Rite Aid 2015 Annual Report Download - page 20

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Certain risks are inherent in providing pharmacy services; our insurance may not be adequate to cover any
claims against us.
Pharmacies are exposed to risks inherent in the packaging and distribution of pharmaceuticals and
other healthcare products, such as with respect to improper filling of prescriptions, labeling of
prescriptions, adequacy of warnings, unintentional distribution of counterfeit drugs and expiration of
drugs. In addition, federal and state laws that require our pharmacists to offer counseling, without
additional charge, to their customers about medication, dosage, delivery systems, common side effects
and other information the pharmacists deem significant can impact our business. Our pharmacists may
also have a duty to warn customers regarding any potential negative effects of a prescription drug if the
warning could reduce or negate these effects. Although we maintain professional liability and errors
and omissions liability insurance, from time to time, claims result in the payment of significant
amounts, some portions of which are not funded by insurance. We cannot assure you that the coverage
limits under our insurance programs will be adequate to protect us against future claims, or that we
will be able to maintain this insurance on acceptable terms in the future. Our results of operations,
financial condition or cash flows may be adversely affected if in the future our insurance coverage
proves to be inadequate or unavailable or there is an increase in liability for which we self-insure or we
suffer reputational harm as a result of an error or omission.
We may be subject to significant liability should the consumption of any of our products cause injury, illness
or death.
Products that we sell could become subject to contamination, product tampering, mislabeling or
other damage requiring us to recall our private brand products. In addition, errors in the dispensing
and packaging of pharmaceuticals could lead to serious injury or death. Product liability claims may be
asserted against us with respect to any of the products or pharmaceuticals we sell and we may be
obligated to recall our private brand products. A product liability judgment against us or a product
recall could have a material, adverse effect on our business, financial condition or results of operations.
Risks Related to the Pending Acquisition of EnvisionRx
We are subject to integration risks as a result of the acquisition, and we may not realize the anticipated
benefits of the acquisition in the time frame anticipated, or at all.
We believe we will benefit from the integration of our product and service offerings with those of
EnvisionRx, and realize other synergies as a result of the acquisition. However, we are subject to
integration risks related to the acquisition, including difficulties in achieving anticipated cost savings,
synergies, business opportunities and revenue opportunities from combining the businesses; difficulties
in assimilation of employees; and challenges in keeping existing customers and obtaining new
customers. Integration efforts between the two companies may also divert management attention and
resources. Additionally, we may not be able to successfully capture all anticipated synergies in the time
frame anticipated, or at all. Any inability to realize the potential benefits of the acquisition, as well as
any delays in integration, could have an adverse effect on our business, financial condition and results
of operations.
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