Quest Diagnostics DGX

The FDA's regulation of clinical laboratory testing is expected to impact industry practices and participants, new competitors may enter the industry, and competition may come in new forms. As of In May 6, 2024, the FDA announced it was phasing out its general enforcement discretion approach so that LDTs manufactured by a laboratory will would generally fall under the same enforcement approach as medical devices. A number of advanced tests we develop internally are offered as LDTs. Pursuant to However, in March 2025, a U.S. District Court set aside and vacated the FDA’s decision LDT rule and the FDA did not appeal the court’s decision. Accordingly, the FDA does not have the authority to remove enforcement discretion with regard regulate LDTs. However, it is the purvey of Congress to most LDTs performed by high complexity CLIA-certified laboratories like ours, all enact new laws or amendments to CLIA or the Food, Drug and significantly modified previously offered laboratory tests that do not benefit from continued enforcement discretion will have Cosmetic Act. If this were to comply with the FDCA over a four-year, five-stage process. Compliance with the FDCA includes, among other things, new quality system regulations and premarket authorization. One major area of the continued FDA enforcement discretion will apply to many tests that were offered for clinical use prior to May 6, 2024 and that do not afterwards undergo certain material modifications. The removal of enforcement discretion for LDTs could result in a revitalization and passage of legislation or other Congressional action. The current FDA policy to remove enforcement discretion and/or occur, any new legislation is expected to could have a significant impact on us and the clinical laboratory testing industry, including regulating industry. This new legislation could include the regulation of LDTs in new ways, a manner that is different than the prior LDT rule, while creating new avenues of opportunity and competition regarding in clinical laboratory testing. New competitors may enter the industry, and competition may come in new forms.

In November 2023, September 2025, the FASB issued a new accounting standard which will require companies impacts internal-use software accounting by removing all references to disclose significant segment expenses software development project stages such that are regularly provided the guidance is neutral to the chief operating decision maker ("CODM"). different software development methods. The pronouncement is effective for annual filings for the year ended December 31, 2024 2028 and for interim periods within such year. The Company is currently evaluating the year ended December 31, 2025. The adoption impact of this standard did not have a material impact on the Company's results of operations, financial position or cash flows. standard.

The Company also received subpoenas from the U.S. Attorney for the District of New Jersey. Jersey (the “NJ USAO”). The subpoenas seek various records relating to the Company’s relationship with the New York Giants and adherence to certain company policies and federal laws. The Company is cooperating settled the matter with the investigation. NJ USAO and agreed to enter into a Corporate Integrity Agreement with the Office of Inspector General of the United States Department of Health and Human Services. The Company has also received several subpoenas from the New York Attorney General’s Office, and is in the process of responding to them.