QUEST DIAGNOSTICS INC

Our business and operations could be adversely impacted by the FDA's approach to regulation.

The FDA has regulatory responsibility over, among other areas, instruments, software, test kits, reagents and other devices used by clinical laboratories to perform diagnostic testing in the United States. The FDA has publicly asserted authority over laboratory testing (LDTs) since the 1990s. A number of tests we develop internally are offered as LDTs. The FDA has claimed regulatory authority over all LDTs, but has stated that it has exercised enforcement discretion with regard to most LDTs performed by high complexity CLIA-certified laboratories.

As the FDA moves to regulate more clinical laboratory testing, its approach to regulation is expected to impact industry practices and participants, new competitors may enter the industry, and competition may come in new forms. On May 6, 2024, the FDA published a final rule to broaden the definition of medical devices to include diagnostic tests and to regulate the laboratories that develop them. The final rule initiates a four-year period for a five-staged process of compliance with medical device regulations, certain FDA quality system requirements and for any required LDT submissions. We continue to evaluate the final rule and are working to ensure compliance with its requirements. Legal challenges have been made to the final rule that may vacate, change, delay or uphold the final rule. The final rule could also impact a revitalization and passage of legislation that authorizes the FDA to regulate LDTs by amending the Food, Drug and Cosmetic Act. However, the final rule requires compliance until such court determination or passage of such legislation.

The final rule could have a significant impact on the clinical laboratory testing industry, while creating new avenues of opportunity and competition regarding clinical laboratory testing. New competitors may enter the industry, and competition may come in new forms. The final outcome and effects of the final rule on our business are still uncertain and difficult to predict.

The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the second quarter of 2024.

(A)Since the share repurchase program’s inception in May 2003, our Board of Directors has authorized $13 billion of share repurchases of our common stock through June 30, 2024. The share repurchase authorization has no set expiration or termination date.

(B)Includes: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of stock options (granted under the Company’s Amended and Restated Employee Long-Term Incentive Plan) who exercised options; and (2) shares withheld (under the terms of grants under the Amended and Restated Employee Long-Term Incentive Plan) to offset tax withholding obligations that occur upon the delivery of outstanding common shares underlying restricted stock units and performance share units.