UCB SA - BNP Paribas Fortis

other U.S. federal and state government agencies, continue to seek price discounts. As proposed, the
U.S. healthcare reform bill increases the rebates on pharmaceutical products for government plans,
including Medicare and Medicaid. Some states have implemented, and other states are considering
price controls or patient access constraints under the Medicaid programme, and some states are
considering price-control regimes that would apply to broader segments of their populations that are not
Medicaid eligible.
The international patchwork of price regulation has led to different prices in different markets, and
consequently there has been some third party trade in the UCB Group’s products from markets with
lower prices. Such trade exploiting price differences between countries can undermine sales in markets
with higher prices. As a result, it is expected that pressures on the pricing component of operating
results will continue.
The UCB Group operates in a heavily regulatory environment worldwide. Every aspect of its business
is regulated by laws of the countries within which it conducts its business from clinical research and
development, to manufacturing, to marketing and promotion of products in the market place, to pricing,
and to pricing reporting. Any non-compliance with the laws can result in lengthy and costly
investigations and litigations, substantial fines, both civil and criminal penalties, product withdrawals,
plant shutdowns and overall reductions of revenue.
(l) The UCB Group faces certain litigation risks, which may adversely affect the business.
The outcome of legal proceedings in which UCB and/or certain of its subsidiaries are involved, or of
potential future litigation, may adversely affect the business, financial condition and results of
operations of the UCB Group. Legal proceedings may include (but are not limited to) regulatory
investigations, defending claims or taking action to protect commercial or competitive interests,
including patents, in a range of jurisdictions and a number of legal systems. The costs and potential
economic consequences of any legal proceedings are difficult to quantify and, particularly in the case of
product patent infringement and significant commercial litigation, may be high. Material legal
proceedings may both impact the profit of the business and, if a patent suit were to result in an adverse
judgment, prevent the UCB Group from continuing to market certain of its products. The UCB Group
is a party to patent litigation involving Xyzal® in the U.S. and in Europe, product liability actions in the
U.S. and elsewhere and in regulatory review of certain marketing practices in the U.S. None of these
actions are currently viewed by the Board as having a material adverse impact on the UCB Group.
Separately, the UCB Group has made and will continue to consider acquisition opportunities within the
pharmaceutical industry. While the Issuer typically obtains warranties or representations from the seller
of such asset or business with respect to certain legal or factual issues, these warranties may not cover
all of the problems that may arise following the acquisition, such as additional tax liabilities, and may
not fully compensate the Issuer for any loss it may suffer in relation to the acquired asset or business. In
addition, it may be difficult or impossible to enforce warranties or representations against a seller for
various reasons, including the expiration of limitation periods or enforcement periods for such
warranties or representations.
(m) The UCB Group relies on its key personnel.
The UCB Group is highly dependent upon the senior management and scientific team, the loss of whose
services might impede the achievement of the scientific development and commercial objectives, or the
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