FORCES SHAPING HEALTH CARE

As we look ahead, we see three major forces shaping the health care environment: macroeconomic conditions, the role of government payers and regulators, and industry trends. Clearly, each poses continuing challenges. But inherent in each are also opportunities … and we are seizing them.

• Macroeconomic conditions: Slowing economic growth, the uncertainty in financial markets, high unemployment and pressure on health care costs have all contributed to constraints on health care spending.

  These dynamics are balanced by demographic trends that are creating demand for health care. Populations in the developed world are aging rapidly, and we consume more health care as we grow older. Global expansion and growth, though slower than a few years ago, also lead to growing demand for health care, especially in emerging markets.

  Our investments continue to be aligned with these market opportunities to address unmet medical needs. Cancers, mental health disorders, diabetes, heart disease, stroke, rheumatoid arthritis and HIV are all among the most significant diseases—and they are markets where today we either have leadership or are increasing investments to gain leadership.

• Government payers and regulators: As health care reform evolves around the world, governments are requiring more cost-effective health care solutions.

  We recognize these priorities and are making investments in personalized medicine and companion diagnostics, especially in the areas of oncology and anti-psychotics, that are geared toward how we can better target treatments, monitor results and be more efficient in product development.

  As the regulatory environment has become much more intense, we share a common goal with regulators: saving lives, easing people's suffering and addressing unmet medical needs with meaningful innovations. We support strong regulatory environments that ensure patient safety while enabling the fast and efficient approval of potentially life-saving medicines and treatments.

• Industry trends: Bringing new innovations to market requires significant investments, access to the best minds and talent, and adaptability to ever-changing markets.

  It is more important than ever for companies to be agile, collaborative and able to thrive with new business models. We have always looked to complement our development efforts with acquisitions and collaborations that help us gain new capabilities or provide access to technology, products and compounds that we can accelerate to market. The collaborations in Alzheimer's disease with Elan and Pfizer, and in HIV with Gilead Sciences, Inc., are just a few of our promising ventures.