Restructuring

6 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

In fiscal 2023, the Company completed a prioritization of its research and development (R&D) investment within its Innovative Medicine segment to focus on the most promising medicines with the greatest benefit to patients. This resulted in the exit of certain programs within certain therapeutic areas. The R&D program exits are primarily in infectious diseases and vaccines including the discontinuation of its respiratory syncytial virus (RSV) adult vaccine program, hepatitis and HIV development. Pre-tax Restructuring income of $0.1 billion in the fiscal second quarter of 2024 and $0.1 billion of expense in the fiscal six months of 2024, included asset divestments, the termination of partnered and non-partnered development program costs and asset impairments. The pre-tax restructuring charge of approximately $0.1 billion and $0.3 billion in the fiscal second quarter and fiscal six months of 2023, respectively, included the termination of partnered and non-partnered program costs and asset impairments. Total project costs of approximately $0.6 billion have been recorded since the restructuring was announced. The majority of this restructuring program is completed, with minor charges expected in the remainder of year.

In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pre-tax restructuring expense of $0.1 billion and $0.1 billion in the fiscal second quarter and fiscal six months of 2024, respectively, primarily included costs related to market and product exits. Total project costs of approximately $0.4 billion have been recorded since the restructuring was announced. The estimated costs of the total program are between $0.7 billion - $0.8 billion and is expected to be completed by the end of fiscal year 2025.

The following table summarizes the restructuring (income) expenses for 2024:


(Pre-tax Dollars in Millions)	Fiscal Second Quarter Ended	Fiscal Six Months Ended
Innovative Medicine Segment(1)	$(63)	81
MedTech Segment(2)	52	79
Total Programs	$(11)	160

(1)Included in Restructuring on the Consolidated Statement of Earnings

(2)The fiscal second quarter of 2024 included $50 million in Restructuring and $2 million in Cost of products sold on the Consolidated Statement of Earnings. The fiscal six months of 2024 included $70 million in Restructuring and $9 million in Cost of products sold on the Consolidated Statement of Earnings.

Restructuring reserves as of June 30, 2024 and December 31, 2023 were insignificant.