filings.toolsItem 1. Business
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Item 1. Business
Business
General
Henry Schein, Inc. is a solutions company for health care professionals powered
by a network of people and
technology.
We believe we are the world’s largest
provider of health care products and services primarily to
office-
based dental and medical practitioners, as well as alternate sites of care.
Our philosophy is grounded in our
commitment to help customers operate a more efficient and successful business so
the practitioner can provide
better clinical care.
With more than 91 years of experience distributing health care products, we have built a vast set of small,
mid-sized
and large customers in the dental and medical markets, serving more than one million
customers worldwide across
dental practices, laboratories,
physician practices, and ambulatory surgery centers, as well as government,
institutional health care clinics and other alternate care clinics.
We are headquartered in Melville, New York
and employ more than 25,000 people.
Approximately 55% of our
workforce is based in the United States and approximately 45% is based outside
of the United States.
We have
operations or affiliates in 33 countries and territories.
Our broad global footprint has evolved over time through our
organic success as well as through contribution from strategic acquisitions.
We stock a comprehensive selection of more than 300,000 branded products and Henry Schein corporate brand
products through our main distribution centers.
Our infrastructure, including over 5.3 million square feet of space
in 36 strategically located distribution and 22 manufacturing facilities around
the world, enables us to historically
provide rapid and accurate order fulfillment, better serve our customers and
increase our operating efficiency.
This
infrastructure, together with broad product and service offerings at competitive
prices, and a strong commitment to
customer service, enables us to be a single source of supply for our customers’
needs.
We conduct our business through two reportable segments: (i) health care distribution and (ii) technology and
value-added services.
These segments offer different products and services to the same customer base.
Our dental
businesses serve office-based dental practitioners, dental laboratories, schools, government
and other
institutions.
Our medical businesses serve physician offices, urgent care centers, ambulatory care sites,
emergency
medical technicians, dialysis centers, home health, federal and state governments
and large enterprises, such as
group practices and integrated delivery networks, among other providers
across a wide range of specialties.
The health care distribution reportable segment, combining our global dental
and medical operating segments,
distributes consumable products, small equipment, laboratory products, large equipment, equipment
repair services,
branded and generic pharmaceuticals, vaccines, surgical products, dental specialty
products (including implant,
orthodontic and endodontic products), diagnostic tests, infection-control products,
personal protective equipment
products (“PPE”) and vitamins.
While our primary go-to-market strategy is in our capacity as a
distributor, we also
market and sell under our own corporate brand portfolio of cost-effective, high-quality consumable
merchandise
products, and manufacture certain dental specialty products in the areas of oral
surgery, implants, orthodontics and
endodontics.
The technology and value-added services reportable segment provides
software, technology and other value-added
services to health care practitioners.
Henry Schein One, the largest contributor of sales to this category, offers
dental practice management solutions for dental and medical practitioners.
In addition, we offer dentists and
physicians a broad suite of electronic health records, patient communication
services including electronic marketing
and website design, analytics and patient demand generation.
Our value-added practice solutions include practice
consultancy, education, integrated revenue cycle management and the facilitation of financial service offerings (on
a non-recourse basis) to help dentists and physicians operate and expand
their business operations,
e-services,
practice technology, network and hardware services, as well as consulting, and continuing education services for
practitioners.
We believe our hands-on consultative approach to provide solutions to support practice decision-
making is a key differentiator for our business.
Recent Developments
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent
Developments” herein for a discussion related to recent Company developments.
Industry
The global health care distribution industry, as it relates to office-based health care practitioners, is fragmented and
diverse.
The industry ranges from sole practitioners working out of
relatively small offices to mid-sized and large
group practices ranging in size from a few practitioners to several
hundred practices owned or operated by dental
support organizations (“DSOs”), medical group purchasing organizations (“GPOs”), hospital
systems or integrated
delivery networks.
Due in part to the limited capacity of office-based health care practitioners
to store and manage large quantities of
supplies in their offices, the distribution of health care supplies and small equipment
to office-based health care
practitioners has been characterized by frequent, small quantity orders,
and a need for rapid, reliable and
substantially complete order fulfillment.
The purchasing decisions within an office-based health care practice
are
typically made by the practitioner, hygienist or office manager.
Supplies and small equipment are generally
purchased from more than one distributor, with one generally serving as the primary supplier.
The health care distribution industry continues to experience growth due
to demand driven by the aging population,
increased health care awareness and the importance of preventative care,
an increasing understanding of the
connection between good oral health and overall health, improved access
to care globally, the proliferation of
medical technology and testing, new pharmacology treatments and
expanded third-party insurance coverage,
partially offset by the effects of unemployment on insurance coverage and technological
improvements, including
the advancement of software and services, prosthetic solutions and telemedicine.
In addition, the non-acute market
continues to benefit from the shift of procedures and diagnostic
testing from acute care settings to alternate-care
sites, particularly physicians’ offices and ambulatory surgery centers.
We believe that consolidation within the industry will continue to result in a number of distributors, particularly
those with limited financial, operating and marketing resources, seeking
to combine with larger companies that can
provide growth opportunities.
This consolidation also may continue to result in distributors seeking
to acquire
companies that can enhance their current product and service offerings or provide
opportunities to serve a broader
customer base.
In addition, customer consolidation will likely lead to multiple locations
under common management and the
movement of more procedures from the hospital setting to the physician
or alternate care setting as the health care
industry is increasingly focused on efficiency and cost containment.
This trend has benefited distributors capable
of providing a broad array of products and services at low prices.
It also has accelerated the growth of health
maintenance organizations (“HMOs”), group practices, other managed care accounts
and collective buying groups,
which, in addition to their emphasis on obtaining products at competitive
prices, tend to favor distributors capable
of providing specialized management information support.
We believe that the trend towards cost containment has
the potential to favorably affect demand for technology solutions, including software,
which can enhance the
efficiency and facilitation of practice management.
Competition
The distribution and manufacture of health care supplies and equipment is
highly competitive.
Many of the health
care products we sell are available to our customers from a number of suppliers.
In addition, our competitors could
obtain exclusive rights from manufacturers to market particular products.
Manufacturers also could seek to sell
directly to end-users, and thereby eliminate or reduce our role and
that of other distributors.
In certain parts of the
dental end market, such as those related to dental specialty products, and
medical end market manufacturers already
sell directly to end customers.
In North America, we compete with other distributors, as well as several
manufacturers, of dental and medical
products, primarily on the basis of price, breadth of product line, e-commerce
capabilities, customer service and
value-added products and services.
In the dental market, our primary competitors in the U.S. are the Patterson
Dental division of Patterson Companies, Inc. and Benco Dental Supply
Company.
In addition, we compete against
a number of other distributors that operate on a national, regional and
local level.
Our primary competitors in the
U.S. medical market, which accounts for the large majority of our global medical
sales, are McKesson Corporation
and Medline Industries, Inc., which are national distributors.
We also compete with a number of regional and local
medical distributors, as well as a number of manufacturers that
sell directly to physicians and patients in their
homes.
With regard to our dental software, we compete against numerous companies, including the Patterson
Dental division of Patterson Companies, Inc., Carestream Health, Inc.,
Carestream Dental LLC, Centaur Software
Development Co Pty Ltd. (d.b.a. dental4windows, dental4web), Open Dental
Software, Inc., PlanetDDS LLC,
Good Methods Global Inc. (d.b.a. CareStack) and Curve Dental, LLC.
In other software end markets, including
revenue cycle management, patient relationship management and patient
demand generation, we compete with
companies such as Vyne Therapeutics Inc., EDI-Health Group, Inc. (d.b.a. Dental X Change, Inc.), Weave
Communications, Inc., and Solutionreach, Inc.
The medical practice management and electronic medical
records
market is fragmented and we compete with numerous companies such
as the NextGen division of Quality Systems,
Inc., eClinicalWorks, Allscripts Healthcare Solutions, Inc. and Epic Systems Corporation.
Outside of the U.S., we believe we are the only global distributor of supplies
and equipment to dental practices and
our competitors are primarily local and regional companies.
We also face significant competition internationally,
where we compete on the basis of price and customer service against
several large competitors, including the
GACD Group, Proclinic SA, Lifco AB, Planmeca Oy and Billericay Dental
Supply Co. Ltd., as well as a large
number of other dental and medical product distributors and manufacturers
in international countries and territories
we serve.
Competitive Strengths
We have more than 91 years of experience in distributing products to health care practitioners resulting in strong
awareness of the Henry Schein
®
brand.
Our competitive strengths include:
A focus on meeting our customers’ unique needs
.
We are committed to providing customized solutions to our
customers that are driven by our understanding of the end markets we
serve and reflect the technology-driven
products and services best suited for their practice needs.
We are committed to continuing to enhance these
offerings through organic investment in our products and our teams, as well as through the acquisition
of new
products and services that may help us better serve our customers.
Direct sales and marketing expertise.
Our sales and marketing efforts are designed to establish and solidify
customer relationships through personal or virtual visits by field sales representatives,
frequent direct marketing and
telesales contact, emphasizing our broad product lines, including exclusive
distribution agreements, competitive
prices and ease of order placement,
particularly through our e-commerce platforms.
The key elements of our direct
sales and marketing efforts are:
Field sales consultants.
Our field sales consultants, including equipment sales specialists, covering
major
North American, European and other international markets.
These consultants complement our direct
marketing and telesales efforts and enable us to better market, service and support
the sale of more
sophisticated products and equipment.
Marketing.
We market to existing and prospective office-based health care providers through a
combination of owned, earned and paid digital channels, tradeshows, as well
as through catalogs, flyers,
direct mail and other promotional materials.
Our strategies include an emphasis on educational content
through webinars and content marketing initiatives.
We continue to enhance our marketing technology to
improve our targeting capability and the relevance of messaging and offers.
Telesales.
We support our direct marketing effort with inbound and outbound telesales representatives,
who facilitate order processing, generate new sales through direct and frequent
contact with customers and
stay abreast of market developments and the hundreds of new products,
services and technologies
introduced each year to educate practice personnel.
Electronic commerce solutions.
We provide our customers and sales teams with innovative and
competitive e-commerce solutions.
We continue to invest in our e-commerce platform to offer enhanced
content management so customers can more easily find the products
they need and to enable an engaging
purchase experience, supported by excellent customer service.
Social media.
Our operating entities and employees engage our customers and
supplier partners through
various social media platforms, which are an important element of our
communications and marketing
efforts.
We continue to expand our social media presence to raise awareness about issues, engage
customers beyond a sale and deliver services and solutions to specialized
audiences.
Broad product and service offerings at competitive prices.
We offer
a broad range of products and services to our
customers, at competitive prices, in the following categories:
Consumable supplies and equipment
.
We distribute consumable products, small equipment, laboratory
products, large equipment, equipment repair services, branded and generic pharmaceuticals,
vaccines, dental
specialty products, diagnostic tests, infection-control products and vitamins.
We stock a comprehensive
selection of more than 300,000 branded products and Henry Schein
corporate brand products through our
main distribution centers.
We also market and sell our own corporate brand portfolio of cost-effective, high-
quality consumable merchandise products and manufacture certain
dental specialty products in the areas of
implants, orthodontics and endodontics.
Technology and other value-added products and services.
We sell practice management, business
analytics, patient engagement and patient demand creation software solutions
to our dental customers.
Our
practice management solutions provide practitioners with electronic
medical records, patient treatment
history, analytics, billing, accounts receivable analyses and management, appointment calendars, electronic
claims processing and word processing programs, network and hardware
services, e-commerce and
electronic marketing services, sourcing third party patient payment plans,
transition services and training
and education programs for practitioners.
We also sell medical software for practice management, certified
electronic health records (“EHR”) and e-Prescribe medications and prescription
solutions.
We have
technical representatives supporting customers using our practice management
solutions and services.
As
of December 30, 2023, we had an active user base of approximately 110,000 practices and 350,000
consumers, including users of AxiUm, Dentally®, Dentrix Ascend®, Dental
Vision®, Dentrix® Dental
Systems, Dentrix® Enterprise, Easy Dental®, EndoVision®, Evolution® and EXACT®, Gesden®, Jarvis
Analytics™, Julie® Software, Oasis, OMSVision®, Orisline®, PBS Endo®,
PerioVision®, Power
Practice® Px, PowerDent,
and Viive® and subscriptions for Demandforce®, Sesame, and Lighthouse360®
for dental practices and DentalPlans.com® for dental patients.
Repair services.
We have 119
equipment sales and service centers worldwide that provide
a variety of
repair, installation and technical services for our health care customers.
Our technicians provide
installation and repair services for dental handpieces,
dental and medical small equipment,
table-top
sterilizers and large dental equipment.
Financial services.
We offer our customers solutions in operating their practices more efficiently by
providing access to a number of financial services and products
provided by third party suppliers (including
non-recourse financing for equipment, technology and software
products, non-recourse practice financing
for leasehold improvements, business debt consolidation and commercial
real estate, non-recourse patient
financing and credit card processing) at rates that we believe are generally
lower than what our customers
would be able to secure independently.
We also provide staffing services, dental practice valuation and
brokerage services.
Commitment to superior customer service
.
We maintain a strong commitment to providing superior customer
service.
We frequently monitor our customer service through customer surveys, focus groups and statistical
reports.
Our customer service policy primarily focuses on:
Exceptional order fulfillment
.
We ship an average of approximately 141,000 cartons daily.
Comprehensive ordering process
.
Customers may place orders 24 hours a day, 7 days a week via e-
commerce solutions, telephone, fax, e-mail and mail.
Integrated management information systems
.
Certain of our information systems generally allow for centralized
management of key functions, including accounts receivable, inventory, accounts payable, payroll, purchasing,
sales, order fulfillment and financial and operational reporting.
These systems allow us to manage our growth,
deliver superior customer service, properly target customers, manage financial
performance and monitor daily
operational statistics.
Cost-effective purchasing
.
We believe that cost-effective purchasing is a key element to maintaining and enhancing
our position as a competitively priced provider of health care products.
We continuously evaluate our purchase
requirements and suppliers’ offerings and prices in order to obtain products at the
lowest possible cost.
In 2023,
our top 10 health care distribution suppliers and our single largest supplier accounted for approximately
24% and
4%, respectively, of our aggregate purchases.
Efficient distribution
.
We distribute our products from our 36 strategically located distribution centers.
We strive
to maintain optimal inventory levels in order to satisfy customer demand
for prompt delivery and complete order
fulfillment.
These inventory levels are managed on a daily basis with
the aid of our management information
systems.
Once an order is entered, it is electronically transmitted to the distribution
center nearest the customer’s
location for order fulfillment.
Products and Services
The following table sets forth the percentage of consolidated net sales
by principal categories of products and
services offered through our health care distribution and technology and value-added services
reportable segments:
December 30,
December 31,
December 25,
2023
2022
2021
Health care distribution:
Dental products
(1)
61.1
%
59.1
%
60.8
%
Medical products
(2)
32.4
35.2
34.0
Total
health care distribution
93.5
94.3
94.8
Technology
and value-added services:
Software and related products and
other value-added products
(3)
6.5
5.7
5.2
Total
100.0
100.0
100.0
(1)
Includes infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, dental implants,
gypsum, acrylics, articulators, abrasives, dental chairs, delivery units and lights, X-ray supplies and equipment, PPE products,
equipment repair and high-tech and digital restoration equipment.
(2)
Includes branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, X-ray
products, equipment, PPE products and vitamins.
(3)
Consists of practice management software and other value-added products, which are distributed primarily to health care providers,
and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other
services.
Business Strategy
Our mission is to provide innovative, integrated health care products and
services; and to be trusted advisors and
consultants to our customers - enabling them to deliver the best quality patient
care and enhance their practice
management efficiency and profitability.
Our BOLD+1 Strategic Plan consists of the following:
Build (“B”)
Complementary software, specialty, and services businesses for high growth
Operationalize (“O”)
One Distribution to deliver exceptional customer experience, increased
efficiency,
and growth
Leverage (“L”)
One Schein to broaden and deepen relationships with our customers
Drive (“D”)
Drive digital transformation for our customers and for Henry Schein
+1
Create Value
for our stakeholders
To accomplish this, we apply our competitive strengths in executing the following strategies:
Increase penetration of our existing customer base.
We have over one million customers worldwide and
we intend to increase sales to our existing customer base and enhance
our position as their primary
supplier.
We believe our offering of a broad range of products, services and support, including software
solutions that can help drive improved workflow efficiency and patient communications
for practices,
coupled with our full-service value proposition, helps us to retain and grow
our customer base.
Increase the number of customers we serve.
This strategy includes increasing the productivity of our field
sales consultants and telesales team, as well as using our customer
database to focus our marketing efforts
in all of our operating segments.
In the dental business, we provide products and services to
independent
practices, mid-market groups, and large DSOs as well as community health centers
and government sites of
care.
Leveraging our broad array of assets and capabilities, we offer solutions to address these
new
markets.
In the medical business, we have expanded to serve customers
located in settings outside of the
traditional office, such as urgent care clinics, retail, occupational health and home health settings.
As
settings of health care shift, we remain committed to serving these practitioners
and providing them with
the products and services they need.
Leverage our value-added products and services.
We continue to increase cross-selling efforts for key
product lines utilizing a consultative selling process.
In the dental business, we have significant cross-
selling opportunities between our dental software users and our dental customers.
In the medical business,
we have opportunities to expand our vaccine, injectables and other pharmaceuticals
sales to health care
practitioners, as well as cross-selling EHR systems and software
when we sell our core products.
Our
strategy extends to providing health systems, integrated delivery networks
and other large group and multi-
site health care organizations, including physician clinics, these same value added
products and services.
As physicians and health systems closely align, we have increased
access to opportunities for cross-
marketing and selling our product and service portfolios.
Pursue strategic acquisitions and joint ventures.
Our acquisition strategy is focused on investments in
companies that add new customers and sales teams, increase our geographic
footprint (whether entering a
new country, such as emerging markets, or building scale where we have already invested in businesses),
and finally, those that enable us to access new products and technologies.
Markets Served
Demographic trends indicate that our markets are growing, as an
aging U.S. population is increasingly using health
care services.
According to the U.S. Census Bureau’s International Database, between 2023 and 2033, the 45 and
older population is expected to grow by approximately 11%.
Between 2023 and 2043, this age group is expected to
grow by approximately 21%.
This compares with expected total U.S. population growth
rates of approximately 6%
between 2023 and 2033 and approximately 11% between 2023 and 2043.
In the dental industry, there is predicted to be a rise in oral health care expenditures as the 45-and-older segment of
the population increases.
There is increasing demand for new technologies that allow
dentists to increase
productivity, and this is being driven in the U.S. by lower insurance reimbursement rates.
At the same time, there is
an expected increase in dental insurance coverage.
In the medical market, there continues to be a migration of procedures from
acute-care settings to physicians’
offices and home health settings, a trend that we believe provides additional opportunities
for us.
There also is the
continuing use of vaccines, injectables and other pharmaceuticals in alternate-care
settings.
We believe we have
established a leading position as a vaccine supplier to the office-based physician
practitioner.
We support our dental and medical professionals through the many SKUs that we offer, as well as through
important value-added services, including practice management software,
electronic claims processing, financial
services and continuing education, all designed to help maximize a practitioner’s
efficiency.
Additionally, we seek to expand our dental full-service model and medical offerings in countries where
opportunities exist.
We do this through both direct sales and by partnering with local distribution and
manufacturing companies.
For information on revenues and long-lived assets by geographic area, see
Note 4 – Segment and Geographic Data
of “Notes to Consolidated Financial Statements.”
Seasonality and Other Factors Affecting Our Business and Quarterly Results
We experience fluctuations in quarterly earnings.
As a result, we may fail to meet or exceed the expectations of
securities analysts and investors, which could cause our stock price
to decline.
Our business is subject to seasonal and other quarterly fluctuations.
Sales and profitability generally have been
higher in the third and fourth quarters due to the timing of sales of seasonal
products (including influenza vaccine),
purchasing patterns of office-based health care practitioners for certain products (including
equipment and
software) and year-end promotions.
Sales and profitability may also be impacted by the timing of
certain annual
and biennial dental tradeshows where equipment promotions are offered.
In addition, some dental practices delay
equipment purchases in the U.S. until year-end due to tax incentives.
We expect our historical seasonality of sales
to continue in the foreseeable future.
Governmental Regulations
We
strive to be compliant in all material respects with the applicable
laws, regulations and guidance described
below, and believe we have effective compliance programs and other controls in place to ensure substantial
compliance.
However, compliance is not guaranteed either now or in the future, as certain laws, regulations and
guidance may be subject to varying and evolving interpretations that could
affect our ability to comply, as well as
future changes, additions and enforcement approaches, including political changes.
When we discover situations of
non-compliance we seek to remedy them and bring the affected area back into compliance.
President Biden’s
administration (the “Biden Administration”) has indicated that it will be
more aggressive in its pursuit of alleged
violations of law, and has revoked certain guidance that would have limited governmental use of informal agency
guidance to pursue potential violations, and has stated that it is more prepared
to pursue individuals for corporate
law violations, including an aggressive approach to anti-corruption activities.
Federal, state and certain foreign
governments have also increased enforcement activity in the health care
sector, particularly in areas of fraud and
abuse, anti-bribery and corruption, controlled substances handling,
medical device regulations and data privacy and
security standards.
Changes to applicable laws, regulations and guidance described below, as well as related administrative or judicial
interpretations, may require us to update or revise our operations, services,
marketing practices and compliance
programs and controls, and may impose additional and unforeseen costs
on us, pose new or previously immaterial
risks to us, or may otherwise have a material adverse effect on our business.
Government
Certain of our businesses involve the distribution, manufacturing, importation,
exportation, marketing, sale and
promotion of pharmaceuticals and/or medical devices, and in this regard, we
are subject to extensive local, state,
federal and foreign governmental laws and regulations, including as applicable
to our wholesale distribution of
pharmaceuticals and medical devices, manufacturing activities, and as part of
our specialty home medical supply
businesses that distribute and sell medical equipment and supplies directly
to patients.
Federal, state and certain
foreign governments have also increased enforcement activity in the health care
sector, particularly in areas of fraud
and abuse, anti-bribery and anti-corruption, controlled substances handling,
medical device regulations and data
privacy and security standards.
Certain of our businesses involve pharmaceuticals and/or medical devices,
including in vitro diagnostic devices,
that are paid for by third parties and must operate in compliance with a variety of
burdensome and complex coding,
billing and record-keeping requirements in order to substantiate claims for
payment under federal, state and
commercial healthcare reimbursement programs.
Government and private insurance programs fund a large portion of the total cost of medical care,
and there have
been efforts to limit such private and government insurance programs, including efforts, thus far
unsuccessful, to
seek repeal of the entire United States Patient Protection and Affordable Care Act,
as amended by the Health Care
and Education Reconciliation Act, each enacted in March 2010 (as amended,
the “ACA”).
Certain of our businesses are subject to various additional federal, state,
local and foreign laws and regulations,
including with respect to the sale, transportation, importation, storage, handling
and disposal of hazardous or
potentially hazardous substances; “forever chemicals” such as per-and
polyfluoroalkyl substances; and safe
working conditions.
In addition, activities to control medical costs, including laws and regulations
lowering
reimbursement rates for pharmaceuticals, medical devices, medical supplies
and/or medical treatments or services,
are ongoing.
The Centers for Medicare & Medicaid Services (“CMS”) recently
released the 2024 durable medical
equipment, prosthetics, orthotics and supplies (“DMEPOS”) reimbursement
schedule, which, effective January 1,
2024, reduced the DMEPOS reimbursement rates for non-rural suppliers,
such as us, by removing the Coronavirus
Aid, Relief, and Economic Security (aka CARES) Act relief rates in effect during
the COVID-19 pandemic.
This
and other laws and regulations are subject to change and their evolving implementation
may impact our operations
and our financial performance.
Our businesses are generally subject to numerous laws and regulations that could
impact our financial performance,
and failure to comply with such laws or regulations could have a material adverse
effect on our business.
Operating, Security and Licensure Standards
Certain of our businesses are subject to local, state and federal governmental
laws and regulations relating to the
distribution of pharmaceuticals and medical devices and supplies.
Among the United States federal laws applicable
to us are the Controlled Substances Act, the Federal Food, Drug,
and Cosmetic Act, as amended (“FDC Act”),
Section 361 of the Public Health Service Act and Section 401 of the Consolidated
Appropriations Act of the Social
Security Act, as well as laws regulating the billing of and reimbursement
from government programs, such as
Medicare and Medicaid, and from commercial payers.
We
are also subject to comparable foreign regulations.
The FDC Act, the Controlled Substances Act, their implementing regulations,
and similar foreign laws generally
regulate the introduction, manufacture, advertising, marketing and promotion,
sampling, pricing and
reimbursement, labeling, packaging, storage, handling, returning or recalling,
reporting, and distribution of, and
record keeping for, pharmaceuticals and medical devices shipped in interstate commerce, and states
may similarly
regulate such activities within the state.
Furthermore, Section 361 of the Public Health Service Act, which provides
authority to prevent the introduction, transmission or spread of communicable
diseases, serves as the legal basis for
the United States Food and Drug Administration’s (“FDA”) regulation of human cells, tissues and cellular and
tissue-based products, also known as “HCT/P products.”
The Federal Drug Quality and Security Act of 2013 brought about significant
changes with respect to
pharmaceutical supply chain requirements.
Title II of this measure, known as the Drug Supply Chain Security Act
(“DSCSA”), was enacted in November 2013, and had a planned
“phase in” schedule over a period of ten years,
resulting in a national electronic, interoperable system to identify and trace
certain prescription drugs as they are
distributed in the United States that went into effect on November 27, 2023.
Those DSCSA requirements that were
scheduled to change on November 27, 2023, and include requiring trading partners
to provide, receive and maintain
documentation about products and ownership only “electronically”(and
not via paper) are now subject to a one-year
“stabilization period” announced by FDA through two guidance documents
in late August 2023.
FDA is permitting
the stabilization period to accommodate an additional year, until November 27, 2024, to allow trading partners
to
implement, troubleshoot and mature their electronic (versus paper), interoperable
systems, during which time the
FDA does not intend to take action to enforce the requirements for the interoperable,
electronic, package level
product tracing.
Additionally, the FDA announced that it does not intend to take action to enforce the portion of the
FDC Act with respect to drug product that is introduced in a transaction into
commerce by the product’s
manufacturer or repackager before November 27, 2024, and for subsequent transactions
of such product through the
product’s expiry.
FDA states this stabilization period is intended to avoid disruption
to the supply chain, and
ensure continued patient access to drug products as trading partners
move towards full implementation of the
DSCSA’s
enhanced drug security requirements.
The law’s track and trace requirements applicable to
manufacturers, wholesalers, third-party logistics providers (e.g., trading partners),
repackagers and dispensers (e.g.,
pharmacies) of prescription drugs took effect in January 2015, and, as stated, continues
to be implemented.
The
DSCSA product tracing requirements replace the former FDA drug pedigree
requirements and pre-empt certain
state requirements that are inconsistent with, more stringent than, or
in addition to, the DSCSA requirements.
The DSCSA also establishes certain requirements for the licensing and operation
of prescription drug wholesalers
and third-party logistics providers (“3PLs”), and includes the eventual
creation of national wholesaler and 3PL
licenses in cases where states do not license such entities.
The DSCSA requires that wholesalers and 3PLs
distribute drugs in accordance with certain standards regarding the recordkeeping,
storage and handling of
prescription drugs.
The DSCSA requires wholesalers and 3PLs to submit annual reports
to the FDA, which include
information regarding each state where the wholesaler or 3PL is licensed, the name
and address of each facility, and
contact information.
According to FDA guidance, states are pre-empted from imposing
any licensing requirements
that are inconsistent with, less stringent than, directly related to, or covered
by the standards established by federal
law in this area.
Current state licensing requirements concerning wholesalers will
remain in effect until the FDA
issues new regulations as directed by the DSCSA.
FDA issued a proposed rule establishing wholesaler and 3PL
national standards for licensing and other requirements in February 2022,
but that rule has not yet been finalized.
In addition, with respect to our specialty home medical supply business, we
are subject to certain state licensure
laws (including state pharmacy laws), and also certain accreditation standards,
including to qualify for
reimbursement from Medicare and other third-party payers.
The Food and Drug Administration Amendments Act of 2007 and
the Food and Drug Administration Safety and
Innovation Act of 2012 amended the FDC Act to require the FDA to promulgate
regulations to implement a unique
device identification (“UDI”) system for medical devices.
The UDI rule phased in the implementation of the UDI
regulations, generally beginning with the highest-risk devices (i.e., Class
III medical devices) and ending with the
lowest-risk devices.
Most compliance dates were reached as of September 24, 2018, with
a final set of
requirements for low risk devices being reached on September 24, 2022, which
completed the phase in.
However,
in May 2021, the FDA issued an enforcement policy stating that
it does not intend to object to the use of legacy
identification numbers on device labels and packages for finished devices
manufactured and labeled prior to
September 24, 2023.
The UDI regulations require “labelers” to include unique device
identifiers (“UDIs”), with a
content and format prescribed by the FDA and issued under a system operated
by an FDA-accredited issuing
agency, on the labels and packages of medical devices (including, but not limited to, certain software that qualifies
as a medical device under FDA rules), and to directly mark certain devices
with UDIs.
The UDI regulations also
require labelers to submit certain information concerning UDI-labeled devices
to the FDA, much of which
information is publicly available on an FDA database, the Global Unique Device
Identification Database.
On July
22, 2022, the FDA posted the final guidance regarding the Global Unique Device
Identification Database called
Unique Device Identification Policy Regarding Compliance Dates for Class
I and Unclassified Devices, Direct
Marketing, and Global Unique Device Identification Database Requirements
for Certain Devices.
The UDI
regulations and subsequent FDA guidance regarding the UDI requirements provide
for certain exceptions,
alternatives and time extensions.
For example, the UDI regulations include a general exception
for Class I devices
exempt from the Quality System Regulation (other than record-keeping
requirements and complaint files).
Regulated labelers include entities such as device manufacturers, repackagers,
reprocessors and relabelers that
cause a device’s label to be applied or modified, with the intent that the device will be commercially distributed
without any subsequent replacement or modification of the label and include certain
of our businesses.
As a distributor of controlled substances, we are required,
under the Controlled Substances Act, to obtain and renew
annually registrations for our facilities from the United States Drug Enforcement
Administration (“DEA”)
permitting us to handle controlled substances.
We
are also subject to other statutory and regulatory requirements
relating to the storage, sale, marketing, handling, reporting, record-keeping
and distribution of such drugs, in
accordance with the Controlled Substances Act and its implementing regulations,
and these requirements have been
subject to heightened enforcement activity in recent times.
We
are subject to inspection by the DEA.
Certain of
our businesses are also required to register for permits and/or licenses
with, and comply with operating and security
standards of, the DEA, the FDA, the United States Department of Health
and Human Services (“HHS”), and
various state boards of pharmacy, state health departments and/or comparable state agencies as well as comparable
foreign agencies, and certain accrediting bodies, depending on the type of
operations and location of product
distribution, manufacturing or sale.
These businesses include those that distribute, manufacture, relabel, and/or
repackage prescription pharmaceuticals and/or medical devices and/or HCT/P
products, or own pharmacy
operations, or install, maintain or repair equipment.
In addition, Section 301 of the National Organ Transplant Act, and a number of comparable state laws, impose civil
and/or criminal penalties for the transfer of human organs, as defined in the regulations, for valuable
consideration,
while generally permitting payments for the reasonable costs incurred
in their procurement, processing, storage and
distribution.
We
are also subject to foreign government regulation of such products.
The DEA, the FDA and state
regulatory authorities have broad inspection and enforcement powers, including
the ability to suspend or limit the
distribution of products by our distribution centers, seize or order the
recall of products and impose significant
criminal, civil and administrative sanctions for violations of these laws and regulations.
Foreign regulations subject
us to similar foreign enforcement powers.
EU Regulation of Medicinal and Dental Products
European Union (“EU”) member states regulate their own healthcare systems,
as does EU law.
The latter regulates
certain matters, most notably medicinal products and medical devices.
Medicinal products are defined, broadly, as
substances or combinations of substances having certain functionalities and
may not include medical devices.
EU
“regulations” apply in all member states, whereas “directives” are implemented
by the individual laws of member
states.
On medicines for humans, we are regulated under Directive No. 2001/83/EC
of 6 November 2001, as amended by
Directive 2003/63/EC of 25 June 2003, and EU Regulation (EC) No. 726/2004
of 31 March 2004.
These rules
provide for the authorization of products, and regulate their manufacture,
importation, marketing and distribution.
It implements requirements which may be implemented without warning, as
well as a national pharmacovigilance
system under which marketing authorizations may be withdrawn, and includes
potential sanctions for breaches of
the rules, and on other bases such as harmfulness or lack of efficacy.
EU Regulation No. 1223/2009 of 30 November 2009
on cosmetic products
requires that cosmetic products (which
includes dental products) be safe for human health when used under normal
or reasonably foreseeable conditions of
use and comply with certain obligations which apply to manufacturer, importer and distributor.
It includes market
surveillance, and non-compliance may result in the recall or withdrawal of
products, along with other sanctions.
In the EU, the EU Medical Device Regulation No. 2017/745 of 5 April 2017
(“EU MDR”) covers a wide scope of
our activities, from dental material to X-ray machines, and certain software.
It was meant to become applicable
three years after publication (i.e., May 26, 2020).
However, on April 23, 2020, to allow European Economic Area
(“EEA”) national authorities, notified bodies, manufacturers and other actors
to focus fully on urgent priorities
related to the COVID-19 pandemic, the European Council and Parliament
adopted Regulation 2020/561,
postponing the date of application of the EU MDR by one year (to
May 26, 2021).
The EU MDR significantly modifies and intensifies the regulatory compliance
requirements for the medical device
industry as a whole.
Among other things, the EU MDR:
strengthens the rules on placing devices on the market and reinforces surveillance
once they are available;
establishes explicit provisions on manufacturers’ responsibilities
for the follow-up of the quality,
performance and safety of devices placed on the market;
improves the traceability of medical devices throughout the supply chain to the
end-user or patient through
a unique identification number;
sets up a central database to provide patients, healthcare professionals and
the public with comprehensive
information on products available in the EU;
strengthens rules for the assessment of certain high-risk devices, such
as implants, which may have to
undergo an additional check by experts before they are placed on the market; and
identifies importers and distributors and medical device products through
registration in a database
(EUDAMED, which is not fully functional for the time being and might
not be so before the end of 2027 at
the earliest; therefore, the use of this database is only possible through
a voluntary basis and, by a way of
consequence, is currently not mandatory).
In particular, the EU MDR imposes strict requirements for the confirmation that a product meets
the regulatory
requirements, including regarding a product’s clinical evaluation and a company’s quality systems, and for the
distribution, marketing and sale of medical devices, including post-market
surveillance.
Regulation 2023/607 of the European Parliament and of the Council of
amending Regulations (EU) 2017/745 and
(EU) 2017/746 as regards the transitional provisions for certain medical devices and in vitro diagnostic medical
devices
has, notably, extended the EU MDR transitional periods applicable to certain medical devices that have
been assessed and/or certified under the Directive No. 93/42/EEC of
1993
concerning medical devices
(“EU
Medical Device Directive”).
Subject to certain conditions, medical devices that (i) obtained a certificate
under the
EU Medical Device Directive from May 25, 2017, (ii) which was still valid
on May 26, 2021, and (iii) has not been
subsequently withdrawn may, for the moment, continue to be placed on the market or put into service until
December 31, 2027 for higher risk devices or December 31, 2028 for
medium and lower risk devices. Nevertheless,
EU MDR requirements regarding the distribution, marketing and sale
including quality systems and post-market
surveillance have to be observed by manufacturers, importers and distributors
as of the application date (i.e., since
May 26, 2021).
Other EU regulations that may apply under appropriate circumstances
include EU Regulation No. 1907/2006 of 18
December 2006
concerning the Registration, Evaluation, Authorisation and
Restriction of Chemicals
, which
requires importers to register substances or mixtures that they import
in the EU beyond certain quantities, and the
EU Regulation No. 1272/2008 of 16 December 2008
on classification, labelling and packaging of substances and
mixtures
(currently under revision), which sets various obligations with respect
to the labelling and packaging of
concerned substances and mixtures.
Furthermore, compliance with legal requirements has required and may in the future
require us to delay product
release, sale or distribution, or institute voluntary recalls of, or other corrective
action with respect to products we
sell, each of which could result in regulatory and enforcement actions, financial
losses and potential reputational
harm.
Our customers are also subject to significant federal, state, local
and foreign governmental regulation, which
may affect our interactions with customers, including the design and functionality
of our products.
Certain of our businesses are subject to various additional federal, state,
local and foreign laws and regulations,
including with respect to the sale, transportation, storage, handling and
disposal of hazardous or potentially
hazardous substances, and safe working conditions.
In addition, certain of our businesses must operate in
compliance with a variety of burdensome and complex billing and record-keeping
requirements in order to
substantiate claims for payment under federal, state and commercial healthcare
reimbursement programs.
Certain of our businesses also maintain contracts with governmental agencies
and are subject to certain regulatory
requirements specific to government contractors.
Antitrust and Consumer Protection
The federal government of the United States, most U.S. states and many
foreign countries have antitrust laws that
prohibit certain types of conduct deemed to be anti-competitive, as well as consumer
protection laws that seek to
protect consumers from improper business practices.
At the U.S. federal level, the Federal Trade Commission
oversees enforcement of these types of laws, and states have similar government
agencies.
Violations of antitrust
or consumer protection laws may result in various sanctions, including criminal
and civil penalties.
Private
plaintiffs may also bring civil lawsuits against us in the United States for alleged antitrust
law violations, including
claims for treble damages.
EU law also regulates competition and provides for detailed rules protecting
consumers.
The Biden Administration has indicated increased antitrust enforcement and
has been more aggressive in
enforcement activities, including investigation and challenging non-compete
restrictions and other restrictive
contractual terms that it believes harm workers and competition.
Health Care Fraud
Certain of our businesses are subject to federal and state (and similar
foreign) health care fraud and abuse, referral
and reimbursement laws and regulations with respect to their operations.
Some of these laws, referred to as “false
claims laws,” prohibit the submission or causing the submission of false or fraudulent
claims for reimbursement to
federal, state and other health care payers and programs.
Other laws, referred to as “anti-kickback laws,” prohibit
soliciting, offering, receiving or paying remuneration in order to induce the referral
of a patient or ordering,
purchasing, leasing or arranging for, or recommending, ordering, purchasing or leasing of, items or services
that are
paid for by federal, state and other health care payers and programs.
Certain additional state and federal laws, such
as the federal Physician Self-Referral Law, commonly known as the “Stark Law,” prohibit physicians and other
health care professionals from referring a patient to an entity with which
the physician (or family member) has a
financial relationship, for the furnishing of certain designated health services
(for example, durable medical
equipment and medical supplies), unless an exception applies.
Violations of Anti-Kickback Statutes or the Stark
Law may be enforced as violations of the federal False Claims Act.
The fraud and abuse laws and regulations have been subject to heightened
enforcement activity over the past few
years, and significant enforcement activity has been the result of “relators” who
serve as whistleblowers by filing
complaints in the name of the United States (and if applicable, particular states)
under applicable false claims laws,
and who may receive up to 30% of total government recoveries.
Penalties under fraud and abuse laws may be
severe, including treble damages and substantial civil penalties under
the federal False Claims Act, as well as
potential loss of licenses and the ability to participate in federal and state
health care programs, criminal penalties,
or imposition of a corporate integrity agreement or corporate compliance
monitor which could have a material
adverse effect on our business.
Also, these measures may be interpreted or applied by a prosecutorial,
regulatory or
judicial authority in a manner that could require us to make changes
in our operations or incur substantial defense
and settlement expenses.
Even unsuccessful challenges by regulatory authorities or private
relators could result in
reputational harm and the incurring of substantial costs.
Most states have adopted similar state false claims laws,
and these state laws have their own penalties, which may be in addition
to federal False Claims Act penalties, as
well as other fraud and abuse laws.
With respect to measures of this type, the United States government (among others) has expressed concerns
about
financial relationships between suppliers on the one hand and physicians,
dentists and other healthcare
professionals on the other.
As a result, we regularly review and revise our marketing practices as necessary
to
facilitate compliance.
We
also are subject to certain United States and foreign laws and regulations
concerning the conduct of our foreign
operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery
Act, German anti-corruption laws
and other anti-bribery laws and laws pertaining to the accuracy of our internal
books and records, which have been
the focus of increasing enforcement activity globally in recent years.
While we believe that we are substantially compliant with applicable fraud and
abuse laws and regulations, and
have adequate compliance programs and controls in place to ensure substantial
compliance, we cannot predict
whether changes in applicable law, or interpretation of laws, or changes in our services or marketing practices in
response to changes in applicable law or interpretation of laws, or failure
to comply with applicable law, could have
a material adverse effect on our business.
Affordable Care Act and Other Insurance Reform
The ACA increased federal oversight of private health insurance plans and
included a number of provisions
designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to
provide access to increased health coverage.
The ACA also materially expanded the number of individuals
in the
United States with health insurance.
The ACA has faced frequent legal challenges, including litigation seeking
to invalidate and Congressional action
seeking to repeal some of or all of the law or the manner in which it has been
implemented.
In 2012, the United
States Supreme Court, in upholding the constitutionality of the
ACA and its individual mandate provision requiring
that people buy health insurance or else face a penalty, simultaneously limited ACA provisions requiring Medicaid
expansion, making such expansion a state-by-state decision.
In addition, one of the major political parties in the
United States remains committed to seeking the ACA’s legislative repeal, but legislative efforts to do so have
previously failed to pass both chambers of Congress.
Under President Trump’s administration, a number of
administrative actions were taken to materially weaken the ACA, including,
without limitation, by permitting the
use of less robust plans with lower coverage and eliminating “premium support”
for insurers providing policies
under the ACA.
The Tax Cuts and Jobs Act enacted in 2017, which contains a broad range of tax reform provisions
that impact the individual and corporate tax rates, international tax provisions,
income tax add-back provisions and
deductions, also effectively repealed the ACA’s
individual mandate by zeroing out the penalty for non-compliance.
An ACA lawsuit decided by the federal Fifth Circuit Court of Appeals found
the individual mandate to be
unconstitutional, and returned the case to the District Court for the Northern
District of Texas for consideration of
whether the remainder of the ACA could survive the excision of the individual
mandate.
The Fifth Circuit’s
decision was appealed to the United States Supreme Court.
The Supreme Court issued a decision on June 17, 2021.
Without reaching the merits of the case, the Supreme Court held that the plaintiffs in the case did not have standing
to challenge the ACA.
Any outcomes of future cases that change the ACA, in addition
to future legislation,
regulation, guidance and/or Executive Orders that do the same, could have a
significant impact on the U.S.
healthcare industry.
For instance, the American Rescue Plan Act of 2021 enhanced
premium tax credits, which has
resulted in an expansion of the number of people covered under the ACA.
These changes were time-limited, with
some enhancements in place for 2021 only and others available through
the end of 2022.
An ACA provision, generally referred to as the Physician Payments Sunshine
Act or Open Payments Program (the
“Sunshine Act”), imposes annual reporting and disclosure requirements
for drug and device manufacturers and
distributors with regard to payments or other transfers of value made to certain
covered recipients (including
physicians, dentists, teaching hospitals, physician assistants, nurse practitioners,
clinical nurse specialists, certified
registered nurse anesthetists, and certified nurse midwives), and for such
manufacturers and distributors and for
group purchasing organizations, with regard to certain ownership interests held by covered
recipients in the
reporting entity.
CMS publishes information from these reports on a publicly available website,
including amounts
transferred and physician, dentist, teaching hospital, and non-physician practitioner
identities.
The Sunshine Act
pre-empts similar state reporting laws, although we or our subsidiaries may
be required to report under certain state
transparency laws that address circumstances not covered by the Sunshine
Act, and some of these state laws, as
well as the federal law, can be unclear.
We
are also subject to foreign regulations requiring transparency of
certain
interactions between suppliers and their customers.
In the United States, government actions to seek to increase health-related
price transparency may also affect our
business.
For example, hospitals are currently required to publish online a list of
their standard charges for all items
and services, including discounted cash prices and payer-specific and de-identified negotiated
charges, in a publicly
accessible online file.
Hospitals are also required to publish a consumer-friendly
list of standard charges for certain
“shoppable” services (i.e., services that can be scheduled by a patient in
advance) and associated ancillary services
or, alternatively, maintain an online price estimator tool.
CMS may impose civil monetary penalties for
noncompliance with these price transparency requirements.
Additionally, the No Surprises Act (“NSA”), generally
effective January 1, 2022, imposes additional price transparency requirements.
The NSA is intended to reduce the
number of “out-of-network” patients.
This will result in fewer out-of-network payments to physicians and
other
providers, which may cause financial stress to those providers who
are dependent on higher out-of-network fees.
Another notable Medicare health care reform initiative, the Medicare Access
and CHIP Reauthorization Act of
2015 (“MACRA”), enacted on April 16, 2015, established a new payment framework,
which modified certain
Medicare payments to “eligible clinicians,” including physicians, dentists and
other practitioners.
Under MACRA,
certain eligible clinicians are required to participate in Medicare through the Merit-Based
Incentive Payment
System (“MIPS”) or Advanced Alternative Payment Models, through which
Medicare reimbursement to eligible
clinicians includes both positive and negative payment adjustments that take
into account quality, promoting
interoperability, cost and improvement activities.
Data collected in the first MIPS performance year (2017)
determined payment adjustments that began January 1, 2019.
MACRA standards and payment levels continue to
evolve, and reflect a fundamental change in physician reimbursement
that is expected to provide substantial
financial incentives for physicians to participate in risk contracts, and to increase
physician information technology
and reporting obligations.
The implications of the implementation of MACRA are uncertain and will
depend on
future regulatory activity and physician activity in the marketplace.
New state-level payment and delivery system
reform programs, including those modeled after such federal programs, are
also increasingly being rolled out
through Medicaid administrators, as well as through the private sector, which may further
alter the marketplace and
impact our business.
Recently, in addition to other government efforts to control health care costs, there has been increased scrutiny on
drug pricing and concurrent efforts to control or reduce drug costs by Congress, the
President, executive branch
agencies and various states.
At the state level, several states have adopted laws that require drug manufacturers
(including relabelers and repackagers) to provide advance notice of certain
price increases and to report information
relating to those price increases, while others have taken legislative or administrative
action to establish
prescription drug affordability boards or multi-payer purchasing pools to reduce the cost of
prescription drugs.
At
the federal level, section 1927 of the Social Security Act sets forth Average Sales Price (ASP) reporting
requirements for manufacturers (including repackagers and relabelers) and
requires that manufacturers provide
CMS with pricing information for their Part B-covered drugs no later
than 30 days after the close of the previous
quarter.
Also at the federal level, several related bills have been introduced and
regulations proposed which, if
enacted or finalized, respectively, would impact drug pricing and related costs.
As a result of political, economic and regulatory influences, the health care distribution
industry in the United
States is under intense scrutiny and subject to fundamental changes.
We
cannot predict what further reform
proposals, if any, will be adopted, when they may be adopted, or what impact they may have on us.
EU Directive on the pricing and reimbursement of medicinal products
EU law provides for the regulation of the pricing of medicinal products which are
implemented by EU member
states (Directive No. 89/105/EC of 21 December 1988
relating to the transparency of measures regulating the
pricing of medicinal products for human use and their inclusion in the scope of national health insurance
systems
).
Member states may, subject notably to transparency conditions and to the statement of reasons based upon
objective and verifiable criteria, regulate the price charged (or its increases) for authorized
medicines and their level
of reimbursement, or they may freeze prices, place controls on the profitability
of persons responsible for placing
medicinal products on the market, and include or exclude the medicine on
the list of products covered by national
health insurance systems.
EU law does not expressly include provisions like those of the Sunshine Act in
the United States, but a growing
number of EU member states (such as France in 2011 and Italy in 2022) have enacted laws to increase
the
transparency of relationships in the healthcare sector.
The scope of these laws varies from one member state to
another and may, for example, include the relations between healthcare industry players and physicians or their
associations, students preparing for medical professions or their associations,
teachers, health establishments or
publishers of prescription and dispensing assistance software.
Regulated Software; Electronic Health Records
The FDA has become increasingly active in addressing the regulation of
computer software and digital health
products intended for use in health care settings.
The 21st Century Cures Act (the “Cures Act”), signed into law on
December 13, 2016, among other things, amended the medical device definition
to exclude certain software from
FDA regulation, including clinical decision support software that meets certain
criteria.
On September 27, 2019,
the FDA issued a guidance document describing the impact the Cures Act
on existing software policies.
Concurrently, FDA issued a draft guidance describing FDA’s
approach to clinical decision support software.
On
September 28, 2022, FDA issued final guidance that made several changes
to the draft guidance and that provided a
more restrictive interpretation of exempt clinical decision support software.
Certain of our businesses involve the
development and sale of software and related products to support physician
and dental practice management, and it
is possible that the FDA or foreign government authorities could determine
that one or more of our products is a
medical device, which could subject us or one or more of our businesses to
substantial additional requirements with
respect to these products.
In addition, our businesses that involve physician and dental practice management
products, and our specialty home
medical supply business, include electronic information technology systems
that store and process personal health,
clinical, financial and other sensitive information of individuals.
These information technology systems may be
vulnerable to breakdown, wrongful intrusions, data breaches and malicious
attack, which could require us to
expend significant resources to eliminate these problems and address related
security concerns and could involve
claims against us by private parties and/or governmental agencies.
For example, we are directly or indirectly
subject to numerous and evolving federal, state, local and foreign laws and
regulations that protect the privacy and
security of personal information, such as the federal Health Insurance Portability
and Accountability Act of 1996,
as amended, and implementing regulations (“HIPAA”), the Controlling the Assault of Non-Solicited Pornography
and Marketing Act (“CAN-SPAM”), the Telephone
Consumer Protection Act of 1991 (“TCPA”), Section 5 of the
Federal Trade Commission Act (“FTC Act”), the California Privacy Act (“CCPA”), and the California Privacy
Rights Act (“CPRA”) that became effective on January 1, 2023.
Several other states have also passed
comprehensive privacy legislation, and several privacy bills have been proposed
both at the federal and state level
that may result in additional legal requirements that impact our business.
Laws and regulations relating to privacy
and data protection are continually evolving and subject to potentially differing interpretations.
These requirements
may not be harmonized, may be interpreted and applied in a manner that
is inconsistent from one jurisdiction to
another or may conflict with other rules or our practices.
Our businesses’ failure to comply with these laws and
regulations could expose us to breach of contract claims, substantial fines,
penalties and other liabilities and
expenses, costs for remediation and harm to our reputation.
Also, evolving laws and regulations in this area could
restrict the ability of our customers to obtain, use or disseminate patient
information, or could require us to incur
significant additional costs to re-design our products to reflect these legal requirements,
which could have a
material adverse effect on our operations.
Also, the European Parliament and the Council of the EU adopted the pan-European
General Data Protection
Regulation (“GDPR”), effective from May 25, 2018, which increased privacy
rights for individuals (“Data
Subjects”), including individuals who are our customers, suppliers and
employees.
The GDPR extended the scope
of responsibilities for data controllers and data processors, and generally
imposes increased requirements and
potential penalties on companies, such as us, that are either established
in the EU and process personal data of Data
Subjects (regardless the Data Subject location), or that are not established
in the EU but that offer goods or services
to Data Subjects in the EU or monitor their behavior in the EU. Noncompliance
can result in penalties of up to the
greater of EUR 20 million, or 4% of global company revenues (sanction
that may be public), and Data Subjects
may seek damages.
Member states may individually impose additional requirements
and penalties regarding
certain limited matters (for which the GDPR let some room of flexibility),
such as employee personal data.
With
respect to the personal data it protects, the GDPR requires, among other things,
controller accountability, consents
from Data Subjects or another acceptable legal basis to process the
personal data, notification within 72 hours of a
personal data breach where required, data integrity and security, and fairness and transparency regarding the
storage, use or other processing of the personal data.
The GDPR also provides rights to Data Subjects relating
notably to information, access, rectification, erasure of the personal
data and the right to object to the processing.
On August 20, 2021, China promulgated the PRC Personal Information
Protection Law (“PIPL”), which took effect
on November 1, 2021.
The PIPL imposes specific rules for processing personal information
and it also specifies
that the law shall also apply to personal information activities carried
out outside China but for the purpose of
providing products or services to PRC citizens.
Any non-compliance with these laws and regulations may
subject
us to fines, orders to rectify or terminate any actions that are deemed
illegal by regulatory authorities, other
penalties, as well as reputational damage or legal proceedings against us,
which may affect our business, financial
condition or results of operations.
The PIPL carries maximum penalties of CNY50 million or 5%
of the annual
revenue of entities that process personal data.
In the United States, the CCPA, which increases the privacy
protections afforded California residents, became effective January 1, 2020.
The CCPA generally requires
companies, such as us, to institute additional protections regarding
the collection, use and disclosure of certain
personal information of California residents.
Compliance with the obligations imposed by the CCPA depends in
part on how particular regulators interpret and apply them.
Regulations were released in August of 2020, but there
remains some uncertainty about how the CCPA will be interpreted by the courts and enforced by the regulators.
If
we fail to comply with the CCPA or if regulators assert that we have failed to comply with the CCPA, we may be
subject to certain fines or other penalties and litigation, any of which may
negatively impact our reputation, require
us to expend significant resources, and harm our business.
Furthermore, California voters approved the CPRA on
November 3, 2020, which amends and expands the CCPA, including by providing consumers with additional rights
with respect to their personal information, and creating a new state agency, the California Privacy Protection
Agency, to enforce the CCPA
and the CPRA.
The CPRA came into effect on January 1, 2023, applying to
information collected by businesses on or after January 1, 2022.
As noted above, other states, as well as the federal government, have increasingly
considered the adoption of
similarly expansive personal privacy laws, backed by significant
civil penalties for non-compliance.
While we
believe we have substantially compliant programs and controls in place to comply
with the GDPR, CCPA, PIPL,
CPRA and other state law requirements, our compliance with data privacy and
cybersecurity laws is likely to
impose additional costs on us, and we cannot predict whether the
interpretations of the requirements, or changes in
our practices in response to new requirements or interpretations of the
requirements, could have a material adverse
effect on our business.
We
also sell products and services that health care providers, such as physicians
and dentists, use to store and
manage patient medical or dental records.
These customers, and we, are subject to laws, regulations and industry
standards, such as HIPAA and the Payment Card Industry Data Security Standards, which require the protection of
the privacy and security of those records, and our products may also be
used as part of these customers’
comprehensive data security programs, including in connection with their efforts to comply with
applicable privacy
and security laws.
Perceived or actual security vulnerabilities in our products or services,
or the perceived or actual
failure by us or our customers who use our products or services to comply
with applicable legal or contractual data
privacy and security requirements, may not only cause us significant reputational
harm, but may also lead to claims
against us by our customers and/or governmental agencies and involve substantial
fines, penalties and other
liabilities and expenses and costs for remediation.
Various
federal initiatives involve the adoption and use by health care
providers of certain EHR systems and
processes.
The initiatives include, among others, programs that incentivize
physicians and dentists, through MIPS,
to use EHR technology in accordance with certain evolving requirements,
including regarding quality, promoting
interoperability, cost and improvement activities.
Qualification for the MIPS incentive payments requires the use
of EHRs that are certified as having certain capabilities designated
in evolving standards adopted by CMS and the
Office of the National Coordinator for Health Information Technology of HHS (“ONC”).
Certain of our businesses
involve the manufacture and sale of such certified EHR systems and other products
linked to government supported
incentive programs.
In order to maintain certification of our EHR products, we
must satisfy these changing
governmental standards.
If any of our EHR systems do not meet these standards,
yet have been relied upon by
health care providers to receive federal incentive payments, we may be exposed
to risk, such as under federal health
care fraud and abuse laws, including the False Claims Act.
Additionally, effective September 1, 2023, the Office of
the Inspector General (“OIG”) for HHS issued a final rule implementing
civil money penalties for information
blocking as established by the Cures Act.
OIG incorporated regulations published by ONC as the basis for
enforcing information blocking penalties.
Each information blocking violation carries up to a $1 million penalty.
Moreover, in order to satisfy our customers, and comply with evolving legal requirements, our products
may need
to incorporate increasingly complex functionality, such as with respect to reporting and information blocking.
Although we believe we are positioned to accomplish this, the effort may involve
increased costs, and our failure to
implement product modifications, or otherwise satisfy applicable standards,
could have a material adverse effect on
our business.
Other health information standards, such as regulations under HIPAA, establish standards regarding electronic
health data transmissions and transaction code set rules for specific electronic
transactions, such as transactions
involving claims submissions to third party payers.
Failure to abide by these and other electronic health data
transmission standards could expose us to breach of contract claims,
substantial fines, penalties, and other liabilities
and expenses, costs for remediation and harm to our reputation.
Additionally, as electronic medical devices are increasingly connected to each other and to other technology, the
ability of these connected systems to safely and effectively exchange and use exchanged
information becomes
increasingly important.
As a medical device manufacturer, we must manage risks including those associated with
an electronic interface that is incorporated into a medical device.
There may be additional legislative or regulatory initiatives in the future impacting
health care.
E-Commerce
Electronic commerce solutions have become an integral part of traditional health
care supply and distribution
relationships.
Our distribution business is characterized by rapid technological
developments and intense
competition.
The continuing advancement of online commerce requires
us to cost-effectively adapt to changing
technologies, to enhance existing services and to develop and introduce a
variety of new services to address the
changing demands of consumers and our customers on a timely basis, particularly
in response to competitive
offerings.
Through our proprietary, technologically-based suite of products, we offer customers a variety of competitive
alternatives.
We
believe that our tradition of reliable service, our name recognition
and large customer base built
on solid customer relationships, position us well to participate in
this significant aspect of the distribution business.
We
continue to explore ways and means to improve and expand our online
presence and capabilities, including our
online commerce offerings and our use of various social media outlets.
International Transactions
United States and foreign import and export laws and regulations require us to
abide by certain standards relating to
the importation and exportation of products.
We
also are subject to certain laws and regulations concerning the
conduct of our foreign operations, including the U.S. Foreign Corrupt Practices
Act, the U.K. Bribery Act, German
anti-corruption laws and other anti-bribery laws and laws pertaining
to the accuracy of our internal books and
records, as well as other types of foreign requirements similar to those
imposed in the United States.
While we believe that we are substantially compliant with the foregoing laws
and regulations promulgated
thereunder and possess all material permits and licenses required for the conduct
of our business, there can be no
assurance that laws and regulations that impact our business or laws and
regulations as they apply to our customers’
practices will not have a material adverse effect on our business.
See “
” for a discussion of additional burdens, risks and regulatory developments
that may
affect our results of operations and financial condition.
Proprietary Rights
We hold trademarks relating to the “Henry Schein
®
” name and logo, as well as certain other trademarks.
We intend
to protect our trademarks to the fullest extent practicable.
Employees and Human Capital
Henry Schein has a long, rich history of a purpose-driven model that engages
our five key stakeholders – our
supplier partners, customers, our employees, who are referred to as Team Schein Members (“TSMs”), stockholders
and society at large – of our Mosaic of Success to drive sustained, long-term economic
success while also creating
shared value for society.
Through our strong values-based culture, our sustainability
approach and environmental,
social, and governance (“ESG”) efforts integrates our sense of purpose into the way we operate our
business so that
we can “do well by doing good” for a healthier planet and healthier people.
Overseen by the Nominating and
Governance Committee of our Board of Directors (“Board”) with the Compensation
Committee also playing a role
in ESG matters related to human capital engagement and executive
compensation, some key 2023 highlights related
to human capital matters include:
continuing to evaluate our pay equity analysis for the majority of
the U.S. workforce, which reviews
compensation across gender and ethnic groups for equity and fairness;
expanding our Diversity and Inclusion (“D&I”) learning journey by educating TSMs
on key D&I
topics; and
continuing to drive a culture of wellness and engagement for our TSMs by
fostering an environment
where they can feel engaged, included and psychologically safe.
At Henry Schein, our employees are our greatest asset.
We employ more than 25,000 people, approximately 55%
of our workforce is based in the United States and approximately 45%
is based outside of the United States.
Approximately 14% of our employees are subject to collective bargaining agreements.
We believe that our
relations with our employees are excellent.
Our TSMs are the cornerstone of the Company.
We provide a connected and caring community that invests in the
career journey of our TSMs and encourages their contribution to
our mission of making the world healthier.
Our
TSM experience strategy is centered around our Team Schein Values,
or the guiding principles and shared
responsibilities of Henry Schein and its TSMs.
We know our business success is built on the engagement and
commitment of our team, which is dedicated to meeting the needs of their
fellow TSMs, our customers, supplier
partners, stockholders and society.
We recognize the changes in how and where we work, and the expectations of our team members to still feel
connected to our values-based culture.
Throughout 2023, we rolled out a continuous listening program
that used
various vehicles, including The Pulse Global Culture Survey and TSM
roundtables, to garner feedback from our
TSMs on their employee experience.
The Pulse Global Culture Survey was redesigned in 2023 to measure
scores
aligned to our Team Schein Values
- and we received good or excellent scores in all values.
The feedback showed
us that TSMs overall enjoy working for the Company and intend
to stay, mainly driven by our values-based culture
and providing TSMs with a sense of purpose, a meaningful experience
and an overall positive work environment.
However, there are also areas of opportunity, which include a focus on reducing burnout and stress, and providing
more opportunities for career mobility.
This feedback is shared with our Executive Management Committee
and
Board, both of whom are committed to addressing the identified opportunities.
As part of this commitment, some
highlights in 2023 included:
Community
: Provide opportunities for TSMs to have fun while contributing to an inclusive team
that respects
and supports one another.
Continued focus on creating a diverse and inclusive environment where TSMs
feel a sense of
belonging.
In 2023, Diversity and Inclusion, for the second time, was our
top strength identified in The
Pulse Global Culture Survey.
To guide our efforts and education related to D&I, our Diversity and
Inclusion Council, with engagement from our Board and Executive
Management Committee, drives the
Company’s overall D&I strategy.
To deepen our commitment to D&I across the Company, Global
Directors and Vice Presidents each have a goal tied to their compensation to champion D&I and attend
educational training, and in 2023 we cascaded this goal down
to our U.S. Managers.
We continue to
expand our D&I learning journey, educating TSMs on key D&I topics.
We understand the importance
of ensuring our internal team reflects the diversity of our customers and society
and continue to focus
on this through our talent planning, compensation and recruitment processes
in alignment with our
corporate strategic planning objectives to achieve concrete results.
We continue to publish our United
States Equal Employment Opportunity Commission (“EEOC”) EEO-1
data for the U.S.
Launched Henry Schein Games, a virtual platform with a field-day type event
at various locations that
brought TSMs together through friendly competition by earning
points for their team by engaging in
cultural-related activities and posting photos.
Launched Community Circles, which brought TSMs across the Company
together to connect about
topics, hobbies and activities that they are passionate about.
Hosted Connection Days throughout the globe at Henry Schein facilities, which
were designed to boost
team morale by bringing TSMs together to participate in fun non-work-related
activities at least once
per quarter.
Continued to expand our Employee Resource Groups (“ERGs”), an
inclusive and diverse vehicle for all
TSMs to share, connect, learn and develop both personally and professionally.
Each of our ERGs has a
sponsor from our Executive Management Committee and our Board.
Our CEO engages directly in
many of our ERG programs.
Launched an enhanced Onboarding Program that provides TSMs with
strategic programming to help
ensure a successful start to their careers at Henry Schein.
To help ensure TSMs who are joining the
Company in a remote or hybrid working environment feel connected to
our values-based culture, we
launched a Culture Ambassador Program, which provides new hires with
a mentor for 90 days to walk
through how we live our values and how they can engage.
Caring:
Build a world we want to live in by supporting each other and
the communities in which we live and
work.
Continued to offer a variety of opportunities to volunteer for team-building and engaging
in local
communities in which TSMs live and work, such as through Carry the Load,
the We Care Global
Challenge, Back to School and Holiday Cheer.
Launched a new quarterly campaign to provide opportunities for TSMs
to engage in meaningful
ways that connect back to their own personal purpose, such as helping
the community through
corporate social responsibility activities virtually or in-person.
Enhanced our strategic partnerships with industry associations, customers
and suppliers that
support access to quality health care through various key programs and
initiatives (e.g., Gives Kids
A Smile, Alpha Omega-Henry Schein Cares Holocaust Survivors Oral
Health Program and Release
the Pressure).
Expanded our Steps for Suicide Prevention campaign, which brings TSMs
together to walk for a
cause and provide education.
We also understand the importance of driving a culture of wellness for our own team members
through our Mental Wellness Committee, which is supported by our CEO, Executive Management
Committee and Board.
In 2023, we rolled out a ‘Year of Wellness’
campaign that provided
monthly tips, videos and educational programming to TSMs that focused
on how they may be
feeling that month.
We also launched an education program for managers of TSMs that provided
tactical examples of how to help reduce burnout amongst teams and support
the new way of
working.
Career:
Provide opportunities for TSMs to develop personally and professionally with an emphasis on
embodying our values to achieve our collective goals with excellence
and integrity.
Continued investment in our employees by providing both formal and
informal learning
opportunities focused on growing and enhancing knowledge, skills and abilities
through a
broad suite of professional development training programs for current and
future roles.
In
2023, we saw an increase in participation in our workshops, with TSMs
reporting a high
utilization of skills learned.
Continued expansion of our formal mentorship and coaching programs.
Continued roll-out of talent planning efforts designed to ensure a strong, diverse leadership
pipeline across the organization by strategically identifying and developing talent
through
targeted development opportunities and intentional succession plans.
Information derived from
talent planning efforts informs curriculum design and content to help focus on the
right
capabilities and help ensure alignment of career development efforts with the future
needs of
the organization.
Our Board is provided with periodic updates regarding our talent
and
succession planning efforts and participates in professional development activities
with our
TSMs.
Enhanced company-wide recognitions, including our Teddy Philson Team Schein Award,
which was redesigned in 2023 to provide more visibility and
meaningful recognition to TSMs
who exemplify our Team Schein Values,
as well as other programs including service awards
which highlight TSMs who exemplify our Team Schein Values.
Available Information
We make available free of charge through our Internet website, www.henryschein.com, our annual report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, statements
of beneficial ownership of
securities on Forms 3, 4 and 5 and amendments to these reports and statements
filed or furnished pursuant to
Section 13(a) and Section 16 of the Securities Exchange Act of 1934
as soon as reasonably practicable after such
materials are electronically filed with, or furnished to, the United States
Securities and Exchange Commission, or
SEC.
Our principal executive offices are located at 135 Duryea Road, Melville, New
York
11747, and our
telephone number is (631) 843-5500.
Unless the context specifically requires otherwise, the terms
the “Company,”
“Henry Schein,” “we,” “us” and “our” mean Henry Schein, Inc., a Delaware
corporation, and its consolidated
subsidiaries.
Information about our Executive Officers
The following table sets forth certain information regarding our executive
officers:
Name
Age
Position
Stanley M. Bergman
Chairman, Chief Executive Officer, Director
James P.
Breslawski
Vice Chairman, President, Director
Brad Connett
Chief Executive Officer, North America Distribution Group
Michael S. Ettinger
Executive Vice President and Chief Operating Officer
Lorelei McGlynn
Senior Vice President, Chief Human Resources Officer
Mark E. Mlotek
Executive Vice President, Chief Strategic Officer, Director
Walter Siegel
Senior Vice President and Chief Legal Officer
Ronald N. South
Senior Vice President, Chief Financial Officer
Stanley M. Bergman
has been our Chairman and Chief Executive Officer since 1989 and a director
since 1982.
Mr. Bergman held the position of President from 1989 to 2005.
Mr. Bergman held the position of Executive Vice
President from 1985 to 1989 and Vice President of Finance and Administration from 1980 to 1985.
James P. Breslawski
has been our Vice Chairman since 2018, President since 2005 and a director since 1992.
Mr.
Breslawski was the Chief Executive Officer of our Henry Schein Global Dental
Group from 2005 to 2018.
Mr.
Breslawski held the position of Executive Vice President and President of U.S. Dental from 1990 to 2005, with
primary responsibility for the North American Dental Group.
Between 1980 and 1990, Mr. Breslawski held
various positions with us, including Chief Financial Officer, Vice President of Finance and Administration and
Corporate Controller.
Brad Connett
has been our Chief Executive Officer, North American Distribution Group since 2021.
Previously
Mr. Connett was the President of our U.S. Medical Group from 2018 to 2021.
Mr. Connett joined us in 1997 and
has held a number of roles of increasing responsibility at the Company.
Throughout his career, he has received
numerous industry honors, including the John F. Sasen Leadership Award from the Health Industry Distributors
Association (HIDA), in recognition of his service to the industry, and induction into the Medical Distribution Hall
of Fame by Repertoire Magazine.
Michael S. Ettinger
has been our Executive Vice President and Chief Operating Officer since 2022.
Prior to his
current position, Mr. Ettinger served as Senior Vice President, Corporate & Legal Affairs, Chief of Staff and
Secretary from 2015 to 2022, Senior Vice President, Corporate & Legal Affairs and Secretary from 2013 to 2015,
Corporate Senior Vice President, General Counsel & Secretary from 2006 to 2013, Vice President, General
Counsel and Secretary from 2000 to 2006, Vice President and Associate General Counsel from 1998 to 2000
and
Associate General Counsel from 1994 to 1998.
Before joining us, Mr. Ettinger served as a senior associate with
Bower & Gardner and as a member of the Tax Department at Arthur Andersen.
Lorelei McGlynn
has been our Senior Vice President, Chief Human Resources Officer since 2013.
Since joining
us in 1999, Ms. McGlynn has served as Vice President, Global Human Resources and Financial Operations from
2008 to 2013, Chief Financial Officer, International Group and Vice President of Global Financial Operations from
2002 to 2008 and Vice President, Finance, North America from 1999 to 2002.
Prior to joining us, Ms. McGlynn
served as Assistant Vice President of Finance at Adecco Corporation.
Mark E. Mlotek
has been our Executive Vice President and Chief Strategic Officer since 2012.
Mr. Mlotek was
Senior Vice President and subsequently Executive Vice President of the Corporate Business Development Group
between 2000 and 2012.
Prior to that, Mr. Mlotek was Vice President, General Counsel and Secretary from 1994 to
1999 and became a director in 1995.
Prior to joining us, Mr. Mlotek was a partner in the law firm of Proskauer
Rose LLP,
counsel to us, specializing in mergers and acquisitions, corporate reorganizations and tax law from
1989
to 1994.
Walter Siegel
has been our Senior Vice President and Chief Legal Officer since 2021.
Previously, Mr.
Siegel was
our Senior Vice President and General Counsel from 2013 until 2021.
Prior to joining us, Mr. Siegel was employed
with Standard Microsystems Corporation, a publicly traded global
semiconductor company from 2005 to 2012,
holding positions of increasing responsibility, most recently as Senior Vice President, General Counsel and
Secretary.
Ronald N. South
has been our Senior Vice President
and Chief Financial Officer (and principal financial officer
and principal accounting officer) since 2022.
Prior to holding his current position, Mr. South was our Vice
President Corporate Finance, and Chief Accounting Officer from 2013 until 2022.
Prior to joining us in 2008 as
our Vice President, Corporate Finance, Mr. South held leadership roles at Bristol-Myers Squibb, where he served as
Vice President, Finance, for the Cardiovascular and Metabolic business lines, as well as Vice President, Controller,
for its U.S. Pharmaceutical Division, and Vice President, Corporate General Auditor.
Prior to Bristol-Myers
Squibb, he served as North American Director of Corporate Audit at
PepsiCo, and held several roles of increasing
responsibility with PricewaterhouseCoopers LLP, where he advised clients located in the United States, Europe,
and Latin America.
Mr. South is a certified public accountant.
Other Executive Management
The following table sets forth certain information regarding other Executive
Management:
Name
Age
Position
Andrea Albertini
Chief Executive Officer, International Distribution Group
Leigh Benowitz
Senior Vice President and Chief Global Digital Transformation Officer
Trinh Clark
Senior Vice President and Chief Global Customer Experience Officer
James Mullins
Senior Vice President, Global Supply Chain
Kelly Murphy
Senior Vice President and General Counsel
Christopher Pendergast
Senior Vice President and Chief Technology Officer
René Willi, Ph.D.
Chief Executive Officer, Global Oral Reconstruction Group
Andrea Albertini
has been Chief Executive Officer, International Distribution Group since 2023.
Mr. Albertini
joined us in 2013 and has held several positions within the organization including
President, International
Distribution Group, President of our EMEA Dental Distribution Group,
and Vice-President of International Dental
Equipment.
Prior to joining Henry Schein, Mr. Albertini held leadership positions at Cefla Dental Group and
Castellini.
Leigh Benowitz
has been our Senior Vice President and Chief Global Digital Transformation Officer since August
Ms. Benowitz joined us in 2017 and has held several key positions
including Vice President Digital &
Customer Experience and Global eCommerce Platform Digital Transformation Officer.
Prior to joining Henry
Schein, Ms. Benowitz held various positions of increasing responsibility
at Citi.
Trinh Clark
has been our Senior Vice President and Chief Global Customer Experience Officer since August
Ms. Clark joined us in 2007 and has served as Vice President, Technology Enablement, North American
Distribution Group.
Prior to joining Henry Schein, Ms. Clark held various positions of
increasing responsibility at
eSurg.
James Mullins
has been our Senior Vice President of Global Supply Chain since 2018.
Mr. Mullins joined us in
1988 and has held a number of key positions with increasing responsibility, including Global Chief Customer
Service Officer.
Kelly Murphy
has been our Senior Vice President and General Counsel since 2021.
Since joining us in 2011, Ms.
Murphy has held several key positions of increasing responsibility within
the legal function, most recently serving
as Deputy General Counsel.
Christopher Pendergast
has been our Senior Vice President and Chief Technology Officer since 2018.
Prior to
joining us, Mr. Pendergast was employed by VSP Global from 2008 to 2018, most recently as the Chief
Technology Officer and Chief Information Officer.
Prior to VSP Global, Mr. Pendergast served in roles of
increasing responsibility at Natural Organics, Inc., from 2006 to 2008, IdeaSphere Inc./Twinlab Corporation from
2000 to 2006, IBM Corporation from 1987 to 1994 and 1998 to 2000
and Rohm and Haas from 1994 to 1998.
René Willi, Ph.D.
has been our Chief Executive Officer, Global Oral Reconstruction Group since 2021.
Previously, Dr.
Willi was the President of our Global Dental Surgical Group.
Prior to joining Henry Schein, Dr.
Willi held senior level roles with Institut Straumann AG as Executive Vice President, Surgical Business Unit from
2005 to 2013.
Prior to Straumann, he held roles of increasing responsibility
in Medtronic Plc’s cardiovascular
division from 2003 to 2005 and with McKinsey & Company as
a management consultant from 2000 to 2003.
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