We are committed to pricing our medicines in a way that reflects the benefit they bring to patients and society, ensuring patients have access and enabling us to continue to invest in new medicines.

• We may consider a number of factors when determining a medicine's price, including, for example: Its impact on patients and their disease, other available treatments, its potential to reduce other health care costs, such as hospital stays, and affordability.
• We may also consider our investments to maintain the quality, safety, and reliability of our medicines, and our ability to continue to innovate to bring new, life-changing medicines and vaccines to patients.
• We may also consult physicians, payers and patient groups, as appropriate. We may also engage with patients, doctors and healthcare plans regarding their views.

We then negotiate with insurers, including PBMs and MCOs, and may provide significant discounts from the initial price.

The price that patients pay for the medicines their physicians prescribe is ultimately set by healthcare providers and insurers.

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Nearly 90% of prescriptions are for generic medicines. The other 10% tend to be for innovative medicines—many of which are for serious, hard-to-treat conditions.

• These more innovative medicines are typically more expensive than generic medications.
• Pfizer's portfolio includes more than 600 generics that are lower-priced alternatives for many medicines

Innovative medicines may become generic after a certain period of time. This is why we have lower-cost, effective options for treating conditions like heart disease and depression today. In the future, as more innovative medicines become generic, lower-cost treatment options may extend to cancer, rheumatoid arthritis and other diseases.

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While we negotiate with insurers and advocate that patient out-of-pocket costs be affordable, the price patients pay for the medicines their physicians prescribe is ultimately set by healthcare providers and insurers.

On average, insurers cover a lower share of prescription drug costs than other healthcare expenses.ⁱ We believe that medicines are amongst the most powerful tools in curing, treating and preventing illness and disability and that all patients should have access to the medicines their doctors prescribe.

We will continue to work with insurance providers, governments, and others to improve access to today’s innovative treatment.

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ⁱThe Pharmaceutical Research and Manufacturers of America (PhRMA), 2016 Profile: Biopharmaceutical Research Industry. (2015). Prescription Medicines: Costs in Context [PhRMA analysis based on Medical Expenditure Panel Survey (MEPS)]. http://phrma-docs.phrma.org/sites/default/files/pdf/prescription-medicines-costs-in-context.pdf

We may change the price of a medicine to reflect new uses or formulations that result from our continued research.

Medicines are often initially approved for use in a specific population. Once a medicine is approved, we continue studying it to see if other patients can benefit, or to find ways to improve it.

• In addition, external factors in the marketplace, such as availability of new medicines or generic options, can impact price.

Keep in mind that medicines are unique because they are a health care cost that decreases over time.

This is because of the U.S. patent system,which allows for lower-priced generic versions to become available when a medicine’s patent expires.

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We price generic and off-patent medicines to maintain their quality, safety and reliability.

When a Pfizer medicine becomes generic, we continue to monitor the quality, safety and reliability of the medicine. We also continue to invest in manufacturing, which can be very complex for certain types of medicines.

We also consider how many other companies supply the medicine.

Marketplace changes, such as the number of suppliers for a particular medicine or biologic, can also impact how we price such medicines.

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