Pfizer 2009 Annual Report Download - page 100

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
We are a party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (CERCLA or Superfund), and other state, local or foreign laws in which the primary relief sought is
the cost of past and/or future remediation.
•MPA Matter
In 2006, Wyeth’s Wyeth Medica Ireland (WMI) subsidiary was served with criminal summonses charging it with violations of the
Ireland Waste Management Act and WMI’s Integrated Pollution Prevention and Control License in connection with five shipments
from WMI’s Newbridge, Ireland facility of sugar waste water allegedly contaminated with medroxyprogesterone acetate (MPA). This
matter remains pending.
D. Government Investigations
Like other pharmaceutical companies, we are subject to extensive regulation by national, state and local government agencies in the
U.S. and in the other countries in which we operate. As a result, we have interactions with government agencies on an ongoing
basis. Among the investigations by government agencies are those discussed below. It is possible that criminal charges and
substantial fines and/or civil penalties could result from government investigations, including but not limited to those discussed
below.
The Company has voluntarily provided the DOJ and the SEC with information concerning potentially improper payments made in
connection with certain sales activities outside the U.S. We have been exploring with the DOJ and SEC various ways to resolve this
matter. In addition, certain potentially improper payments and other matters are the subject of investigations by government
authorities in certain foreign countries, including a civil and criminal investigation in Germany with respect to certain tax matters
relating to a wholly owned subsidiary of Pfizer.
The DOJ is conducting civil and criminal investigations regarding Wyeth’s promotional practices with respect to Protonix and its
practices relating to the pricing for Protonix and Premarin for Medicaid rebate purposes. In connection with the pricing investigation,
in May 2009, the DOJ filed a civil complaint in intervention in two qui tam actions that had been filed under seal in the U.S. District
Court for the District of Massachusetts. The complaint alleges that Wyeth’s practices relating to the pricing for Protonix for Medicaid
rebate purposes between 2001 and 2006 violated the Federal Civil False Claims Act and federal common law. The two qui tam
actions have been unsealed, and the complaints include substantially similar allegations. In addition, in June 2009, several states
and the District of Columbia filed a complaint under the same docket number asserting violations of various state laws based on
allegations substantially similar to those set forth in the civil complaint filed by the DOJ.
The U.S. Attorney’s Office for the Western District of Oklahoma is conducting a criminal investigation with respect to Wyeth’s
promotional practices relating to Rapamune.
E. Guarantees and Indemnifications
In the ordinary course of business and in connection with the sale of assets and businesses, we often indemnify our counterparties
against certain liabilities that may arise in connection with the transaction or related to activities prior to the transaction. These
indemnifications typically pertain to environmental, tax, employee and/or product-related matters and patent infringement claims. If
the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to
reimburse the loss. These indemnifications are generally subject to threshold amounts, specified claim periods and other restrictions
and limitations. Historically, we have not paid significant amounts under these provisions and, as of December 31, 2009, recorded
amounts for the estimated fair value of these indemnifications were not significant.
20. Segment, Geographic and Revenue Information
Business Segments
Effective with the acquisition of Wyeth, we operate in the following two distinct commercial organizations, which constitute our two
business segments:
•Biopharmaceutical consists of the Primary Care, Specialty Care, Oncology, Established Products and Emerging Markets customer-
focused units and includes products that prevent and treat cardiovascular and metabolic diseases, central nervous system disorders,
arthritis and pain, infectious and respiratory diseases, urogenital conditions, cancer, eye diseases and endocrine disorders, among
others. Biopharmaceutical’s segment profit includes costs related to research and development, manufacturing, and sales and
marketing activities that are associated with the products in our Biopharmaceutical segment.
•Diversified includes animal health products that prevent and treat diseases in livestock and companion animals including vaccines,
parasiticides and anti-infectives; consumer healthcare products that include over-the-counter healthcare products such as pain
management therapies (analgesics and heat wraps), cough/cold/allergy remedies, dietary supplements, hemorrhoidal care and
personal care items; nutrition products such as infant and toddler nutritional products; and Capsugel, which represents our gelatin
capsule products and services business. Diversified’s segment profit includes costs related to research and development,
manufacturing, and sales and marketing activities that are associated with the products in our Diversified segment.
Segment profit/(loss) is measured based on income from continuing operations before provision for taxes on income and income
attributable to noncontrolling interests. Certain costs, such as significant impacts of purchase accounting for acquisitions,
restructuring and acquisition-related costs, costs related to our cost-reduction initiatives and transition activity associated with our
former consumer healthcare business, which was sold in 2006, are included in Corporate/Other only. This methodology is utilized by
management to evaluate our businesses. Each segment is managed separately and offers different products requiring different
marketing and distribution strategies.
98 2009 Financial Report