AstraZeneca Annual Report and Form 20-F Information 2008

Competition

Our main competitors are other international, research-based pharmaceutical companies that sell innovative, patent-protected, prescription medicines. Following patent expiry, our products also compete with generic pharmaceuticals. Since generic manufacturers do not bear the same high costs of R&D, nor do they typically invest as significantly in safety monitoring or marketing, they typically adopt lower prices for their products.

The generic industry is increasingly challenging innovators’ patents and in the US, the world’s largest pharmaceutical market, many leading medicines have faced or are facing patent challenges from generic manufacturers. The research-based industry is also experiencing increased challenges elsewhere in the world, for example in Europe, Canada, Asia and Latin America. It is increasingly complex to enforce patent rights and other intellectual property in certain markets, especially those where practices are in place to encourage broad access to medicines. While there are few established regulatory systems for biosimilars of biological products, several markets, including the US, are considering regulatory structures that might allow for an abbreviated marketing approval mechanism akin to that for generic pharmaceuticals. Further information about the risk of the early loss and expiry of patents is explained in the Intellectual Property section.

Competition also comes from collaborations and partnerships between traditional pharmaceutical companies and smaller biotechnology and vaccine companies. Increasingly, as pharmaceutical companies seek to expand their pipeline, they are able to gain access to promising new product candidates by partnering with these smaller companies that may lack some of the infrastructure for growth that a larger company can provide. Competition for high quality collaborations is increasingly fierce as the major pharmaceutical companies frequently focus on the same opportunities to enhance their in-house capabilities.

Further information about the principal risks and uncertainties we face can be found in the Risk section.

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