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Other (Income)/Deductions - Net (Tables)
 12 Months Ended
Dec. 31, 2022
Other Income and Expenses [Abstract]  
Schedule of Other Nonoperating Income (Expense)
Components of Other (income)/deductions––net include:
Year Ended December 31,
(MILLIONS)202220212020
Interest income$(251)$(36)$(73)
Interest expense(a)
1,238 1,291 1,449 
Net interest expense
987 1,255 1,376 
Royalty-related income(845)(857)(770)
Net (gains)/losses on asset disposals— (99)237 
Net (gains)/losses recognized during the period on equity securities(b)
1,273 (1,344)(540)
Income from collaborations, out-licensing arrangements and sales of compound/product rights(c)
(188)(396)(326)
Net periodic benefit costs/(credits) other than service costs(849)(2,547)311 
Certain legal matters, net(d)
230 182 28 
Certain asset impairments(e)
421 86 1,691 
Haleon/Consumer Healthcare JV equity method (income)/loss(f)
(436)(471)(298)
Other, net(g)
(378)(687)(497)
Other (income)/deductions––net
$217 $(4,878)$1,213 
(a)Capitalized interest totaled $124 million in 2022, $108 million in 2021 and $96 million in 2020.
(b)2022 losses include, among other things, unrealized losses of $986 million related to investments in BioNTech, Allogene Therapeutics, Inc. and Arvinas. 2021 gains included, among other things, unrealized gains of $1.6 billion related to investments in BioNTech and Cerevel Therapeutics Holdings, Inc. 2020 gains included, among other things, unrealized gains of $405 million related to investments in BioNTech and SpringWorks Therapeutics, Inc.
(c)2022 includes, among other things, $94 million of out-licensing income from multiple licensees. 2021 included, among other things, $188 million of net collaboration income from BioNTech related to Comirnaty and $97 million of milestone income from multiple licensees. 2020 included, among other things, (i) $178 million in milestone income from multiple licensees and (ii) a $75 million upfront payment received from our sale of our CK1 assets to Biogen Inc.
(d)2022 primarily includes certain product liability and other expenses related to products discontinued and/or divested by Pfizer. 2021 primarily includes certain product liability expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition commitments.
(e)2022 primarily includes intangible asset impairment charges of: (i) $200 million associated with our Biopharma segment, representing an IPR&D asset for the unapproved indication of symptomatic dilated cardiomyopathy due to a mutation of the gene encoding the lamin A/C protein, acquired in our Array acquisition, and was a result of the Phase 3 trial reaching futility at a pre-planned interim analysis, (ii) $171 million associated with our Biopharma segment, related to developed technology rights acquired in our Hospira acquisition, and reflect updated commercial forecasts mainly reflecting competitive pressures, and (iii) $50 million associated with PC1, related to finite-lived licensing agreements acquired in our Hospira acquisition, and reflects updated contract manufacturing forecasts reflecting changes to market dynamics. 2020 included intangible asset impairment charges associated with our Biopharma segment that reflected, among other things, updated commercial forecasts mainly reflecting competitive pressures: (i) $900 million related to IPR&D assets for unapproved indications of certain cancer medicines, acquired in our Array acquisition; (ii) $528 million related to Eucrisa, a finite-lived developed technology right acquired in our Anacor Pharmaceuticals, LLC acquisition; and (iii) $263 million related to finite-lived developed technology rights for certain generic sterile injectables acquired in our Hospira acquisition.
(f)See Note 2C.
(g)2022 includes, among other things, (i) dividend income of $314 million from our investment in ViiV, (ii) income net of costs associated with TSAs of $142 million and (iii) charges of $77 million, reflecting the change in the fair value of contingent consideration. 2021 included, among other things, (i) income net of costs associated with TSAs of $288 million, (ii) dividend income of $166 million from our investment in ViiV and (iii) charges of $142 million, reflecting the change in the fair value of contingent consideration. 2020 included, among other things, (i) dividend income of $278 million from our investment in ViiV, (ii) income net of costs associated with TSAs of $114 million and (iii) charges of $105 million, reflecting the change in the fair value of contingent consideration.
Schedule of Additional Information About Intangible Assets Impaired
Additional information about the intangible assets that were impaired during 2022 (impairment recorded in Other (income)/deductions–net) follows:
Year Ended
Fair Value(a)
December 31, 2022
(MILLIONS)AmountLevel 1Level 2Level 3Impairment
Intangible assets––IPR&D(b)
$— $— $— $— $200 
Intangible assets––Developed technology rights(b)
60 — — 60 171 
Intangible assets––Licensing agreements and other(b)
30 — — 30 50 
Total$90 $— $— $90 $421 
(a)The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis. See also Note 1E.
(b)Reflects intangible assets written down to fair value in 2022. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.