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Other (Income)/Deductions - Net
 3 Months Ended
Apr. 02, 2023
Other Income and Expenses [Abstract]  
Other (Income)/Deductions - Net Other (Income)/Deductions—Net
Components of Other (income)/deductions––net include:
 Three Months Ended
(MILLIONS)April 2,
2023		April 3,
2022
Interest income$(177)$(14)
Interest expense318 322 
Net interest expense141 308 
Royalty-related income(204)(173)
Net (gains)/losses on asset disposals(7)(1)
Net (gains)/losses recognized during the period on equity securities(a)
451 699 
Income from collaborations, out-licensing arrangements and sales of compound/product rights(68)(9)
Net periodic benefit costs/(credits) other than service costs(80)(283)
Certain legal matters, net(b)
36 79 
Certain asset impairments(c)
264 — 
Haleon/Consumer Healthcare JV equity method (income)/loss(d)
(68)(184)
Other, net(e)
(396)(88)
Other (income)/deductions––net$70 $350 
(a)The losses in the first quarter of 2023 include, among other things, unrealized losses of $363 million related to our investments in Cerevel Therapeutics Holdings, Inc. and BioNTech. The losses in the first quarter of 2022 included, among other things, unrealized losses of $473 million related to our investment in BioNTech.
(b)The first quarter of 2023 primarily includes certain product liability expenses related to products discontinued and/or divested by Pfizer. The first quarter of 2022 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.
(c)The first quarter of 2023 primarily represents intangible asset impairment charges, including $128 million associated with Other business activities, related to IPR&D and developed technology rights for acquired software assets and reflects unfavorable pivotal trial results and updated commercial forecasts, and $120 million associated with our Biopharma segment due to the discontinuation of a study related to an out-licensed IPR&D asset for the treatment of prostate cancer, acquired in our Array BioPharma Inc. acquisition.
(d)See Note 2C.
(e)The first quarter of 2023 primarily includes, among other things, dividend income of $211 million from our investment in Nimbus resulting from Takeda Pharmaceutical Company Limited’s acquisition of Nimbus’s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary, and $92 million from our investment in ViiV.
Additional information about the intangible assets that were impaired during 2023 follows:
Three Months Ended
Fair Value(a)
April 2, 2023
(MILLIONS)AmountLevel 1Level 2Level 3Impairment
Intangible assets––Licensing agreements and other(b)
$— $— $— $— $120 
Intangible assets––IPR&D(b)
— — — — 94 
Intangible assets––Developed technology rights(b)
— — — — 34 
Total$— $— $— $— $248 
(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 in our 2022 Form 10-K.
(b)Reflects intangible assets written down to fair value in 2023. 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.