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## GTN Adjustments 

We recognize revenue net of GTN adjustments that are further described in “—Critical Accounting Policies.” 

The activities and ending reserve balances for each significant category of GTN adjustments were as follows: 

<img src='content_image/1032035.jpg'>

The reconciliation of gross product sales to net product sales by each significant category of GTN adjustments was as follows: 

<img src='content_image/1032036.jpg'>

GTN adjustments are primarily a function of product sales volume, regional and payer channel mix, contractual or legislative discounts and rebates. 

GTN adjustments are increasing at a higher rate than gross product sales due to higher U.S. Eliquis gross product sales, which has a relatively high 

GTN adjustment percentage as a result of competitive pressures to maintain its position on healthcare payer formularies allowing patients continued access through their medical plans. 

