HOSPIRA (HSP)

Competition

        Hospira's industry is highly competitive. Hospira believes that the most effective competitors in its industry are focused on product quality and performance, breadth of product offering, manufacturing efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care in an environment that requires increasing levels of efficiency and productivity.

        Hospira's most significant competitors in specialty injectable pharmaceuticals include Fresenius AG, Baxter International Inc. ("Baxter"), Bedford Laboratories (a division of Boehringer Ingelheim), Sandoz, Teva Pharmaceuticals ("Teva"), as well as divisions of several multinational pharmaceutical companies. Local manufacturers of specialty injectable pharmaceuticals also compete with Hospira on a

8

Table of Contents

country-by-country basis. Hospira's most significant competitors in medication management systems include Cardinal Healthcare Inc., Baxter, B. Braun Melsungen AG, and Fresenius Medical Care AG.

        Hospira believes that it is one of the leading competitors, in terms of U.S. market share, in each of its major product lines, and believes that its size, scale, customer relationships and breadth of product line are significant contributors to its market positions. Hospira believes that to further its competitive position it must continue to invest significantly in, and successfully execute, its research and product development activities, and optimize its manufacturing efficiency and productivity. Particularly, within its specialty injectable product line, Hospira seeks to maximize its opportunity to establish a "first-to-market" position for its generic injectable drugs and, within its medication management systems product line, Hospira seeks to differentiate its products through technological innovation and an integrated approach to drug delivery. These efforts will depend heavily on the success of Hospira's research and development programs.

        The use of generic pharmaceuticals in the EMEA segment is subject to variations in the structure of health care systems (including purchasing practices) and government policies regarding the use of generic products and pricing, which all lead to differing levels of customer acceptance. There are different policies and levels of generic penetration in each country in the EMEA, causing the competition for generic pharmaceuticals to differ widely. In EMEA, competitors tend to vary by country and are often smaller in scale than those in the United States, although some consolidation and geographic expansion is now occurring. Teva is the largest company that competes with Hospira in the generic oncology market across Europe. Hospira's other key competitors vary from country to country.

        The use of generic pharmaceuticals in the APAC segment is subject to variations in government policies and public perception. In Australia, generic penetration is moderate and growing primarily due to changes in government support. Competitors include Sandoz and Teva, a number of smaller competitors and the innovator companies. In Asia, Hospira sells its products primarily to public and private hospitals. Hospira's competition in Asia tends to be with the innovator companies and multinational companies such as Teva. In Japan, the market share of generic pharmaceutical products traditionally has been low because of quality perceptions, product format and other regulatory differences in comparison to other markets. The Japanese government is actively pursuing a program to double generic usage within the next five years. Laws in Japan have been introduced to allow for easier substitution of generics for branded pharmaceuticals and to change financial incentives for hospitals and clinics to use generics, in a government sponsored effort to reduce costs, which is believed to have resulted in an increased acceptance of generic pharmaceutical products.

Competition

        Hospira's industry is highly competitive. Hospira believes that the most effective competitors in its industry are focused on product
quality and performance, breadth of product offering, manufacturing efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care
in an environment that requires increasing levels of efficiency and productivity.

        Hospira's
most significant competitors in specialty injectable pharmaceuticals include Fresenius AG, Baxter International Inc. ("Baxter"), Bedford Laboratories (a division of
Boehringer Ingelheim), Sandoz, Teva Pharmaceuticals ("Teva"), as well as divisions of several multinational pharmaceutical companies. Local manufacturers of specialty injectable pharmaceuticals also
compete with Hospira on a

8

HREF="#bg49501a_main_toc">Table of Contents

country-by-country
basis. Hospira's most significant competitors in medication management systems include Cardinal Healthcare Inc., Baxter, B. Braun Melsungen AG, and
Fresenius Medical Care AG.

        Hospira
believes that it is one of the leading competitors, in terms of U.S. market share, in each of its major product lines, and believes that its size, scale, customer relationships
and breadth of product line are significant contributors to its market positions. Hospira believes that to further its competitive position it must continue to invest significantly in, and
successfully execute, its research and product
development activities, and optimize its manufacturing efficiency and productivity. Particularly, within its specialty injectable product line, Hospira seeks to maximize its opportunity to establish a
"first-to-market" position for its generic injectable drugs and, within its medication management systems product line, Hospira seeks to differentiate its products through
technological innovation and an integrated approach to drug delivery. These efforts will depend heavily on the success of Hospira's research and development programs.

        The
use of generic pharmaceuticals in the EMEA segment is subject to variations in the structure of health care systems (including purchasing practices) and government policies regarding
the use of generic products and pricing, which all lead to differing levels of customer acceptance. There are different policies and levels of generic penetration in each country in the EMEA, causing
the competition for generic pharmaceuticals to differ widely. In EMEA, competitors tend to vary by country and are often smaller in scale than those in the United States, although some consolidation
and geographic expansion is now occurring. Teva is the largest company that competes with Hospira in the generic oncology market across Europe. Hospira's other key competitors vary from country to
country.

        The
use of generic pharmaceuticals in the APAC segment is subject to variations in government policies and public perception. In Australia, generic penetration is moderate and growing
primarily due to changes in government support. Competitors include Sandoz and Teva, a number of smaller competitors and the innovator companies. In Asia, Hospira sells its products primarily to
public and private hospitals. Hospira's competition in Asia tends to be with the innovator companies and multinational companies such as Teva. In Japan, the market share of generic pharmaceutical
products traditionally has been low because of quality perceptions, product format and other regulatory differences in comparison to other markets. The Japanese government is actively pursuing a
program to double generic usage within the next five years. Laws in Japan have been introduced to allow for easier substitution of generics for branded pharmaceuticals and to change financial
incentives for hospitals and clinics to use generics, in a government sponsored effort to reduce costs, which is believed to have resulted in an increased acceptance of generic pharmaceutical
products.

Competition

        Hospira's industry is highly competitive. Hospira believes that the most effective competitors in its industry are focused on product
quality and performance, breadth of product offering, manufacturing efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care
in an environment that requires increasing levels of efficiency and productivity.

        Hospira's
most significant competitors in specialty injectable pharmaceuticals include Fresenius AG, Baxter International Inc. ("Baxter"), Bedford Laboratories (a division of
Boehringer Ingelheim), Sandoz, Teva Pharmaceuticals ("Teva"), as well as divisions of several multinational pharmaceutical companies. Local manufacturers of specialty injectable pharmaceuticals also
compete with Hospira on a

8

HREF="#bg49501a_main_toc">Table of Contents

country-by-country
basis. Hospira's most significant competitors in medication management systems include Cardinal Healthcare Inc., Baxter, B. Braun Melsungen AG, and
Fresenius Medical Care AG.

        Hospira
believes that it is one of the leading competitors, in terms of U.S. market share, in each of its major product lines, and believes that its size, scale, customer relationships
and breadth of product line are significant contributors to its market positions. Hospira believes that to further its competitive position it must continue to invest significantly in, and
successfully execute, its research and product
development activities, and optimize its manufacturing efficiency and productivity. Particularly, within its specialty injectable product line, Hospira seeks to maximize its opportunity to establish a
"first-to-market" position for its generic injectable drugs and, within its medication management systems product line, Hospira seeks to differentiate its products through
technological innovation and an integrated approach to drug delivery. These efforts will depend heavily on the success of Hospira's research and development programs.

        The
use of generic pharmaceuticals in the EMEA segment is subject to variations in the structure of health care systems (including purchasing practices) and government policies regarding
the use of generic products and pricing, which all lead to differing levels of customer acceptance. There are different policies and levels of generic penetration in each country in the EMEA, causing
the competition for generic pharmaceuticals to differ widely. In EMEA, competitors tend to vary by country and are often smaller in scale than those in the United States, although some consolidation
and geographic expansion is now occurring. Teva is the largest company that competes with Hospira in the generic oncology market across Europe. Hospira's other key competitors vary from country to
country.

        The
use of generic pharmaceuticals in the APAC segment is subject to variations in government policies and public perception. In Australia, generic penetration is moderate and growing
primarily due to changes in government support. Competitors include Sandoz and Teva, a number of smaller competitors and the innovator companies. In Asia, Hospira sells its products primarily to
public and private hospitals. Hospira's competition in Asia tends to be with the innovator companies and multinational companies such as Teva. In Japan, the market share of generic pharmaceutical
products traditionally has been low because of quality perceptions, product format and other regulatory differences in comparison to other markets. The Japanese government is actively pursuing a
program to double generic usage within the next five years. Laws in Japan have been introduced to allow for easier substitution of generics for branded pharmaceuticals and to change financial
incentives for hospitals and clinics to use generics, in a government sponsored effort to reduce costs, which is believed to have resulted in an increased acceptance of generic pharmaceutical
products.

Competition

        Hospira's industry is highly competitive. Hospira competes with many companies, both public and private, that range from small, highly focused companies to large diversified healthcare manufacturers. Hospira believes that the most effective competitors in its industry are focused on product quality and performance, breadth of product offering, manufacturing efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care in an environment that requires increasing levels of efficiency and productivity.

        Hospira's most significant competitors in specialty injectable pharmaceuticals include APP Pharmaceuticals, Inc., Baxter International Inc., Bedford Laboratories (a division of Boehringer Ingelheim), Sandoz and Teva Pharmaceuticals, as well as divisions of several multinational pharmaceutical companies. Local manufacturers of specialty injectable pharmaceuticals also compete with Hospira on a country-by-country basis. Hospira's most significant competitors in medication delivery systems include Baxter, B. Braun Melsungen AG, Cardinal Healthcare Inc., Fresenius Medical Care AG and Terumo Medical Corporation. Baxter, Patheon, Inc. and Catelent Pharma Solutions are significant competitors of Hospira's contract manufacturing business. Edwards Lifesciences Corporation is a significant competitor in critical care monitoring devices.

        Hospira believes that it is one of the leading competitors, in terms of U.S. market share, in each of its major product lines, and believes that its size, scale, customer relationships and breadth of product line are significant contributors to its market positions. Hospira believes that to further its competitive position it must continue to invest significantly in, and successfully execute, its research and product development activities, optimize its manufacturing efficiency and productivity, increase its international presence and successfully integrate Mayne Pharma's business into its operations. Particularly, within its specialty injectable product line, Hospira seeks to maximize its opportunity to establish a "first-to-market" position for its generic injectable drugs and, within its medication delivery systems product line, Hospira seeks to differentiate its products through technological innovation and an integrated approach to drug delivery. These efforts will depend heavily on the success of Hospira's research and development programs.

        Generic penetration rates in Europe vary due to wide variations in the structure of health care systems (including purchasing practices) and government policies regarding the use of generic products and pricing, which all lead to differing levels of customer acceptance. Because the European market is fragmented, with different policies and levels of generic penetration in each country, the competition for generic pharmaceuticals differs widely. In general, the United States is a largely homogenous market with a higher level of generic drug usage. In Europe, competitors tend to vary by country and are often smaller in scale than those in the United States, although some consolidation and geographic expansion is now occurring. Teva is the largest company that competes with Hospira in the generic oncology market across Europe. Hospira's other key competitors vary from country to country.

        In Australia, generic penetration is growing primarily due to changes in government support. Laws have been introduced to allow for easier compulsory substitution of generic for branded pharmaceuticals, as a response to pressure to reduce costs, which is believed to have resulted in an increased acceptance of generic pharmaceutical products. Competitors include the Sandoz division of Novartis, a number of smaller competitors and the innovator companies. In the Asian region, Hospira sells its products primarily to public and private hospitals. Hospira's competition in the Asian region tends to be with the innovator companies rather than local generic competitors. In Japan, the market share of generic pharmaceutical products traditionally has been low because of quality perceptions, product format and other regulatory differences to other markets. The Japanese government is actively pursuing a program to double generic usage within the next five years.

8

Patents, Trademarks and Other Intellectual Property

        When possible, Hospira seeks patent and trademark protection for its products. Hospira owns, or has licenses under, a substantial number of patents, patent applications, trademarks and trademark applications. However, Hospira does not consider any one or more of these patents, patent applications, trademarks and trademark applications to be material in relation to its business as a whole. Hospira is actively pursuing a strategy of challenging the intellectual property of proprietary pharmaceutical companies in an effort to be the first generic company to the market for certain drug compounds.

Competition

        Hospira's industry is highly competitive. Hospira competes with many companies, both public and private, that range from small, highly focused companies to large
diversified healthcare manufacturers. Hospira believes that the most effective competitors in its industry are focused on product quality and performance, breadth of product offering, manufacturing
efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care in an environment that requires increasing levels of efficiency and
productivity.

        Hospira's
most significant competitors in specialty injectable pharmaceuticals include APP Pharmaceuticals, Inc., Baxter International Inc., Bedford Laboratories (a
division of Boehringer Ingelheim), Sandoz and Teva Pharmaceuticals, as well as divisions of several multinational pharmaceutical companies. Local manufacturers of specialty injectable pharmaceuticals
also compete with Hospira on a country-by-country basis. Hospira's most significant competitors in medication delivery systems include Baxter, B. Braun Melsungen AG, Cardinal
Healthcare Inc., Fresenius Medical Care AG and Terumo Medical Corporation. Baxter, Patheon, Inc. and Catelent Pharma Solutions are significant competitors of Hospira's contract
manufacturing business. Edwards Lifesciences Corporation is a significant competitor in critical care monitoring devices.

        Hospira
believes that it is one of the leading competitors, in terms of U.S. market share, in each of its major product lines, and believes that its size, scale, customer relationships
and breadth of product line are significant contributors to its market positions. Hospira believes that to further its competitive position it must continue to invest significantly in, and
successfully execute, its research and product development activities, optimize its manufacturing efficiency and productivity, increase its international presence and successfully integrate Mayne
Pharma's business into its operations. Particularly, within its specialty injectable product line, Hospira seeks to maximize its opportunity to establish a "first-to-market"
position for its generic injectable drugs and, within its medication delivery systems product line, Hospira seeks to differentiate its products through technological innovation and an integrated
approach to drug delivery. These efforts will depend heavily on the success of Hospira's research and development programs.

        Generic
penetration rates in Europe vary due to wide variations in the structure of health care systems (including purchasing practices) and government policies regarding the use of
generic products and pricing, which all lead to differing levels of customer acceptance. Because the European market is fragmented, with different policies and levels of generic penetration in each
country, the competition for generic pharmaceuticals differs widely. In general, the United States is a largely homogenous market with a higher level of generic drug usage. In Europe, competitors tend
to vary by country and are often smaller in scale than those in the United States, although some consolidation and geographic expansion is now occurring. Teva is the largest company that competes with
Hospira in the generic oncology market across Europe. Hospira's other key competitors vary from country to country.

        In
Australia, generic penetration is growing primarily due to changes in government support. Laws have been introduced to allow for easier compulsory substitution of generic for branded
pharmaceuticals, as a response to pressure to reduce costs, which is believed to have resulted in an increased acceptance of generic pharmaceutical products. Competitors include the Sandoz division of
Novartis, a number of smaller competitors and the innovator companies. In the Asian region, Hospira sells its products primarily to public and private hospitals. Hospira's competition in the Asian
region tends to be with the innovator companies rather than local generic competitors. In Japan, the market share of generic pharmaceutical products traditionally has been low because of quality
perceptions, product format and other regulatory differences to other markets. The Japanese government is actively pursuing a program to double generic usage within the next five years.

8

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Patents, Trademarks and Other Intellectual Property

        When possible, Hospira seeks patent and trademark protection for its products. Hospira owns, or has licenses under, a substantial number of patents, patent
applications, trademarks and trademark applications. However, Hospira does not consider any one or more of these patents, patent applications, trademarks and trademark applications to be material in
relation to its business as a whole. Hospira is actively pursuing a strategy of challenging the intellectual property of proprietary pharmaceutical companies in an effort to be the first generic
company to the market for certain drug compounds.

Competition

Hospira’s industry is highly competitive. Hospira competes with many companies, both public and private, that range from small, highly focused companies to large diversified healthcare manufacturers. Hospira believes that the most effective competitors in its industry are focused on product quality and performance, breadth of product offering, manufacturing efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care in an environment that requires increasing levels of efficiency and productivity.

Hospira’s most significant competitors in specialty injectable pharmaceuticals include Abraxis BioScience, Inc., Baxter International Inc. and Teva Pharmaceuticals, as well as divisions of several multinational pharmaceutical companies. Local manufacturers of specialty injectable pharmaceuticals also compete with Hospira on a country-by-country basis. Hospira’s most significant competitors in medication delivery systems include Baxter, Becton, Dickinson and Company, B. Braun Melsungen AG, Cardinal Healthcare Inc., Fresenius Medical Care AG and Terumo Medical Corporation. Baxter, Cardinal and Patheon, Inc. are significant competitors of Hospira’s contract manufacturing business. Edwards Lifesciences Corporation is a significant competitor in critical care monitoring devices.

Hospira believes that it is one of the leading competitors, in terms of U.S. market share, in each of its major product lines, and believes that its size, scale, customer relationships and breadth of product line are significant contributors to its market positions. Hospira believes that it must continue to invest significantly in, and successfully execute, its research and product development activities, optimize its manufacturing efficiency and productivity, increase its international presence and successfully integrate Mayne Pharma’s business into its operations to further its competitive position. Particularly, within its specialty injectable product line, Hospira seeks to maximize its opportunity to establish a “first-to-market” position for its generic injectable drugs and, within its medication delivery systems product line, Hospira seeks to differentiate its products through technological innovation and an integrated approach to drug delivery. These efforts will depend heavily on the success of Hospira’s research and development programs.

Competition

        Hospira's industry is highly competitive. Hospira competes with many companies, both public and private, that range from small, highly focused companies to large diversified healthcare manufacturers. Hospira believes that the most effective competitors in its industry are focused on product quality and performance, breadth of product offering, manufacturing efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care in an environment that requires increasing levels of efficiency and productivity.

        Hospira's competitors in medication delivery systems include Baxter International Inc., Becton, Dickinson and Company, B. Braun Melsungen AG, Cardinal Healthcare Inc., Fresenius Medical Care AG and Terumo Medical Corporation. Competitors in specialty injectable pharmaceuticals include American Pharmaceutical Partners, Inc., Baxter and Teva Pharmaceuticals, as well as divisions of several multinational pharmaceutical companies. Baxter, Cardinal and Patheon, Inc. are significant competitors of Hospira's contract manufacturing business. Edwards Lifesciences Corporation is a significant competitor in critical care monitoring devices. Local manufacturers of specialty injectable pharmaceuticals also compete with Hospira on a country-by-country basis.

        Hospira believes that it is one of the leading competitors in terms of U.S. market share in each of its major product lines, and believes that its size, scale, customer relationships and breadth of product line are significant contributors to its market positions. Hospira believes that it must continue to invest

10

significantly in research and product development activities, optimize its manufacturing efficiency and productivity, and increase its international presence to further its competitive position. Particularly, within its specialty injectable product line, Hospira seeks to maximize its opportunity to introduce generic injectable drugs on the day of patent expiration and, within its medication delivery systems product line, Hospira seeks to differentiate its products through technological innovation and an integrated approach to drug delivery. These efforts will depend heavily on the success of Hospira's research and development programs.

Competition

        Hospira's industry is highly competitive. Hospira competes with many companies, both public and private, that range from small, highly focused companies to large diversified healthcare manufacturers. Hospira believes that the most effective competitors in its industry are focused on product quality and performance, breadth of product offering, manufacturing efficiency and the ability to develop and deliver cost-effective products that help hospitals provide high quality care in an environment that requires increasing levels of efficiency and productivity.

        Hospira's competitors in medication delivery systems include Baxter International Inc., Becton Dickinson and Company, B. Braun Melsungen AG, Cardinal Healthcare Inc., Fresenius Medical Care

17

AG and Terumo Medical Corporation. Competitors in specialty injectable pharmaceuticals include American Pharmaceutical Partners, Inc., Baxter and Teva Pharmaceuticals, as well as divisions of several multinational pharmaceutical companies. Baxter, Cardinal and Patheon, Inc. are significant competitors of Hospira's contract manufacturing business. Edwards Lifesciences Corporation is a significant competitor in critical care monitoring devices. Local manufacturers of specialty injectable pharmaceuticals also compete with Hospira on a country-by-country basis.