Rite Aid 2014 Annual Report Download - page 11

The pharmacist shortage has eased significantly. The increase in the number of graduates from
U.S. Schools of Pharmacy is meeting our workforce demand. However, pharmacist employment
opportunities still exist in certain areas.
Research and Development
We do not make significant expenditures for research and development.
Licenses, Trademarks and Patents
The Rite Aid name is our most significant trademark and the most important factor in marketing
our stores and private brand products. We hold licenses to sell beer, wine and liquor, cigarettes and
lottery tickets. As part of our strategic alliance with GNC, we have a license to operate GNC ‘‘stores-
within-Rite Aid-stores.’’ We also hold licenses to operate our pharmacies and our distribution facilities.
Collectively, these licenses are material to our operations.
Seasonality
We experience moderate seasonal fluctuations in our results of operations concentrated in the first
and fourth fiscal quarters as the result of the concentration of the cough, cold and flu season and the
holidays. We tailor certain front end merchandise to capitalize on holidays and seasons. We increase
our inventory levels during our third fiscal quarter in anticipation of the seasonal fluctuations described
above. Our results of operations in the fourth and first fiscal quarters may fluctuate based upon the
timing and severity of the cough, cold and flu season, both of which are unpredictable.
Regulation
Our business is subject to federal, state and local laws, regulations, and administrative practices
concerning the provision of and payment for health care services, including, without limitation: federal,
state and local licensure and registration requirements concerning the operation of pharmacies and the
practice of pharmacy; Medicare, Medicaid and other publicly financed health benefit plan regulations
prohibiting kickbacks, beneficiary inducement and the submission of false claims; the Patient Protection
and Affordable Care Act (ACA); regulations of the U.S. Food and Drug Administration and the U.S.
Drug Enforcement Administration, including regulations governing the purchase, sale, storing and
dispensing of controlled substances and other products, as well as regulations promulgated by state and
other federal agencies concerning the sale, advertisement and promotion of the products we sell,
including tobacco and alcoholic beverages.
Our business is also subject to patient privacy and other obligations, including corporate, pharmacy
and associate responsibility imposed by the Health Insurance Portability and Accountability Act. As a
covered entity, we are required to implement privacy standards, train our associates on the permitted
uses and disclosures of protected health information, provide a notice of privacy practice to our
pharmacy customers and permit pharmacy customers to access and amend their records and receive an
accounting of disclosures of protected health information.
We are also subject to laws governing our relationship with our associates, including health and
safety, minimum wage requirements, overtime, working conditions, equal employment opportunity and
unionizing efforts.
In addition, in connection with the ownership and operations of our stores, distribution centers and
other sites, we are subject to laws and regulations relating to the protection of the environment and
health and safety matters, including those governing the management and disposal of hazardous
substances and the cleanup of contaminated sites.
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