Business Risks litigation could also impact the Astellas group’s business  results significantly. The main risks that could significantly impact the business  results and financial position of the Astellas group are  outlined below. In general, the probability of discovering a promising com- pound through drug discovery research is not high. Further,  it takes a large amount of investments and a great deal of  time to successfully launch a new product after discovery  of a new compound. However, it may be necessary to  discontinue clinical development if the effectiveness of a  drug is not proven as initially expected, or if safety issues  arise. In addition, pharmaceuticals are subject to legal  restrictions in each country, so that authorization from local  regulatory authorities is a prerequisite for a product launch  in each country. It is difficult to accurately foresee if and  when approvals for new products can be obtained. The Astellas group’s R&D activities are subject to these  inherent risks. The pharmaceutical industry operates in a highly competitive  environment characterized by rapid technological innova- tion. The Astellas group faces fierce competition from drug  makers and generics manufacturers based in Japan or  overseas. The launch of competitive products by rivals could  impact the Astellas group’s business results significantly. The Astellas group is careful to observe laws and regulations  relating to environmental or health and safety issues and  has instituted internal standards that aim to exceed most  statutory requirements. Despite such precautions, the costs  involved in the unlikely event of a business-related incident  causing a serious breach of compliance in this area could  impact the Astellas group’s business results significantly. The Astellas group’s business results and financial position  are subject to the impact of exchange rate fluctuations due  to the Astellas group’s extensive international operations. In addition to the risks outlined above, the Astellas group is  exposed to a wide range of business-related risks, including  but not limited to (1) general commercial litigation, (2) delays  or suspension of manufacturing activities due to natural  disasters or other factors, and (3) partial dependence on  licensing or sales agreements relating to pharmaceuticals  developed by other companies. The Astellas group’s ethical pharmaceuticals business  benefits from the protection of many patents. Although the  Astellas group manages intellectual property rights properly  and is vigilant against third party violation of such rights, the  adverse impact on the Astellas group’s business results of  actual IP violations may still be substantial. The Astellas  group’s business results are also subject to the outcome of  litigation undertaken by the Astellas group to protect patents  where infringement has occurred. While the Astellas group strives to ensure that its actions  do not infringe the IP rights of other parties, there is a risk  of litigation in the event of any inadvertent violations. Such  Astellas Pharma Inc.  _ Annual Report 2014 102 The ethical pharmaceutical business is governed by a wide  variety of regulations in each country. In Japan, for exam- ple, the authorities periodically revise the NHI drug prices.  Some governments continue to adopt measures aimed at  containing medical expenditures. Any trend toward stricter  regulations governing the development, manufacture or  distribution of pharmaceuticals is a factor that could impact  business results. Any problems arising due to serious side effects or other  safety issues that are caused by the Astellas group’s  products could impact the Astellas group’s business  results significantly. •  Inherent uncertainties in pharmaceutical R&D •  Risks relating to product side effects and safety •  Pharmaceutical regulatory risk •  Environment-related risks •  Sales-related risk •  Intellectual property (IP) risk •  Foreign exchange rate fluctuations