teams focused on any given therapeutic area to one of four major sites.

• We will restructure our U.S. Pharmaceutical Operations into four business units to create a more focused and entrepreneurial environment that will enhance innovation while allowing us to draw on the advantages of our scale and resources. A fifth business unit will be responsible for customer support and specifically focused on managed care and access.

• We will continue to address the wide array of patient populations through our innovative access and affordability programs.

• Fundamentally, we will change the way we run our company to meet the challenges of a changing business environment. (See further discussion in the “Our Productivity and Cost- Savings Program” section of this Financial Review.)

In addition to the above challenges and opportunities, we believe that there are other opportunities for revenue generation for our products, including:

• Current demographics of developed countries indicate that people are living longer and, therefore, will have a greater need for the most effective medicines.

• The large number of untreated patients within our various therapeutic categories. For example, of the tens of millions of Americans who need medical therapy for high cholesterol, we estimate only about one-fourth are actually receiving treatment.

• Refocusing the debate on health policy to address the cost of disease that remains untreated and the benefits of investing in prevention and wellness to not only improve health, but save money.

• Developing medicines that meet medical need and that patients will take; that physicians will prescribe; that customers will pay for; and that add the most value for Pfizer.

• The promise of technology to improve upon existing therapies and to introduce treatments where none currently exist.

• Our increased presence in emerging markets worldwide, where economic expansion is creating new growth opportunities.

• Worldwide emphasis on the need to find solutions to difficult problems in healthcare systems.

Our Productivity and Cost-Savings Program

During 2006 and 2005, we made significant progress with our multi-year productivity initiative, called Adapting to Scale (AtS), which was designed to increase efficiency and streamline decision- making across the company. This initiative, launched in early 2005, and broadened in October 2006, follows the integration of Warner-Lambert and Pharmacia. During 2006 and 2005, cost savings realized from our AtS productivity initiative were approximately $2.6 billion and $800 million.

On January 22, 2007, we announced plans to fundamentally change the way we run our business to meet the challenges of a changing business environment and take advantage of the diverse opportunities in the marketplace. We intend to generate cost savings through site rationalization in research and manufacturing, reductions in our global sales force, streamlined organizational structures, staff function reductions, and increased outsourcing and procurement savings. Our cost reduction initiatives will result in the elimination of about 10,000 positions, or about 10% of our total worldwide workforce by the