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Item 1. Reports to Shareholders

(a) Report pursuant to Rule 30e-1.

Health Sciences Fund

December 31, 2021

PRHSX	Investor Class
THISX	I Class

 

T. ROWE PRICE HEALTH SCIENCES FUND

 

HIGHLIGHTS

 

■	The Health Sciences Fund outperformed its benchmark but trailed the broad equity market in the 12 months ended December 31, 2021.
■	Sector allocation and stock selection drove the portfolio’s strong relative performance versus its peer group. The biotechnology and services subsectors contributed the most to relative performance.
■	Generally, we continue to invest in companies developing treatments or products for a wide range of conditions that improve the standard of care and meet unmet medical needs, as well as companies that provide services that improve access to and affordability of health care. During the period, our allocations to the life sciences subsector increased while our exposures to the biotechnology and products and devices subsectors decreased.
■	We remain positive on the long-term prospects for investing in the health care sector as the pace of medical innovation and our understanding of the genetic causes of disease continue to accelerate.

 

 

Log in to your account at troweprice.com for more information.

 

*Certain mutual fund accounts that are assessed an annual account service
fee can also save money by switching to e-delivery.

 

Market Commentary

 

Dear Shareholder

 

Major stock and bond indexes produced mixed results during 2021 as strong
corporate earnings growth and a recovering economy contended with worries about inflation, new coronavirus variants, and less accommodative
central banks. Most developed market stock benchmarks finished the year with positive returns, although gains slowed in the second half
of the year, while fixed income returns faced headwinds from rising interest rates.

 

Large-cap U.S. growth stocks delivered the strongest returns, but solid
results were common in many developed markets. However, emerging markets stock benchmarks struggled amid a significant equity market downturn
in China.

 

The large-cap S&P 500 Index returned almost 29%, marking its third straight
year of positive returns. Robust results were widespread across the benchmark—according to Bloomberg data, 2021 marked the first
year that all of the S&P 500 sectors recorded double-digit gains. The energy sector, which was the worst performer in 2020, was the
leader in 2021 amid a sharp increase in oil prices, and real estate stocks also rebounded from a down year as strong demand led to rising
rents. Financial and information technology stocks also produced excellent returns and outperformed the broad market.

 

In the fixed income market, rising Treasury yields weighed on performance,
but below investment-grade corporate bonds delivered solid results as they benefited from improving fundamentals and investor demand for
higher-yielding securities. (Bond prices and yields move in opposite directions.)

 

A robust increase in corporate earnings growth appeared
to be a significant performance driver during the year. According to FactSet, overall earnings for the S&P 500 rose 89% in the second
quarter of 2021 versus the year before, the fastest pace since 2009, and while third-quarter earnings slowed, they continued to beat expectations
at an impressive pace. Despite the significant rally in the S&P 500 during 2021, the index’s price/earnings ratio actually fell
over that period as earnings rose faster than stock prices. Although economic growth showed signs of slowing at times, data remained generally
positive through the end of the period. The unemployment rate, which started the year at 6.7%, fell to 3.9% by December, and job openings
reached a record high.

 

However, optimism surrounding strong earnings and employment gains was tempered
by inflation concerns. Prices surged as the release of pent-up demand and supply chain disruptions contributed to higher inflation around
the globe. In the U.S., the 6.8% increase in the consumer price index for the 12-month period ended in November was the highest level
since 1982, a factor that may have contributed to a decline in consumer sentiment late in the year.

 

Meanwhile, central banks began to move away from the extremely accommodative
policies they instituted in response to the initial wave of the coronavirus. The Federal Reserve began trimming its purchases of Treasuries
and agency mortgage-backed securities in November, and policymakers indicated that they could soon start raising short-term interest rates.

 

How markets respond to the normalization of monetary policy is an open question.
While fading stimulus might pose some challenges for investors, I believe it could contribute to a return of price sensitivity in global
markets, which bodes well for selective investors focused on fundamentals.

 

Elevated valuations, higher inflation, and the continuing struggle to control
the pandemic also pose potential challenges for financial markets in 2022. However, on the positive side, household wealth gains, pent-up
consumer demand, and a potential boom in capital expenditures could sustain growth even as monetary policy turns less supportive. In this
environment, our investment teams will remain focused on using fundamental research to identify companies that can add value to your portfolio
over the long term.

 

Thank you for your continued confidence in T. Rowe Price.

 

Sincerely,

 

 

Robert Sharps

President and CEO

 

Management’s Discussion of Fund Performance

 

INVESTMENT OBJECTIVE

 

The fund seeks long-term capital appreciation.

 

FUND COMMENTARY

 

How did the fund perform in the past 12 months?

 

The Health Sciences Fund returned 13.27% in the 12-month period ended December
31, 2021. The fund outperformed its benchmark, the Lipper Health/Biotechnology Funds Index, but trailed the broad equity market as measured
by the S&P 500 Index. (Returns for I Class shares varied slightly, reflecting their different fee structure. Past performance cannot
guarantee future results.)

 

 

What factors influenced the fund’s performance?

 

Allocation decisions and stock selection both contributed to the portfolio’s
solid absolute and relative results. We believe our focus on bottom-up stock selection will be the primary long-term performance driver
as shown in the Growth of $10,000 chart on page 10.

 

Biotechnology was the portfolio’s largest source of relative outperformance
as stock selection and an underweight exposure to one of the benchmark’s poorest-performing subsectors were both beneficial. Shares
of BioNTech, a commercial-stage biotechnology company based in Germany, more than tripled over the period. The mRNA-based coronavirus
vaccine it developed with Pfizer helped drive solid growth in vaccine revenues. Moderna Therapeutics, which saw its stock more than double
in the past year, is an innovative company that developed its own mRNA-based coronavirus vaccine and, similarly, benefited from strong
demand for vaccinations globally. (Please refer to the portfolio of investments for a complete list of holdings and the amount each represents
in the portfolio.)

 

Stock selection within the services subsector contributed to relative gains. Diversified U.S. managed care company
UnitedHealth Group was the best contributor in the sector. Shares advanced on a string of strong quarterly results. Most recently, the
company reported better-than-expected medical loss ratio and solid growth from its pharmacy benefits division, OptumRx, leading management
to raise its 2021 full-year earnings guidance. We think UnitedHealth is well positioned to benefit in a range of scenarios due to its
strong Medicare and Medicaid businesses and other diversified business segments such as pharmacy, technology, and contract research organization.
Shares of health benefits company Anthem also rose following a string of quarterly results that exceeded expectations, driven by a better-than-feared
medical loss ratio. The company also raised its 2021 guidance on more than one occasion throughout the year. Shares jumped again late
in the period with the broader market on hopes that the omicron variant of the coronavirus wouldn’t weigh on economic growth as
much as originally feared.

 

Within pharmaceuticals, stock selection and an overweight allocation further
benefited relative results. Eli Lilly advanced on investor optimism toward the company’s experimental Alzheimer’s drug, donanemab,
which received Breakthrough Therapy designation by the FDA in June and was submitted for FDA approval in October. Late in the period,
shares were also boosted by a significant increase in the company’s 2021 annual revenue forecast as well as an analyst upgrade.
We believe the company has several late-stage assets with high probabilities of success that will benefit its visibility and revenue over
the next 12 to 18 months.

 

The products and devices subsector was the sole detractor from relative
performance over the period due to stock selection. Shares of iRhythm Technologies, which makes a wearable heart monitor for detecting
cardiac arrhythmias, plunged in late January due to growing uncertainty about Medicare reimbursement rates for its Zio XT monitor. The
stock came under further pressure in April after the company announced it would no longer offer its Zio Service to Medicare patients and
in early June after the firm’s chief executive officer resigned. While shares recovered slightly toward the end of the year, it
wasn’t enough to make up for earlier losses. We like the company’s Zio Service, which enables faster and more accurate diagnosis
of arrhythmias. We believe Zio is well positioned to capture significant share over the next few years, eventually becoming the standard
of care in the U.S. for first-line ambulatory electrocardiogram monitoring.

 

How is the fund positioned?

 

Given our broad mandate, we look to invest in innovative therapeutic and
device companies that will meaningfully contribute to human health and serve severe and unmet medical needs, as well as in companies that
improve access to and affordability of health care. We want to own companies developing innovative, game-changing therapies and those
that are improving the standard of care in a cost-effective manner because those are areas where we think investors can realize the best
long-term growth. The portfolio maintains a balanced blend of therapeutics (biotechnology and pharmaceuticals) and nontherapeutics (life
sciences, products and devices, and services) companies.

 

Biotechnology represents our largest allocation within the portfolio. We
remain optimistic on the subsector given the acceleration in innovation occurring in the space, which should lead to meaningful drug launches
that will cure diseases or dramatically improve quality of life in the coming years. We continue to look for secular winners—companies
that have the best chance of dominating their space, either through drugs likely to become standard of care in large and well-characterized
markets or companies with platform value that can replicate their success. During the year, we initiated a position in Zentalis Pharmaceuticals,
a development-stage company focused on oral cancer drugs. We have an optimistic view of the company’s pipeline and like the company’s
strategy of developing “me-better” oral oncology drugs that address well-characterized classes and large markets. To manage
position sizes, we also trimmed BioNTech, an immunotherapy company based in Germany, during periods of strength; Vertex Pharmaceuticals,
which is focused on developing treatments for cystic fibrosis; and Amgen, which develops original cancer and kidney disease supportive-care
products.

 

 

As is the case with biotechnology, we generally favor
pharmaceutical companies that are developing novel therapeutics. We appreciate the defensive nature of pharmaceutical
investments, and valuations among large-cap pharmaceuticals are not demanding. We added to biopharmaceutical company
AstraZeneca. The firm continues to execute on delivering margin expansion, improving free cash flow, and investing heavily in
its research and development pipeline. The company is in the early stages of a new product cycle, which we believe can
generate above-average growth for several years. We also trimmed our position in Eli Lilly, which performed well over the
period.

 

Within the services segment, we continue to have an overweight to managed
care companies, which we view as quality businesses with compelling runways for long-term growth. We think the segment broadly stands
out as one of the few spaces in the market that is still meaningfully dislocated from a price standpoint. Within the space, we have meaningful
exposure to UnitedHealth Group, Anthem, Humana, and Centene, each of which was among the portfolio’s top positions at the end of
the year.

 

We maintain an overweight to the life sciences tools space, which is levered
to the ongoing innovation within the biopharma space and has companies with meaningful diagnostics businesses that should benefit from
a robust coronavirus testing ecosystem. Within the space, we have core positions in Thermo Fisher Scientific and Danaher.

 

What is portfolio management’s outlook?

 

The continued spread of the coronavirus delta variant and the emergence
of the omicron variant in late November reminded investors that we have not yet fully emerged from the coronavirus pandemic. While we
expect equity markets to remain volatile in the near term, our longer-term outlook for the health care sector remains positive given the
secular tailwinds related to aging populations, increasing demand for clinical procedures, and accelerating innovation that is leading
to the development of game-changing therapies and medical devices that are leading to vast improvements in the standard of care.

 

Advancements in research tools, increasing investment capital, and a maturing
contract research and development field are all helping drive drug innovation, as evidenced by the 50 new drug approvals by the U.S. Food
and Drug Administration’s Center for Drug Evaluation and Research in 2021 and the more than 200 new drug approvals over the four
years prior. While numerous disorders affecting large patient populations that need improved treatment options remain, innovative emerging
modalities, such as gene and cell therapies, precision tissue delivery, and targeted protein degradation, have shown great promise for
expansion of treatment into new disease areas.

 

We expect innovation in the sector to continue at a rapid pace but also
recognize the uncertainty that investors face regarding the ongoing health crisis and potential implications of additional variants. We
acknowledge that investor concerns around macro factors like higher inflation, which could pressure margins, and higher interest rates,
which would raise the cost of capital and potentially dampen mergers and acquisitions activity, could lead to periods of short-term weakness
in certain areas of health care. However, we continue to focus our efforts on finding the best innovations in medicine and health care
services that improve patient outcomes, access, and/or affordability, which we think will create long-term value for our clients. Ultimately,
we believe we are in the midst of a golden age for health care, which should have a much longer runway in the future.

 

The views expressed reflect the opinions of T. Rowe Price as of the date
of this report and are subject to change based on changes in market, economic, or other conditions. These views are not intended to be
a forecast of future events and are no guarantee of future results.

 

RISKS OF GROWTH INVESTING

 

Growth stocks can be volatile for several reasons. Since these companies
usually invest a high portion of earnings in their businesses, they may lack the dividends of value stocks that can cushion stock prices
in a falling market. Also, earnings disappointments often lead to sharply falling prices because investors buy growth stocks in anticipation
of superior earnings growth.

 

RISKS OF HEALTH SCIENCES FUND INVESTING

 

Funds that invest only in specific industries will experience greater volatility
than funds investing in a broad range of industries. Companies in the health sciences field are subject to special risks such as increased
competition within the health care industry, changes in legislation or government regulations, reductions in government funding, product
liability or other litigation, and the obsolescence of popular products.

 

BENCHMARK INFORMATION

 

Note: Lipper, a Thomson Reuters Company, is the source for all Lipper content
reflected in these materials. Copyright 2022 © Refinitiv. All rights reserved. Any copying, republication or redistribution of Lipper
content is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the
content, or for any actions taken in reliance thereon.

 

Note: ©2022, S&P Global Market Intelligence. Reproduction of any
information, data or material, including ratings (Content) in any form is prohibited except with the prior written permission of the relevant
party. Such party, its affiliates and suppliers (Content Providers) do not guarantee the accuracy, adequacy, completeness, timeliness
or availability of any Content and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause,
or for the results obtained from the use of such Content. In no event shall Content Providers be liable for any damages, costs, expenses,
legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with any use of the Content.

 

 

GROWTH OF $10,000

 

This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The result is compared with benchmarks, which
include a broad-based market index and may also include a peer group average or index. Market indexes do not include expenses, which are
deducted from fund returns as well as mutual fund averages and indexes.

 

 

AVERAGE ANNUAL COMPOUND TOTAL RETURN

 

 

EXPENSE RATIO

 

 

FUND EXPENSE EXAMPLE

 

As a mutual fund shareholder, you may incur two types of costs: (1) transaction
costs, such as redemption fees or sales loads, and (2) ongoing costs, including management fees, distribution and service (12b-1) fees,
and other fund expenses. The following example is intended to help you understand your ongoing costs (in dollars) of investing in the
fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000
invested at the beginning of the most recent six-month period and held for the entire period.

 

Please note that the fund has two share classes: The original share class
(Investor Class) charges no distribution and service (12b-1) fee, and the I Class shares are also available to institutionally oriented
clients and impose no 12b-1 or administrative fee payment. Each share class is presented separately in the table.

 

Actual Expenses

The first line of the following table (Actual) provides information about
actual account values and expenses based on the fund’s actual returns. You may use the information on this line, together with your
account balance, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid
During Period” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

The information on the second line of the table (Hypothetical) is based
on hypothetical account values and expenses derived from the fund’s actual expense ratio and an assumed 5% per year rate of return
before expenses (not the fund’s actual return). You may compare the ongoing costs of investing in the fund with other funds by contrasting
this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical
account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

 

Note: T. Rowe Price charges an annual account service fee of $20,
generally for accounts with less than $10,000. The fee is waived for any investor whose T. Rowe Price mutual fund accounts total $50,000
or more; accounts electing to receive electronic delivery of account statements, transaction confirmations, prospectuses, and shareholder
reports; or accounts of an investor who is a T. Rowe Price Personal Services or Enhanced Personal Services client (enrollment in these
programs generally requires T. Rowe Price assets of at least $250,000). This fee is not included in the accompanying table. If you are
subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses
of this fund with other funds.

 

You should also be aware that the expenses shown in the table highlight
only your ongoing costs and do not reflect any transaction costs, such as redemption fees or sales loads. Therefore, the second line of
the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds.
To the extent a fund charges transaction costs, however, the total cost of owning that fund is higher.

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

The accompanying notes are an integral part of these financial statements.

 

December 31, 2021

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

December 31, 2021

 

 

The accompanying notes are an integral part of these financial statements.

 

 

The accompanying notes are an integral part of these financial statements.

 

 

The accompanying notes are an integral part of these financial statements.

 

NOTES TO FINANCIAL STATEMENTS

 

T. Rowe Price Health Sciences Fund, Inc. (the fund) is registered under
the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. During the reporting period, the fund’s
classification changed from nondiversified to diversified. The fund seeks long-term capital appreciation. The fund has two classes of
shares: the Health Sciences Fund (Investor Class) and the Health Sciences Fund–I Class (I Class). I Class shares require a $500,000
initial investment minimum, although the minimum generally is waived or reduced for financial intermediaries, eligible retirement plans,
and certain other accounts. Prior to November 15, 2021, the initial investment minimum was $1 million and was generally waived for financial
intermediaries, eligible retirement plans, and other certain accounts. Each class has exclusive voting rights on matters related solely
to that class; separate voting rights on matters that relate to both classes; and, in all other respects, the same rights and obligations
as the other class.

 

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Preparation The fund is an investment company and follows
accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946
(ASC 946). The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United
States of America (GAAP), including, but not limited to, ASC 946. GAAP requires the use of estimates made by management. Management believes
that estimates and valuations are appropriate; however, actual results may differ from those estimates, and the valuations reflected in
the accompanying financial statements may differ from the value ultimately realized upon sale or maturity.

 

Investment Transactions, Investment Income, and Distributions Investment
transactions are accounted for on the trade date basis. Income and expenses are recorded on the accrual basis. Realized gains and losses
are reported on the identified cost basis. Income tax-related interest and penalties, if incurred, are recorded as income tax expense.
Dividends received from mutual fund investments are reflected as dividend income; capital gain distributions are reflected as realized
gain/loss. Dividend income and capital gain distributions are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded
at the fair market value of the asset received. Distributions to shareholders are recorded on the ex-dividend date. Income distributions,
if any, are declared and paid by each class annually. A capital gain distribution may also be declared and paid by the fund annually.

 

Currency Translation Assets, including investments, and liabilities
denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate, using the mean of the
bid and asked prices of such currencies against U.S. dollars as provided by an outside pricing service. Purchases and sales of securities,
income, and expenses are translated into U.S. dollars at the prevailing exchange rate on the respective date of such transaction. The
effect of changes in foreign currency exchange rates on realized and unrealized security gains and losses is not bifurcated from the portion
attributable to changes in market prices.

 

Class Accounting Shareholder servicing, prospectus, and shareholder
report expenses incurred by each class are charged directly to the class to which they relate. Expenses common to all classes, investment
income, and realized and unrealized gains and losses are allocated to the classes based upon the relative daily net assets of each class.

 

Capital Transactions Each investor’s interest in the net assets
of the fund is represented by fund shares. The fund’s net asset value (NAV) per share is computed at the close of the New York Stock
Exchange (NYSE), normally 4 p.m. ET, each day the NYSE is open for business. However, the NAV per share may be calculated at a time other
than the normal close of the NYSE if trading on the NYSE is restricted, if the NYSE closes earlier, or as may be permitted by the SEC.
Purchases and redemptions of fund shares are transacted at the next-computed NAV per share, after receipt of the transaction order by
T. Rowe Price Associates, Inc., or its agents.

 

Indemnification In the normal course of business, the fund may provide
indemnification in connection with its officers and directors, service providers, and/or private company investments. The fund’s
maximum exposure under these arrangements is unknown; however, the risk of material loss is currently considered to be remote.

 

NOTE 2 – VALUATION

 

Fair Value The fund’s financial instruments are valued at the
close of the NYSE and are reported at fair value, which GAAP defines as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. The T. Rowe Price Valuation Committee (the
Valuation Committee) is an internal committee that has been delegated certain responsibilities by the fund’s Board of Directors
(the Board) to ensure that financial instruments are appropriately priced at fair value in accordance with GAAP and the 1940 Act. Subject
to oversight by the Board, the Valuation Committee develops and oversees pricing-related policies and procedures and approves all fair
value determinations. Specifically, the Valuation Committee establishes policies and procedures used in valuing financial instruments,
including those which cannot be valued in accordance with normal procedures or using pricing vendors; determines pricing techniques, sources,
and persons eligible to effect fair value pricing actions; evaluates the services and performance of the pricing vendors; oversees the
pricing process to ensure policies and procedures are being followed; and provides guidance on internal controls and valuation-related
matters. The Valuation Committee provides periodic reporting to the Board on valuation matters.

 

Various valuation techniques and inputs are used to determine the fair value
of financial instruments. GAAP establishes the following fair value hierarchy that categorizes the inputs used to measure fair value:

 

Level 1 – quoted prices (unadjusted) in active markets for identical
financial instruments that the fund can access at the reporting date

 

Level 2 – inputs other than Level 1 quoted prices that are observable,
either directly or indirectly (including, but not limited to, quoted prices for similar financial instruments in active markets, quoted
prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and
credit spreads)

 

Level 3 – unobservable inputs (including the fund’s own assumptions
in determining fair value)

 

Observable inputs are developed using market data, such as publicly available
information about actual events or transactions, and reflect the assumptions that market participants would use to price the financial
instrument. Unobservable inputs are those for which market data are not available and are developed using the best information available
about the assumptions that market participants would use to price the financial instrument. GAAP requires valuation techniques to maximize
the use of relevant observable inputs and minimize the use of unobservable inputs. When multiple inputs are used to derive fair value,
the financial instrument is assigned to the level within the fair value hierarchy based on the lowest-level input that is significant
to the fair value of the financial instrument. Input levels are not necessarily an indication of the risk or liquidity associated with
financial instruments at that level but rather the degree of judgment used in determining those values.

 

Valuation Techniques Equity securities, including exchange-traded
funds, listed or regularly traded on a securities exchange or in the over-the-counter (OTC) market are valued at the last quoted sale
price or, for certain markets, the official closing price at the time the valuations are made. OTC Bulletin Board securities are valued
at the mean of the closing bid and asked prices. A security that is listed or traded on more than one exchange is valued at the quotation
on the exchange determined to be the primary market for such security. Listed securities not traded on a particular day are valued at
the mean of the closing bid and asked prices for domestic securities and the last quoted sale or closing price for international securities.

 

The last quoted prices of non-U.S. equity securities may be adjusted to
reflect the fair value of such securities at the close of the NYSE, if the fund determines that developments between the close of a foreign
market and the close of the NYSE will affect the value of some or all of its portfolio securities. Each business day, the fund uses information
from outside pricing services to evaluate and, if appropriate, decide whether it is necessary to adjust quoted prices to reflect fair
value by reviewing a variety of factors, including developments in foreign markets, the performance of U.S. securities markets, and the
performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The fund uses
outside pricing services to provide it with quoted prices and information to evaluate or adjust those prices. The fund cannot predict
how often it will use quoted prices and how often it will determine it necessary to adjust those prices to reflect fair value.

 

Investments in mutual funds are valued at the mutual fund’s closing
NAV per share on the day of valuation. Assets and liabilities other than financial instruments, including short-term receivables and payables,
are carried at cost, or estimated realizable value, if less, which approximates fair value. Investments for which market quotations or
market-based valuations are not readily available or deemed unreliable are valued at fair value as determined in good faith by the Valuation
Committee, in accordance with fair valuation policies and procedures. The objective of any fair value pricing determination is to arrive
at a price that could reasonably be expected from a current sale. Financial instruments fair valued by the Valuation Committee are primarily
private placements, restricted securities, warrants, rights, and other securities that are not publicly traded. Factors used in determining
fair value vary by type of investment and may include market or investment specific considerations. The Valuation Committee typically
will afford greatest weight to actual prices in arm’s length transactions, to the extent they represent orderly transactions between
market participants, transaction information can be reliably obtained, and prices are deemed representative of fair value. However, the
Valuation Committee may also consider other valuation methods such as market-based valuation multiples; a discount or premium from market
value of a similar, freely traded security of the same issuer; discounted cash flows; yield to maturity; or some combination. Fair value
determinations are reviewed on a regular basis and updated as information becomes available, including actual purchase and sale transactions
of the investment. Because any fair value determination involves a significant amount of judgment, there is a degree of subjectivity inherent
in such pricing decisions, and fair value prices determined by the Valuation Committee could differ from those of other market participants.

 

Valuation Inputs The following table summarizes the fund’s
financial instruments, based on the inputs used to determine their fair values on December 31, 2021 (for further detail by category, please
refer to the accompanying Portfolio of Investments):

 

 

Following is a reconciliation of the fund’s Level 3 holdings for the
year ended December 31, 2021. Gain (loss) reflects both realized and change in unrealized gain/ loss on Level 3 holdings during the period,
if any, and is included on the accompanying Statement of Operations. The change in unrealized gain/loss on Level 3 instruments held at
December 31, 2021, totaled $128,704,000 for the year ended December 31, 2021.

 

 

In accordance with GAAP, the following table provides quantitative information
about significant unobservable inputs used to determine the fair valuations of the fund’s Level 3 assets, by class of financial
instrument. Because the Valuation Committee considers a wide variety of factors and inputs, both observable and unobservable, in determining
fair values, the unobservable inputs presented do not reflect all inputs significant to the fair value determination.

 

 

 

NOTE 3 – OTHER INVESTMENT TRANSACTIONS

 

Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks and/or to enhance performance. The investment objective, policies, program, and risk factors
of the fund are described more fully in the fund’s prospectus and Statement of Additional Information.

 

Restricted Securities The fund invests in securities that are subject
to legal or contractual restrictions on resale. Prompt sale of such securities at an acceptable price may be difficult and may involve
substantial delays and additional costs.

 

Private Investments Issued by Special Purpose Acquisition Companies

Special purpose acquisition companies (SPACs) are shell companies that have
no operations but are formed to raise capital with the intention of merging with or acquiring a company with the proceeds of the SPAC’s
initial public offering (IPO). The fund may enter into a contingent commitment with a SPAC to purchase private investments in public equity
(PIPE) if and when the SPAC completes its merger or acquisition. The fund maintains liquid assets sufficient to settle its commitment
to purchase the PIPE. However, if the commitment expires, then no shares are purchased. Purchased PIPE shares will be restricted from
trading until the registration statement for the shares is declared effective. Upon registration, the shares can be freely sold; however,
in certain circumstances, the issuer may have the right to temporarily suspend trading of the shares in the first year after the merger
or acquisition. The securities issued by a SPAC may be considered illiquid, more difficult to value, and/or be subject to restrictions
on resale.

 

Other Purchases and sales of portfolio securities other than short-term
securities aggregated $6,322,088,000 and $6,505,022,000, respectively, for the year ended December 31, 2021.

 

NOTE 4 – FEDERAL INCOME TAXES

 

Generally, no provision for federal income taxes is required since the fund
intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and distribute to shareholders
all of its taxable income and gains. Distributions determined in accordance with federal income tax regulations may differ in amount or
character from net investment income and realized gains for financial reporting purposes.

 

The fund files U.S. federal, state, and local tax returns as required. The
fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations,
which is generally three years after the filing of the tax return but which can be extended to six years in certain circumstances. Tax
returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.

 

Financial reporting records
are adjusted for permanent book/tax differences to reflect tax character but are not adjusted for temporary differences. The permanent
book/tax adjustments have no impact on results of operations or net assets and relate primarily to a tax practice that treats a portion
of the proceeds from each redemption of capital shares as a distribution of taxable net investment income or realized capital gain and
the offset of the current net operating loss against realized gains. For the year ended December 31, 2021, the following reclassification
was recorded:

 

 

Distributions during the years ended December 31, 2021 and December 31,
2020, were characterized for tax purposes as follows:

 

 

At December 31, 2021, the tax-basis cost of investments
and components of net assets were as follows:

 

 

The difference between book-basis and tax-basis net unrealized appreciation
(depreciation) is attributable to the deferral of losses from wash sales and the realization of gains/losses on passive foreign investment
companies for tax purposes. The fund intends to retain realized gains to the extent of available capital loss carryforwards. Net realized
capital losses may be carried forward indefinitely to offset future realized capital gains. All or a portion of the capital loss carryforwards
may be from losses realized between November 1 and the fund’s fiscal year-end, which are deferred for tax purposes until the subsequent
year but recognized for financial reporting purposes in the year realized. In accordance with federal tax laws applicable to investment
companies, net specified losses realized between November 1 and December 31 are not recognized for tax purposes until the subsequent year
(late-year ordinary loss deferrals); however, such losses are recognized for financial reporting purposes in the year realized.

 

NOTE 5 – FOREIGN TAXES

 

The fund is subject to foreign income taxes imposed by certain countries
in which it invests. Additionally, capital gains realized upon disposition of securities issued in or by certain foreign countries are
subject to capital gains tax imposed by those countries. All taxes are computed in accordance with the applicable foreign tax law, and,
to the extent permitted, capital losses are used to offset capital gains. Taxes attributable to income are accrued by the fund as a reduction
of income. Current and deferred tax expense attributable to capital gains is reflected as a component of realized or change in unrealized
gain/loss on securities in the accompanying financial statements. To the extent that the fund has country specific capital loss carryforwards,
such carryforwards are applied against net unrealized gains when determining the deferred tax liability. Any deferred tax liability incurred
by the fund is included in either Other liabilities or Deferred tax liability on the accompanying Statement of Assets and Liabilities.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

The fund is managed by T. Rowe Price Associates, Inc. (Price Associates),
a wholly owned subsidiary of T. Rowe Price Group, Inc. (Price Group). The investment management agreement between the fund and Price Associates
provides for an annual investment management fee that consists of an individual fund fee and a group fee; management fees are computed
daily and paid monthly. The investment management agreement provides for an individual fund fee equal to 0.35% of the fund’s average
daily net assets. The group fee rate is calculated based on the combined net assets of certain mutual funds sponsored by Price Associates
(the group) applied to a graduated fee schedule, with rates ranging from 0.48% for the first $1 billion of assets to 0.260% for assets
in excess of $845 billion. The fund’s group fee is determined by applying the group fee rate to the fund’s average daily net
assets. At December 31, 2021, the effective annual group fee rate was 0.28%. Effective May 1, 2021, Price Associates has contractually
agreed, at least through April 30, 2023, to waive a portion of its management fee so that an individual fund fee of 0.2975% is applied
to the fund’s average daily net assets that are equal to or greater than $25 billion. Thereafter, this agreement will automatically
renew for one-year terms unless terminated by the fund’s Board. Any fees waived under this agreement are not subject to reimbursement
to Price Associates by the fund. No management fees were waived under this arrangement for the year ended December 31, 2021.

 

The I Class
is subject to an operating expense limitation (I Class Limit) pursuant to which Price Associates is contractually required to pay all
operating expenses of the I Class, excluding management fees; interest; expenses related to borrowings, taxes, and brokerage; and other
non-recurring expenses permitted by the investment management agreement, to the extent such operating expenses, on an annualized basis,
exceed the I Class Limit. This agreement will continue through the expense limitation date indicated in the table below, and may be renewed,
revised, or revoked only with approval of the fund’s Board. The I Class is required to repay Price Associates for expenses previously
paid to the extent the class’s net assets grow or expenses decline sufficiently to allow repayment without causing the class’s
operating expenses (after the repayment is taken into account) to exceed the lesser of: (1) the I Class Limit in place at the time such
amounts were paid; or (2) the current I Class Limit. However, no repayment will be made more than three years after the date of a payment
or waiver.

 

 

In addition, the fund has entered into service agreements with Price Associates
and two wholly owned subsidiaries of Price Associates, each an affiliate of the fund (collectively, Price). Price Associates provides
certain accounting and administrative services to the fund. T. Rowe Price Services, Inc. provides shareholder and administrative services
in its capacity as the fund’s transfer and dividend-disbursing agent. T. Rowe Price Retirement Plan Services, Inc. provides subaccounting
and recordkeeping services for certain retirement accounts invested in the Investor Class. For the year ended December 31, 2021, expenses
incurred pursuant to these service agreements were $82,000 for Price Associates; $5,382,000 for T. Rowe Price Services, Inc.; and $705,000
for T. Rowe Price Retirement Plan Services, Inc. All amounts due to and due from Price, exclusive of investment management fees payable,
are presented net on the accompanying Statement of Assets and Liabilities.

 

Additionally, the fund is one of several mutual funds in which certain college
savings plans managed by Price Associates may invest. As approved by the fund’s Board of Directors, shareholder servicing costs
associated with each college savings plan are borne by the fund in proportion to the average daily value of its shares owned by the college
savings plan. For the year ended December 31, 2021, the fund was charged $113,000 for shareholder servicing costs related to the college
savings plans, of which $77,000 was for services provided by Price. All amounts due to and due from Price, exclusive of investment management
fees payable, are presented net on the accompanying Statement of Assets and Liabilities. At December 31, 2021, approximately less than
1% of the outstanding shares of the Investor Class were held by the college savings plans.

 

The fund may invest its cash reserves in certain open-end management investment
companies managed by Price Associates and considered affiliates of the fund: the T. Rowe Price Government Reserve Fund or the T. Rowe
Price Treasury Reserve Fund, organized as money market funds, or the T. Rowe Price Short-Term Fund, a short-term bond fund (collectively,
the Price Reserve Funds). The Price Reserve Funds are offered as short-term investment options to mutual funds, trusts, and other accounts
managed by Price Associates or its affiliates and are not available for direct purchase by members of the public. Cash collateral from
securities lending, if any, is invested in the T. Rowe Price Government Reserve Fund; prior to December 13, 2021, the cash collateral
from securities lending was invested in the T. Rowe Price Short-Term Fund. The Price Reserve Funds pay no investment management fees.

 

The fund may participate in securities purchase and sale transactions with other funds or accounts advised by Price Associates (cross
trades), in accordance with procedures adopted by the fund’s Board and Securities and Exchange Commission rules, which require,
among other things, that such purchase and sale cross trades be effected at the independent current market price of the security. During
the year ended December 31, 2021, the fund had no purchases or sales cross trades with other funds or accounts advised by Price Associates.

 

Price Associates has voluntarily agreed to reimburse the fund from its own
resources on a monthly basis for the cost of investment research embedded in the cost of the fund’s securities trades. This agreement
may be rescinded at any time. For the year ended December 31, 2021, this reimbursement amounted to $267,000, which is included in Net
realized gain (loss) on Securities in the Statement of Operations.

 

NOTE 7 – OTHER MATTERS

 

Unpredictable events such as environmental or natural disasters, war, terrorism,
pandemics, outbreaks of infectious diseases, and similar public health threats may significantly affect the economy and the markets and
issuers in which a fund invests. Certain events may cause instability across global markets, including reduced liquidity and disruptions
in trading markets, while some events may affect certain geographic regions, countries, sectors, and industries more significantly than
others, and exacerbate other pre-existing political, social, and economic risks. The fund’s performance could be negatively impacted
if the value of a portfolio holding were harmed by such events. Since 2020, a novel strain of coronavirus (COVID-19) has resulted in disruptions
to global business activity and caused significant volatility and declines in global financial markets. The duration of this outbreak
or others and their effects cannot be determined with certainty.

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders of

T. Rowe Price Health Sciences Fund, Inc.

 

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of T. Rowe Price Health Sciences Fund, Inc. (the “Fund”) as of December 31, 2021, the related
statement of operations for the year ended December 31, 2021, the statement of changes in net assets for each of the two years in the
period ended December 31, 2021, including the related notes, and the financial highlights for each of the five years in the period ended
December 31, 2021 (collectively referred to as the “financial statements”). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Fund as of December 31, 2021, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the period ended December 31, 2021 and the financial highlights
for each of the five years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United
States of America.

 

Basis for Opinion

These financial statements are the responsibility of the Fund’s management.
Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect
to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

 

We conducted our audits of these financial statements in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud.

 

Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation
of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2021 by correspondence with the
custodians, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe
that our audits provide a reasonable basis for our opinion.

 

PricewaterhouseCoopers LLP

Baltimore, Maryland

February 15, 2022

 

We have served as the auditor of one or more investment companies in the
T. Rowe Price group of investment companies since 1973.

 

TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 12/31/21

 

We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of differences between tax and financial reporting requirements.

 

The fund’s distributions to shareholders included:

 

■	$306,590,000 from short-term capital gains
■	$1,098,925,000 from long-term capital gains, subject to a long-term capital gains tax rate of not greater than 20%

 

For taxable non-corporate shareholders, $102,184,000 of the
fund’s income represents qualified dividend income subject to a long-term capital gains tax rate of not greater than
20%.

 

For corporate shareholders, $87,326,000 of the fund’s income qualifies for
the dividends-received deduction.

 

INFORMATION ON PROXY VOTING POLICIES, PROCEDURES, AND RECORDS

 

A description of the policies and procedures used by T. Rowe Price funds
to determine how to vote proxies relating to portfolio securities is available in each fund’s Statement of Additional Information.
You may request this document by calling 1-800-225-5132 or by accessing the SEC’s website, sec.gov.

 

The description of our proxy voting policies and procedures is also available
on our corporate website. To access it, please visit the following Web page:

 

https://www.troweprice.com/corporate/en/utility/policies.html

 

Scroll down to the section near the bottom of the page that says, “Proxy Voting Policies.” Click on the Proxy Voting Policies
link in the shaded box.

 

Each fund’s most recent annual proxy voting record is available on
our website and through the SEC’s website. To access it through T. Rowe Price, visit the website location shown above, and scroll
down to the section near the bottom of the page that says, “Proxy Voting Records.” Click on the Proxy Voting Records link
in the shaded box.

 

HOW TO OBTAIN QUARTERLY PORTFOLIO HOLDINGS

 

The fund files a complete schedule of portfolio holdings with the Securities
and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s
reports on Form N-PORT are available electronically on the SEC’s website (sec.gov). In addition, most T. Rowe Price funds disclose
their first and third fiscal quarter-end holdings on troweprice.com.

 

LIQUIDITY RISK MANAGEMENT PROGRAM

 

In accordance with Rule 22e-4 (Liquidity Rule) under the Investment Company
Act of 1940, as amended, the fund has established a liquidity risk management program (Liquidity Program) reasonably designed to assess
and manage the fund’s liquidity risk, which generally represents the risk that the fund would not be able to meet redemption requests
without significant dilution of remaining investors’ interests in the fund. The fund’s Board of Directors (Board) has appointed
the fund’s investment advisor, T. Rowe Price Associates, Inc. (Price Associates), as the administrator of the Liquidity Program.
As administrator, Price Associates is responsible for overseeing the day-to-day operations of the Liquidity Program and, among other things,
is responsible for assessing, managing, and reviewing with the Board at least annually the liquidity risk of each T. Rowe Price fund.
Price Associates has delegated oversight of the Liquidity Program to a Liquidity Risk Committee (LRC), which is a cross-functional committee
composed of personnel from multiple departments within Price Associates.

 

The Liquidity Program’s principal objectives include supporting the
T. Rowe Price funds’ compliance with limits on investments in illiquid assets and mitigating the risk that the fund will be unable
to timely meet its redemption obligations. The Liquidity Program also includes a number of elements that support the management and assessment
of liquidity risk, including an annual assessment of factors that influence the fund’s liquidity and the periodic classification
and reclassification of a fund’s investments into categories that reflect the LRC’s assessment of their relative liquidity
under current market conditions. Under the Liquidity Program, every investment held by the fund is classified at least monthly into one
of four liquidity categories based on estimations of the investment’s ability to be sold during designated time frames in current
market conditions without significantly changing the investment’s market value.

 

As required by the Liquidity Rule, at a meeting held on July 27, 2021, the
Board was presented with an annual assessment prepared by the LRC, on behalf of Price Associates, that addressed the operation of the
Liquidity Program and assessed its adequacy and effectiveness of implementation, including any material changes to the Liquidity Program
and the determination of each fund’s Highly Liquid Investment Minimum (HLIM). The annual assessment included consideration of the
following factors, as applicable: the fund’s investment strategy and liquidity of portfolio investments during normal and reasonably
foreseeable stressed conditions, including whether the investment strategy is appropriate for an open-end fund, the extent to which the
strategy involves a relatively concentrated portfolio or large positions in particular issuers, and the use of borrowings for investment
purposes and derivatives; short-term and long-term cash flow projections covering both normal and reasonably foreseeable stressed conditions;
and holdings of cash and cash equivalents, as well as available borrowing arrangements.

 

For the fund and other T. Rowe Price funds, the annual assessment incorporated
a report related to a fund’s holdings, shareholder and portfolio concentration, any borrowings during the period, cash flow projections,
and other relevant data for the period of April 1, 2020, through March 31, 2021. The report described the methodology for classifying
a fund’s investments (including derivative transactions) into one of four liquidity categories, as well as the percentage of a fund’s
investments assigned to each category. It also explained the methodology for establishing a fund’s HLIM and noted that the LRC reviews
the HLIM assigned to each fund no less frequently than annually.

 

During the period covered by the annual assessment, the LRC has concluded,
and reported to the Board, that the Liquidity Program continues to operate adequately and effectively and is reasonably designed to assess
and manage the fund’s liquidity risk.

 

ABOUT THE FUND’S DIRECTORS AND OFFICERS

 

Your fund is overseen by a Board of Directors (Board) that meets regularly
to review a wide variety of matters affecting or potentially affecting the fund, including performance, investment programs, compliance
matters, advisory fees and expenses, service providers, and business and regulatory affairs. The Board elects the fund’s officers,
who are listed in the final table. At least 75% of the Board’s members are considered to be independent, i.e., not “interested
persons” as defined in Section 2(a)(19) of the 1940 Act, of the Boards of T. Rowe Price Associates, Inc. (T. Rowe Price), and its
affiliates; “interested” directors and officers are employees of T. Rowe Price. The business address of each director and
officer is 100 East Pratt Street, Baltimore, Maryland 21202. The Statement of Additional Information includes additional information about
the fund directors and is available without charge by calling a T. Rowe Price representative at 1-800-638-5660.

 

INDEPENDENT DIRECTORS^(a)

 

Name (Year of Birth) Year Elected [Number of T. Rowe Price Portfolios Overseen]		Principal Occupation(s) and Directorships of Public Companies and Other Investment Companies During the Past Five Years
Teresa Bryce Bazemore (1959) 2018 [204]		President and Chief Executive Officer, Federal Home Loan Bank of San Francisco (2021 to present); President, Radian Guaranty (2008 to 2017); Chief Executive Officer, Bazemore Consulting LLC (2018 to 2021); Director, Chimera Investment Corporation (2017 to 2021); Director, First Industrial Realty Trust (2020 to present); Director, Federal Home Loan Bank of Pittsburgh (2017 to 2019)
Ronald J. Daniels (1959) 2018 [204]		President, The Johns Hopkins University(b) and Professor, Political Science Department, The Johns Hopkins University (2009 to present); Director, Lyndhurst Holdings (2015 to present); Director, BridgeBio Pharma, Inc. (2020 to present)
Bruce W. Duncan (1951) 2013 [204]		President, Chief Executive Officer, and Director, CyrusOne, Inc. (2020 to 2021); Chief Executive Officer and Director (2009 to 2016), Chair of the Board (2016 to 2020), and President (2009 to 2016), First Industrial Realty Trust, owner and operator of industrial properties; Chair of the Board (2005 to 2016) and Director (1999 to 2016), Starwood Hotels & Resorts, a hotel and leisure company; Member, Investment Company Institute Board of Governors (2017 to 2019); Member, Independent Directors Council Governing Board (2017 to 2019); Senior Advisor, KKR (2018 to present); Director, Boston Properties (2016 to present); Director, Marriott International, Inc. (2016 to 2020)
Robert J. Gerrard, Jr. (1952) 2012 [204]		Advisory Board Member, Pipeline Crisis/Winning Strategies, a collaborative working to improve opportunities for young African Americans (1997 to 2016); Chair of the Board, all funds (July 2018 to present)
Paul F. McBride (1956) 2013 [204]		Advisory Board Member, Vizzia Technologies (2015 to present); Board Member, Dunbar Armored (2012 to 2018)
Cecilia E. Rouse, Ph.D.(c) (1963) 2012 [0]		Dean, Princeton School of Public and International Affairs (2012 to present); Professor and Researcher, Princeton University (1992 to present); Director of Education Studies Committee, MDRC, a nonprofit education and social policy research organization (2011 to 2020); Member, National Academy of Education (2010 to present); Board Member, National Bureau of Economic Research (2011 to present); Board Member of the Council on Foreign Relations (2018 to present); Board Member, The Pennington School (2017 to present); Board Member, the University of Rhode Island (2020 to present); Chair of Committee on the Status of Minority Groups in the Economic Profession of the American Economic Association (2012 to 2018); Vice President (2015 to 2016) and Board Member (2018 to present), American Economic Association
John G. Schreiber(d) (1946) 2001 [0]		Owner/President, Centaur Capital Partners, Inc., a real estate investment company (1991 to present); Cofounder, Partner, and Cochair of the Investment Committee, Blackstone Real Estate Advisors, L.P. (1992 to 2015); Director, Blackstone Mortgage Trust, a real estate finance company (2012 to 2016); Director and Chair of the Board, Brixmor Property Group, Inc. (2013 to present); Director, Hilton Worldwide (2007 to present); Director, Hudson Pacific Properties (2014 to 2016); Director, Invitation Homes (2014 to 2017); Director, JMB Realty Corporation (1980 to present)
Kellye Walker(e) (1966) 2021 [204]		Executive Vice President and Chief Legal Officer, Eastman Chemical Company (April 2020 to present); Executive Vice President and Chief Legal Officer, Huntington Ingalls Industries, Inc. (NYSE: HIl) (January 2015 to March 2020); Director, Lincoln Electric Company (October 2020 to present)
(a) All information about the independent directors was current as of December 31, 2020, unless otherwise indicated, except for the number of portfolios overseen, which is current as of the date of this report.   (b) William J. Stromberg, chair of the Board, director, and chief executive officer of T. Rowe Price Group, Inc., the parent company of the Price Funds’ investment advisor, has served on the Board of Trustees of Johns Hopkins University since 2014.   (c) Effective March 4, 2021, Dr. Rouse resigned from her role as independent director of the Price Funds.   (d) Effective December 31, 2021, Mr. Schreiber resigned from his role as independent director of the Price Funds.   (e) Effective November 8, 2021, Ms. Walker was elected as independent director of the Price Funds.

 

INTERESTED DIRECTORS^(a)

 

Name (Year of Birth) Year Elected [Number of T. Rowe Price Portfolios Overseen]		Principal Occupation(s) and Directorships of Public Companies and Other Investment Companies During the Past Five Years
David Oestreicher (1967) 2018 [204]		General Counsel, Vice President, and Secretary, T. Rowe Price Group, Inc.; Chair of the Board, Chief Executive Officer, President, and Secretary, T. Rowe Price Trust Company; Director, Vice President, and Secretary, T. Rowe Price, T. Rowe Price Investment Services, Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Services, Inc.; Director and Secretary, T. Rowe Price Investment Management, Inc. (Price Investment Management); Vice President and Secretary, T. Rowe Price International (Price International); Vice President, T. Rowe Price Hong Kong (Price Hong Kong), T. Rowe Price Japan (Price Japan), and T. Rowe Price Singapore (Price Singapore); Principal Executive Officer and Executive Vice President, all funds
Robert W. Sharps, CFA, CPA (1971) 2017 [204]		Director and Vice President, T. Rowe Price; President, T. Rowe Price Group, Inc.; Director, T. Rowe Price Investment Management, Inc.; Vice President, T. Rowe Price Trust Company
(a) All information about the interested directors was current as of December 31, 2020, unless otherwise indicated, except for the number of portfolios overseen, which is current as of the date of this report.

 

 

OFFICERS

 

Name (Year of Birth) Position Held With Health Sciences Fund		Principal Occupation(s)
Ziad Bakri, M.D., CFA (1980) President		Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Anne Daub (1973) Vice President		Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; (to 2018); Senior Analyst, Citadel LLC (to 2017)
Alan S. Dupski, CPA (1982) Principal Financial Officer, Vice President, and Treasurer		Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company
Melissa C. Gallagher (1974) Vice President		Vice President, T. Rowe Price Group, Inc., and Price International
John R. Gilner (1961) Chief Compliance Officer		Chief Compliance Officer and Vice President, T. Rowe Price; Vice President, T. Rowe Price Group, Inc., and T. Rowe Price Investment Services, Inc.
Gary J. Greb (1961) Vice President		Vice President, T. Rowe Price, Price International, and T. Rowe Price Trust Company
John Hall (1977) Vice President		Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Kate Hobbs (1982) Vice President		Vice President, T. Rowe Price; formerly, Portfolio Manager, Millennium Partners (to 2020); Senior Analyst, Citadel LLC, Aptigon Capital (to 2018); Equity Research Analyst, MFS Investment Management (to 2017)
Jeffrey Holford, Ph.D., ACA (1972) Vice President		Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; formerly, Managing Director, Jeffries Financial Group (to 2018)
Rachel D. Jonas (1983) Vice President		Vice President, T. Rowe Price and T. Rowe Price Group, Inc.
Paul J. Krug, CPA (1964) Vice President		Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company
Fran M. Pollack-Matz (1961) Vice President and Secretary		Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Investment Services, Inc., and T. Rowe Price Services, Inc.
Shannon H. Rauser (1987) Assistant Secretary		Assistant Vice President, T. Rowe Price
Taymour R. Tamaddon, CFA (1976) Vice President		Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price Trust Company
Megan Warren (1968) Vice President		Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price Retirement Plan Services, Inc., T. Rowe Price Services, Inc., and T. Rowe Price Trust Company; formerly, Executive Director, JPMorgan Chase (to 2017)

 

Unless otherwise noted, officers have been employees of T. Rowe Price or
Price International for at least 5 years.

 

Item 1. (b) Notice pursuant to Rule 30e-3.

 

Not applicable.

 

Item 2. Code of Ethics.

 

The registrant has adopted a code of ethics,
as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as an exhibit to this Form
N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this
report.

 

Item 3. Audit Committee Financial Expert.

 

The registrant’s Board of Directors has determined that
Ms. Teresa Bryce Bazemore qualifies as an audit committee financial expert, as defined in Item 3 of Form N-CSR. Ms. Bazemore is
considered independent for purposes of Item 3 of Form N-CSR.

 

Item 4. Principal Accountant Fees and Services.

 

(a) – (d) Aggregate fees billed for the last two fiscal
years for professional services rendered to, or on behalf of, the registrant by the registrant’s principal accountant were
as follows:

 

 

Audit fees include amounts related to the
audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with
statutory and regulatory filings. Audit-related fees include amounts reasonably related to the performance of the audit of the
registrant’s financial statements and specifically include the issuance of a report on internal controls and, if applicable,
agreed-upon procedures related to fund acquisitions. Tax fees include amounts related to services for tax compliance, tax planning,
and tax advice. The nature of these services specifically includes the review of distribution calculations and the preparation
of Federal, state, and excise tax returns. All other fees include the registrant’s pro-rata share of amounts for agreed-upon
procedures in conjunction with service contract approvals by the registrant’s Board of Directors/Trustees.

 

(e)(1) The registrant’s audit committee
has adopted a policy whereby audit and non-audit services performed by the registrant’s principal accountant for the registrant,
its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides
ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings. If such a service
is required between regularly scheduled audit committee meetings, pre-approval may be authorized by one audit committee member
with ratification at the next scheduled audit committee meeting. Waiver of pre-approval for audit or non-audit services requiring
fees of a de minimis amount is not permitted.

 

(2) No services included in (b) –
(d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

(f) Less than 50 percent of the hours
expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent
fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.

 

(g) The aggregate fees billed for the
most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered
to the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment
adviser that provides ongoing services to the registrant were $3,732,000 and $3,781,000, respectively.

 

(h) All non-audit services rendered
in (g) above were pre-approved by the registrant’s audit committee. Accordingly, these services were considered by the registrant’s
audit committee in maintaining the principal accountant’s independence.

 

Item 5. Audit Committee of Listed Registrants.

 

Not applicable.

 

Item 6. Investments.

 

(a) Not applicable. The complete schedule of investments is
included in Item 1 of this Form N-CSR.

 

(b) Not applicable.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures
for Closed-End Management Investment Companies.

 

Not applicable.

 

Item 8. Portfolio Managers of Closed-End Management Investment
Companies.

 

Not applicable.

 

Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.

 

Not applicable.

 

Item 10. Submission of Matters to a Vote of Security Holders.

 

There has been no change to the procedures by which shareholders
may recommend nominees to the registrant’s board of directors.

 

Item 11. Controls and Procedures.

 

(a) The registrant’s principal executive
officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days
of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date,
in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized,
and reported timely.

 

(b) The registrant’s principal executive
officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting.

 

Item 12. Disclosure of Securities Lending Activities for
Closed-End Management Investment Companies.  

 

Not applicable.

 

Item 13. Exhibits.

 

(a)(1) The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is attached.

 

(2) Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

 

(3) Written solicitation
to repurchase securities issued by closed-end companies: not applicable.

 

(b) A certification by the registrant’s principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached.