2012 Annual Report  Marketing, selling and administrative Advertising and product promotion  Research and development  Impairment charge for BMS-986094 intangible asset 15  A $1.8 billion impairment charge was recognized when the development of BMS-986094 (formerly INX-189), a compound which we  acquired as part of our acquisition of Inhibitex to treat hepatitis C virus infection, was discontinued in the interest of patient safety. See Note 13 “Goodwill and Other Intangible Assets” for further information.  Most expenses are managed by our global research and development organization of which, approximately $1.9 billion of the total  spend was attributed to development activities with the remainder attributed to preclinical and research activities. These expenses can  vary between periods for a number of reasons, including the timing of upfront, milestone and other licensing payments.  Research and development expenses consist of salary and benefit costs, third-party grants and fees paid to clinical research  organizations, supplies and facility costs. Total research and development expenses include the costs of discovery research,  preclinical development, early- and late-clinical development and drug formulation, as well as clinical trials and medical support of  marketed products, proportionate allocations of enterprise-wide costs, facilities, information technology, and employee stock  compensation costs, and other appropriate costs. These expenses also include third-party licensing fees that are typically paid upfront  as well as when regulatory or other contractual milestones are met. Certain expenses are shared with alliance partners based upon  contractual agreements.  Marketing, selling and administrative expenses consist of salary and benefit costs, third-party professional and marketing fees,  outsourcing fees, shipping and handling costs and other expenses that are not attributed to product manufacturing costs or research and  development expenses. These expenses are managed through regional commercialization organizations or global corporate  organizations such as finance, law, information technology and human resources.  • Marketing, selling and administrative expenses increased slightly in 2012 primarily as a result of the Amylin acquisition ($125  million, including $67 million related to the accelerated vesting of stock options and restricted stock units), partially offset by a  reduction in sales-related activities for  Plavix  and  Avapro / Avalide. Marketing, selling and administrative expenses were also  impacted by favorable foreign exchange.  • The increase in 2011 was attributed to the annual pharmaceutical company fee, unfavorable foreign exchange and higher  marketing costs to support new launches and key products and to a lesser extent, higher bad debt expense in the EU, charitable  funding and information technology expenses.  • The annual pharmaceutical company fee was $246 million in 2012 and $220 million in 2011.  Advertising and product promotion expenses consist of related media, sample and direct to consumer programs.  • The decrease in 2012 was primarily attributed to lower spending on the promotion of  Plavix ,  Avapro / Avalide ,  Abilify , and certain  mature brands in the U.S. to coincide with their product life cycle.  • Research and development expenses increased in 2012 primarily from $60 million of expenses related to the Amylin acquisition  (including $27 million related to the accelerated vesting of Amylin stock options and restricted stock units), partially offset by  favorable foreign exchange and the net impact of upfront, milestone, and other licensing payments and IPRD impairment charges. Refer to “Specified Items” included in “—Non-GAAP Financial Measures” for amounts attributed to each period. IPRD  impairment charges relate to projects previously acquired in the Medarex, Inc. (Medarex) acquisition and Inhibitex acquisition  (including $45 million in 2012 related to FV-100, a nucleoside inhibitor for the reduction of shingles-associated pain) resulting  from unfavorable clinical trial results and decisions to cease further development.  • The increase in 2011 was attributed to higher upfront, milestone and other licensing payments, unfavorable foreign exchange, and  additional development costs resulting from the acquisition of ZymoGenetics. Upfront, milestone and other licensing payments  were $207 million in 2011, including an $88 million payment associated with an amendment of an intellectual property license  agreement for  Yervoy  prior to its FDA approval and payments for exclusive licenses to develop and commercialize certain  programs and compounds. 