PFIZER INC
For the period ended Dec 31, 2023. Filed Feb 22, 2024.
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FY2023 · Filed Feb 22, 2024
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Product Revenue Deductions
Product Revenue Deductions––Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these product revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends.
| The following presents information about product revenue deductions: | |||
|---|---|---|---|
| Year Ended December 31, | |||
| (MILLIONS) | 2023 | 2022 | 2021 |
| Medicare rebates | $997 | $838 | $726 |
| Medicaid and related state program rebates | 1,655 | 973 | 1,214 |
| Performance-based contract rebates | 5,159 | 3,575 | 3,253 |
| Chargebacks | 9,828 | 7,560 | 6,122 |
| Sales allowances | 6,790 | 5,460 | 4,809 |
| Sales returns and cash discounts(a) | 5,619 | 1,290 | 1,054 |
| Total | $30,048 | $19,697 | $17,178 |
(a) The increase in sales returns and cash discounts in 2023 was primarily due to the revenue reversal of $3.5 billion in the fourth quarter of 2023, related to the expected return of an estimated 6.5 million treatment courses of EUA-labeled U.S. government Paxlovid inventory (see Note 17C).
Product revenue deductions are primarily a function of product sales volume, mix of products sold, contractual or legislative discounts and rebates.
For information on our accruals for product revenue deductions, including the balance sheet classification of these accruals, see Note 1G.
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