Quest Diagnostics 2012 Annual Report Download - page 32

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We are subject to numerous political, legal, operational and other risks as a result of our international operations which
could impact our business in many ways.
Although we conduct most of our business in the United States, our international operations increase our exposure to
the inherent risks of doing business in international markets. Depending on the market, these risks include, without limitation:
• changes in the local economic environment;
• political instability;
• social changes;
• intellectual property legal protections and remedies;
• trade regulations;
• procedures and actions affecting approval, production, pricing, reimbursement and marketing of products and
services;
• exchange controls;
• attracting and retaining qualified employees;
• local market practices;
• export and import controls;
• weak legal systems which may affect our ability to enforce contractual rights;
• changes in local laws or regulations; and
• potentially longer payment and collection cycles.
International operations also require us to devote significant management resources to implement our controls and
systems in new markets, to comply with the U.S. Foreign Corrupt Practices Act and similar anti-corruption laws in non-U.S.
jurisdictions and to overcome challenges based on differing languages and cultures.
If we do not successfully navigate these risks, our financial condition or results of operations could be materially
adversely affected.
Our medical diagnostic products business is subject to numerous governmental regulations and it can be costly to
comply with these regulations and to develop compliant diagnostic products.
Our medical diagnostic products are subject to extensive regulation by numerous governmental authorities in the
United States, including the FDA, and by regulatory authorities outside the United States, including the European Commission.
The process of obtaining regulatory clearance or approval to market a medical diagnostic product can be costly and time-
consuming, and clearance or approval for future products is never certain. Securing regulatory clearance or approval of
additional indications or uses of existing products is not predictable. Delays in the receipt of, or failure to obtain clearance or
approval for, future products, or new indications or uses, could result in delayed realization of product revenues and in
substantial additional costs.
In addition, no assurance can be given that we will remain in compliance with applicable regulations once clearance or
approval has been obtained for a product. These requirements include, among other things, regulations regarding manufacturing
practices, product labeling and advertising and postmarket reporting, including adverse event reports and field alerts due to
manufacturing quality concerns. Our diagnostic product facilities and procedures and those of our suppliers are subject to
ongoing regulation, including periodic inspection by the FDA and other regulatory authorities. Failure to comply with
applicable rules could result in, among other things, substantial modifications to our business practices and operations; refunds,
recalls or seizures of our products or products of our suppliers; a total or partial shutdown of production in one or more of our
facilities while we or our suppliers remedy the alleged violation; the inability timely to obtain future pre-market clearances or
approvals; and withdrawals or suspensions of current products from the market. Any of these events could disrupt our business
and have a material adverse effect on our reputation, revenues, profitability or financial condition.
Our efforts to develop commercially successful medical diagnostic products may not succeed.
We may commit substantial efforts, funds and other resources to developing commercially successful medical
diagnostic products. A high rate of failure, or costly delay, is inherent in the development of new medical diagnostic products.
There is no assurance that our efforts to develop these products will be commercially successful. Failure can occur at any point
in the development process, including after significant funds have been invested.
Promising new product candidates may fail to reach the market or may have only limited commercial success because
of efficacy or safety concerns, failure to achieve positive clinical outcomes, inability to obtain necessary regulatory approvals,