that were open as of December 31, 2023 and 2022, a hypothetical 5% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates on these dates would not have a material effect on the fair values of these contracts or related income in the respective ensuing years.
To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified and were designated for accounting purposes as fair value hedges for certain of our fixed-rate debt. These interest rate swap contracts effectively converted a fixed-rate interest coupon to a floating-rate LIBOR-based coupon over the life of the respective notes.
To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified and were designated for accounting purposes as fair value hedges for certain of our fixed-rate debt. These interest rate swap contracts effectively converted a fixed-rate interest coupon to a floating-rate SOFR-based coupon over the life of the respective notes.
A hypothetical 100 basis point decrease in interest rates relative to interest rates as of December 31, 2022 and 2021, would have resulted in an increase of $3.5 billion and $4.5 billion, respectively, in the aggregate fair value of our outstanding debt on these dates.
A hypothetical 100 basis point decrease in interest rates relative to interest rates as of December 31, 2023 and 2022, would have resulted in an increase of $5.4 billion and $3.5 billion, respectively, in the aggregate fair value of our outstanding debt on these dates.
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates on these dates would have resulted in reductions in the fair values of these contracts of approximately $540 million and $700 million on these dates, respectively.
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates on these dates would have resulted in reductions in the fair values of these contracts of approximately $480 million and $540 million on these dates, respectively.
Applying a duration model, a hypothetical 100 basis point increase in interest rates as of December 31, 2022 and 2021, would not have resulted in a material reduction in the fair values of these securities.
Applying a duration model, a hypothetical 100 basis point increase in interest rates as of December 31, 2023 and 2022, would not have resulted in a material reduction in the fair values of these securities.
As of December 31, 2022 and 2021, we had open, short-duration, foreign currency forward contracts that mature in one month or less, that had notional amounts of $0.5 billion and $0.7 billion, respectively, and that hedged fluctuations of certain assets and liabilities denominated in foreign currencies but were not designated as hedges for accounting purposes.
As of December 31, 2023 and 2022, we had open, short-duration, foreign currency forward contracts that mature in one month or less, that had notional amounts of $0.5 billion and $0.5 billion, respectively, and that hedged fluctuations of certain assets and liabilities denominated in foreign currencies but were not designated as hedges for accounting purposes.
Treasury securities and money market mutual funds. The fair values of our available-for-sale investments were $4.3 billion and $7.3 billion as of December 31, 2022 and 2021, respectively. Duration is a sensitivity measure that can be used to approximate the change in the value of a security that will result from a 100 basis point change in interest rates.
Treasury securities and money market mutual funds. The fair values of our available-for-sale investments were $10.4 billion and $4.3 billion as of December 31, 2023 and 2022, respectively. Duration is a sensitivity measure that can be used to approximate the change in the value of a security that will result from a 100 basis point change in interest rates.
In the discussion that follows, we assumed a hypothetical change in interest rates of 100 basis points from those as of December 31, 2022 and 2021.
In the discussion that follows, we assumed a hypothetical change in interest rates of 100 basis points from those as of December 31, 2023 and 2022.
A 20% decrease in the aggregate value of our equity investment portfolio as of December 31, 2022 and 2021, would result in losses in fair value of approximately $1.1 billion and $1.4 billion, respectively. Counterparty credit risks Our financial instruments, including derivatives, are subject to counterparty credit risk, which we consider as part of the overall fair value measurement.
A 20% decrease in the aggregate value of our equity investment portfolio as of December 31, 2023 and 2022, would result in losses in fair value of approximately $1.0 billion and $1.1 billion, respectively. Counterparty credit risks Our financial instruments, including derivatives, are subject to counterparty credit risk, which we consider as part of the overall fair value measurement.
Interest rate swap contracts with aggregate notional amounts of $6.7 billion were outstanding as of both December 31, 2022 and 2021.
Interest rate swap contracts with aggregate notional amounts of $6.7 billion were outstanding as of both December 31, 2023 and 2022.
A hypothetical 100 basis point increase in interest rates relative to interest rates as of December 31, 2022 and 2021, would have resulted in reductions in fair values of approximately $210 million and $330 million, respectively, on our interest rate swap contracts on these dates.
A hypothetical 100 basis point increase in interest rates relative to interest rates as of December 31, 2023 and 2022, would have resulted in reductions in fair values of approximately $180 million and $210 million, respectively, on our interest rate swap contracts on these dates.
These contracts had no material net unrealized gains or losses as of December 31, 2022 and 2021.
These contracts had no material net unrealized gains or losses as of December 31, 2023 and 2022.
With regard to contracts that were open as of December 31, 2021, a hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2021, would have resulted in a reduction in fair value of these contracts of approximately $1.1 billion on this date and in the ensuing year, a reduction in income of $390 million.
With regard to foreign currency forward contracts that were open as of December 31, 2023, a hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2023, would have resulted in a reduction in fair value of these contracts of approximately $1.2 billion on this date and in the ensuing year, a reduction in income of approximately $690 million.
To further reduce our net exposure to foreign currency exchange rate fluctuations on our results of operations, we enter into foreign currency forward and cross-currency swap contracts. As of December 31, 2022, we had outstanding euro-, pound-sterling- and Swiss-franc-denominated debt with a principal carrying value and a fair value of $3.0 billion and $2.9 billion, respectively.
To further reduce our net exposure to foreign currency exchange rate fluctuations on our results of operations, we enter into foreign currency forward and cross-currency swap contracts. 80 As of December 31, 2023, we had outstanding euro- and pound-sterling- denominated debt with a principal carrying value and a fair value of $2.3 billion and $2.3 billion, respectively.
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2021, would have resulted in an increase in fair value of this debt of $710 million on this date and a reduction in income in the ensuing year of $640 million.
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2023, would have resulted in an increase in fair value of this debt of approximately $470 million on this date and a reduction in income in the ensuing year of approximately $460 million.
As of December 31, 2022, we had primarily euro-based open foreign currency forward contracts with notional amounts of $6.0 billion. As of December 31, 2021, we had primarily euro-based open foreign currency forward contracts with notional amounts of $5.7 billion.
As of December 31, 2023, we had primarily euro-based open foreign currency forward contracts with notional amounts of $6.6 billion. As of December 31, 2022, we had primarily euro-based open foreign currency forward contracts with notional amounts of $6.0 billion.
As of December 31, 2021, we had outstanding euro-, pound-sterling- and Swiss-franc-denominated debt with a principal carrying value and a fair value of $3.2 billion and $3.6 billion, respectively.
As of December 31, 2022, we had outstanding euro-, pound-sterling- and Swiss-franc-denominated debt with a principal carrying value and a fair value of $3.0 billion and $2.9 billion, respectively.
As of December 31, 2021, we had outstanding debt with a carrying value of $33.3 billion and a fair value of $37.9 billion. Our outstanding debt was composed of debt with fixed interest rates. Changes in interest rates do not affect interest expense on fixed-rate debt. Changes in interest rates would, however, affect the fair values of fixed-rate debt.
As of December 31, 2022, we had outstanding debt with a carrying value of $38.9 billion and a fair value of $35.0 billion. Our outstanding debt was composed of debt with fixed interest rates. Changes in interest rates do not affect interest expense on fixed-rate debt. Changes in interest rates would, however, affect the fair values of fixed-rate debt.
Increases and decreases in our international product sales from movements in foreign currency exchange rates are partially offset by corresponding increases or decreases in our international operating expenses. Increases and decreases in our foreign-currency-denominated assets from movements in foreign currency exchange rates are partially offset by corresponding increases or decreases in our foreign-currency-denominated liabilities.
Increases and decreases in our foreign-currency-denominated assets from movements in foreign currency exchange rates are partially offset by corresponding increases or decreases in our foreign-currency-denominated liabilities.
In addition, a hypothetical 100 basis point decrease in interest rates as of December 31, 2022 and 2021, would not result in a material effect on income in the respective ensuing year. As of December 31, 2022, we had outstanding debt with a carrying value of $38.9 billion and a fair value of $35.0 billion.
In addition, a hypothetical 100 basis point decrease in interest rates as of December 31, 2023 and 2022, would not result in a material effect on income in the respective ensuing year. As of December 31, 2023, we had outstanding debt with a carrying value of $64.6 billion and a fair value of $59.2 billion.
As of both December 31, 2022 and 2021, we had outstanding cross-currency swap contracts with aggregate notional amount of $3.4 billion that hedge our foreign-currency-denominated debt and related interest payments.
As of December 31, 2023 and 2022, we had outstanding cross-currency swap contracts with aggregate notional amounts of $2.7 billion and $3.4 billion, respectively, that hedge our foreign-currency-denominated debt and related interest payments.
We have cross-currency swap contracts that are designated as cash flow hedges of our debt denominated in euros, pounds sterling and Swiss francs, with aggregate notional amount of $3.4 billion as of both December 31, 2022 and 2021.
We have cross-currency swap contracts that are designated as cash flow hedges of our debt denominated in euros and pounds sterling (and Swiss francs with respect to the prior year), with aggregate notional amount of $2.7 billion and $3.4 billion as of December 31, 2023 and 2022, respectively.
As of December 31, 2022, the fair values of these contracts were a $288 million asset and a $76 million liability. As of December 31, 2021, the fair values of these contracts were a $183 million asset and a $39 million liability.
As of December 31, 2023, the fair values of these contracts were a $145 million asset and a $116 million liability. As of December 31, 2022, the fair values of these contracts were a $288 million asset and a $76 million liability.
Market-price-sensitive financial instruments As of December 31, 2022 and 2021, we were exposed to price risk on equity securities included in our portfolio of investments, which were acquired primarily for the promotion of business and strategic objectives. These investments include publicly and privately held small-capitalization stocks, limited partnerships that invest in early-stage biotechnology companies 76 and our investment in BeiGene.
Market-price-sensitive financial instruments As of December 31, 2023 and 2022, we were exposed to price risk on equity securities included in our portfolio of investments, which were acquired primarily for the promotion of business and strategic objectives.
Removed
In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts, which are designated as cash flow hedges, in order to hedge the variability in cash flows due to changes in the applicable U.S. Treasury rate between the time we enter into these contracts and the time the related debt is issued.
Added
Foreign-currency-sensitive financial instruments Our international operations are affected by fluctuations in the value of the U.S. dollar compared with foreign currencies, predominantly the euro. Increases and decreases in our international product sales from movements in foreign currency exchange rates are partially offset by corresponding increases or decreases in our international operating expenses.
Removed
As of December 31, 2022, we had forward interest rate contracts outstanding with an aggregate notional amount of $700 million; there were no outstanding forward interest rate contracts as of December 31, 2021.
Added
These investments include our investments in BeiGene and Neumora, as well as other publicly and privately held small-capitalization stocks, limited partnerships that invest in early-stage biotechnology companies.
Removed
A hypothetical 100 basis point decrease in interest rates relative to interest rates as of December 31, 2022 would have resulted in a reduction in fair value of approximately $60 million on our forward interest rate contracts on this date.

Other AMGN 10-K year-over-year comparisons