Quest Diagnostics 2010 Annual Report Download - page 33

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(o) Development of technologies that substantially alter the practice of clinical test medicine, including
technology changes that lead to the development of more cost-effective tests such as (1) point-of-care
tests that can be performed by physicians in their offices, (2) esoteric tests that can be performed by
hospitals in their own laboratories or (3) home testing that can be carried out without requiring the
services of clinical laboratories.
(p) Negative developments regarding intellectual property and other property rights that could prevent, limit
or interfere with our ability to develop, perform or sell our tests or operate our business. These include:
(1) Issuance of patents or other property rights to our competitors or others; and
(2) Inability to obtain or maintain adequate patent or other proprietary rights for our products and
services or to successfully enforce our proprietary rights.
(q) Development of tests by our competitors or others which we may not be able to license, or usage of
our technology or similar technologies or our trade secrets by competitors, any of which could
negatively affect our competitive position.
(r) Regulatory delay or inability to commercialize newly developed or licensed products, tests or
technologies or to obtain appropriate reimbursements for such tests.
(s) Impact of any national healthcare information network or the adoption of standards for health
information technology interoperability that are incompatible with existing software and hardware
infrastructure requiring widespread replacement of systems and/or software.
(t) Inability to promptly or properly bill for our services or to obtain appropriate payments for services that
we do bill.
(u) Changes in interest rates and changes in our credit ratings from Standard & Poor’s, Moody’s Investor
Services or Fitch Ratings causing an unfavorable impact on our cost of and access to capital.
(v) Inability to hire and retain qualified personnel or the loss of the services of one or more of our key
senior management personnel.
(w) Terrorist and other criminal activities, hurricanes, earthquakes or other natural disasters, and health
pandemics, which could affect our customers, transportation or systems, or our facilities, and for which
insurance may not adequately reimburse us.
(x) Difficulties and uncertainties in the discovery, development, regulatory environment and/or marketing of
new products or new uses of existing products.
(y) Failure to comply with the requirements of our Corporate Integrity Agreement that could subject us to
suspension or termination from participation in federal healthcare programs and substantial monetary
penalties.
(z) Failure to adapt to changes in the healthcare system and healthcare delivery stemming from the 2010
federal healthcare reform legislation.
Item 1B. Unresolved Staff Comments
There are no unresolved SEC comments that require disclosure.
Item 2. Properties
Our executive offices are located in Madison, New Jersey. We maintain clinical testing laboratories in major
metropolitan areas and elsewhere throughout the continental United States; in several instances a joint venture of
which we are a partner maintains the laboratory. We also maintain offices, data centers, billing centers, call
centers, an assembly center, distribution centers, patient service centers and a clinical trials testing laboratory at
locations throughout the United States. In addition, we maintain offices, manufacturing facilities, patient service
centers and clinical laboratories in locations outside the United States, including in Sweden, Puerto Rico, Mexico,
the United Kingdom, India, Ireland and Australia. Our properties that are not owned are leased on terms and for
durations that are reflective of commercial standards in the communities where these properties are located. We
believe that, in general, our facilities are suitable and adequate for our current and anticipated future levels of
operation and are adequately maintained. We believe that if we were unable to renew a lease on any of our
facilities, we could find alternative space at competitive market rates and relocate our operations to such new
location without material disruption to our business. Several of our principal facilities are highlighted below.
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