Good morning, everyone. I'm Melissa Trombetta, Head of Global Investor Relations here at Viatris, and it is my pleasure to welcome everyone to Viatris' naugural 2021 Virtual Investor Day. Our goal for today is to provide a deep dive into the company's strategy to optimize total shareholder return while delivering on its mission to empower people worldwide to live healthier at every stage of life. During today's presentation, we will be making forward-looking statements on a number of matters. These forward-looking statements are subject to risks and uncertainties that could cause future results or events to differ materially from today's projections. Please refer to the slides that we will be reviewing during today's presentation for a fuller explanation of those risks and uncertainties and the limits applicable to forward-looking statements. These slides are also posted on our website at investor.viatris.com.
Viatris routinely posts information that may be important to investors on this website, and we use this website address as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC's Regulation Fair Disclosure, Reg FD. We will be referring to certain financial metrics of Viatris on an adjusted basis, which are non-GAAP financial measures. We will refer to these measures as adjusted and present them in order to supplement your understanding and assessment of our financial performance. Non-GAAP measures should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP. The most directly comparable GAAP measures, as well as reconciliations of the non-GAAP measures to those GAAP measures, are available in the presentation slides as well as in the investor section of our website.
In addition, solely to supplement your understanding and assessment of our financial guidance for 2021, we have provided in the presentation slides and may reference during today's call certain preliminary estimated financial measures relating to 2020, which do not reflect financial actual results or pro forma results. Such measures also do not reflect the effect of any purchase accounting adjustments. Later today, Viatris intends to file its Form 10-K for the year ended December 31, 2020, which will include the company's finalized actual results and segment-related information for the year. Let me also remind you that the information discussed during Investor Day, except for the participant questions, is the property of Viatris and cannot be recorded or rebroadcast without Viatris' express written permission. An archived copy of today's presentation will be available on our website and will remain available for a limited time.
Before I turn it to our CEO, Michael Goettler, we're going to share a quick video to start us off this morning.
In a world that is perpetually changing, there is increasing need for steady leadership. Companies demonstrating the courage to address the world's emerging healthcare challenges with passion and compassion. Viatris is redefining the healthcare landscape. We are uniquely positioned to be a source of stability with the commitment, capability, and vision to meet the world's evolving patient needs. Viatris believes in healthcare not as it is, but as it should be. We know the way to provide access to a sustainable, affordable, and diverse portfolio of high-quality medicines, regardless of a patient's geography or circumstance. We are leading the way by providing a versatile, scalable platform that combines best-in-class manufacturing and supply capabilities with innovative solutions that span therapeutic areas.
As a partner of choice, we are pioneering a way to empower companies of any size to leverage our distinctive global healthcare gateway so products from across the industry and around the world can rapidly and effectively reach patients where they live. We do so with a collective spirit of resilience, driving forward until each challenge is addressed and every opportunity embraced. We are inspired by this moment of shared purpose because, as Viatris, we know the way to empower people worldwide to live healthier at every stage of life.
Welcome to Viatris, a new kind of healthcare company, and welcome to Viatris' first Investor Day. Now, because of the ongoing COVID pandemic, we'll be hosting today's Investor Day virtually. This Investor Day also follows our 2021 guidance call, which we had about a week ago. As we said then, we're confident that our 2021 financial guidance reflects the changes in the operating environment and is the right starting point for Viatris. What we want to do today is to share more with you, share more with you to help you better understand the assets, the capabilities, and the talent that this newly formed company has, to better understand our unique operating model, and to better understand the clear strategy and priorities that we have in order to deliver value to our shareholders.
Now, on this slide, you see the agenda, and as you can see, we have a number of interesting topics and what I hope will be an informative session for you today. Now, I'm excited to have our leadership team here. As you can see, we have our regional presidents giving you a walk around the world and giving you insight into each of the regions. We have our head of R&D. We're going to give you an insight into our manufacturing and supply chain. We're going to talk about our efforts around sustainability and our commitment to sustainability. Sanjeev is going to wrap it up with our financial commitments. These leaders really are the best ones to convey our confidence in the strength of what we've built and the vision that we have for the future. I want to start my presentation with our mission.
What binds us is our shared passion for our mission. We created this company. We created Viatris because we see healthcare not as it is, but as it should be. We act courageously, and we're uniquely positioned to be a source of stability in the world of evolving healthcare needs. This is the springboard for our future. We aspire to empower people worldwide to live healthy at every stage of life, regardless of geography, regardless of circumstances. Our mission, we believe, is even more important today, given what's happening in healthcare. As you know, there are tremendous issues facing healthcare today. We believe that through access, we believe that through leadership, we believe that through partnership, we can not only make a difference, but also help to make this world a better place.
Now, Viatris was created just about 90 days ago through a combination of Mylan and Upjohn. This highly, highly complementary combination makes Viatris an even stronger platform, an even stronger platform that gives us enhanced global and geographic reach. That gives us a sustainable, diverse, and differentiated portfolio and pipeline. That gives us a powerful operating platform and commercial capabilities and strong and sustainable cash flow. Now that we're about a little bit over 90 days in, I would like to share with you some of my observations as I have had the opportunity to better understand our strengths and some of the areas that we can build upon and further improve. I want to share with you that the first thing that really struck me was the passion of our entire workforce.
As I said, we're all truly motivated by our mission and what we can accomplish together. It's that passion that inspires an incredible work ethic. Nowhere was that work ethic more visible than through the integration process, the over a year that we spent. Despite the pandemic, the colleagues worked tirelessly to separate Upjohn from Pfizer and to integrate our two businesses. Thanks to the effort of literally thousands of colleagues around the world, our integration has been accomplished without any business disruption for our customers and our patients. All that we've been able to accomplish since day one has also given me a deep appreciation for the talent that we have. Talent in the organization that's entrepreneurial is certainly one of our strengths.
Talent that is also experienced, that has deep industry knowledge, and that's transparent in discussing issues and authentic at all levels of the organization. These are strengths that we have to build on. We're also building on a robust foundation, a platform with global scale and diversity. I'll share more about that later as I talk about our unique operating model and our global healthcare gateway. Finally, we have financial strengths. Clearly, we have financial strengths, the ability to generate strong and robust operating cash flows. I believe these are strengths we can play to as we have the opportunity to further enhance them. As we bring the two organizations together, my leadership team and I were laser-focused on creating the right internal conditions for success. That starts with a common definition of success, a common definition for everyone in the organization, the entire organization.
That definition has to be generating net income in excess of our cost of capital for every product in every country. For that, we need transparency and we need granularity of data to empower our managers to make the right economic decisions. We can incentivize them that way that aligns with shareholder value. Granularity is particularly important because we have 1,400 molecules. We are in 165 countries. I said before, this is not a business that we can manage with averages. You will see later in Rajiv's presentation how we put this philosophy into practice through what we call our IMT principles: that is invest, maintain, and tail. We do that at a very granular level.
Secondly, now that we have our combined commercial footprint, we really have the opportunity to maximize our commercial impact, both for our current portfolio, but especially also for our new launches. There is a lot of value to be uncovered here, and we're focused on that. Third, we've got a very productive—I am so impressed—we have a very productive R&D engine, an R&D engine that has high volume, that has high productivity, that has high success rates, and strong returns on investments. We are nowhere near the point of diminishing returns on that investment. There are clear opportunities to enhance that investment through and while leveraging our global healthcare gateway. Lastly, we clearly have already identified opportunities to enhance our efficiency.
We announced our program to generate over $1 billion in synergies, and we've now accelerated that program from four years to three years to meet or exceed that target. Clearly, efficiencies are to be gained in the system here. That is what I see. I'm excited about the opportunity to lead us on this journey and to act on that. We laid out a clear execution roadmap to optimize total shareholder return. It comes in two horizons. The first horizon, the next three years, will focus on deleveraging and rebalancing our business, laying the foundation for future durable growth and operating leverage. We said before, 2021 is our 12th year. We've already accelerated our synergy capture of $1 billion from four years to three years, and we expect that period to generate strong and growing free cash flow.
We're committed to repaying our debt, $6.5 billion in that timeframe, and we expect to initiate a dividend, 25% of free cash flow starting in the second quarter, and expect to grow that dividend amount annually in the subsequent years. This horizon one, this period, these three years, it's all about execution. It's all about preparing for the future. You're going to hear more about that in Rajiv's presentation. By creating Viatris, we now have all the pieces in place to fully leverage our operating model and the powerful and opportunistic platform that we have created. Now, I want to give you a bit of a personal note because I spent my entire career on the branded and innovative side of the business. Coming into Viatris, I was on the outside looking in.
I spent a lot of time in the past month diving deeply into this operating model, which is very different from what I've known before. Today, I want to spend some time describing this unique platform to you, and you will get an even deeper insight into each of the components as we go through the presentations throughout the day. Why is it important? It's important because when you, as I have been, on the branded and innovative side of the business, your entire worldview is through that branded lens. Your focus is on a few key brands, mostly protected by patents. You start with those brands, then you go around the world and select the countries to sell it based on the unmet needs or the market conditions, including the protection of intellectual property. At Viatris, our business model is the exact opposite of that.
We start with a deep expertise in each market. You will see that later in the regional presentation. Each market has unique characteristics. Especially if you do not have IP protection, it forces us to be creative. It forces us to be more nimble. The needs of each country and the business opportunities are different. Whether we talk about a developing market like China with huge population, growing consumer demand, large unmet needs, or whether we talk about a mature healthcare system like Japan, whether we talk about promotionally sensitive markets, or whether we talk about tender markets. I personally appreciate those differences because I lived and worked in many of these markets. We, as Viatris, strive to tailor our offering to the needs and opportunities of each market.
That is in line with our mission, our mission to empower people worldwide to live healthier every stage of life, regardless of circumstances and regardless of geography. We have a strong global commercial infrastructure that enables us to do that. We are in 165 countries and territories. We are serving over 60,000 customers. We have an 11,000-person strong field force. We are truly global, but in each market, we are local, and with a deep understanding of how to best serve our customers and our patients. Few companies, if any, can do this truly at scale. To be able to tailor our offering to the particular needs and market opportunities of each country, one needs a particular set of purpose-fit, custom-built capabilities. That is what we have. That is what Viatris has, starting with our broad portfolio of more than 1,400 products, 30,000 SKUs.
It's only with such a broad product portfolio that we can truly serve the markets based on their needs, not based on what we have. Our research and development is also purpose-fit. It must be high volume. For example, we currently have 1,400 submissions, potential submissions in our pipeline for the next few years. It must be high speed. It has high probability of technical and regulatory success because we don't have the binary risk that innovative brand companies have. Instead, our R&D model is built on broad technical capabilities. You'll hear that later as Walt is presenting. Now, on this slide, you see a breakdown of our revenue and some of the examples of these 1,400 molecules, ranging from the iconic brands such as Lipitor, Lyrica, Viagra, Norvasc, others, to generics across all therapeutic areas, whether it's infectious diseases or non-communicable diseases.
Now, consider that Viatris provides trusted and high-quality medicines to 9 out of the 10 WHO leading causes of death. We have a growing and emerging area for us, which is biosimilar and complex generics. We will hear more about that in the subsequent presentations. Our supply chain and manufacturing network also is purpose-fit. We have approximately 50 sites around the world, and that allows us to cater to the local markets. Local proximity is important and allows us to better serve the markets and be nimble and flexible to meet their needs. Our network is optimized for flexibility, for high quality, and low cost. That is the purpose-fit capabilities, and that is the countries. The last piece of the puzzle that powers this operating model is what we call our high-performance drivers.
In many ways, these high-performance drivers are the oil that makes the gears go faster and move better. I told you, we have talent. Talent is something we were born with. It is how we work together that is our real competitive advantage. That is our secret sauce. I always say other companies have also good products. I hate to admit that. Other companies can get financing. Other companies can hire talent. It is our culture. It is how we all work together that is a true competitive advantage that we have. We are building upon, and we are enhancing and building a culture that is performance-driven, that is highly engaging, that is inclusive. We have a great foundation to build on. As we go along, we build our Viatris way, our culture of the future. That is the importance of culture.
The next driver of our success is having the right disciplines in place. With a vast portfolio and geographic complexity, we need the right financial discipline. We need the right governance discipline. We need the right quality compliance. We need the right capital deployment principles. They are all essential for us to maximize value creation. As I said before, there is significant opportunity for us to do that discipline at a granular level. That is how we will distinguish ourselves, and that is how we will create value. There is a lot of value to be uncovered here. The last one, the last differentiator, is sustainability. At Viatris, we are all fueled by our shared commitment to act responsibly, doing what is right. It is in our mission. We know that our actions affect all of our stakeholders, especially the patients that we pledge to serve.
Social responsibility, corporate social responsibility is integral to our company. It's fundamental to achieving our mission. Later, you'll hear from Lara Ramsburg, our Head of Corporate Affairs. You'll also be able to read about it in our first CSR report, which we intend to publish in May. You'll also see it in our long-term sustainability goals, which we plan to establish and publish by the end of this year. This is Viatris. This is us. This is our unique operating model. It's unique. It's been built over many years and through many transactions, and the last transaction of which is the Upjohn and Mylan combination. It's essentially complete now, and it's up to us to fully leverage its power. We're also making this entire platform, this entire powerful operating platform, now available to partners through the global healthcare gateway.
This global healthcare gateway sits right at the heart of Viatris. There are so many assets out there in the industry. I know, we know, that do not reach all the patients that could benefit because the companies that invented them do not have the scale, do not have the capabilities necessary, or cannot find the right partner to create the full value that these assets can bring. We can bring our full operating platform, our full model to bear, either through organic R&D or through partnerships, and thereby connecting more patients with more products and services, creating value for patients, creating value for our partners in a true win-win way, and of course, value to our shareholders. Opportunities are plenty.
The art is selecting the right ones, the right ones that meet our stringent discipline investment criteria and withstand our strict due diligence, and to ensure that all capital investments we make create value for our shareholders. As the world's healthcare needs evolve, our unique global gateway offers partners ready access to more markets and patients worldwide through the company's unmatched global infrastructure and expertise, making Viatris a true partner of choice. We have a small video that brings this to life for you. I'd like to play that video for you now. I think if you look at where healthcare is today, often a system that's been grown over 100 years, if you were to build it today, you may build it differently. Healthcare needs are constantly evolving.
What Viatris brings is a unique set of capabilities, a unique set of commitments, and a unique vision to see healthcare not as it is, but as it should be. The global healthcare gateway will be the true heart of Viatris. Not only is it the heart of the company, but it really culminates everything I think Viatris stands for. It leverages our unmatched global infrastructure and capabilities to connect more patients to products and services around the world through organic R&D or through partnerships. The global healthcare gateway has, beyond the growth element, also a discipline element to it to make sure that every investment we make, whether it's in R&D or in BD and external and partnerships, every major capital investment we make gets put through the ringers of making sure it returns value.
By offering others access to Viatris' global healthcare gateway, Viatris will create value for partners who would otherwise need to rely on a fragmented, highly localized, or regional strategy on their own. We have been focusing on fostering and creating the partnership, which has helped us bring many of these innovative products to the market and helps us commercialize, leveraging each other's strengths and managing those relationships. We can do a lot more with this Viatris platform as we go along. By leveraging our global healthcare gateway, Viatris can help partners navigate the complex regulatory, intellectual property, and commercial systems in established markets like the U.S. and Europe, and in difficult-to-enter markets like China and Japan, where we can really offer partners a lot. We have an absolute premier infrastructure in China. We can promote in multiple channels: hospital, retail, and digital.
We have a deep reach in the country, not just in the top cities. We want to aspire to do more for patients, more for customers, and healthcare systems, especially given the events of 2020. It's been a reminder of the important role pharmaceuticals play in the lives of patients around the world. Our one-of-a-kind global healthcare gateway can help empower more people around the world to live healthier at every stage of life and makes Viatris a true partner of choice. We're excited about the opportunity to make this platform available to more partners. Viatris is officially open for business, and we're excited about what we can do together with our partners. That is our global healthcare gateway. As opportunities come in, we will evaluate these opportunities.
I often get asked, "What are you going to look for in deals?" We are going to look for strategic fit and financial criteria. Strategically, our preference, but not exclusively, our preference is on complex and innovative or otherwise differentiated products, products that leverage our commercial and technical strengths, especially China, where we have a lot of commercial capabilities, and that are complementary to our current therapeutic footprint so we can create more value and/or enhance our technical capabilities. On the financial side, financially, we are focused on value creation with strong returns, returns that are at least in excess of our cost of capital, and of course, investments that are consistent with our commitment for debt repayment and our debt repayment priorities. Here you have it. That is our strategy. That is what we call our Horizon One, the next three years. Our strategy is very clear.
We're going to be focused on delivering and rebalancing our business to meet or exceed expectations. We have a unique and very purpose-fit—I hope I demonstrate—the purpose-fit operating model. I am confident that you appreciate the strength of each of the components as you hear from the rest of the team today in subsequent presentations. Our operating model is a very well-oiled machine and one that is now open for business, open for business for our partners through the global healthcare gateway. With the strength of our own R&D, with the strength of the global healthcare gateway, we will return to long-term, durable top-line growth and operating leverage, and that creates more shareholder value creation.
Our strong operating cash flow generation, our debt repayment, the achievement of the synergies, everything that we lay as a foundation in Horizon One, in Horizon Two, enhances our financial flexibility and allows for many more options for capital deployment, returning value to shareholders and investing in our pipeline and business development. The operating words really are execution, transparency, and accountability. That is exactly what you will see from us starting today at this investor meeting. In summary, we're building on a really strong foundation. We're on a multi-year journey to transform this company within the healthcare industry. We believe we're uniquely positioned to achieve our goals through leveraging the strength and capabilities that we have, but we're also relentless in our commitment to continuous improvement. If we can get better, we will get better.
Our obsession, our North Star, is our obsession to create value in everything we do. That is what we are going to—that is what we focus on. With the talented and committed colleagues we have—I told you, I am so impressed by the talent that we have. You will hear from many of them today. An engaged culture and a clear strategy, there is no doubt that we will deliver and hence shareholder value as we execute. With that, I would like to hand it over to my colleague, Rajiv Malik, and Rajiv will be focusing on business execution and how we are preparing for future growth. Thank you.
Thank you, Michael, for a great introduction. Thanks for recognizing and appreciating all the building blocks that got us here. I am humbled to represent thousands of colleagues who were part of this journey from Mylan to Viatris.
I'm especially proud of the leadership team who's going to share with you today what makes Viatris so unique. Along with this dedicated and hardworking team and so many others, we have already accomplished a lot in the first 90 days, and I look forward to what lies ahead. Our two companies coming together is much stronger than our two organizations apart. As Michael said, I would like to reaffirm that nothing has changed about the strategic rationale of our powerful combination. Today is a very exciting day for us while we are showcasing for you our new organization, but also discuss with you in some depth detail how we will deliver. A week ago, we shared with you our financial guidance for 2021.
We talked to many of you one-on-one and really appreciated hearing the questions on your mind, such as, "What is this business made up of? How big is the erosion? Is 2021 a really tough year? How is this platform going to come back to the growth?" Today, we pick up from where we left off last week and walk you through our business on a much deeper level to give you the confidence in what we have, how we are managing this business, and how we are preparing the company, most importantly, for the future growth. This waterfall chart should look familiar as we just shared this on our guidance call. You may recall we described all of the one-time special events that impacted our 2021 guidance.
Today's presentation is going to be all about how we are executing on our business plan and can be broken into four key priorities. The number one, how we are maximizing our base business. I'll cover how we are managing our business region by region, product by product, to stabilize and offset inherent erosion. I'll walk you around the globe to give you an understanding of our differentiated commercial segments, share how these businesses are supported from a manufacturing and a supply chain perspective. Second, I'll cover how we are delivering on our launches. More importantly, what is our pipeline, especially as it continues to evolve towards complex generics and biosimilars. Third, about integration and integrating our legacy businesses while accelerating our synergy activity. I'll give you a little bit more detail around the roadmap, what the roadmap looks like.
The fourth, how we are preparing the company for future growth to maximize the full potential of this platform and leverage global healthcare gateway. The next several slides, I'll walk you around and a little bit give you insights into about our diversified platform and how we are maximizing our base business. Let's start with our commercial platform, which is both diverse and resilient. We have a truly global footprint with presence in more than 165 markets. Our business segments are present: Tony, Sean, Drew, Menassie. They will give you a walk around the globe and tell you what we have and how we expect to win in these geographies. Within each of our segments, we have broad reach across all the channels, priming leadership positions in many of these key markets.
Lastly, but more importantly, our portfolio of over 1,400 molecules, which we know from here onwards we have agreed to share with you in the three broad segments: the brands, the generics, and our growing offering of complex generics and biosimilars. Now, let me walk you through our commercial platform by the three above-mentioned categories and start with the brands and give you a little bit of insights into the diversity within the brands. We have roughly 20 iconic brands, which came from along with the legacy of Upjohn, which are focused on key therapeutic areas, including cardiovascular, neurology, pain, CNS, urology. Look what happens when we add in legacy Mylan brand portfolio.
Not only do we have complementary products that extend our depth into the legacy of therapeutic areas, but even better, our combined portfolio increases our offering across all therapeutic areas, gives us an incredibly broad reach. I mentioned about diversity within the brands. Our branded portfolio is made up of exclusive brands like YUPELRI, where you have still the patent life, trimming growth. These are the growing brands. Second, established brands like Creon and Influvac, which provide us durability as well as growth because they are hard to commoditize. Despite having no longer any IP protection, they are hard to commoditize because of the complexity in the science. Lastly, our iconic alloy brands like Lipitor and Viagra, where we have tremendous brand equity. Now, when you couple all these brands with the number of the markets in which we play, it highlights for us to be successful.
We cannot just manage every brand the same way in every market. Instead, it's critical that we granularly measure and manage at the individual market and product level. As Michael highlighted at JP Morgan, we are instilling the right internal conditions, disciplines to manage and maximize this business. In that regard, first and foremost, we have a general understanding of the profitability and the performance of any product or SKU at a market and channel level. This means our entire portfolio, not only just brands, even the generics. As you can see here, as an example, we continuously evaluate the contribution of each SKU, both extending the profitable life of each product and managing out SKUs that are not earning their cost of capital. This helps ensure we are making fact-based portfolio and resource allocation decisions.
Another example of how we're going to leverage our granular analytics is about implementation of investment, maintenance, and tail resource allocation framework. We have classified every product within every market based on its responsiveness and growth potential. For example, in a highly responsive investment category, like for example, YUPELRI we mentioned, we are investing for growth with a full suite of capabilities, which I will get into in a minute. Conversely, we manage the stable, moderately responsive maintenance products differently with selective investments, largely with the lower-cost activities in order to protect their base and optimize our selling and marketing dollars. Lastly, for our tail products, which are not very responsive, it's all about doing more with less to stem the decline. Any investment we make over here is through our central marketing centers of excellence and some low-cost activities.
As you can see on the right side of the slide, this has resulted in the legacy Mylan continuing to optimize its selling and marketing spend by mid-single digits per year while still preserving the top line of its branded portfolio. This discipline and rigor when applied to Viatris, now a combined platform, is a critical input for ensuring that we are maximizing the base business while driving efficiencies and synergies in our spend. Now, let's talk about some commercial capabilities. Hopefully, the last few slides gave you a clear picture of diversity and stability of our branded portfolio. Now, just look into some of the capabilities which we use to sell and market our portfolio across all the channels.
For products and markets that are responsive and provide attractive returns on personal promotion, like the investment products I mentioned, the YUPELRI example I mentioned on the last slide, we have the full suite of traditional as well as the digital tools available to deploy. For less promotionally sensitive products and markets like Creon, we have efficient, high-quality tools and resources that drive revenue at the right cost profile. Across the full portfolio, many of our core commercial activities are efficiently delivered into the markets through our global centers of excellence at a lower cost but better quality than external agencies or some local resources, which is helping us to optimize every selling and marketing dollar we spend. Moreover, we do not just have these capabilities available.
We know how to tailor them to each local market in an integrated model with the right traditional and digital programs which fit to the needs of these products, customers, and patients. I want to go into a little bit more detail on the omnichannel and the digital tools that are such a key part of our commercial model. If I have to call out a few commercial capabilities which we enhance by bringing these two platforms together, this is the one. We have been developing these tools for many years, and the onset of COVID-19 compelled us to further accelerate that ramp-up. We've taken the learnings from the early COVID period to increasingly strengthen and augment, and in some cases, totally replace our traditional capabilities with some really great success stories.
For example, we have been able to add remote detailing to our sales reps to drive over one and a half times reach to our prescribers. Also, augmented our marketing through activities like webinars, and we are delivering 8-10 times more reach versus face-to-face meetings. Altogether, our full suites of omnichannel and promotional tools and programs drive an efficient and effective model across Viatris' portfolio and pipeline. The last piece and another area which really got enhanced by these two platforms coming together is the medical affairs. I want to talk about that. How medical affairs teams work to maximize the impact of our scientific investments in a patient-centric four-pillar approach. We have the core medical support roles that engage with the KOLs, generate evidence, and effectively communicate evidence back.
Second, the partnership and policy shaping is a critically important capability, especially for our brands and emerging markets. For example, we are actively engaged with leading organizations like American College of Cardiology, NCD Academy. These types of partnerships are a key part of moving from treating a specific condition to full disease management, especially in the cardiovascular and respiratory areas. Focusing on the real-world evidence, we are very active in generating and analyzing the data that informs new publications and potential new indications, as well as some new product ideas. Lastly, the most important one, also the lifecycle management. It's a critical capability for our portfolio, which I would like to spend a little bit more time on the next slide.
LCM strategies, as you all know, are essential to extend the value of our drugs, the lifecycles of drugs to the patients and the lifespan of our assets in our portfolio. We have a range of LCM options available, including OTC switches, line extensions, new formulations, dosages, etc. Both Mylan and Upjohn have great success in extending the life of our products. Take, for example, Viagra and Amitiza. These are good examples of how we have worked to make our drugs more accessible through OTC switches. We have utilized our formulation development and regulatory expertise to develop new formulations or dosage forms to satisfy some unmet needs, for example, Creon 35000 or Influvac Tetra , etc. Lifecycle management has been successful for us historically, as well as we see this playing a huge role as we go forward.
Now, let's move into our second segment, which is perhaps the one that has got a lot of attention, the complex generics and biosimilars portfolio. Our goal over the last few years has been to move up the value chain from science perspective. The complex generics and the biosimilars require not only just high R&D spend, I think it requires a high level of the science, more complex science, executing through the complex science, regulatory strategy, IP legal skill sets. I believe we have already shown that we have those ore competencies to excel in this space through some first-to-market successes like generic Advair, generic to the Advair, generic to the Copaxone, biosimilar to Neulasta, biosimilar to Herceptin, and I can go on.
While we are very proud of our track record, we also believe that we can do a lot more in this space and better serve the patient needs by breaking down these barriers. These investments have enabled us to see durable long-term revenue streams as compared to the core generics. We see this as a core part of our forward-looking Viatris portfolio. Let me give you some color on our biosimilars business. The global biosimilar market is still in a very early stage and evolving. We know there's a lot more headroom for biosimilars. Today, biosimilars only make about 6% of global biologic sales, and biologics themselves are expected to more than double in the next seven years, far outpacing small molecules. We are excited. We are very excited by our start with some big, notable successes as we have entered this biosimilar market.
The number two in biosimilar market share for our oncology biosimilars in the U.S.A. We are a market leader for trastuzumab in Australia and Canada, where we happen to be the first to enter the market. As we start 2021, we are also excited to bring the first biosimilar to Humira in Japan and be a part of the first wave of the launch in Canada. Very soon, we will be looking forward to launch our biosimilar to Avastin, as well as the first biosimilar to NovoLog in developed markets. We have always said that we see this business as a truly global franchise. Started long back with the Herceptin launch in India, but slowly and steadily have built upon that with the strength of regulatory approval and the launches around the globe, with the rapid growth in the past few years.
More than just individual approvals, we are excited to have a biosimilar franchise now at the commercial scale that legacy Upjohn brings to further expand our reach and drive the biosimilar updates in these markets. While we are optimistic for the future, we won't shy away from the fact that we had certain hiccups, which is not very surprising when you are trying to create a new market. Importantly, as we evolve, we are taking these learnings into our forward-looking plan. We have learned quickly the importance of entering each biosimilar market with the right product at the right time, at the right cost, and with enough supply. In our early launches, we had some hiccups. We were late to market in some cases. We missed the tender cycles in some markets.
We also underestimated how the innovators would slow down or would compete aggressively and slow down the biosimilar update. We've also taken away some positives here. We have a great group of R&D partners. We quickly developed a global presence, and we did really well in some tender markets and many other markets where we were the first. We take all of this forward and are committed to our next steps to leverage not only science but our commercial capabilities to get the most out of this franchise. That commitment includes quickly ramping up the investments in our commercial capabilities wherever necessary in certain markets, if there is opportunity to expand the success, drive uptake, and help the market realize those cost savings. We also continue to remain committed to invest in the biosimilar development programs.
We will talk in a lot of detail about our biosimilar pipeline, where we are with the pipeline, with the development programs. I would just like to highlight that we will be extremely focused on our efforts to be the first to the market and believe we are well-positioned for several of our key programs in the future. Viatris is committed from scientific as well as from the commercial capabilities and know-how to be a long-term leader in this space. Now, let's move to the third very important category of generic segment, which makes up a little less than one-third of our total portfolio. Legacy Mylan, as you know, has been a strong leader in this space. Even within generics, let me make it clear, we are not moving away from generics. We are being more diligent.
We are being more prudent, more prudent in the selection of the products and have enriched our portfolio to encompass complex oral solids, hard-to-make products, injectables, transdermal patches. We all know the U.S. generics market is relatively more volatile as compared to Europe and some other emerging markets. Overall, we all agree that generics provide a steady source of cash flow. Within the U.S., if we just come back to the volatility, our focus has been to address the volatility of our own portfolio. To achieve that, we have been closely monitoring the margin profile of these products and rationalizing if we have to rationalize, if we believe the product has enough supply, enough competition, and there is no risk of supply disruption from patients and customers' point of view.
As we move forward, we'll be diligently and prudently investing in this space, leveraging our strong science, regulatory skill sets, as well as the IP skill sets to continue to be the first to the market. These are examples of Dactridera, Anzitica, and the good ones. Let me now talk to you and introduce you about another very important component of our platform that enables us to maximize this business. This is one-of-a-kind, diversified, resilient global manufacturing network. I know very soon you're going to hear from our Chief Operating Officer, Sanjeev Sethi, who will talk to you about this expansive network and our strategy. From my perspective, our operations strategy is very well aligned and enables us to manage a robust and diversified portfolio. First and foremost, we have a deep and unwavering commitment to quality, compliance, safety of our employees, as well as the environment.
All these four elements are at the center of our manufacturing strategy. We have a flexible network which can meet customer needs, and they are always at the heart of how we operate. Ensuring supply continuity is very critical for our customers and the patients we serve. This platform is an outcome of a very well-thought-out supply chain strategy which continues to evolve as the markets around us evolve. We, of course, continue to be focused on the cost of the goods, which is one of the key imperatives for our generic segment. Now, let me talk to you about our exciting science platform, which we are so proud of. I'm myself a scientist by profession, and I can tell you we have one of the most efficient and productive teams I've seen in our industry.
As I shared earlier, we have a strong track record, and we have been diligently moving up the value chain from the science perspective. Today is not about the past. Today is about the future. How are we going to leverage all our combined experience and assets to maximize our future growth? Three-fourths of our pipeline you will get to know is made up of complex generics and biosimilars and some other novel products. We are investing proportionately, almost three-fourths of our R&D spend in this segment. We will walk you through this in great detail while highlighting our renewed focus on geographies like China and Japan, as well as the portfolio expansion through the emerging markets. We all know this expression that "Picture speaks louder than the words." Just look at this slide. It gets me so energized about the future.
It's a powerful visual that not only illustrates our past successes in bringing complex generics and biosimilar counterparts of these products to the market, but more importantly, gives a great snapshot of the depth of our global pipeline with several high-value products in the final stages of either pending approval or in development stage. Now, let me shift gears and walk you through another very important chapter about integration and our synergy plans, which is another important lever. As I shared on our guidance call last week, we have accelerated our planning and anticipate achieving our $1 billion target in cost synergies over the next three years instead of four years. The in-depth rigor, the discipline we are applying against these equities gives us the confidence that we will not only meet but have the potential to exceed our synergy targets as we move into year four.
The actions taken to date show that execution of our global restructuring program is very well underway. In addition to the five sites we announced in December, we have identified and finalized eight additional sites to either close, downsize, or divest the sites across various verticals, the sites across various geographies. These sites were selected because of either surplus capacity or a shift in the portfolio towards more complex products or the age of the assets or some other similar reasons. We all know this will be a multi-year process. As always, throughout this process, we are committed to ensuring supply continuity so that patient needs for critical medicines are met. I'll walk you through the phasing on the next slide. We spent the last few months finalizing the plans for our synergies roadmap and have identified several key drivers.
This slide gives you an appreciation when we will start to see the savings coming from our synergy activities and what those dollars are in year two, year three. You will see that in the first few years, we start seeing savings come from the cost, procurement, overlapping infrastructure opportunity, whether as we efficiently organize our support functions or commercial infrastructure. Also, you will appreciate that we'll be relying upon multiple services from Pfizer for a period of time through TSAs and MSAs. As we are able to absorb these services on the new Viatris platform, these savings will be part of our synergies. The full TSA and MSA synergies will largely be realized after year two due to the time it takes to unwind the services.
At this point of time, I can only tell you that our IT team is working diligently around the clock to build up and ramp up and set us up in a way that we can get off the TSA in a timely manner without any hiccup. Now, just let's talk about how this platform can get back to the growth. As we look to the future, we see a number of growth opportunities across our pipeline, portfolio, geographies, partnerships, and many more. To that, I would like to highlight our ability today. I would like to just walk you through our ability to cross-pollinate our legacy products across the world and the opportunity we see as a partner of choice through our global healthcare gateway. Let's start with the cross-pollination of our businesses in key markets.
We know there are opportunities to bring legacy Mylan products as well as pipeline into countries where Upjohn had a significant footprint and Mylan did not, or vice versa. Korea is one such good example that I would like to highlight. Where Mylan had a presence, some products, but we were trying to work, we were working through distributors, third-party distributors. Upjohn on the other hand had a significant footprint, a dedicated sales and marketing team, and very mature digital capabilities, but did not have a pipeline to expand in the market. You bring those two assets together, and you see a clear opportunity to bring the approved Mylan legacy products as well as the pipeline into Korea and leverage the combined scale to launch these products as well as the exciting biosimilar and other pipeline products. Korea is one example within our 165+ countries.
We are going to do work now. Starting tomorrow, as you will hear, we're going to go back and figure out how we bring this, how can we basically leverage and bring this example to the light. How can we do more with this platform as a part of our long-term strategy and share with you when we come next time and share with you our long-term outlook. It's important to tell you that in addition to the organic opportunities that our combination provides, we have a very strong track record, as you can see on this slide, that we have a strong record as a partner of choice.
To me, this is very exciting, very exciting that we are much better placed than we were placed yesterday as a legacy Mylan company to further leverage this platform from a partnership point of view in a more institutional way. As Michael mentioned, this platform with its deep market expertise, tremendous science and manufacturing capabilities, discipline management, because all these attributes is why we believe we are a great partner of choice. Our scale and our expertise provide endless possibilities to connect patients to more products and services, ultimately creating better value for all stakeholders. You will hear more about this in practice throughout the day. From here onwards, I would like to turn it over to our Commercial Segment Presidents to give you a bit of a virtual walk around the globe to see this platform and management in action.
Sanjeev Sethi will take you through our global supply chain, and Dr. Walt Owens will provide you more details about our robust pipeline and scientific expertise to drive value from R&D. After all this, I'll come back and reiterate our key priorities and why this management team is absolutely competent in meeting and exceeding expectations. Thank you.
Good morning. I'm Tony Mauro, and I'm the President of Developed Markets at Viatris. I'm very proud to be leading this segment after approximately 25 years with legacy Mylan. I'm also excited to be part of the first Viatris Investor Day, and I'm looking forward to talking to you this morning about our Developed Markets segment. As you've heard, this segment includes our businesses in North America and in Europe and contributes significantly to Viatris's revenue.
I plan to walk you through the businesses in these two regions and talk to you a little bit about the roadmap for success. It's a roadmap that centers around three main building blocks. First, sustainable stability. We expect to see our historical low to mid single-digit erosion continue. This will be driven primarily by LOEs, but also will be offset by new launches in volume growth in the segment. The second building block on this roadmap is focused growth. I will talk to you about our focus on highly profitable, highly complex products. You will see our global business in biosimilars continue to be a long-term investment strategy, and we project growth in this franchise in both developed market regions on a year-over-year basis.
In addition, we are focusing efforts on products like YUPELRI in North America, as well as on products from our newly acquired business from Aspen in Europe. Finally, the third building block on the roadmap to success is an effective and efficient infrastructure. We strive to create one of the most efficient selling and marketing organizations in the industry with focused granular analysis to drive portfolio and resource decisions at the market level in the intention where we have experienced field force and existing relationships built within our current customer base. We will continue to employ new digital capabilities to enhance these interactions and provide quality service to the customers and patients we serve in all our markets. Let's take a look at developed markets at a glance. The developed markets total prescription marketplace is nearly $780 billion in value combined in both Europe and North America.
Both of these regions are growing on a year-to-year basis. Seven of the top 10 prescription markets globally are within the developed market segment, including the largest pharmaceutical market in the world being the U.S. at $526 billion in IQVIA value. The generic and biosimilar conversion percentages shown on the screen are that of the entire prescription marketplace. Based on these statistics, we see significant opportunity for our portfolio to continue to grow and be successful throughout the entire segment. I would like to turn now to the Viatris business performance within the segment. As I mentioned, our developed market segment, which is made up of more than 35 countries in North America and Europe, is a significant contributor to the total revenue of Viatris.
For 2021, we project the business to be approximately $10.5 billion in total revenue, making up approximately 60% of Viatris's total revenue for 2021. You can see from the table shown on the slide, our North American business continues to be a strong business with approximately 700 products and a field force of roughly 400 people supporting our entire portfolio. We have many launches planned in 2021 and also expect to see a significant contribution coming from our biosimilar franchise within the region. That said, we are seeing that our business in Europe is growing and will now contribute more revenue to Viatris than our North American region. We have a portfolio of greater than 1,400 products and a sales force of more than 3,000 colleagues working to support our European market.
We have a significant number of launches planned in 2021, as well as strong performance around our biosimilars for growth in this marketplace as well. Now, as we look at the products and footprints in developed markets, we are going to dive a little more into how the depth of our portfolio and the sustainability and stability of our business. You will see that we have a diverse portfolio mix of brands, generics, and complex generics and biosimilars that are spread across multiple technologies in dosage forms across the 35 countries that make up developed markets. We continue to be a market leader in complex generic products, where we rank number one in value, volume, and total prescriptions for products like Wixela, glatiramer acetate, and Xulane.
When you look at the stability of our portfolio, you will see, as I have already mentioned, that historical erosion is expected to continue in the low to mid single digits. In addition to this, we continue to be a leader in the retail pharma market in value in Italy, Portugal, France, and the U.K. In the U.S., we rank number two in generic value, with more than half of our generic products ranking either number one or number two in overall value. Turning to growth opportunities within the segment, we see our focus has been very strategic. When we launch brand products like YUPELRI and support them with the appropriate investments, we are the clear leader with 93% market share and continued growth of more than 30% projected on a year-over-year basis.
We have also ensured that other key brands have the right commitment and level of support and are projecting growth on many of these products, especially within our European region, along with our biosimilars portfolio that continues to grow on a year-over-year basis in both North America and the U.S. and Canada. Finally, when we look at the commercial operations around developed market segment, we see a very strong commercial presence and sales teams that are strategically focused within the relevant channels. These teams have built long-standing relationships that have allowed us to be a partner of choice with our customers. It is very clear from this slide that we are much more than one market, one product, and one channel.
Moving to the commercial toolkit and how we deploy the resources that I just walked you through, we're going to continue this discussion around the commercial operations focus and how we've continued to evolve the organization over the years, and specifically with the COVID-19 pandemic we've had over the last 12 months. I'd like to walk you through two specific case studies that I think will be very helpful in showing you how we're going to deploy these resources in market. First, let's take a deeper dive into YUPELRI. While we started this journey with a dedicated sales force, strategic call targets, and a marketing platform, until the deployment of our investment, maintenance, and tail brand strategy, we never truly realized the full potential, efficiency, and effectiveness that could be created through a true omnichannel marketing strategy.
We have now taken our traditional sales force with the approach that we've done from launch and complemented it with digital capabilities. In 2020 alone, our 135 field reps with approximately 40,000 call targets completed more than 400,000 HCP interactions and hundreds of thousand digital interactions with both healthcare professionals and consumers. These efforts have driven cost savings while enhancing our share of voice in the marketplace. Turning your attention to the chart on the right side of the slide, you will see in Europe, the investment, maintenance, and tail strategy and analysis has allowed us to reevaluate the specific tactics around the portfolio. With successful optimization of the maintenance and tail products, we have been able to reduce our overall SG&A by more than 10%, while at the same time growing our revenue by 5%. Moving to focus future growth in the global healthcare gateway.
When we introduced you to Viatris, we also introduced you to our global healthcare gateway. This is our commitment to leveraging our global platform and experience to fuel future growth and broaden access to medicines for patients through unique partnerships around the world. In developed markets, one example of the global healthcare gateway was the announcement of our agreement to acquire the commercialization rights of Aspen's thrombosis business in Europe. This portfolio of products was a significant addition to our business that makes us one of the largest suppliers of thrombosis products to patients in the European market. It also, most importantly, as well, bolsters our commercial infrastructure to further expand on complex injectables throughout the European countries. By adding to our experienced sales and marketing team, we will further strengthen our current reach into hospitals and enhance the future growth of our biosimilars franchise in Europe.
In addition to this example, you can see we have a strong track record of partnerships from Natco and Theravance in the U.S. to Biocon in the U.S. and in Europe and to FKB in Europe. We have been able to leverage the capabilities and strengths each organization has to offer to achieve great success in the markets we participate in. What are some of the key factors impacting performance? As we take a look at where developed markets is coming from, and most importantly, where we're headed, we can see there are several factors that are impacting our projected performance for 2021. The North American region is projected to see year-over-year decline due to one-time events and certain pro forma adjustments.
These include things such as the loss of exclusivity on Perforomist expected in June of this year and an administrative fee and return reserve adjustment for Lyrica in the U.S. in 2020. COVID-19 and normal competition also continue to impact our business. When we account for these one-time events and normalize our business, you can see base business erosion is in the low single digits, as we have stated and as we have expected. Offsetting some of these negatives are tailwinds and opportunities such as the projected growth in YUPELRI, new product launches within the segment, the addition of this very important Aspen portfolio in Europe, and the projected growth of our key brands and biosimilar products in Europe and across the segment. The segment projection overall for developed markets is to remain flat. Let's talk again about the building blocks to drive growth.
When I began this presentation, I started out by highlighting the roadmap to success and detailed the important building blocks along the way. The building blocks to drive growth for developed markets are very simple. First, we must have a stable business, which will be done through prudent management of our portfolio and continued investment in a robust pipeline across North America and in Europe. Next, a strategic focus on growth. Products that are included in these are highly profitable and highly complex. The continued commitment to our biosimilar franchise across the regions and growing our share, as well as investment and focus products based on the investment, maintenance, and tail strategy, will be extraordinarily critical to our success.
Finally, maximizing the effectiveness and the efficiencies in our commercial infrastructure to include the continuation of omnichannel marketing approach will provide cost savings and enhance our share of voice in North America and in Europe. I truly appreciate the opportunity to talk with you today about the exciting and dynamic business we have in developed markets. We look so forward to 2021 and the future, and thank you for your time.
Good morning. I'm Drew Cuneo. I'm Viatris's President of our JANZ segment, which is made up of Japan, Australia, and New Zealand. I myself have spent more than 20 years in the healthcare industry in various roles, including running large and complex commercial businesses. However, I'm humbled, honored, and truly excited to have the privilege of leading this segment comprised of what I consider highly talented and hardworking people.
As you will see, we have a lot of work to do in the near term, but this team is up for the challenge. Now, let's dive in. We are true leaders in these markets with substantial commercial operations across product and business types that enable us to maintain leadership and deliver healthcare solutions to our customers. Our businesses in JANZ are diverse and durable, with efficient commercial infrastructures and operational excellence that support long-term competitive advantages. However, in order to respond to industry and macroeconomic trends and to deal with company-specific headwinds, we are proactively restructuring to ensure stability and set ourselves up for long-term growth. Additionally, we are focused on optimizing and taking a disciplined approach to our investments. We're targeting investments into our focus growth products ranging from our key brands to our biosimilars.
Using our existing commercial platforms and our local market expertise, we have success in managing products through their entire life cycles, from launch and growth through and including the post-LOE period and during generalization. We also have a proven track record of leveraging our platform to partner with pharmaceutical and biotech companies, creating future opportunities to manage risk and capitalize on growth opportunities. Now, just for a snapshot, JANZ is a substantial business segment. We're forecasting about $1.9 billion in revenue this year, which represents a little more than 10% of total Viatris revenue. As I mentioned before, we are market leaders in all three JANZ markets. We're top 10 in both sales and volume in Japan. In fact, we're number one in volume for both Australia and New Zealand and top 10 in sales for both.
Our portfolio is broad and features about 800 products and 3,000 SKUs. Our sales colleagues in JANZ number over 1,100 people, providing a robust promotional capability that enables us to continually have a share of voice necessary to meet customer needs across channels. In terms of the JANZ markets in which we operate, these are wealthy developed nations with advanced healthcare systems and promotionally sensitive pharmaceutical markets. Japan, in fact, has the oldest population in the world, with nearly 30% of their population aged 65 and higher. Our portfolio plays very well into these demographics, with chronic medications geared toward aging populations in areas such as cardiovascular, gastrointestinal, pain, and respiratory. Generic penetration is also high in these markets, but we are well positioned to operate in these markets, and post-LOE brands often retain a substantial portion of their value.
Now, let's turn to what makes our JANZ business different. We have significant competitive advantages that support our leadership positions. First, we have a broad portfolio across channels, product types, and therapeutic areas, allowing us to deliver a full portfolio of solutions to our customers and the governments we serve. Second, we have responsive operations capabilities that are underpinned by local manufacturing and distribution and a team that's dedicated to excellence. This last-mile distribution capability has created our reputation locally as a reliable supplier. Importantly, we have the operating agility to respond to the emerging needs of customers and government stakeholders, thereby providing significant value on a day-to-day basis. Third, our commercial infrastructure with representation across the customer-facing spectrum, from physician office to pharmacies to OTC front-of-store expertise, positions us to be able to promote products efficiently and to manage the product life cycles effectively.
Finally, our investment into our digital platform has been key during the COVID-19 pandemic by enabling us to more efficiently and more broadly reach our customer base in these conditions. Going forward, a hybrid approach to promotion will be critical as it will allow us to continue to promote to customers with a leaner and more efficient organization. Now, let's dig into some of the details that make our business a durable platform for the long term. As far as portfolio diversity goes, branded revenue makes up greater than two-thirds of the sales in JANZ. Most of that revenue is made up of sticky, established brands that will continue to provide value year after year. Further, as you can see in the bottom left, no product makes up a disproportionate share of our revenue going forward.
We have a portfolio of growth brands such as Amitiza and Effexor, our two largest brands in the region, as well as our OTC brand ParaGard and specialty products such as Dymista and Creon. Our focus growth brands have sales of greater than $500 million in year-over-year growth of nearly double digits, complementing our brand portfolio and demonstrating our capabilities to manage a product life cycle. We have recently begun launching authorized generics, biosimilars, and complex generics. While their contribution today is relatively small, it will grow over time. The JANZ markets, like all developed markets, present complexities and nuances. Annual price decreases and high generalization are the norm, but Viatris has a granular management discipline and approach to effectively manage these complexities. Key to our approach, as I mentioned before, is strength across different channels, featuring the ability to promote to GPs, specialists, hospitals, and to pharmacies.
Two, we have a disciplined investment philosophy. We're investing in products of the most differentiation and the greatest returns and addressing the rest of the portfolio via efficient means such as our digital platform and key account management, optimizing value, long-term value, and maximizing what we have. We're placing emphasis on value optimization down to the product level. By doing this, we're able to effectively manage product life cycles by launching line extenders such as for Amitiza and Creon, by pursuing OTC switches such as for Dymista and Relpax, and by launching authorized generics in these markets. Finally, we are an organization that seeks sustainability. In order to do that, we are applying a careful approach to managing costs and economics throughout the business by focusing on cost and investment discipline, product-level optimization, in some cases, rationalization, and always improving operational-level efficiencies.
Now, focusing on growth in the future, the global healthcare gateway will be key to our long-term growth. In JANZ, we have very specialized markets where we hold distinct competitive advantages and local market expertise. This truly differentiates Viatris as a partner of choice. Additionally, we have a proven track record of partnering in these markets, including for Amitiza, our largest product in the region, with large pharma to leverage our unique local infrastructure, and for various biosimilars. The most recent example of partnership is with FKB for Hulio, where our close collaboration has allowed us to recently launch the first and only biosimilar of adalimumab in the Japan market. These are some examples of how our scientific operations and commercial excellence have created the opportunity for us to partner in JANZ and create value for both us and our partner.
Now, let's talk about some of the factors impacting our performance in 2021. Last year, the JANZ region did about $2.4 billion in sales. That's approximately $500 million more than our 2021 plan. With Celebrex going off exclusivity in 2020 and Lyrica at the end of 2020, we are experiencing significant erosion of these products in 2021 and expect high generic penetration before year-end. We also continue to anticipate COVID-19 impacts throughout the year as ongoing states are emerging and continuing in Japan, and their delays continue in rolling out the vaccine. Annual price declines and products are also something that we routinely face in these markets. We see that manifest in normalized base business erosion of 3%-4%.
While we cannot entirely offset the headwinds we're seeing in 2021, especially ones as large as losing exclusivity on your two largest products, Celebrex and Lyrica, in the same year, we are taking action. We are proactively and aggressively restructuring the business and our cost structure to meet these challenges to enhance profitability and to better position JANZ for future growth. Our restructuring plan will significantly reduce our footprint and right-size the cost structure by approximately 35% versus our pre-COVID operating costs. With this leaner organization, we continue to leverage digital and remote tools, and we continue to use our hybrid and virtual reps, allowing us to efficiently enhance our reach. To maximize profitable growth, we will discontinue unprofitable products and end uneconomic relationships while we seek continual improvement to contract terms.
Most of these headwinds are one-time events, and we are taking action with the goal of stabilizing the business for the future. Now, putting this all together, let's look to the future and think about it in two horizons. In the near term, as I mentioned, we are restructuring and stabilizing the JANZ business. We're refining our market approach and how we target customers using our lean and new infrastructure. We are creating a cohesive culture built on competitive advantages where we aim to serve our customers in a comprehensive way, and we are laying the groundwork for future success. As we move forward after stabilization, we will focus on maximizing the potential of our assets that we have, and we'll collaborate with our R&D colleagues to build out targeted pipeline to support future growth. Our new combined JANZ platform brings together the best of both legacy companies.
We have top-notch talent, a stronger, more efficient commercial platform, additional business drivers, and opportunities to generate long-term growth. All of this will establish the base at which point we will turn our focus to leveraging the global healthcare gateway and our uniquely strong commercial platform. In conclusion, I want to reiterate the Viatris JANZ region has a number of strengths. One, an established leadership position, effective and efficient infrastructure, disciplined investments into our focus products, proven experience in managing product life cycles, local market expertise that truly differentiates us, and the successful track record of successfully partnering with other pharmaceutical and biotech companies to ensure long-term success. Thank you and be well.
Good morning. My name is Menassie Tadesse. I'm the President of Viatris Emerging Markets and extremely happy to be here with you.
By way of brief introduction, I've got over 23 years of industry experience, both in domestic and international markets, having managed innovative and established businesses, having had the good fortune to live and work in the U.K. and South Africa, and where I'm based now in Dubai, UAE. My markets are very complex and varied and still dogged by some of the same stereotypes that we associate with developing economies. What I'm here to tell you is these markets have made tremendous, tremendous progress just in the last couple of decades in this century. What's important to me and important to us at Viatris is the fact that two out of every three individuals on this earth live in these emerging markets. What does this mean from an emerging markets business perspective for Viatris?
Emerging markets Viatris is $3.3 billion, a nice composition of business across Asia, across Africa, the Middle East, and emerging Europe, Latin America. The business vertical that represents 37% of our business is the ARV business vertical that we manage as such. We serve over 125 markets. We've got a nice channel mix. This is a topic that's ever more important as markets and healthcare evolves around these countries. 55% of our business comes from retail, 45% comes from business to government, business to business, and other funders. What I'm particularly excited about is the 3,500 talented, capable individuals that are highly engaged in emerging markets, the majority of which are customer-facing. When you look at our rank, we're a top 15 player. Adjusted for the third-party funder business, which I keep here does not capture, we're actually a top 10 player.
In five out of our eight markets, we're a top 10 player. In three markets, three of our leading markets, we're actually a top five player. We have scale, breadth, and depth of this Viatris business in emerging markets. Now, if I pan out towards the market, it's a very attractive $150 billion market, $100 billion of which is concentrated in the top 10 markets. These markets have been growing at double the global pharma market growth rate and are expected to only accelerate that from 2020 to 2024. Some key trends that I'll highlight: twin demographic divide. When you think about the aging population, when you think about economies, when you think about healthcare, a growing middle class that we've all heard about. This is not only underpinning wealth creation and urbanization, it's also driving demand for quality healthcare.
As the WHO describes it, the dual burden of communicable and non-communicable diseases. To me, this is the health equity conversation of the day. How are we going to provide quality medications at affordable prices with broad access across this 5 billion-plus person population? The good news for us is not only are we well-positioned to be able to do that as Viatris, national healthcare agendas are also moving towards quality and affordability as key markets. It is important to note that these markets are still markets that value brands. Differentiation, share of voice, brand consciousness is extremely important for our markets. I have been giving you a little bit of a sense of who we are in emerging markets as Viatris, but also the marketplace. This obviously leads to one conclusion, and that is that there is opportunity. I would say that there is huge opportunity, significant unmet medical need.
What I'm going to do over the next few slides is really tell you about how we're approaching this business, how we think we can unlock value across these markets. To me, success in emerging markets is threefold. We've got the scale, we've got the portfolio and the solutions, we've also got the capabilities and the efficiency. The scale I've already talked about, but scale with knowledge as well to leverage the market similarities, but to also tailor solutions for local dynamics. That's just the way healthcare works in these markets, and that's experience that we have. The breadth and depth of the portfolio we've already talked about. For me, beyond the leading positions that we have in CV, in pain, in CNS, and other areas, the ARV, the pipeline that comes behind it is extremely important. I come from a legacy Upjohn background, a legacy Pfizer background.
When I think about the Upjohn business, just 20 products, we were trying to maximize 20 products and doing a fairly good job. I see this pipeline and an ability to really go further in the therapy areas where we're competing and very strong and leading, but also to be able to expand beyond that. This also comes with strong brand equity that will help us be able to identify growth paths across our markets. We've got an efficient infrastructure. What I'm here to also tell you is that it's extremely effective with end-to-end capabilities to be able to execute with excellence in commercial and other settings. These are headlines. Let me give you a sense for what our sustainable competitive advantages are. A very busy slide. I'll spend a little bit of time on this, so bear with me.
I do not want you to think that these are individual silos. I do not think you can be good in one or two and succeed in emerging markets. You have got to be good across the board. This is what Viatris brings to the table. If I start off at the left, the breadth and depth of the portfolio is really unmatched. There is nobody that has the profile of offering that we have across chronic conditions, 11 TAs, the NCD5 as has been described and defined by the WHO, but also industry leadership in ARVs and other such areas. When you look at the composition of the business, brands are more than half of our business. Generics, including this ARV component, is a large chunk of our business, and complex and biosimilars are a growing portion of our business.
What's important to note in emerging markets is, given the profile of these businesses, given the nature of these businesses, and given the margins of these businesses, we've got unique go-to-market models that are fit for purpose to make sure that we're doing well by patients, but also doing well on behalf of the business. When I think of scale and operational excellence, it's really end-to-end capabilities. It will take too much time to be able to exhaust it, but if I focus in on just a couple of them, the anchor market footprint that we have is not just about sales and marketing. It's really going beyond that. The marketplace is evolving. Key account management capabilities, channel capabilities, whether it's tender, retail, funding capabilities to be able to work with funders across the globe, some local, some global.
What cannot ever be overstated in emerging markets is that manufacturing footprint and the supply reliability. The ability to be able to do what you say you will do and produce the product, but also supply it in the last mile concept across emerging markets is extremely critical. Not only do we have the breadth of the portfolio, not only do we have the execution excellence, but if I go over to the right, what gives me confidence as we go forth also is we have got the know-how. The know-how, which comes through from the expertise and the leadership that we have, scientific in nature, the beyond-the-pill solutions. This is to say it is not just about the product, it is the holistic patient journey that we need to solve for in emerging markets, and for that matter, across any market in healthcare.
A key differentiator for us is our ability to be able to expand access in broad ways. I'll show you some examples as we go forth that will bring this to life. The strong brand equity and reputation that we have is not just about our rank. It is actually the legacy companies that we come from, the iconic brands that we have, the leading portfolios that we have in certain areas, and again, this footprint and supply reliability that all sums up to exceptional stakeholder management, which is critical not only to identify opportunities, but to also mitigate risk, which is part and parcel of the way we manage the business. All this to say creating value through know-how, execution excellence, and differentiation. I have talked about country examples. Let me give you some. Again, another busy slide.
I will leave this with you, but touch a few points to punctuate. From a Thailand perspective, starting left to right, Thailand is an evolving market, like all of my markets. 70% of the business flows through a hospital, but retail is becoming an ever more important channel. We've got broad geographic footprint, but what's important to note in Thailand is that we've got a comprehensive portfolio and a channel mixed management approach that allows us to be able to continue to win in hospital, but also expand in retail through differentiation. This has very much led to us being a top five player, and we think actually a top three player with leadership in CV, in pain, in ARVs, and beyond. Switching to Korea, it's about our digital capabilities.
As a platform beyond the table stakes of everything else that we do, a single payer system where ACPs have increasing demand for digital information. We've got a digital infrastructure and multi-channel capabilities that is world-class, and we're evolving it, and we've used it, especially in COVID days, and we continue to use it. What's important to note in Korea is the number one ranked product in all of Korea is still Lipitor. If I switch gears to South Africa and talk about access with a very different market, a large population per capita healthcare spend at a lower level, our end-to-end capabilities to be able to really broaden access that I talked about earlier through differentiation, through funding, and through partnerships has led us to be a leader in South Africa, again another top five, and a leader in ARV in both retail and hospital channels.
Finally, over to the right is stakeholder management in the Gulf markets, high per capita spend, relatively smaller markets, predominantly tender-driven, but evolving. Regulations are changing on a regular basis. Our ability to be able to operate in this environment requires that we mitigate risk, but we also drive opportunities. Again, we are a top five player here with leadership in CV and pain and in other areas. Hopefully, this gives you some examples of sustainable competitive advantages coming to life. If I switch gears, I want to talk about Global Healthcare Gateway and an example, almost a case study of the types of things that we think we can do as we go forth in this new Viatris journey that we are on. To understand the ARV business, you will know that 9 million patients are on Viatris HIV treatments across 125 countries.
It's the largest portfolio across first line, second line, and pediatrics. We're consistently among the first to launch novel first-line regimens across multiple markets. Again, it's not just about the advancement in the technology and the innovation, it's also the access that we're offering. We've got strong relationships with key stakeholders in the HIV community, innovative solutions for HIV patients, strategic partnerships with partners like Gilead and other innovator companies. This focus is not only in HIV, but expanding to hepatitis, to TB, with partnerships with Gilead, Otsuka, TB Alliance. Again, all this to say a case study for what is to come in emerging markets, given the footprint that we have now when we continue to execute Global Healthcare Gateway going forth.
What I hope I've done is give you some market dynamics, allowed you to touch and feel some of the capabilities that we have that give me confidence that this combination is really why this transaction happened, to be able to leverage the sort of scale that we'll have in markets like the emerging markets. Now, before I go into a longer-term timeline, what I want to do is actually focus on the near term of 2021. 2021 is impacted by some special one-time items. There's no doubt about it. Remdesivir was a positive for us in how quickly we were able to capitalize on treatments for COVID patients in 2020. That's no longer the case going forth, so it will be a negative in 2021. There are other items in emerging markets, too many to list.
The pluses, minuses, go-to-market model changes that we have in Vietnam and a few others, those would be too long to discuss. What I'd like to focus on are the headwinds and tailwinds that apply in 2021, but are also themes that we need to concentrate on and own as we go forth. Pricing and cost containment has been, is here, will be here as we go forth, and competition as well. I hope I've given you a bit of a sense that we're equipped to be able to manage that, to be able to mitigate risk where possible, but to also identify opportunities as we go forth. What excites me is the tailwinds. We talked a lot about healthcare agenda, a growing middle class, and unmet medical need. I think that's clear.
Again, coming from an Upjohn background with 20 products that we were trying to maximize, when I look at the potential to be able to launch additional treatments, additional products in areas we're strong in and in complementary areas as we evaluate strategically where we want to go, there's a tremendous, tremendous opportunity, and this will be a tailwind that is in play already in 2021, and I think only grows as we go forth as a combined company. I've been giving you this 2021 and this near-term overview. I'd really like to focus now on the building blocks for growth as we go forth. Organically, for now, in the near term, we're going to continue to modify our go-to-market model, continue to find efficiencies and effectiveness as we look to build our capabilities, especially in the digital front. That will continue.
When you get to the medium to longer term and you look at phase two and phase three, there's a tremendous opportunity, as I've spoken to already, to be able to launch global products in markets that they're not in already, to continue to expand beyond the urban centers, and again, in fit-for-purpose, unique sort of ways that either leverage our current platform or actually use new go-to-market models where we've got tremendous third-party capabilities, intermediary capabilities that we can bring to bear, and continue to enhance our product differentiation through lifecycle management, which has been part and parcel of the way we've managed the business and the way we've insulated this business for many years.
Now, finally, as we begin to execute more with Global Healthcare Gateway, I think there's a tremendous opportunity to expand much deeper in the therapeutic areas that we're in and potentially expand into other adjacencies, as I spoke to already, again, thinking about highly differentiated incremental innovation to be able to bring something more to the market, to be able to build our business. Now, with this as background, I really want to close out this conversation with three key takeaways. We are extremely well-positioned. I said a little earlier, this combination of Mylan and Upjohn coming to be able to create Viatris, for me, makes most sense in emerging markets. I may be a little partial, but that's the case. We've got a solid foundation, really a differentiated position in evolving markets.
We've got scale, leadership, and know-how to really be able to drive the near-term opportunities, but also ensure that the business continuity and business growth occurs. When you think about it going beyond that, we've got an opportunity to be able to have focused growth through meeting the significant unmet medical needs that exist. Look, I know it's a lot to digest in a very short period of time. When you're trying to cover 125 countries, 200-plus products, multiple therapeutic areas, not very easy to be able to pull it all together. What I hope I've given you is a sense of the marketplace from an emerging markets perspective, our presence as Viatris, and the growth plans that we have as we go forth. Thank you for your attention. I'd be happy to answer questions in the Q&A session. Thank you very much.
I'm Sean Ni, President of Greater China Region, and I'm speaking to you from our headquarters in Shanghai. I'm very proud to present to you on behalf of over 5,000 Viatris colleagues in this region about the exciting business opportunity we have here in one of the most dynamic and promising markets to create value for Viatris and all of its stakeholders. In the presentation, I'll show you that we have a strong and sustainable business foundation here. We have already fully integrated our legacy businesses and are operating as one company. We have also adapted our business model to the new market environment and shifted our focus to less policy-sensitive market segments. Despite the policy headwinds, China as the second largest pharmaceutical market in the world is still very attractive.
In addition to strong economic fundamentals, the rise of healthcare consumerism offers great opportunities for our products in channels beyond the traditional hospital channel. Both our retail-oriented portfolio on the market and our pipeline are well-positioned to capture these opportunities. Finally, the new Viatris organization has transformed itself into an agile, patient-centric omnichannel operating model. We have a powerful organization here with deep roots in this market and exceptional, well-rounded capabilities. We are set to regain growth from focused portfolio expansion and to become the partner of choice in this complex market with very high entry barriers. First, let me give you a quick overview of the Greater China market segment. We have three markets in this segment: Mainland China, Taiwan, and Hong Kong, estimated to contribute $1.75 billion in 2021, which is about 10% of Viatris' overall revenue.
We have leadership positions in each of the three markets, ranked number eight among all multinational pharma companies in Mainland China, number nine in Hong Kong, and number 14 in Taiwan. Mainland China is our main market, representing about 90% of the overall revenue in the segment. We will focus the rest of the presentation on Mainland China. It is the second largest economy in the world with 20% of global GDP and is expected to grow 7.5%-8.5% in 2021. Private consumption is growing rapidly and is expected to match the current scale of the United States by 2030 at $12.7 trillion. Healthcare spending is about 6% of GDP and expected to grow in line with GDP growth. It is worth pointing out that this is far below the U.S. healthcare spending of 18% of GDP.
The recent healthcare reform initiatives, such as volume-based procurement, are shifting funds towards innovative medicine and broadening coverage of basic medical needs. In the meantime, private funding is growing rapidly, driven by rising disposable income and the need of high-quality healthcare. Cardiovascular diseases represent the greatest disease burden in the next 10 years for China. At 20%, it is much higher than the global average of 14%. We're well-organized to benefit from the strong demand with our infrastructure in China. We have a field force of 4,200 employees covering over 7,000 hospitals and over 400,000 pharmacies in China. We can't talk about China without talking about VBP, so let me walk you through the history of VBP. VBP stands for volume-based procurement. This slide shows you the history of VBP implementation. In the Viatris portfolio, Lipitor and Norvasc were included in round one.
Celebrex, Zoloft, and Viagra were included in round three, and most recently, Lyrica was included in round four. All Viatris products with meaningful sales are now subject to VBP tenders. Going forward, our portfolio has very limited exposure to the current VBP policy. We have proactively rebalanced our business to adapt to VBP impact. Through focused investment in the retail channel, our business contribution from retail has increased from 23% to 35% in 2020 and is expected to further increase to 46% in 2021. The implementation of universal reimbursement prices will further pressure our hospital business. We're keeping a close eye on the policy implementation details of URP that is expected later this year, and we have fully accounted for the potential impact in our operating plan.
The creation of Viatris last year provided us with a great opportunity to adapt ourselves to the changing landscape, and we're well-positioned to compete effectively in the post-VBP China market. We rapidly integrated the legacy businesses with teams working together from day one after closing and rebalanced our business to be ready to go to market with the right strategy to drive our business forward. We restructured our organization to focus on each of the three patient access channels: hospital, retail, and online platforms. Our organization is equipped with deep experience in this industry. Robust business processes and systems and localized manufacturing and R&D capabilities are all our great assets. Our long history of partnerships with the healthcare community and government in China's healthcare priorities gives us a strong foundation to serve our patients, business partners, and stakeholders effectively as Viatris.
Our portfolio is well-positioned to leverage our strong commercial capabilities in China. Iconic brands like Lipitor and Norvasc have very high brand loyalty and a large patient base. We have already started executing a plan to expand the cardiovascular portfolio. Viagra is a very successful retail-oriented RX product and is the foundation of our strong position in the retail channels. Celebrex, Lyrica, Viartril, Legalon, which are already launched in China, all have very strong retail potential and are growing rapidly. Our planned introduction of our retail-oriented portfolio, including OTC and consumer healthcare products, will further solidify our leadership position in the retail channel and capture the opportunity in healthcare consumerism. Our deep and differentiated commercial experience and capabilities make us an extremely desirable standout when optimizing ours or any of our future partners' portfolios.
Although our patients may purchase their needed medicine from retail pharmacy or online channels, the recommendation of doctors in hospitals is still an important key influence factor. We have a unique operating system that allows our teams to work seamlessly together across all three patient access channels: hospital, retail, and online digital channels. This is another key differentiator for Viatris. Our business is also operating with a robust compliance program, and we're committed to continuing investing in this area to maintain high standards of compliance for our company. We believe our unique strategy and positioning, our first-in-class global and local capabilities, our deep roots in the China market, which has an extremely high barrier to entry, positions us as the best partner of choice for any other global pharma or biotech companies around the globe looking forward to tap into this market.
We offer our potential partners a one-stop shopping opportunity through our global healthcare gateway with the resources and capabilities of a top-tier big pharma and the mindset of an entrepreneur, including our commitment to provide our partners with high standards of compliance. We're also committed to bring the science from China to the global markets. Looking into 2021, the key factors impacting our performance will be VBP expansion with impacts Celebrex and Zoloft for the full year and Lyrica for three quarters. URP, which is universal reimbursement price, is expected to happen later this year, and we're closely monitoring the developments on this new policy. As I said before, the impact has already been fully accounted for in our operation plan. Besides the impact of these factors, we expect our hospital business to be flat.
Our retail business will continue to show strong growth, benefiting from growing healthcare consumerism and underlying market growth driven by unmet medical needs. We also expect to realize both revenue and cost synergies as planned, benefiting from a quick completion of integration of the two businesses. To conclude this presentation, we're set to regain growth with a focused strategy in Greater China. In the near term, our rapid integration of the businesses and transformation of our business model will allow us to stabilize the business and realize planned synergies. As the organization further transforms itself into our new omnichannel business model and unleashes the full power of our commercial capabilities, we'll drive organic growth from our current portfolio to its full potential.
In the medium to long term, portfolio expansion from both internal R&D pipeline and our global healthcare gateway will drive exciting new growth opportunities for our business in Greater China. As we expand from the current portfolio of products to now optimizing Viatris' global portfolio of innovative, branded, generic, and consumer healthcare products, I hope to share my excitement with the opportunity to lead the Greater China business to do our part in creating value for Viatris. Thank you. Attention all. The Investor Day will resume in roughly 90 seconds. Repeat, this call will resume in roughly 90 seconds. Thank you.
Good morning, everyone. Really honored to be here today, even though we are meeting virtually. My name is Sanjeev Sethi. I'm the Chief Operating Officer for Viatris. I'm proud of the team I represent.
You heard from Rajiv about our overall supply network strategy and how it is designed to serve patient needs in the different markets that we operate in. He talked about some of the key enablers and the basic principles which govern our operations. We are proud to have built a robust global operating platform. This has been the result of years of strategic planning and investment. Our operating platform enables us to deliver on our mission of providing access. I will now walk you through all the key elements in more detail. We currently have 50 manufacturing sites spread across five continents. It is not just about the number of sites. It is about how well we manage them. Flexibility of network and proximity of these sites to our key markets is very critical. We have global sites with regulatory approvals to serve multiple countries.
However, the complexity of regions like Europe and emerging markets cannot be fully served by global sites. We have sites dedicated to serve regional needs. We also have local sites to cater to in-country needs. In some cases, such as South Africa and Turkey, local presence is required even to participate in the market. With the coming together of Mylan and Upjohn, we have further expanded our local footprint. We now have local sites in Africa, China, the Middle East, and Southeast Asia as well. We have about 190 distribution centers spread across 60 countries. These distribution centers provide us last-mile distribution capabilities. Another important aspect of our network is our flexibility. Flexibility in terms of volume and batch size for country-specific needs. This becomes important because we serve large markets like the United States and also small fragmented markets in Europe and emerging markets.
Let's now talk about our manufacturing capabilities. We are proud of the diversity and scale that we have built. As you see here on the slide, we have technical capabilities to manufacture across dosage forms and across the complexity spectrum from oral solids to transdermal patches to respiratory products and biosimilars. For example, OST for us is not just about simple immediate release tablets. It includes multiple difficult-to-manufacture technologies as well. Similarly, in injectables, we have now built capabilities for complex injectable technologies like depot injections, liposomes, and microspheres. For topicals, we have a full range of ointments, creams, foams, and transdermal patches. For respiratory, we have capabilities for nasal sprays, metered-dose inhalers, and dry powder inhalers. We have full scientific and manufacturing bandwidth for biosimilars. We have the capability and capacity to handle almost every type of synthetic API.
Overall, we currently have the capacity to produce approximately 80 billion units across different dosage forms and technologies. Coming to the backbone of our operating platform, our supply chain network. This slide here shows, as an example, how all our major markets are well-supported to ensure reliable supply to customers. We understand the diverse needs of different markets and have built infrastructure and capabilities to cater to these market-specific requirements. Let's look into France as an example. We have two manufacturing sites located in-country. In addition, we have a dedicated packaging facility for the French market. Outside of France, there are multiple internal manufacturing and packaging sites that are approved to make products for the French market. We also have relationships with several third parties as well.
In addition to the manufacturing and packaging support, we have also deployed dedicated in-country resources for key functions like supply chain, regulatory, pharmacovigilance, and quality. These examples highlight how the network we have built is well-positioned to serve the needs of markets across the globe and drive access. What has this resulted in overall? Let's briefly look into some key stats that help us define a resilient and reliable supply chain. Our efforts of being responsive to market needs have helped us maintain customer service levels at approximately 95%, despite the COVID disruptions in 2020. We have also made conscious efforts to de-risk all our critical products and markets and ensure supply continuity.
Our top 100 products are supplied from 80 different locations in 20 countries, meaning if an event such as a global pandemic hits again, no single geography or location will cause a major disruption to our business. Approximately 50% of our top 100 products are dual-sourced, either for API or for finished product or for both, providing us with an even greater level of supply chain security. In addition, we do not depend only on China or India for our API needs. Twenty countries supply API for our top 100 products. We talked about our manufacturing capabilities and our supply chain network. We also need the right cost of goods to be sustainable. We always keep challenging ourselves to stay cost-competitive. We are in the process of reshaping our operating platform. In line with our network strategy, we will be rationalizing approximately 15 sites across the network.
This will help us optimize overall capacity and focus on changing portfolio needs towards more complex products. We will continue to have ample capacity to meet customer needs once our network is further optimized. We will leverage low-cost geographies for commodity products. Needless to say, ensuring supply continuity will be a top priority during this exercise. With the combination of Upjohn and Mylan, we are using our procurement scale to drive spend efficiencies. Vertical integration. This gives us end-to-end control on supplies, cost competitiveness, and speed to market. We are driving efficiencies by utilizing centers of excellence. By centralizing resources and activities, we are able to reduce redundancies across locations and deliver a more standard output at a better cost. We are further improving efficiencies by enhancing automation in manufacturing and quality labs, and also by balancing the scale of operations.
This slide shows you, as an example, how vertical integration helps us stay in the game for a longer duration, even in a hyper-cost-sensitive market. When we manufacture APIs internally, we have full control over the chemistry and the process, and we can use it to our advantage to improve and get to more efficient processes. We can source key starting materials more efficiently and increase the scale of manufacturing. In this particular example, we could bring down the cost of API from $614 per kg to $270 per kg. All these efforts have helped us hold our leadership position in the hyper-cost-sensitive ARV business for more than a decade now. In the previous slide, you saw that we have relationships with over 600 third parties. Within that group, there are several key strategic partnerships that we have built over the years.
These partnerships complement our internal capabilities and capacities, and at times, provide us with a greater speed to market. We partner with these suppliers much more closely than traditional third-party relationships. We share in risk, cost, as well as commercial success. We work in close collaboration and engage directly to ensure effective decision-making at every stage. There are many success stories where, along with our partners, we could achieve speed to market, expand depth and breadth of our portfolio, and enhance market reach. For example, biosimilars with Biocon, revefenacin with Theravance, Creon and Influvac with Abbott. We also have contract manufacturing relationships with companies like TRC and Gland Pharma. We will take all these learnings from our past successes in our partnerships and amplify them with a unique commercial and operating platform that Viatris offers and be a partner of choice.
Now, coming to the most important aspect of our platform, quality and compliance. We do not view quality as a function. It is a mindset for us. It is in our DNA. It is built into everything we do and is the fundamental point of decision-making for every product. We constantly work towards enhancing our quality culture. We encourage our workforce to speak up. We do not stop with that. We have a strong focus on continuous improvement. We continue to invest in automation and leverage the latest technologies to enhance our quality systems and processes. We also have our shares of issues as well. However, what differentiates us from others is how we deal with the issues. We are constantly engaged with the regulators and stay close to the issues to minimize any disruption in our business. As you see on this slide, we have experience to deal with multiple regulatory authorities.
Last year alone, we had approximately 100 inspections by different regulatory authorities. We are regularly inspected not only by the U.S. FDA or European agencies, but by many other health authorities across the globe. This allows us to continually strengthen our quality systems and share best practices and learnings across our sites. Environment, health, and safety are very important for our business, and we really pay serious attention to it. As a responsible organization, we are not only committed to providing a safe and healthy workplace for our employees, contractors, and visitors, but also to protect the environment. We encourage our employees to play an active role in making workplace safety a priority. Many of our sites have been certified by ISO and recognized by the British Safety Council, with five-star ratings and Sword of Honour.
We have made significant efforts and invested resources to protect our environment and reduce impact on climate change through conservation of water, promoting clean air, and responsibly managing waste. A truly differentiating aspect of our operations is the highly engaged and performance-driven leadership team that manages it. Our operations leadership team has more than 250 years of combined pharmaceutical industry experience, averaging 25 years per leader. We are hands-on, and we are focused on execution, continuous improvement, customer service, and financial discipline. While we are operationally set up across the globe, the organization design we have ensures close connectivity amongst the leadership and the operating teams. There is seamless cross-functional collaboration, driving accountability and end-to-end ownership. I've mentioned continuous improvement several times, and this comes in many forms. Another example is shown in the way we deploy our capital.
We diligently and purposefully select projects and investments to enhance our platform for the future. Capital is deployed for the maintenance and for improving the efficiency of our existing infrastructure. We have selectively invested in the implementation of best-in-class systems for our manufacturing sites, picking areas that help improve quality and compliance or increase the efficiency of our operations. In line with our business and R&D strategy, we are deploying capital to upgrade our facilities to the most current technologies and further enhance our capabilities and capacities in areas like complex injectable, continuous manufacturing, and biosimilars. Before I close, I want to share a short video that will give you a glimpse of inside some of our manufacturing facilities, which I hope will bring some of my slides and words to life. That was a quick view of our manufacturing operations.
This brings me to the end of my section. To summarize, we have a customer-oriented, diversified, and flexible operations platform. Our supply chain network is resilient and de-risked. Our experienced leadership team is focused on execution, sustainability of operations, and continuous improvement. Overall, we are well-positioned to deliver access and growth with best-in-class manufacturing capabilities and strong strategic partnerships. Thank you very much.
Good day, all. My name is Walt Owens, and I am Head of Global R&D for Viatris. By way of introduction, my background includes 25 years of experience in the pharmaceutical industry in areas of R&D, operations, and quality. Prior to entering the pharmaceutical industry, I was involved in academic research in organic and physical chemistry at Rice University. I'm very excited to share with you today our long-term R&D strategy to support Viatris and the global healthcare gateway business model.
I'm also going to share with you additional details regarding our capability, our pipeline, and why we are so confident in our ability to excel. Our R&D strategy is composed of six fundamental pillars that will support the Viatris business model. These strategy components are, number one, development of complex and novel products. These represent unique, limited-competition products. Our second pillar is biosimilars, with an emphasis on first-to-market opportunities. Number three, we're not shying away from traditional generics, but instead, we are diligently pursuing the challenging opportunities. We will also support our markets, including Japan and China, with new submissions. We will enhance our current brands through appropriate lifecycle management. Finally, we will maintain our broad portfolio of marketed products for enhanced cost of goods, risk mitigation, and regulatory compliance. Taking together all these R&D strategies is critical to meeting our goals in each of our markets.
Our R&D strategy is underwritten by our scientific, clinical, and regulatory depth and breadth of capability. We have 3,000 scientists worldwide with local and global regulatory presence in 55 countries that are focused on delivering a portfolio of products that exceeds $224 billion in brand sales. Our scientists have expertise in multiple dosage forms, device design, and engineering. In addition, we have demonstrated experience in 80-plus multinational clinical studies and have conducted over 800 bioequivalent studies in the generic space. Legacy Mylan and now Viatris has a long-standing proven track record of delivering complex products. We've never shied away from challenging science or allowed the lack of an obvious regulatory pathway to inhibit our development of these types of products. We like breaking down barriers.
Our basic science, engineering, and clinical research, combined with our regulatory expertise and manufacturing capability, have allowed us to deliver products such as glatiramer acetate, Wixela, and an array of transdermals, peptide, and protein-based products, as well as complex respiratory products. Not only have these development programs resulted in non-commoditized products, the learnings and the science developed fuel the science of the future to develop and deliver complex products for Viatris. An excellent example of our complex product focus can be seen with our success in the development of complex depot injections. We have all the necessary science and capabilities in-house to deliver these products across a wide array of technologies such as nanoparticular designs, depots, and complex APIs, which does include peptides and proteins. The acquired scientific capability and knowledge that we have sets us up for long-term success in complex products for the company.
We have already demonstrated success with programs such as Copaxone, as well as with the submissions of Victoza and the Invega family of products. In addition to the submissions that I just mentioned, we are making excellent progress on eigho programs that are at various stages of development. Furthermore, five of these programs are well-advanced and have reached the regulatory exhibit batch stage or are in clinical execution. We're confident that several of these products will result in first-to-market opportunities. Along with our complex product programs, we're also focused on delivering novel products that meet the needs of the patient or that fill gaps in healthcare. Development of these products depends upon strong clinical research, regulatory strategy and experience, as well as formulation design and end-to-end product and process capability.
The ability to translate medical and patient needs through science into an effective product label is a key expertise that we have. We have all the necessary elements to be successful. In addition, we have a demonstrated track record of delivering novel brand products, and we are not new to this area of development, as proven by the success of products such as YUPELRI, PERFOROMIST, SYMBICORT, and Impo. We're well-positioned to leverage our regulatory and science platform to deliver a broad portfolio of novel drug products. As an update for you for our novel products programs, we wanted to share the current progress of key developments such as the novel delivery of fast-acting meloxicam and glatiramer acetate depot injection once monthly. As you can see on this milestone status graphic, both of these programs are reaching or are actively progressing into the important clinical phases of development.
In addition to these, we're excited to have MR-100 and MR-108 progressing as well into phase three. It's noteworthy that Pertamina and Delamine were developed in partnership with TB Alliance, where Viatris conducted the necessary research to bring these infectious disease products to the markets that need them, and they are now approved. Expanding our biosimilars platform with an emphasis on being first is our second key strategic pillar. As you can see, and as we have demonstrated, we have internally developed a strong scientific, clinical, and regulatory discipline for biosimilars. We have leveraged our internal capability with key partners to develop these challenging products across multiple therapeutic categories, technologies, and geographies. We have promoted these programs across many of our regions into the emerging markets while relying upon opportunistic business development activities to support unique markets like Japan.
As we have mentioned, Viatris has a proven scientific and regulatory track record in biosimilars. As a demonstration, this has yielded 313 country-level approvals across seven products and has facilitated our ability to market these critical medicines in 76 countries. We're also making excellent progress in the pipeline products for biosimilars such as Eylea, which has now completed its phase three clinical study enrollment despite the COVID pandemic. We have several programs that are nearing the end of their regulatory review cycles, and our Botox program is moving at an excellent pace with our partner Reverence. We have initiated analytical and preclinical characterization studies. Considering the progress shown here, we have a number of first-to-market opportunities in this existing biosimilars portfolio. That said, our focus on biosimilars does not stop with our current pipeline programs.
Moving forward, we have identified 13 new target development programs spanning additional therapeutic areas and equating to $57 billion in global brand sales. Combining our existing portfolio with these new biosimilar targets will give Viatris one of the industry's leading biosimilar pipelines with 30 products yielding a global brand value of nearly $161 billion. This forward-looking focus on biosimilars, in combination with our deep science and track record, positions us very well for execution in this critical strategy element. For our third component of our R&D strategy, we're not shying away from generic drug development. Instead, we will continue to pursue those products that have high barriers to entry and represent first-to-market or niche opportunities. Historically, our R&D teams have been very successful in delivering products that fall into this category.
Valuable products such as mesalamine suppositories, remdesivir injection, Dimethyl fumarate, heparin, daptomycin, just really to name a few, were made a reality from this generic product strategy. Our R&D and regulatory teams will continue to focus their generic development efforts on products that meet the criteria of non-commodity, first-to-market, or are challenging from a regulatory scientific perspective across all of the Viatris markets. How will we support our key markets in North America, Europe, Japan, and China? We will continue to feed these markets with new products and submissions year over year. As you can see in the charts on this slide, we are projecting significant increases in our submissions to Europe, Japan, Australia, New Zealand, and China when compared to the previous five years.
Specifically, we see increases of greater than 250% for submissions into the Japan, Australia, New Zealand, and China markets when compared to the 2016 through 2020 timeframe. For Japan and China, we're also excited to increase our footprint on our submissions, particularly in China as it's a new market for us. We also recognize that there may be unique regulatory requirements such as clinical trials and local patient populations or different product strengths that are needed to compare to the same product in the U.S. or Europe. Therefore, dedicated expert resources with a specific focus on these markets is required and is now established inside the Viatris R&D organization. We will continue to deploy our science from our large markets in the U.S. and Europe through incremental regulatory execution.
This strategy will deliver a large portfolio of products and submissions into the emerging markets such as Southeast Asia, Africa, the Middle East, and Latin America. By developing products for a primary market like the U.S. or Europe and then geographically expanding through incremental regulatory execution provides a mechanism for efficient and cost-effective delivery of new products to our emerging markets businesses. Here's an excellent example of how a complex biosimilar product has been geographically expanded through excellence in regulatory execution after receiving a primary market approval. Viatris's trastuzumab was the first U.S. approval in 2017. The scientific data from the U.S. and Europe has been leveraged to rapidly expand access to this product in 97 countries, with 38 more countries pending approval or plan for submission. These activities have facilitated marketing of this important product in 63 countries to date.
Enhancing our existing brands through lifecycle management is another key pillar of our R&D strategy. We are undertaking development actions such as OTC switches for Dymista and Viagra, development of new indications, and the development of new product strengths such as what we have done with Creon in New York, where we have introduced the 20,000 and 35,000 lipase unit capsule product. We are also actively pursuing improvements in device designs and expanding dosage forms and marketed products to enhance their value. These enhancements are a key focus of our R&D strategy with the aim of filling patient and medical needs while at the same time inhibiting the natural erosion of these products in the market. As one can imagine, with a large portfolio of products such as ours, we must maintain our disciplined regulatory compliance and engage in activities to improve cost as well as address risk mitigation.
We have organized our centers of excellence for regulatory operations, tech services, product safety and risk management, as well as medical affairs to enable them to focus on these important product maintenance activities, and they can do this in an unencumbered fashion. The efforts of these groups support 30-plus thousand marketing authorizations worldwide. As part of our R&D operating model, we also identify and manage closely key partners that can complement and enhance our organic capability and capacity. We operate in very close collaboration with our partners to ensure quick and decisive decision-making and defined product development strategy. The model has been very successful, as is evidenced by products such as YUPILRI, OGIVRI, and SYMBICORT, demonstrating our ability as a development partner. Based upon our scientific depth and breadth of capability, combined with our proven track record to develop challenging products, Viatris is absolutely a development partner of choice.
We only need to look at our example of OGIVRI with our partner Biocon to appreciate how two high-science organizations can be brought together to deliver an important oncology product. The deep scientific capabilities of both groups complement each other. Where overlaps do exist, the ideas of both organizations are considered in the best possible strategy emergence. Governance is critical, and governance of these programs is managed through joint steering teams that ensure agreed-upon strategy, decisive decision-making, and that execution stays on track. Combining all of our strategic pillars that we have discussed here today yields a very compelling and robust product pipeline for Viatris. This pipeline spans oral solids, injectables, topicals, and semisolid products, as well as transdermals, respiratory, and biosimilars. Our R&D and regulatory teams are focused on delivering products that account for $224 billion in global brand sales.
For our novel products, we can estimate between $100 million-$500 million in peak sales for each of these products. In addition, 75% of the brand product value of our pipeline is associated with the development of complex products and biosimilars. In closing, as you can see, Viatris R&D has a robust set of strategies to support the long-term business model and our global healthcare gateway. These strategies are not at all necessarily new, but are based upon a proven track record of scientific and regulatory success, which gives us great confidence in our ability to execute and deliver new products to the Viatris markets for the future. Thank you.
Before I conclude, again, I would like to mention how proud I am of our leadership team. What excites me about all that we have shared with you today is that we are just at the starting point, just at the beginning of optimizing the value of what we are creating. As a combined company, our assets are incredibly powerful. We have diversity in every aspect of our platform, supported by all of the strong commercial capabilities I showcased. It is how we manage this unmatched platform that will truly determine the success. As Michael, as well as I stated earlier, we believe we have the right internal capabilities and management discipline.
Our disciplined approach to understanding our profit growth potential on a granular level and strategically managing our resource allocation, coupled with a rigorous performance management process focused on execution and results, gives us the tremendous confidence in our ability to meet our stated objectives. Everything that I just shared with you today comes down to our people. I'm so proud of the talented, high-performing, and diverse workforce we have brought together and cannot thank them enough. I'll close my remarks from where I began. Whether it was Tony walking you through developed markets or Sean Ni discussing Greater China or Menassie talking about his excitement about emerging markets or Drew giving you an insight into our chance, I hope by hearing from this team gave you enough insight to appreciate why we are confident that we can manage our base business, manage its erosion in a more diligent way.
We're extending the profitable life of our existing products and proactively responding to the country-specific changes in our market structure and environment. I also hope that Walt's presentation about our attractive pipeline helped give you a glimpse into the future and why we passionately believe that we are uniquely positioned to meet the world's evolving healthcare needs as well as offset, very well offset, the inherent erosion of our business. Sanjeev's presentation showcased how our deep portfolio and pipeline is supported through an expansive, durable, and resilient manufacturing and supply network. We also shared with you the synergy roadmap and detailed action plans to execute not just the $1 billion cost synergy target, but our potential to exceed that. Lastly, the attractiveness of our commercial footprint, our scientific and manufacturing capabilities, our legal capabilities makes us a partner of choice and leverage our global healthcare gateway.
When taking all of these pieces into consideration, you should have an appreciation about our confidence in 2021 being a tough year. While there is more work to be done starting tomorrow, we are identifying the opportunities for future growth that will propel us into the next stage. We look forward to discussing with you in the months ahead. Thank you very much.
Hi, everyone. I'm Lara Ramsburg, Head of Corporate Affairs at Viatris, and it's really great to be with all of you here today. During my almost 30-year career now, including 12 years at Mylan, I've valued every leadership experience I've ever had, whether in communications and corporate brand, global policy, or government affairs, the Office of the CEO, or managing previous integrations. One of the most rewarding times of my career was driving the creation of Mylan's global sustainability program. Significant strides were made in a few short years. Now, combined with the legacy and the commitment of the Upjohn organization, it really sets the stage for the strong Viatris sustainability platform that I'm just so excited to talk with you about today. As you've seen throughout the earlier presentations, the tenets of sustainability truly are fundamental to our mission.
Our overall sustainability priorities are not only aligned with our business objectives, but I can really attest they're also embedded throughout our organization and our teams. You'll be learning more about that throughout this presentation. We may be a healthcare company, and we're certainly very proud of that. Patient health is obviously critically important to us. Our vision of health is not just about physical health. We're also focused on employee health, environmental health, community health, and global public health. While Viatris may be early in its life cycle, the strong foundation to deliver on this vision and fulfill our mission is not. That includes a real dedication to fostering an engaged workforce where everyone feels a sense of belonging and has access to the tools they need to reach their full potential.
Even in these early days of Viatris, we have also been expanding upon the strong impact of our legacy companies, which I'll give some specifics on shortly. With all that said, advancing our sustainability performance and efforts is a continuous journey, as you all know. It really requires us to have a holistic approach. I'll be outlining the clear path that we have set for ourselves to take what we believe are our most important next steps. As you've seen, access, leadership, and partnership are the pillars of our work to fulfill our mission. To me, it really does all start with our focus on access and our ability to consistently provide high-quality medicines to patients in more than 165 countries and across all income levels.
In addition to the stats you've already seen today, and I know you've seen many of them, the power of our access platform really comes to life when you realize that Viatris has a portfolio capable of treating 9 out of the 10 leading causes of death, has more than 200 medicines listed on the WHO essential medicines list, markets biosimilars in more than 70 countries. With our combined resources, we now have strong leadership in the noncommunicable disease space while also continuing to be the largest producer by volume of antiretroviral medicine for infectious disease, reaching five times as many HIV patients as the originator companies combined. I can think of no better way to describe our impact on access than that combination right there. As you've already heard from Sanjeev, we're also committed to leadership when it comes to advancing sustainable operations.
Ensuring the quality and the safety of our products is at the heart of how we operate across our network. All of our facilities operate with strict quality management systems, and we audit those facilities and those of our suppliers to ensure compliance. We're committed to environmental responsibility and have been working to reduce our environmental impact. We've decreased our scope one and scope two greenhouse gas emissions by approximately 16% in the past five years. You'll also see we've significantly increased our renewable energy use, and we've decreased our water supply ratio, all while continuing to focus first and foremost on the health and the safety of our employees. Where I think you can see the strength and the resilience of our operations really come through is as we've been able to continue to work throughout COVID.
We've been able to do this without significant disruption, and I just personally cannot thank the teams directly involved enough for their efforts. Turning to our partnership pillar, this is where both legacy organizations and Viatris really shine with deep relationships that we are quickly continuing to build upon. In addition to the partnerships referenced earlier today that expand access, we also partner with nonprofit organizations such as the Gates Foundation, the Clinton Health Access Initiative, and the TB Alliance to provide critically needed infectious disease medicines and innovations. While at the same time, we have a leading role in groups like the NCD Alliance to aid in disease awareness and screening, as NCDs represent leading causes of death, including in low and middle-income countries.
We work with industry groups and trade associations on access policy advocacy and with philanthropic organizations to help support patients and communities in need around the world. We are leveraging a strong foundation to help oversee these efforts. Between the Viatris board and our management team, we have the environmental, social, and governance, also known as ESG, oversight mechanisms in place to help drive our agenda forward, including the board's risk oversight committee, which oversees management's efforts regarding corporate social responsibility, and our internal cross-functional social responsibility council. As part of building out our ESG oversight, we have also been actively working to enhance our disclosures so that key stakeholders like you have the information they need to follow our journey. This includes striving to ensure that we meet all necessary investment criteria.
We really do look forward to continuing to build upon and expand these efforts as we go along. Michael also acknowledged at the very beginning of today's discussion that cultivating a dedicated and engaged workforce is a critical priority as we bring our two companies together and drive our mission. To that end, we are establishing what we call the Viatris Way. This will be the foundation of how we are building a performance-driven, highly inclusive, and engaging organization through all aspects of the employee experience. This holistic plan for workforce integration and culture building includes all the foundational elements you would expect, such as competitive compensation and benefit plans, internal opportunities for advancement, and more. We're also advancing our work in diversity and inclusion, standing up employee resource groups and instituting policies and trainings that enable flexible remote work even after today's COVID protocols are no longer necessary.
We not only want to be a partner of choice, but we also want to be an employer of choice. We want to enable every employee at Viatris to really be able to reach their full potential. Even though our time as a combined company has been relatively short, we are already expanding our impact. We are a principal sponsor of the NCD Academy and recently supported its launch of oncology coursework for healthcare providers, particularly in rural regions. Our leadership in treating infectious diseases such as HIV/AIDS continues through our recent announcement of FDA's tentative approval of our pediatric formulation of the frontline treatment, dolutegravir. At the same time, we also announced a groundbreaking partnership with CHAI and Unitaid to significantly reduce the price of this product and expand access in low and middle-income markets.
I'm also really proud of our global partnership with Sesame Workshop to help children and caretakers deal with the socio-emotional impact of COVID-19, as children are especially exposed to the negative effects from the pandemic. This is an initiative that many of our employees have really gotten behind and shared with their family and friends as we all continue to try to find new ways to cope during what are certainly challenging times. We have a clear path in place to continue enhancing our commitments. This includes an assessment of our ESG priorities as a combined company in collaboration with external experts and in conjunction with the company's enterprise risk management process. This work will help us to solidify our goal-setting priority areas and initiatives. We're also continuing to expand our sustainability-focused memberships and board and company policies.
We are driving towards the publication, as I speak, of our inaugural Viatris Sustainability Report in the first half of this year, where we will be working to provide additional transparency, including further enhancements to our TCFD and SASB-related disclosures. By the end of the year, following the completion of an assessment of our restructuring activities, we will be in a position to really solidify the relevant baseline data that we need in order to establish and announce our long-term goals. We then plan to begin tracking against those goals in January of 2022 and expect that our initial focus will likely include areas like climate, water and waste, diversity and inclusion, and obviously access.
I know this was a lot of information to absorb in a short amount of time, but I hope you can really feel as I walk through these highlights that our focus on sustainability isn't just words on a sheet of paper. Not only do we have a strong foundation to grow from, the tone really is set at the top, where we have the highest level of board and management commitment. We have a plan to drive additional progress, which we look forward to executing. To close, obviously, empowering people worldwide to live healthier at every stage of life is certainly an ambitious goal. It is one we take great pride in because we really do see our efforts and our impact in action every day. We look forward to sharing more of that story with you as we continue along our journey. Thank you.
Hope today was insightful and constructive, and you have a better understanding of our business. Being on the job for 90 days as CFO of this company, I'm very happy to be here to take a few minutes to talk about what I'm focused on and then address some of the feedback we received after the guidance call from last week. Let me begin with highlighting our commitment to deliver on financial guidance and creating shareholder value. I believe four pillars will define our success. First, on focused execution by enhancing and strengthening our capabilities to plan and forecast for the future. Strong discipline by applying rigor in allocation of resources. We are committed to providing an appropriate level of transparency. Granular reporting of results, identifying the risk and opportunities. Finally, balanced approach to capital allocation with top priorities of deleveraging and dividend growth.
Strengthening our balance sheet will be key. We need the flexibility given the nature of our business and to insulate from the market volatility. First, let me start with our 2021 guidance we shared last Monday. I want to punctuate a few points. I believe we accomplished the goal to give you enhanced visibility and understanding across P&L and cash flow. I want to reiterate that 2021 will be a trough year for revenue, adjusted EBITDA, and free cash flow. 2021 is a unique year given the significant impact of special and one-time items. Because of the nature of special items, comparison of 2020 to 2021, it's somewhat less important. This is especially true with respect to quarter four of 2020. Given the stub period and the transaction-related items, we do not believe the fourth quarter of 2020 is representative of business going forward for Viatris.
Quarter one 2021 will be the first full quarter for Viatris. Now, let me share with you more detail of revenue guidance. In this revenue walk, we've kept the special items on the left-hand side and the normalized basis on the right-hand side. If you look at the left-hand side, the first item is Japan Lyrica. We've seen the generic entry, and we see a rapid erosion. All that has been modeled and reflected in the forecast. We are anticipating performance will go LOE in the U.S. The U.S. rebate adjustment for Lyrica for legacy Upjohn that impacted favorably in 2020 is not expected to repeat in 2021. For China, 2021 reflects the impact of fourth round of VBP billing. With that, the VBP should be behind us as most of the hospital portfolio is under VBP program.
We've also factored in an initial implementation of China's URP beginning in quarter three. We're expecting gradual COVID recovery beginning in the second half. The impact in 2021 is expected to be relatively less than 2022. However, the overall impact for 2021 would still be a negative of about 3% of the revenue. Moving to the right side of this chart, you can see the normalized base. You can see the base business erosion. That is almost entirely offset by new product revenue, including the Aspen transaction. Product pruning, we continue to look at our portfolio. There is discontinuation of product in our portfolio that generates very low or negative profit margin. This slide shows you the reportable segments and approximation of revenue. The special items on the chart are in the middle of the chart to focus on.
These items have a disproportionately higher gross margin, impacting approximately 120 basis points of decline on a year-on-year basis. Once those items are behind us, I expect the gross margin to normalize. Looking forward, we focused on balancing between base erosion and new products. We will continue to seek opportunities to slow the erosion, maximize the value of launches given our expanded global and diversified platform. Now, on to the EBITDA walk. There are a few additional items that were not driven by revenue I want to highlight here. Depreciation and amortization adjustment reflects lower allocation. We are covering the TSA cost from Pfizer in the operating cost. The product pruning, as I mentioned before, has a very little impact on the EBITDA. We do see a sudden increase in the expenses, especially with R&D investment and normal inflationary changes.
We're building a synergies of approximately $500 million in the guidance. That's part of the $1 billion that we expect to achieve over the next three years. While we give no quarterly guidance, I expect both revenue and adjusted EBITDA to be more second-half weighted due to the seasonality of products, timing of government tenders, and synergy realization. I want to provide some additional clarity relating to $1.5 billion of cash cost in 2021. You can see on this chart, we're providing a summarized breakout components. Cash cost to achieve synergies of approximately $400 million in 2021. That is within the estimated range that we shared with you before of $1 billion-$1.3 billion total in the next three years. Remaining cash charges relating to restructuring and integration, we expect them to decline significantly over the next two years.
The total cash cost to achieve over three years period between 2021 to 2023 will normalize in 2023 to an amount that approximates historical milestone levels. Going forward, not all estimated savings for restructuring activities are expected to impact adjusted EBITDA because certain historical costs were already being excluded from adjusted EBITDA. Again, just as a reminder, 2021 is a trough year for free cash flow. I expect the cash flow to grow significantly over the next two years. Reinforcing on our financial commitments, debt reduction, and growing dividends are two main priorities. We expect to pay down $6.5 billion of debt over the next three years. That consists of $1.1 billion of short-term debt and $5.4 billion of long-term debt. We expect the short-term borrowings will fluctuate throughout the year given significant one-time cash outlays and seasonality of our business.
Our intention is to continue to strengthen our balance sheet. That's absolutely necessary for future flexibility. Our long-term leverage target goal continues to be two and a half times, which we expect to achieve post-2023. We will be creative when it comes down to bolt-on business development opportunities. They will not impact our ability to pay down debt. The dividend is clearly impacted in 2021 by $1.5 billion of cash cost. We expect to grow dividend demand in the future year, and we will expect the board to consider dividend growth on an annual basis. We are committed to transparent disclosure that will help you to understand the drivers of our business. With the 10-K that will be filed later today, historical milestone revenue and segment profitability recast will happen for new segments. We will also provide definition of segment profitability.
We'll also provide revised product categories for brands, complex generic biosimilars, and generics. This is consistent with how we intend to manage our business. Starting with first quarter, you should expect to see revenue by top products under each of the four regional segments. We also received multiple questions on multi-year outlook. We expect to begin our strategic planning exercise over the next coming months. More visibility into three years' outlook will be provided later in the year. Before wrapping up, I want to provide additional perspective on some of the initiatives underway in my organization to support delivering on our financial commitments. You can see on the chart a couple of items I want to highlight. We want to be strategic partners to business to provide insightful analysis, enhancing our core capabilities while building infrastructure to share services and centers of excellence.
For all the reasons we discussed today, improving cash flow conversion will be key. We're looking at end-to-end cash conversion cycle to identify improvement opportunities. To conclude, I'm very excited about the quality of two organizations coming together and the opportunity to create value. As CFO of this company, my priorities are on focused execution, strong financial management, transparency and granularity, and balanced capital allocation. We remain diligent to meet our financial commitment and create shareholder value. Now, with that, after listening to so many hours, I'll turn it over to Bill Szablewski, Head of Capital Markets, to begin our Q&A session. Thank you.
Good morning, everyone, and thank you for joining us for our inaugural Investor Day. Hopefully, you felt this morning was informative and helpful as we walked you around our business.
Joining us today for our Q&A is our CEO, Michael Goettler, our President, Rajiv Malik, our CFO, Sanjeev Narula, and they're also accompanied by their regional leadership that you heard from today on our presentation. With that, I'll get started with the Q&A session. Greg Gilbert, would you please ask your first question? Thank you.
Thanks, Bill. Thanks, everyone. Michael, given the number of geographies you operate in and the number of types of products you have, it seems like the number and types of deals are endless. Maybe you could focus us on the types and perhaps size of deals you can anticipate doing in the next couple of years. Maybe as part of that for Sanjeev, there used to be a mantra advisor for deals, "Share buyback is the case to beat." That's probably ingrained in your head.
Curious if you have a similar mindset or something different here. Thanks, guys.
Right. Thank you for joining us today, and thanks for the question. I hope it became clear from everything you've heard today that we are, by our nature, a hybrid business model. We've got an R&D pipeline that Walt presented that we're very proud of, that is very rich, that's increasingly complex, and that gives us everything we need to deliver on the commitments that we made. We are also very open for business development, and we always look at both. You saw the number of deals that each of the regional presidents presented, the partnerships they have, etc. Opportunities are plenty. As you said, with the breadth of our portfolio, it's a wide gamut of type of deals, of kind of products we could do.
The art is really—you made the reference to Sanjeev and share buyback—the art is in the right discipline for how we do capital investments. Be very disciplined about it, making sure that investments we make ultimately return value to shareholders. We're going to apply that same discipline not only for external deals, but we apply that same discipline internally for our R&D pipeline as we do portfolio selection. As I try to say in my presentation, we're going to look for every deal, every opportunity we look at. We're going to look at strategic fits, and we're going to look at financial criteria. Strategically, we have a preference for more complex, more differentiated, more innovative type products that have longer tails. That's a preference that we have, clearly.
We're looking for fits with our commercial footprint and infrastructure because, again, if you look at China, for example, we have a very strong presence in Cardiovascular. We have a very strong presence in retail, etc. Having deals in those similar areas allows us to create more value and, again, return value to shareholders because one plus one is more than two. We are going to look for deals that enhance our technical capabilities that then we can leverage across the portfolio as well. That is strategically. Financially, we're going to look at majority of two things. One is very, very strong returns, returns in excess of the cost of capital, returns that are the case to be to create value for shareholders. The second thing we're going to look at is very clearly, does it get in the way of our commitment to debt repayment?
We're not going to make any deals in the next three years that get in our way on debt repayment. That's what I would say. As far as the gateway is concerned, we've got all the physical assets in place, the monetary assets that we're ready to day one. The monetary assets, we make sure it doesn't conflict with our debt repayments, and you're going to see more coming forward. Thank you.
Thanks, Greg, for your question. Next question, could we go to Umer, please? Umer, are you in the queue, Umer? Okay. We'll circle back to you. Next question, Balaji, would you please go ahead?
Hi. Thanks, everyone. Can you hear me? Yes. We can hear you. Yeah, a couple of questions for me.
Firstly, on the biosimilars front, can you tell us if you have enough pipeline currently now with the second and third wave portfolio of biosimilars, and do you need to augment this with newer partnerships? Also, if you can help us call out the ROCI you generate on biosimilars today and directionally where could this move to? I'm asking this in particular context with one of your competitors signaling exit from the biosimilar strategy, indicating that this is not as attractive as it was thought two years ago or one year ago. What could also be due in terms of changing game plan? I have a couple of other questions that I'll come back to. Thanks.
Thanks, Balaji. Let me just summarize. We have no intention to get out of biosimilars. Quite the opposite. Let me have Rajiv get more into details on that.
Thanks, Balaji, and thanks, Michael. Balaji, we today tried to show you a little bit about what not we have only achieved, but more importantly, what's in the pipeline. We are excited as we already disclosed with the projects like looking into the biosimilar to Avastin, looking into the biosimilar of NovoLog, Eylea, biosimilar to Humira, biosimilar to Perjeta, Toujeo, Botox. I can go on. As we are talking about this, you would expect us that Walt talked about certain targets, and that's where exactly where we are either near the program, finalizing the diligence around that, and we will continue to go both ways. We will keep on looking for the partnerships, and we'll keep on building our own competencies. It is an area for us where we have said this is a global franchise.
This is an area where we have decided to hang in, not get out. For us, it's a long-term play, and we continue to make the R&D investments as well as investments in our commercial infrastructure because we are very excited what we see ahead in this growing space. That's my two cents here on the biosimilars.
Thanks, Rajiv. Can you also comment on the ROCI part of the question, please?
Yes. Look, you have to take it at the beginning of a life cycle. Everything is not because you are investing simultaneously to build up the capabilities and all that. We see it's a market to markets. They are somewhere in the tender markets. There might be challenges on the ROCI, but that's why when you look into a global franchise, we don't in making those investment decisions based on market to market.
For us, we see this as attractive financially from the returns perspective as we go on. We see a longer annuity. We see these sticky, and these are the products once you get the share. They're not going to be commoditized very easily. So there's a different type of the value. Do you set a DCF-type value to these programs and this business?
Thank you, Balaji, for your question. Moving on. Next question, Randall, could you go ahead, please?
Yeah. Hey, thanks, guys. On slide 153, you pointed to post-2023 long-term leverage target of at or below two and a half times. If we take the $6.5 billion in debt paydown, that would imply EBITDA of around $6.6 billion or 3% annual growth. Is that the right way to think about it?
If it's not and that target is later, then it implies a lower level of growth. I'm trying to get some visibility around what you're thinking about for the next couple of years in terms of growth. I have a follow-up for Rajiv. You talked a lot about digital tools, right? What about digital therapeutics? You've got some peers who are focused here in areas like respiratory, but also other areas. Is that part of your thinking as you think about the broad global Viatris platform, either on the generic or the brand side? Thanks.
Okay. Thanks, Randall. Sanjeev, can you take a question on the leverage and the implied EBITDA? Rajiv, if I could have you answer on the digital therapeutics.
Yep. Randall, let me first address the leverage question. You're absolutely right on slide 153.
We're talking about long-term debt leverage target of two and a half. That's not being achieved in 2023. To be clear, that's a long-term target post-2023. We've also said that by 2023, we're paying down $6.5 billion of debt, $5.4 billion in long-term, and $1.1 billion on short-term. That's the commitment that we've given. Now, based on that, we're not providing any long-term EBITDA guidance, but one thing I can clearly tell you is that 2021 is the trough year for EBITDA, cash flow, and revenue, and that is what there. Particularly for free cash flow, we're expecting that to rapidly grow as some of the one-time payments go down.
Thanks, Sanjeev.
Randall, to your question, I think one of the areas we saw a huge enhancement when we brought these two assets together is around the commercial infrastructure and especially the omnichannel and digital tools, which I just talked about. You also heard Menassie speak about beyond the pill and not just limiting to the conventional way. That is where digital therapeutics come in. You pointed out exactly that respiratory is a great area where you can have a smart tailor, smart nebulizer, trying to reach out to the patient in a different way. Definitely, that is another area which, when we are looking at the pipeline, when we are looking into the pipeline, we continue to look into those opportunities, and you will see us bringing some of those capabilities along.
Thank you, Rajiv.
Thanks, Randall, for your question. Next question, could we go to Nate, please? Hi.
Good morning. I wanted to ask on China. As we think about the URP program being implemented later this year, excuse me, could you talk about what impact you see on your sales in the hospital channel and how will implementation of the URP program impact pricing and maybe acceptance of generics in the retail channel in China? Do you feel like there could be any spillover effects given what's going on with the hospital setting? Thank you.
Rajiv, you want to take that question?
Okay. We have always factored in after VBP, we knew the URP is the next thing. We had factored in the volume change, volume drop we would see in some of the hospital segment. And we have already factored it in. We have factored it in. In fact, our trough in China is based on the full implementation of the URP.
We are very confident that once we hit that, that's where our work starts actually when we're looking into because we still see a lot of value in the hospital. Even today, if you see after the VBP, second round of VBP in Lipitor, if you go back and check the databases, there is still a lot of value of the brand and brand loyalty. Hospital channel will always be important. Hospital channel will be important for us to bring in more products. More and more, I think the focus is going to be about the evolving healthcare, which I think Sean hit it very nicely about the consumerism in the healthcare and the move towards the retail and our renewed focus on this is how we have rebalanced our distance.
Our portfolio selection is taking all this into consideration that while we see hospital as an ongoing opportunity and important channel, we definitely see more opportunity in aligning our portfolio towards the tail channel. Michael, you want to add something or?
Yeah. I think the only thing I can add to that is that clearly we've taken the headwinds into account as Rajiv and Sean laid out in this presentation. I do want to emphasize the long-term bullishness that we have on China, that we are fundamentally rebalancing this business. We've reacted very quickly. We're already ahead of expectations where we thought we would be this year. We have shifted our investment to now spend on three legs as Sean laid out, not only the hospital channel, but also the retail channel and the digital channel, right? That gives us a much stronger base to build upon.
We recently approved about two dozen products in our pipeline that we're going to bring to China, which is the strength of this platform that now we have 1,400 molecules that we can choose from and see where we have opportunities in China, leveraging the commercial presence and the footprint that we have that much better.
Thank you for your question on China. Next question, could we go to Akash, please?
Hey, guys. Thanks so much for hosting this, and I really do appreciate the additional color. I just want to make sure the messaging I'm understanding. On slide 12, you're saying you're not going to see top-line revenue growth until 2024, but you're also alluding that 2021 will be a trough year on revenues.
Given some of the China headwinds, some of the rationalizations you're alluding to in JANZ and some of the developed markets, are you saying that top-line revenues might be choppy up and down from 2021 to 2023 and then start growing in 2024 onwards? If so, what in 2024 onwards will allow you to start going into kind of sustainable growth? I remember Rob had kind of alluded to Viatris might be run at a 17%-18% long-term SG&A as a percent of sales. That might be something you guys are thinking about. Can you comment on where you see your SG&A expenses going over time, and is that maybe a doable goal if we're thinking from a five-year horizon? Thanks a lot.
Yeah, Akash, thanks for the question. Look, as we said, we gave 2021 guidance.
We're not going to give a quantitative guidance for 2022 and 2023. That's going to come at a later point where we have the ability to really build this bottom-up with quality because everything we're going to give to you is with quality. What we can say, and you see that in the slides, the ones that you quoted and others, is that we have all the levers in place now to be very confident to say that 2021 is a trough year, and as Sanjeev just said, a trough year on revenue, a trough year on EBITDA, and definitely a trough year on cash flow. Why are we confident in that? Look at all the levers we have. A lot of the one-time items like the Lyrica LOE, like the Perforomist LOE, other things have basically washed out of the system.
URP, we anticipated that's going to wash out as well. What you're left with are no major LOEs after this. After Lyrica is our last major LOE in excess of $100 million that we're going to look at in this planning horizon. You're going to get a much more normalized base business after that. We still have synergies we can deliver. We have commercial excellence, and you saw, I think, plenty of examples in today's regional presentation of how we can get more out of what we have, how we can cross-pollinate the portfolio, how we can leverage the capabilities we have to get more out of what we have. Revenue synergies. We're going to have COVID updraft. We put some of that in our 2021 guidance, but clearly that's going to drop over into 2022 as well. The launches.
I think we can do better with our launches. You take all of that together, clearly, we are confident 2021 is a trough year, and we're going to give quantitative guidance at a later point.
Maybe next, want to pass the second piece, Michael, to Rajiv on kind of synergies and SG&A?
I think that's a great idea. Thank you.
No, and Akash, you're right. Robert had clearly mentioned that. If you look into the—if you ask me, one of the reasons, one of the purposes of today's presentation was to give you an idea about our mix. Now, all products are not equal. All markets are not equal. Even within the brands, there's a diversity. It's about understanding of that granularity at SDU level, at a market level, and then more importantly, how you manage it.
This is going to help us to take it directly to that 17.5% or 18% which you mentioned. I absolutely see us moving in that direction over the next three to five years.
Thank you so much.
Yeah. Thanks, Akash, for your question. Next question, now, could we go to Umer, please?
Hi. Can you hear me now? Yes. We can hear you. Okay. Thank you. Thank you so much for all the help, Melissa, for getting me on. There are two broad areas I wanted to touch on. One was on the finance side. Michael, Sanjeev, I was curious if there really is $6.5 billion of debt paydown by year-end 2023, and presumably there is another, I do not know, give or take a couple of billion in dividend paid by the end of 2023.
That implies free cash flow of something like $8.5 billion. Considering the guidance for the current year is around low $2 billion, that implies you are doing north of $3 billion in free cash flow. You are effectively committing to that in a way. Am I mistaken there? Number one. On the R&D side, Rajiv, I felt like outside of oral semaglutide, I did not really hear a big meaningful new pipeline disclosure today, unlike in prior investor days where there have been new things we learn about Botox, etc. I guess, can you highlight for us your top three or top five programs, the highest R&D priorities for you over the next three to five years? Also, Rajiv, I would be curious, how early do you think you can launch a potential biosimilar PD1? Thank you.
Okay. Sanjeev, do you want to take the cash flow question?
Rajiv, the pipeline, please.
Umer, thank you. Thank you for the question. Let me take the cash flow question. Let's just step back and kind of just reiterate some of the facts. Clearly, strengthening the balance sheet is a key priority, as you heard there from Michael and what I mentioned about that in my comments. We are paying down $6.5 billion debt by 2023, so $5.4 billion long-term and $1.1 billion of short-term debt. We also said that, and I shared that in the chart today, the big part of the impact on the cash flow in 2021 is the $1.5 billion of one-time cost. That is going to be, because of the nature of that cost, will decline significantly over the next two years.
The restructuring costs that you have, costs to achieve synergies, they'll decline over the next two years. You should expect, for modeling purposes, by the end of around 2023, that should be at the historical mileage level. That's kind of the parameters I can provide you. Now, without giving you the absolute guidance on the cash flow, you will see the cash flow should rapidly improve as this cost declines over a period of time. That obviously will allow us, enhance capacity to grow the dividend in dollar terms and do all the other things. That's kind of what I would say. You're absolutely right. The cash flow will improve over the next couple of years in a significant way.
Umer, your question is fair.
Last time when we talked in 2018, if you recall that my last slide in R&D section was fleshing out all those brand names which are in our pipeline. Today, I tried to put it into a segment of what's already approved, what's pending approval, what's still in the development stage, and what teach you a little bit about the target areas around that. We couldn't share with you unless we have a very definitive development timeline laid out that over this period of time, it's going to be hit at the market.
You can expect that as we keep on finalizing the, especially the biosimilars, the cell membranes and the clones and all that, and getting a fair idea about how deep we already are in that science and how much it's going to take us, as and when we keep on getting that clarity, we will keep on bringing this visibility for you. Going back to, again, at that point, I said, I've been saying again and again about our focus on the complexity, the complex injectables. I'm very excited by the progress we are making in this pocket. I'm excited on the biosimilars. I'm excited into some other drug devices you will see which we bring. After the success of Advair, we are very close to bringing in the first SYMBICORT, the first generic to the SYMBICORT. We keep on adding these products into our pipeline.
As far as your PD1, yes, this is post 2025. As we get more definitiveness, we will give you the clarity on the next five biosimilar programs very
soon.
Thank you, Umer, for your question. Next question, could we go to Chris Schott? Thank you.
Great. Thanks so much for the questions and all the details today. I just have two. I guess, first, maybe more broadly on the business, how does Viatris protect itself from some of the policy changes like we've seen in China over the past few years occurring elsewhere in the portfolio? I guess, does inherently the portfolio need to evolve further, as you highlight, with biosimilars and complex generics?
Do you think we have reached a point where most of the potential changes have really occurred at this point, and we do not have to maybe think about that as a risk factor in the business as much going forward? My second question was just on margins by segment. I think we are going to get some of our details later today. Can you, just on a high level, talk about the profitability of the four segments? As we think about the business units, are there particular regions we should be thinking about, I guess, more margin expansion potential than others? Are there regions where we can think about more investment going on? Just trying to get a sense of, I guess, if you think about the mix of the different products, are there standouts on either end of those divisions? Thanks so much.
Chris, excellent question.
I'll try to address the first one and then ask Rajiv and Sanjeev to address the second one on the margins. Look, as policy changes are concerned, the trend, I mean, look, we're blessed to be in an industry, healthcare, which clearly has incredible demand, and it's going to be growing. Because of that, governments all around the world have continuous efforts to try to contain healthcare costs. That's the business we're in. Where you get in trouble is if you stand on one leg, right? In China, the legacy Upjohn business was overexposed to a few products in one segment, right? We have fundamentally rebalanced this business now. We're standing on several legs. We have a much larger portfolio. If we look at the Viatris portfolio, it is so diversified, the number of products, the number of countries we stand on.
We have no major LOEs ahead of us. In terms of countries, the U.S. generic, our new definition of generic segment, the U.S. generic business is 10% of the overall pie. China is about 10%. If something happens now in one country, clearly, we have enough levers to offset that, and there is a much more solid base to stand on. The second thing I would say is that because of the broad base, and that is essential to the logic of this combination, because of the broad base where we play in generics, in biosimilars and complex, and in brands, we can often be part of the solution as well. As things evolve, we can see opportunities, and then we can act on it. That is part of this opportunistic business model that I tried to describe in my opening comments. You start with the countries.
You see what the countries need, where the country opportunities are. We have this entire platform, the portfolio, the manufacturing, the R&D, the capabilities we have, the performance drivers, our culture, that we can bring that to bear for a country and react to it fairly quickly. I am very confident about the future there. Now, on the margin by segment, Rajiv, do you want to start and maybe Sanjeev can complement?
I would also like to add something to your very powerful answer you gave and just complement you. Chris, you know this. You have seen this market evolve for a number of years. Remember how long back Germany or U.K., from generics point of view, became just a distribution market, highly genericized once you get into a market, yes. You saw also Portugal.
Today, if you see our business in Germany or the U.K., yes, generics, we are still there in generics. We have brought in this diversity around the brand and all that. The biosimilars now leading to the growth in the German market or leading in the U.K. I think it all comes together. This is where the diversity comes in that while you're trying to manage all this pressure from this environmental pressure, the pricing pressure, and all that, there are components of our business which sustain us, which help us wither it in a much better way. The third piece is the growth on the biosimilars and the complexities continue to go to offset that erosion. Europe today, per se, as I mentioned to you, it's just 1-2% erosion.
We have a sort of pipeline, definitely much more to offset that. I think that's another proof point I just wanted to give before I move on to the segment. From the margin profile point of view, holistically, not just by segment by segment, one of the key parts is us managing the costs. We have always done it so well. Because this is what our business taught us, we have grown up in this business, keeping an eye on that gross margin and how we can manage proactively our cost of goods to offset any mixed pressures and all that to an extent possible. It's not a one-time event.
While we have a couple of hundred million dollars built in our synergies plan, you can expect us to continue to use all the skill sets within the network, vertical integration, using the scale to procure it more effectively to continue to drive the cost of goods so that we can proactively manage the segment profitability.
Chris, just to add to what Rajiv's great answer is, in terms of the transparency and visibility, you will see in the 10K that we filed today, we will provide you the definition of the segment profitability. Going forward, you will be able to see the profitability at a level which is gross margin and the direct cost. You can be able to track how each of those segments are performing in terms of the margin and be able to track that business.
That's the enhanced transparency and granularity we will provide going forward.
Thank you for your question. Next question, can we go to Gary, please?
Hi, guys. Thank you. I guess first, just following on Chris's question, given the breadth of the portfolio and geographic presence and so many fluid markets, how often are you going through the portfolio in depth and determining how to allocate capital to maximize profitability? Are you constantly looking to rationalize the portfolio? How much pruning should we expect every year in order to minimize pressure in the base business? It did not look like such a huge number this year for pruning. Just walk through the diligence with that exercise that you highlighted today. With the global healthcare gateway, when you partner products in different regions, how much does profitability change across the portfolio?
How much growth do you expect from partnerships versus Mylan's internal pipeline when you think of having the global healthcare gateway as sort of a funnel into those regions going forward? Thank you.
Okay. Thank you, Greg. The short answer, the pruning is constant. It's something you constantly have to be vigilant about. It's something we said we want to be granular about. I'll let Rajiv give a more in-depth answer, and then I come back from the global healthcare gateway.
Okay. It's a way of life from here onwards which we have decided. It's not one time. It's a constant looking into not just from the profitability point of view, but from many other points of view. We have set up a separate team.
We call it Office of Business Performance, which is going to continuously look into and give the feedback to the business that where we are heading into that red zone of where we may not be making enough margin. It is already enough, has enough competition. So supply is not an issue. The patient being served is not an issue because there are enough suppliers. I do not see this, as we go along, a huge number. Although it is going to be continuous, it is not going to be a huge number because I think the one bigger market where we saw this was the U.S. We took our time while restructuring this business to one time have a deeper look into and rationalize. That is why you saw last couple of years the top line in the U.S.A. being impacted by that pruning or rationalization.
Outside of the, I think once you get out of the U.S.A., the product mix is very different. It's a lot of the brands, the OTC products, but it applies to across. I don't see the magnitude of that pruning, as you said, and I already noticed it to be so significant. Michael, back to you.
Thank you, Rajiv. Gary, on the growth of internal versus external, I think what I can tell you is for 2021, we've assumed no incremental BD. The numbers that we're giving you is essentially what we can produce with what we have. Going forward, we will be very neutral on this. It doesn't matter really whether something is internal or external as long as it meets our strict financial criteria. That means returning value to shareholders. That means not getting in the way of our debt repayment priorities.
It means meeting the strategic criteria that we set out, fit with our portfolio, increasingly complex portfolios so we get longer tails, etc. That is how we are going to look at the business. We are not going to set an artificial percentage about how much we allocate to each.
Thank you, Michael. Before we go to the— That is great. Thank you. Thanks, guys, for the questions. Before we go to the next one, just to maybe go back to a question a few minutes ago, particularly on cash flow. Sanjeev, can you embellish a little bit on particularly Randall and Umer's question on how we see cash flow trajectory over the next few years?
Thanks.
Sure. Sure. Bill, as we said, the cash flow, the 2021 is going to be the trophy year for free cash flow.
As I mentioned, that's clearly impacted by $1.5 billion of one-time cost. As I provided the granularity on the one-time cost, $1.5 billion, there are four components of that. Because of the nature of those costs, those costs will decline over the next two years significantly. The cost of restructuring our plant network, the cost to achieve synergies, those are going to decline as those programs are wrapped up. That will then increase the cash flow rapidly in the next two years. The way to think about this is the one-time cost that we have of $1.5 billion that will probably reach to a level of historical Mylan by the end of 2023. That's the cash flow growth. What you should expect is a rapid growth of cash flow over the next three years.
That then, obviously, will allow us to pay down the debt that we said, $6.5 billion. That will create capacity for us to increase the dividend dollars, which obviously will be a bold decision.
Thanks, Sanjeev. Just to clarify here for the transcript, just to be specific, even though we're not giving guidance, your math that you've kind of cited, guys, is directionally correct. We will go on to the next question. David Amsellem, could you go forward with the next question, please? Thank you.
Sure. Thanks. I know there's been some questions and some back and forth about business development, but I wanted to dig a little bit deeper. In developed markets and in the United States, a challenge, obviously, is base business erosion. You already have a diversified business in these markets.
What I wanted to ask is, what is the extent to which you're looking to add more of a specialty brand presence, not just by SIMs, but actual brands, either via bolt-on or something even more significant? Secondly, can you talk about R&D investment in specialty brands? I guess where I'm going with this is a number of your peers in the broader generic space certainly are focused on building more and more of a brand presence. How do you think about that as you think about strategic planning over the next few years? Thanks.
Thanks, David. Let me talk a little bit about what you call the base business erosion, and then I'll hand it to Rajiv for the specialty brands and investment in R&D in this area. There's a few things ongoing.
On the base business erosion, the only thing I would say is, again, we're not giving guidance, but don't take the current erosion as a constant. I mean, clearly, as we come together now, as we have an enhanced commercial infrastructure, as we have enhanced capabilities and bring things together, we can do more with what we have. We have the revenue synergies that we can potentially generate. We have capabilities we can exchange. We have a stronger commercial presence in the country we previously didn't have it. I mean, one of the things you saw in the presentations today was the example of Korea. There is actually a lot of upside, I believe, and value to be generated just in the assets that we have. That's part of the equation as you look at growth.
The other equation then is pipeline and potential business development, cost synergies, and all the other things we talked about, right? I just want to highlight that as a comment. Rajiv, are you good specifically to comment on the specialty brands?
Now, your very fair question. Our Europe, as well as our rest of the world businesses, have benefited from our past acquisitions, I can say, of Abbott and Mylan, not U.S. to that extent. We have been conscious that we need to build this and build this brand business, specialty brand business. We knew we had a fairly good presence as far as the respiratory products was concerned, especially into the nebulizer business. Perforomist was followed up with YUPELRI, which is now growing. We knew we had a Dymista, which was the only product which came from the Mylan acquisition over there.
We had a brand, EpiPen, built that. And even if you know today in our pipeline, Copaxone once a month is an investment in that direction to further build those capabilities for U.S. because U.S. is a leading candidate for that program. Today, while I talked about this nano-paired pain product, that's also focused in U.S., U.S. being the leading business case over there. But you're right. We're going to look based on this approach. We're going to look—it's not just we said we're going up the value chain from the biosimilars point of view or the complex products. We said innovation also. And that's going to be one of the spots. And I think Michael laid out very clearly in his said, not only the complexity, but the innovation. And that's what we meant from there, finding the other YUPELRI-like partnerships. Absolutely, yes.
Finding some more candidates, if we can get some of these opportunities, U.S. will be an attractive market for us to build this portfolio and the capabilities.
Okay. Thank you. Thanks.
Thanks, David, for the question. Next up, could we go to Kevin, please?
Hi. Thanks for taking my call. I think we're all trying to edge around the same question around sort of organic growth. The one number that just keeps popping up to me is that in 2021, your expectation for new product growth is $690 million, which exceeds a traditional or typical year for the company. Yet it still wasn't enough to offset the base business erosion on the EBITDA line.
I guess what my question is, and we're all kind of asking it, saying it in different ways, is do you think that new products can offset base business erosion beyond 2021 on the EBITDA line? Meaning, is this something that can sustain the company beyond 2021 before we get to 2024 and the expected sort of top-line growth?
Okay. Kevin, thank you. Look, I think on EBITDA, I already said several times now on that question that we have a lot of levers to work on EBITDA, right? The synergies, the more performance, etc. I am not going to repeat myself on that. I think the numbers that you're referencing from our chart from the guidance call, these are gross margin numbers, right? On gross margin, clearly, between 2020 and 2021, we have a significant step down, partially due to a couple of one-time items.
I think what you can expect going forward is a much more normalized business evolution on our overall gross margin. Rajiv, maybe you can comment a little bit more on the pipeline and what we see coming there.
One of the reasons we wanted to make sure, first of all, you guys get comfortable about the 2021 being the tough year. That was one of the objectives today. The second objective was we give you an insight into this platform and show you the potential of not only these new launches or the revenue synergies offsetting the base erosion, but also our proactively trying to manage the erosion because once we get over here, if you can arrest the decline of 1% tail products, that takes off the pressure of your new product launches that you have and all that. There are many levers.
As we always said, we have 90 days behind us. We very well appreciate what we have now got to work with. The teams are excited. You saw that excitement. We are going down right from tomorrow onwards to work and give you a basically, once we come out, whenever we talk to you next, give you a more tangible direct answer than beating around this that there's a potential to do that. That's an old idea. I am very excited. I'm looking into—I gave you a Korea example. Menassie gave you several other examples and so many other walkthroughs. We believe there's enough opportunity for us, one, to do more from these launches. Absolutely. The 600, 100 you saw, yeah, this is an average, but there have been years of a billion-dollar launches, which was 2019. 2018, 2019 was 800, 900 million. Then there are some light years.
All numbers were based on what Mylan had built on based on their sort of commercial presence. Can we do more from the launches? Yes. Can we get more out of this platform? Absolutely, yes. We are going to do our work before we say how much. That is the task that lies ahead of us. Fair enough.
Thanks, guys.
Yeah. Thank you for the question. Next one, could we go to Ronnie? Okay. Hey, Ronnie, we will come back to you. We are going to reopen this and do a few more questions.
Bad enough?
Hey, Ronnie, you there?
Yes, I am. Okay.
Please go ahead.
Hi, everybody. Thank you for taking my question, guys. A little bit of a tech issue here. A couple of questions about the cost structure. You got out running at roughly 5%, a bit shy of that as an R&D percentage of revenue.
I'm kind of wondering, with what has to be a significant investment in regulatory effort around the globe, how much money is actually being dedicated to R&D proper in your R&D centers? Just because it seems like a very low ratio for a company that plans to do internal development in a significant way. You kind of mentioned just about similar efforts in the generics seem to require a bit more than that. Second, I was wondering if you guys are building your own R&D for biosimilars, or are you developing your own manufacturing for biosimilars? You relied on external partners so far, but with Biocon busy elsewhere for second-wave products. I was wondering about that. Last, if I can throw a couple of individual products, I noticed darbepoetin BS on your portfolio. Are you developing darbepoetin for developed market?
Rajiv, do you expect to get SYMBICORT this year in the United States? I noticed you got a conference on this tomorrow.
Yeah. Go on, Michael.
Rajiv, why don't you start and take the second question first, and I'll come back to the R&D percentage?
I can start with the SYMBICORT. Very confident, Ronnie. March 9 is our target date. Any day we can hear something. I am very confident that we will be—like Advair—we'll be the one to open this market as soon as we can. That is SYMBICORT. Your second question was around the pipeline on—yeah.
Double Epoetin?
Yeah. I went to Double—yeah. Can you comment specifically on that, Paul?
Can you hear me?
Yeah.
Yeah. For Double Epoetin, Ronnie, I mean, that is something that was developed as a deal for Japan.
We're obviously looking at a number of biosimilar products, as you see, out in time with a fairly long horizon where we hope to be first to market. Certainly, all things are in consideration there, for sure.
Your third question was, we're building our own R&D capabilities. Absolutely, yes. We are building that science capabilities. I will not say the same today for the manufacturing because I think there are a lot of options available through the strategic partnerships and all that. That's where we are not building our own at this point of time. Yes, as we go along, as the landscape changes, this direction can change. Before I give it back to Michael because we will wrap it up on the R&D, I can tell you we have one of the very efficient and most productive R&D.
We have used our centers of excellence, especially around areas like regulatory, which you called out, to optimally do best from the dollars we spend around that. Michael, back to you.
Thanks, Rajiv. Ronnie, you said on R&D, you said 5%. Actually, the guidance is 3.8%-3.9%, so it is even lower than what you had. I have to say, I am extremely impressed with the R&D we have. I am extremely impressed with the productivity that we have. What we get out of the 3.8%-3.9% is amazing. As I mentioned in my opening remarks, we are nowhere near the point of diminishing returns. Clearly, as we now start with our strategic plan, laying out a more multi-year plan, we are going to take a very, very hard look at the required R&D spending going forward.
Thanks for the questions, Ronnie. Really appreciate it.
Next, could we go to Ami, please?
Hi. Thank you for the question. A lot of my questions have been answered. I will ask about China. You highlighted on China being a significant growth driver, but there seem to be a lot of long-term headwinds in the market with the government really deciding that they are not going to pay or they are going to look to lower costs of drugs. Can you talk about how you can drive sustainable growth in the market with those types of headwinds? Is it that you—yeah, maybe talk about the pipeline or how you see the market dynamics changing that give you confidence for growth. Thanks.
Thanks, Ami. I think there is actually a question. I think we still have Sean on the line. We actually may ask Sean to elaborate a little bit more.
Just at a high level, Ami, I think that the simple story is China's healthcare expenditure will grow. They will grow at least in line with the GDP. There is growth in the market. The question is, are you positioned correctly to capture that growth? That is exactly the transition we are going through, and we are already kind of halfway there in terms of positioning ourselves to participate in that potential growth. Sean, if you are still there and if you are still awake, you want to elaborate on that?
Yeah. I am here, Michael. Can you hear me?
Yes. Yeah. As Michael alluded to, I mean, China has two parts of the healthcare spending that is growing rapidly. The government funding is growing, even though it is slowing down. What is more important is the consumer side of the spending is increasing rapidly.
Even though the government is trying to limit its funding to cover more patients and to pay less on an average basis, the consumer side of the spending is increasing rapidly, and that's exactly what we're doing. We're positioning our portfolio. We're positioning our commercial capabilities to capture that side of the business. Back to you, Michael.
Michael, if I can just add, I think the global healthcare gateway is going to be a huge driver for China because I think if you ask us the excitement, our excitement about global healthcare gateway, setting us the stage for the future growth.
Once we start, we talked about our internal pipeline will bring us back to the modest growth, but global healthcare gateway will go a long way to help us because we are so proud of our platform in China, and that's a perfect offering for many other partners who are looking to be in China.
Okay. Thank you.
Thank you, Ami, for the question. We have a question in from Jason Gerber. He's having some technical difficulties with Zoom. I'll ask the question to you guys. As a follow-up on biosimilars, we're seeing competitors take a hybrid approach in the U.S. with both need-to BLAs and products going through conventional biosimilar framework. This appears to prioritize expedience to market over some of the commercial benefits of being a biosimilar. Are you working through a similar hybrid approach?
As an example, is the EGN business subject to natural erosion, or will you have underlying growth in that market? Thank you.
Rajiv, do you want to take that?
I'll pass it on to Walt this one. And then I'll come back and wrap it up. Walt?
The overall biosimilars pathway that we're following, I think, as you have seen, it's a very broad viewpoint. Certainly looking at this in terms of BLA opportunities, if you will, 351K opportunities as first-to-market opportunities over, as I said, a fairly long horizon. We see quite a bit of opportunity in that particular area as we're moving forward.
Yeah. I mean, I would say that when you're looking into the gaps around existing biologics products, there are always opportunities which used to be called biobattles or something. We are constantly looking into some gaps or unmet needs.
It might be an evolution of a drug device which can help you move the needle or address some of the questions from the provider's point of view. We see this as an area. At the moment, we do not have a program in our pipeline, but as we go along, we definitely keep on looking at this space.
Thanks, Rajiv.
Thanks.
Thanks, Rajiv. That is going to conclude our Q&A session now. Michael, I will turn it back to you to wrap up our day.
Thank you, Bill. Thanks for all the questions. I want to thank the team that has joined by video for being available for all the Q&As. Not everybody got a question, but thanks for being here, folks. I want to thank everybody who participated for your attention.
I know it was long, it was virtual, and you had to listen to a lot of videos. I'm really convinced that we were able to give you an inside look into our business deep inside and increase your confidence in what we can able to deliver so that you see the same thing we see. In summary, I think we've accomplished a lot in the first 90 days. We're building on a strong foundation. We are on a multi-year journey to transform this company. You've seen some of our talented and wicked colleagues, and there are 45,000 more around the world that we have to work together with, a pleasure to work together with. We have an incredible global platform and a unique operating model. I think you can also see today a little bit the culture shines through and the clarity of the strategy.
We think we're very well positioned to not only achieve our mission to empower people worldwide to live healthier life at every stage of life, but also for our financial commitments that we made. We're looking forward to continuing this conversation with the transparency that we display today. Thank you very much. Thanks for joining us, and we'll talk to you soon.
Thank you.