Geographical Review

• Significant growth continues to be delivered by key products: Arimidex (7%), Crestor (29%), Seroquel (12%) and Symbicort (23%). Nexium growth of 9% outside the US.
• Despite a continually challenging environment, including pressure from generic medicines, combined sales of Arimidex, Crestor, Nexium, Seroquel and Symbicort were up 10% in the US to 66% of our total US sales.
• In North America, despite several key mergers (Merck/Schering-Plough, Pfizer/Wyeth), AstraZeneca maintained its position as the second largest pharmaceutical company in Canada. In the US, AstraZeneca is now the third largest pharmaceutical company. In the US, AstraZeneca grew its audited sales faster than any other pharmaceutical company in the top 10.
• Solid sales performance outside the US, up 6%.
• Strong brand performance in our Western Europe markets but intense competition and governmental controls over healthcare expenditure.
• Emerging Markets delivered strong sales growth, up 12% with Emerging Europe sales up 7% and Emerging Asia Pacific sales (including China) up 15%.
• Live attenuated H1N1 influenza (swine flu) vaccine approved. AstraZeneca contracted with the US Department of Health and Human Services to supply 42 million doses of live attenuated H1N1 influenza vaccine at $389 million.
• For the first time, the seasonal influenza vaccine, FluMist, sold out of its approximately 10 million dose supply.

For more information regarding our products see the Therapy Area Review. Details of material legal proceedings can be found in Note 25 to the Financial Statements and details of relevant risks are set out in the Principal risks and uncertainties section.

See the market definitions table for information on AstraZeneca's market definitions.

US

Sales in the US increased 9% to $14,778 million, benefiting from the 10% growth of our leading brands. Combined sales of those brands, namely Arimidex, Crestor, Nexium, Seroquel (all formulations) and Symbicort, were up 10% to $9,717 million (2008: $8,803 million) and sales of Toprol-XL and its authorised generic increased as a result of supply issues facing its generic competitors. AstraZeneca is currently the third largest pharmaceutical company in the US, with a 6% share of US prescription pharmaceutical sales. Sales for Aptium Oncology, Inc. fell by 1% to $393 million (2008: $395 million) and sales for Astra Tech AB rose by 4% to $83 million (2008: $80 million).

Seroquel maintained its strong position as the number one prescribed atypical anti-psychotic on the market, with sales up 13% to $3,416 million (2008: $3,015 million). Seroquel (all formulations) posted total prescription growth of 2% with an increase of 408,000 prescriptions, driven by strong Seroquel XR prescription growth of 195%. At the end of 2009, Seroquel XR accounted for 11.1% of the Seroquel total prescription volume in the US, up from 3.4% at the end of 2008.

Throughout 2009, Nexium continued to lead the branded proton pump inhibitor (PPI) market for new prescriptions, total prescriptions and total capsules dispensed. Generic lansoprazole and Prevacid OTC 24 Hour were introduced in November, leaving Nexium as the only branded product with significant market share in the PPI class. In the face of continuing generic, OTC and pricing pressures, Nexium sales were down 9% to $2,835 million in 2009 (2008: $3,101 million).

Crestor achieved sales of $2,100 million (2008: $1,678 million) and a total prescription growth of 22.8%. For the second year in a row Crestor was the only branded statin to grow market share despite pressure from generic medicines. In fact, in 2009, Crestor's total prescription growth of 22.8% significantly outpaced the market by 17.5% and that of total generic statins by 3.3%. We continue to see increased interest in the clinical profile of Crestor from physicians following receipt of the atherosclerosis indication. Crestor is the fastest growing branded statin prescribed by cardiologists and internists.

In June, AstraZeneca and Abbott submitted an NDA for Certriad for the treatment of mixed dyslipidaemia. AstraZeneca and Abbott have also entered into an agreement under which AstraZeneca obtained the non-exclusive right to co-promote Trilipix™, alongside Abbott in the US (excluding Puerto Rico), from June. This is the second co-promotion agreement between AstraZeneca and Abbott. In 2008, the companies announced a non-exclusive agreement for Abbott to co-promote Crestor alongside AstraZeneca in the US (excluding Puerto Rico).

Onglyza™ was launched in August, the first launch in the collaboration with BMS. Execution of the Onglyza™ launch strategy remains on-target and the number of physicians prescribing the product is growing. Brand awareness is increasing and is in line with expectations.

Sales for Toprol-XL and the authorised generic, which is marketed and distributed by Par Pharmaceutical Companies, Inc. increased 227% to $964 million (2008: $295 million) following the withdrawal from the market of two other generic metoprolol succinate products in early 2009. AstraZeneca worked diligently following these withdrawals to ensure an adequate supply of Toprol-XL and the authorised generic. In September, Watson Pharmaceuticals Inc. received approval for 25mg and 50mg strengths of metoprolol succinate. We expect further generic competition in 2010.

Arimidex continued to perform well with sales up 16% to $878 million (2008: $754 million) for the full year. Arimidex continues to be the market leader in new prescriptions in hormonal treatments for post-menopausal women with hormone receptor positive breast cancer in the US.

Patent protection in the US for the Casodex advanced prostate cancer indication expired in April 2009. In July, multiple generic formulations of Casodex were approved by the FDA and entered the market. As a result, 2009 sales of Casodex declined 49% to $148 million (2008: $292 million).

Sales for Pulmicort Respules were down 21% to $692 million (2008: $874 million) as a result of the 'at risk' launch of generic budesonide inhalation suspension by Teva in November 2008. On 25 November 2008, the parties settled the ensuing litigation and in accordance with the settlement agreement, Teva commenced sales of its generic product under an exclusive licence from AstraZeneca on 15 December 2009.

Symbicort pMDI continued to deliver steady growth in the US with sales up 91% to $488 million (2008: $255 million). It surpassed a 15% total prescription share and a 17% new prescription share of the inhaled corticosteroid/long-acting beta-agonist market. Symbicort pMDI is now prescribed to 26% of all patients who are new to combination therapy. In February 2009, it was approved for the maintenance treatment of airflow obstruction in patients with chronic obstructive pulmonary disease, including chronic bronchitis and emphysema.

Synagis is the only FDA-approved MAb to help protect high-risk babies against severe respiratory syncytial virus (RSV). In 2009, sales in the US were $782 million (2008: $923 million). Sales in the 2009-2010 RSV season started slower than anticipated due to payer pressure as a result of the introduction of more restrictive guidelines regarding the use and dosing of Synagis by the American Academy of Pediatrics and the adoption of these guidelines.

AstraZeneca's monovalent H1N1 influenza (swine flu) vaccine, which is made using the same technology and process as AstraZeneca's seasonal influenza vaccine, FluMist, was approved by the FDA in September for the same patient population as FluMist (patients two to 49 years of age). AstraZeneca began shipping product to the US Department of Health and Human Services (HHS) in September. All sales in the US were through the HHS and totalled $389 million.

AstraZeneca has a number of new drug application submissions under review by the regulatory authorities in the US and the EU, including: Crestor (for a new indication, as an sNDA based on the results of the JUPITER study), Vimovo, Certriad, motavizumab and Symbicort pMDI as an sNDA for paediatric use as well as sNDAs for Seroquel XR for generalised anxiety disorder (acute, maintenance and use in elderly), and for the use of Seroquel XR as monotherapy for the treatment of patients with major depressive disorder (acute, maintenance and use in elderly). Further information about the status of these submissions and others is contained in the Therapy Area Review.

Currently, there is no direct government control of prices for commercial prescription drug sales in the US. However, some publicly funded programmes, such as Medicaid and TRICARE (Department of Veterans Affairs), have statutorily mandated rebates and discounts that have the effect of price controls for these programmes. Additionally, pressure on pricing, availability and utilisation of prescription drugs for both commercial and public payers continues to increase, driven by, among other things, an increased focus on generic alternatives. Primary drivers of increased generic use are budgetary policies within healthcare systems and providers, including the use of 'generics only' formularies, and increases in patient co-insurance or co-payments. In 2009, 75% of the prescriptions dispensed in the US were generic. Despite these price pressures and a challenging economic environment, AstraZeneca increased net product sales in 2009 by 9% and IMS Health audited sales for the US market show that AstraZeneca was the fastest growing branded company in the top 10. While it is unlikely that there will be widespread adoption of a broad national price-control scheme in the near future, there will continue to be increased attention to pharmaceutical prices and their impact on healthcare costs for the foreseeable future.

In 2010, we anticipate there will be continued focus on health reform that may result in the implementation of changes in legislation and regulation. AstraZeneca believes that every American should have affordable health insurance and prescription drug coverage. In reviewing different health reform proposals that Congress is considering, AstraZeneca will ask whether any particular provision:

• Promotes market competition that leads to improved health outcomes
• Ensures patient safety is maintained or enhanced
• Expands coverage for the uninsured
• Fosters and rewards innovation
• Provides protection for intellectual property.

For further discussion of the proposed US healthcare reforms, see the Competition, price controls and price reductions section.

In its fourth year of operation, the Medicare Part D prescription drug programme maintained high levels of enrolment and beneficiary satisfaction. It also achieved prescription volume growth similar to that of other mature markets and provided access to our medicines for a large segment of the patient population. Overall access for AstraZeneca's products in key accounts was maintained or improved in 2009.

We continue our long-standing commitment to educating Medicare beneficiaries and supporting healthcare professionals in all aspects of Medicare Part D through our partnership with the National Council on Aging. This includes a consumer website, My Medicare Matters, which was revised this year to provide detailed, yet easy-to-understand information about Medicare services including Part D for people with commonly diagnosed diseases among the elderly, starting with diabetes, cancer and Alzheimer's disease and related dementias. Funding from AstraZeneca also supports MyMedicareCommunity.org, an on-line community for healthcare professionals and grass roots organisations serving people with Medicare.

Additionally, through the AZ&Me Prescription Savings Programme, AstraZeneca provides prescription access to financially needy Medicare Part D beneficiaries. AstraZeneca has been providing patient assistance to the uninsured for 30 years. Last year, we provided more than $750 million in savings to approximately 505,000 people without drug coverage (approximately 3.8 million prescriptions).

Canada

Despite the entry of generic forms of Seroquel IR in late 2008, total product sales in Canada increased by 3% to $1,203 million (2008: $1,275 million) and we remain the second largest brand name pharmaceutical company in Canada. Combined sales of Crestor, Nexium, Symbicort and Atacand were up 18% to $872 million (2008: $805 million) with Crestor and Nexium among the top 10 prescription products in Canada by sales. Sales of Seroquel were down 68% to $48 million (2008: $160 million) as a result of generic entry. Crestor maintained its number two ranking in the statin market and was the fastest-growing product in both new and total prescription segments (25.5% and 27.6% growth, respectively). Crestor is also the second largest pharmaceutical product in Canada by sales.

AstraZeneca received a number of important regulatory approvals from Health Canada in 2009, including regulatory approval for Onglyza™ for the treatment of Type 2 diabetes, Symbicort Turbuhaler for the treatment of chronic obstructive pulmonary disease and Seroquel XR for the treatment of major depressive disorder. In addition, new tablet strengths (32/12.5mg and 32/25mg) were approved for Atacand Plus.

Key organisational efficiencies were obtained through structural changes, as well as the move to regional shared service models and common North American technology platforms.

A recent study, 'The Rx&D International Report on Access to Medicines, 2008-2009' by George Wyatt, highlights that only 55% of innovative medicines receive approval from Canada's Health Technology Assessment appraisal system compared to an international average of 73%. The Patented Medicine Prices Review Board (PMPRB) has the role of ensuring that prices charged by manufacturers for patented medicines are not excessive. Recent PMPRB guideline changes to be introduced in 2010 have secured a competitive pricing environment for the Canadian pharmaceutical industry.

The provinces have adopted different approaches to pharmaceutical funding, from one end of the continuum in Quebec, with more open access, to more restricted access in British Columbia. Ontario, Alberta and British Columbia have all undertaken reviews of their drug reimbursement system, resulting in the introduction of product listing agreements, the reduction of generic prices and changes to the role of pharmacists. The trend in Canada indicates provinces will continue to introduce policy changes that drive cost savings, while providing reasonable patient access to innovative medicines.

Sales in the Rest of World performed strongly in 2009, up 6% (flat as reported) to $16,823 million (2008: $16,816 million), despite the world economic crisis. Key products (Arimidex, Crestor, Nexium, Seroquel and Symbicort) delivered a strong performance, up 15% (+8% reported) with sales of $7,977 million (2008: $7,413 million). China, Emerging Asia Pacific and Other Emerging markets delivered particularly strong sales, up 14% (+7% reported) with sales of $3,261 million (2008: $3,058 million).

Other Established Markets

Sales in Other Established Markets increased by 4% (-1% reported). The key products driving sales growth in 2009 were Crestor, Symbicort, Nexium and Seroquel.

Western Europe

In our Western Europe markets, we saw good growth of 3% (-5% reported). The weakness of the pound sterling in comparison to the euro resulted in a significant change in the pattern of export trade within the EU with strong sales in the UK (up 27%, +6% reported) more than offsetting sales declines in Italy (down 3%, -9% reported), Spain (down 6%, -11% reported), and the Nordics (ie Sweden, Finland, Denmark and Norway) (down 5%, -16% reported).

Within our Western Europe markets, Crestor has delivered a strong financial performance and has outperformed the market with strong double-digit growth. Likewise, Seroquel has outperformed the market by two times with the successful launch of Seroquel XR and the bipolar indication driving performance. Symbicort has defended its market position and Nexium has moved from second to first place in its class. Arimidex has maintained its position as the leading aromatase inhibitor. Sales of Casodex continue to decline following patent expiries in 2008.

Sales in our Western Europe markets continued to be impacted by government initiatives to contain drug expenditures and by generic erosion of those of our products which have lost patent protection and Regulatory Exclusivity.

We have continued with our programme of resource management in our Western Europe markets and have reduced our cost base by 5% and headcount by over 600 during 2009.

Overall our sales in France were up 2% (-4% reported) to $1,849 million (2008: $1,922 million). The strong performance of Crestor and Nexium, which gained significant market share from competitors, was offset by the continuing impact of patent expiry for Casodex.

In Germany, sales were up 3% (-2% reported) to $1,278 million (2008: $1,307 million) with good growth in Atacand, Symbicort and Seroquel offsetting the continued declines in Nexium, resulting from government restrictions to access, and Casodex following patent expiry.

As a result of the weak pound sterling and its impact on export sales through parallel trade, in the UK sales were up 27% (+6% reported) to $1,082 million (2008: $1,020 million) driven by Crestor (up 62%, +35% reported), Seroquel (up 64%, +35% reported), Symbicort (up 42%, +18% reported) and Nexium (up 95%, +59% reported).

In Italy, overall sales declined by 3% (-9% reported) to $1,199 million (2008: $1,323 million) as a result of reference pricing and Casodex patent expiry. However, Crestor performed well, increasing its sales by 8% (+3% reported) and Seroquel showed strong growth, increasing sales by 36% (+28% reported).

In Spain, sales were down 6% (-11% reported) to $768 million (2008: $863 million) due to Seroquel (down 17%, -21% reported), Symbicort (down 3%, -9% reported) and Arimidex (down 30%, -33% reported). However, Nexium performed well with sales up 15% (+9% reported).

Most governments in Europe intervene directly to control the price and reimbursement of medicines. The decision-making power of prescribers in Europe has been eroded in favour of a diverse range of payers. While the systems to control pharmaceutical spending vary, they have all had a noticeable negative impact on the uptake and availability of innovative medicines. Several governments have imposed price reductions and increased the use of generic medicines as part of healthcare expenditure control. Several countries are applying strict tests of cost-effectiveness to medicines, which has reduced access for European patients to medicines in areas of high unmet medical need. These and other measures all contribute to an increasingly difficult environment for branded pharmaceuticals in Europe.

Japan

In Japan, strong volume gains of 8.3% increased overall sales by 7% (+20% reported) to $2,341 million (2008: $1,957 million) and allowed us to maintain our twelfth place position in the market. This was achieved despite a decline of 5% (+6% reported) of Casodex, our largest product in Japan, following the launch of generic competitors in May 2009. The key drivers of growth were the continued success of Crestor (up 58%, +76% reported), the continued growth of Losec (up 8%, +20% reported) and the increased penetration of Seroquel (up 25%, +39% reported).

In addition, future growth prospects received a boost in 2009 with the approval of Symbicort Turbuhaler for the Japanese market. Symbicort Turbuhaler was launched in January 2010 into an asthma market where the proportion of patients treated by inhaled corticosteroids is growing but lags behind other major markets by five to 10 years. Symbicort Turbuhaler is being promoted in Japan by both AstraZeneca and Astellas.

In Japan there is formal central government control of prices by the Ministry of Health, Labour and Welfare (MHLW) and the pricing and reimbursement system has been stable in recent years. Regular price revisions are imposed in April every other year that reduce the reimbursement price of almost all products. Accordingly, prices were not revised in 2009, but will be in 2010. At the same time, it is expected that in April 2010, a new pricing rule will be adopted on a trial basis to reward the development of innovative new products. Under this rule, new products with a below industry-average doctor margin will be subject to either a zero or a significantly reduced price revision, as long as the manufacturer has demonstrated appropriate progress in developing unapproved products and indications requested by the government. The long-term objective of the Japanese government is to raise generic volume share from 20.9% in 2008 to 30% by 2012; recent reforms have supported this goal by making the substitution of a generic product for a branded product easier.

Australasia

In Australia and New Zealand, we delivered a strong sales performance with sales up 12% (+1% reported) to $853 million (2008: $843 million), driven mainly by sales growth for Crestor, Atacand, Nexium, Seroquel and Symbicort. These five brands grew by 26% (+14% reported). Crestor's performance in Australia has been particularly strong, gaining over 6% volume market share in the year.

Emerging Markets

In the Emerging Markets, sales increased by 12% (+2% reported) to $4,352 million (2008: $4,273 million), accounting for nearly 49% of total sales growth outside the US. Sales in Emerging Europe were up 7% (-10% reported) to $1,091 million (2008: $1,215 million). Sales in China (excluding Hong Kong) increased by 27% (+29% reported) to $811 million (2008: $627 million).

In many of the larger markets, such as Brazil and Mexico, patients tend to pay directly for prescription medicines and consequently these markets are at less risk of direct government interventions on pricing and reimbursement. In other markets such as South Korea, Taiwan and Turkey where governments do pay for medicines, we are seeing measures to reduce the cost of prescriptions in line with the systems in Europe, Canada and Australia.

Emerging Europe

As part of our ongoing growth strategy, we have significantly increased our presence in the Russian market and sales have grown by 23% (-2% reported) to $180 million (2008: $184 million). The strongest performance has been seen in the cardiovascular (up 61%, +26% reported) and respiratory (up 33%, +6% reported) Therapy Areas.

In Romania, AstraZeneca has increased its market share to 3.3% in a very dynamic prescription market environment. Sales have increased by 51% (+29% reported) to $92 million (2008: $71 million), driven primarily by Crestor (up 54%, +29% reported) and Nexium (up 59%, +36% reported).

In late 2009 the government in Turkey imposed unprecedented levels of price reductions on the pharmaceutical industry. As a result our full-year growth was limited to 6%.

Ukraine, Kazakhstan, Belarus and Georgia have been particularly challenged by the financial crisis, most notably in Ukraine, although the pharmaceutical sector has been less affected than others by the GDP decline.

China

In China, in line with our growth and expansion strategy of the past five years, we have continued to build our presence and sales (excluding Hong Kong) were up 27% (+29% reported) to $811 million (2008: $627 million). We are the second largest multinational pharmaceutical company in the prescription market in China (including Hong Kong) with a growth rate for prescription sales of 29%. Our investment in China increased with further growth in the number of sales representatives, and continued to support our innovation discovery research centre in Shanghai and our several external collaborations.

In November, the third edition of China's National Reimbursable Drugs List (NRDL) was published by the Ministry of Human Resources and Social Security (MHRSS), five years after the publication of the second edition in 2005. 131 new 'western' medicines were added to the list, representing a 13% increase. For AstraZeneca Crestor, Nexium i.v., Symbicort and Seloken XR were included on the list for the first time whilst previous restrictions that applied to Arimidex, Casodex and Zoladex were removed. Based on the current guidelines issued by MHRSS, we expect the new list to be operational at the provincial and hospital level in the second half of 2010.

In August, China's National Essential Drug System (NEDL) was officially launched. This formulary lists 307 essential drugs (205 chemical and biologics and 102 formulated traditional Chinese medicines) which should be used in all government owned healthcare institutions. Seloken and Losec MUPS are listed in the NEDL. The Chinese Government has a target that by the end of 2009, 30% of basic healthcare institutions (ie community health centres and rural hospitals) will stock all drugs listed in the NEDL.

Emerging Asia Pacific

In Emerging Asia Pacific, overall sales were up 6% (-3% reported) to $780 million (2008: $802 million) with double-digit growth in India, Malaysia and Vietnam and a more subdued performance in Thailand, the Philippines and Singapore due to the more pronounced impact of the economic crisis and government interventions in these countries.

Other Emerging markets

Latin America

During 2009, GDP growth in Latin America slowed significantly to -2.1% from 4.2% in 2008, as a result of the global financial crisis. The pharmaceutical market in Latin America grew by 12% compared to 2008 and AstraZeneca's sales grew 8% (-4% reported) to $1,118 million (2008: $1,159 million), mainly driven by Brazil, Argentina and Venezuela. As a result, our market share grew to 2.4% (2008: 2.3%) in the prescription market, improving our position again from eleventh last year to tenth this year in the regional competitor rankings.

Atacand, Crestor, Nexium, Seroquel and Symbicort showed strong performance, with overall sales up 17% (+5% reported) to $544 million (2008: $516 million). Nexium is our number one prescription product in Latin America, with sales up 4% (-5% reported) to $175 million (2008: $185 million), and is ranked fourth in the top 20 products of the Latin American prescription market. Crestor is our second largest prescription product, with overall sales up 27% (+14% reported) to $146 million (2008: $128 million), and is now number seven in the top 20 Latin American prescription products.

Brazil, Mexico and Venezuela are our three largest markets in the region, with sales up 18% (+4% reported) to $457 million (2008: $440 million), down 9% (-26% reported) to $261 million (2008: $353 million) and up 15% (+15% reported) to $163 million (2008: $142 million), respectively. Mexico in particular has been heavily impacted by the global financial crisis as a result of its reliance on the US economy.

Middle East and Africa (MEA)

During 2009, MEA has achieved strong growth essentially driven by Maghreb and Egypt. Our largest three markets in the region are now South Africa, the Gulf States and Saudi Arabia.

Sales force expansion in MEA over the past few years has directly contributed to this strong performance in the region, with Crestor, Symbicort and Seroquel demonstrating growth. Overall, AstraZeneca's sales in MEA are growing twice as fast as the pharmaceutical market in MEA.