United states securities and exchange commission

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Laws and regulations have been enacted by the 
federal government and various states to regulate the 
sales and marketing practices of pharmaceutical 
manufacturers. The laws and regulations generally 
limit financial interactions between manufacturers and 
health care providers or require disclosure to the 
government and public of such interactions. The laws 
include federal “sunshine” provisions. The sunshine 
provisions apply to pharmaceutical manufacturers 
with products reimbursed under certain government 
programs and require those manufacturers to 
disclose annually to the federal government (for re-
disclosure to the public) certain payments made to 
physicians and certain other healthcare practitioners 
or to teaching hospitals. State laws may also require 
disclosure of pharmaceutical pricing information and 
marketing expenditures. Many of these laws and 
regulations contain ambiguous requirements. Given 
the lack of clarity in laws and their implementation, 
our reporting actions could be subject to the penalty 
provisions of the pertinent federal and state laws and 
regulations. Outside the U.S., other countries have 
implemented requirements for disclosure of financial 
interactions with healthcare providers and additional 
countries may consider or implement such laws.
Other Regulations
Foreign Anti-Corruption
We are subject to various federal and foreign 
laws that govern our international business practices 
with respect to payments to government officials. 
Those laws include the U.S. Foreign Corrupt Practices 
Act (FCPA), which prohibits U.S. companies and their 
representatives from paying, offering to pay, promising 
to pay or authorizing the payment of anything of value 
to any foreign government official, government staff 
member, political party or political candidate for the 
purpose of obtaining or retaining business or to 
otherwise obtain favorable treatment or influence a 
person working in an official capacity. In many 
countries, the health care professionals we regularly 
interact with may meet the FCPA's definition of a 
foreign government official. The FCPA also requires 
public companies to make and keep books and 
records that accurately and fairly reflect their 
transactions and to devise and maintain an adequate 
system of internal accounting controls.
The laws to which we are subject also include 
the U.K. Bribery Act 2010 (Bribery Act), which 
proscribes giving and receiving bribes in the public 
and private sectors, bribing a foreign public official 
and failing to have adequate procedures to prevent 
employees and other agents from giving bribes. U.S. 
companies that conduct business in the U.K. 
generally will be subject to the Bribery Act. Penalties 
under the Bribery Act include significant fines for 
companies and criminal sanctions for corporate 
officers under certain circumstances.
NIH Guidelines
We seek to conduct research at our U.S. 
facilities in compliance with the current U.S. National 
Institutes of Health Guidelines for Research Involving 
Recombinant DNA Molecules (NIH Guidelines). By 
local ordinance, we are required to, among other 
things, comply with the NIH Guidelines in relation to 
our facilities in Research Triangle Park (RTP), NC and 
are required to operate pursuant to certain permits.
Other Laws
Our present and future business has been and 
will continue to be subject to various other laws and 
regulations. Various laws, regulations and 
recommendations relating to data privacy and 
protection, safe working conditions, laboratory 
practices, the experimental use of animals and the 
purchase, storage, movement, import, export and use 
and disposal of hazardous or potentially hazardous 
substances, including radioactive compounds and 
infectious disease agents, used in connection with 
our research work are or may be applicable to our 
activities. Certain agreements entered into by us 
involving exclusive license rights may be subject to 
national or international antitrust regulatory control, 
the effect of which cannot be predicted. The extent of 
government regulation, which might result from future 
legislation or administrative action, cannot accurately 
be predicted.
The European Parliament and the Council of the 
European Union adopted a comprehensive general 
data privacy regulation (GDPR) in 2016 to replace the 
current E.U. Data Protection Directive and related 
country-specific legislation. The GDPR will take effect 
in May 2018 and governs the collection and use of 
personal data in the E.U. The GDPR, which is wide-
ranging in scope, will impose several requirements 
relating to the consent of the individuals to whom the 
personal data relates, the information provided to the 
individuals, the security and confidentiality of the 
personal data, data breach notification and the use of 
third party processors in connection with the 
processing of the personal data. The GDPR will also 
impose strict rules on the transfer of personal data 
out of the E.U. to the U.S., will provide an 
enforcement authority and will impose large penalties 
for noncompliance, including the potential for fines of 
up to €20 million or 4% of the annual global revenues 
of the infringer, whichever is greater.

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Environmental Matters
We strive to comply in all material respects with 
applicable laws and regulations concerning the 
environment. While it is impossible to predict 
accurately the future costs associated with 
environmental compliance and potential remediation 
activities, compliance with environmental laws is not 
expected to require significant capital expenditures 
and has not had, and is not expected to have, a 
material adverse effect on our operations or 
competitive position.
Manufacturing
We are committed to ensuring an uninterrupted 
supply of medicines to patients around the world. To 
that end, we continually review our manufacturing 
capacity, capabilities, processes and facilities. We 
believe that our manufacturing facilities, together with 
the third-party contract manufacturing organizations 
we outsource to, currently provide sufficient capacity 
for our products and the contract manufacturing 
services we provide to Samsung Bioepis, our joint 
venture that develops, manufactures and markets 
biosimilars, and other strategic contract 
manufacturing partners. In light of the development of 
our pipeline, we are expanding our production capacity 
by building a large-scale biologics manufacturing 
facility in Solothurn, Switzerland. We expect this 
facility to be operational by the end of the decade.
Manufacturing Facilities
Our drug substance manufacturing facilities 
include:
Facility
Drug Substance Manufactured
RTP, North Carolina
ALPROLIX
AVONEX
ELOCTATE
PLEGRIDY
TYSABRI
ZINBRYTA
Other*
Hillerød, Denmark
TYSABRI
Biosimilars
* Other includes products manufactured for contract 
manufacturing partners
In addition to our drug substance manufacturing 
facilities, we have a drug product manufacturing 
facility and supporting infrastructure in RTP, NC 
including a parenteral facility and an oral solid dose 
products manufacturing facility. 
The parenteral facility adds capabilities and 
capacity for filling biologics into vials and is principally 
used for filling product candidates. The oral solid 
dose products facility supplements our outsourced 
small molecule manufacturing capabilities, including 
the manufacture of TECFIDERA.
We also have a new oligonucleotide synthesis 
manufacturing (OSM) facility in RTP, NC. This facility 
gives us the capability to manufacture ASO drugs like 
SPINRAZA as well as our other ASO candidates 
currently in our clinical pipeline.
During the first quarter of 2016 we purchased 
land in Solothurn, Switzerland and are building a 
large-scale biologics manufacturing facility at this site. 
We expect this facility to be operational by the end of 
the decade. 
Genentech is responsible for all worldwide 
manufacturing activities for bulk RITUXAN and GAZYVA 
and has sourced the manufacture of certain bulk 
RITUXAN and GAZYVA requirements to a third party. 
Acorda supplies FAMPYRA to us pursuant to its supply 
agreement with Alkermes, Inc. and Ionis supplies the 
active pharmaceutical ingredient (API) for SPINRAZA.
Third-Party Suppliers and Manufacturers
We principally use third parties to manufacture 
the API and the final product for our small molecule 
products and product candidates, including 
TECFIDERA and FUMADERM, and the final drug 
product for our large molecule products and, to a 
lesser extent, product candidates. 
We source all of our fill-finish and the majority of 
final product assembly and storage operations for our 
products, along with a substantial part of our 
packaging operations, to a concentrated group of 
third-party contract manufacturing organizations. We 
have internal label and packaging capability for clinical 
and commercial products at our Hillerød facility. Raw 
materials, delivery devices, such as syringes and 
auto-injectors, and other supplies required for the 
production of our products and product candidates 
are procured from various third-party suppliers and 
manufacturers in quantities adequate to meet our 
needs. Continuity of supply of such raw materials, 
devices and supplies is assured using a strategy of 
dual sourcing where possible or by a risk-based 
inventory strategy. Our third-party service providers, 
suppliers and manufacturers may be subject to 
routine cGMP inspections by the FDA or comparable 
agencies in other jurisdictions and undergo 
assessment and certification by our quality 
management group.

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