203077--3/2/2010--ST_JUDE_MEDICAL

related topics

{regulation, government, change}

{product, liability, claim}

{financial, litigation, operation}

{product, market, service}

{customer, product, revenue}

{property, intellectual, protect}

{operation, natural, condition}

{cost, regulation, environmental}

{system, service, information}

{condition, economic, financial}

{operation, international, foreign}

{acquisition, growth, future}

{loss, insurance, financial}

We face intense competition and may not be able to keep pace with the rapid technological changes in the medical devices industry. We are subject to stringent domestic and foreign medical device regulation and any adverse regulatory action may materially adversely affect our financial condition and business operations. If we are unable to protect our intellectual property effectively, our financial condition and results of operations could be adversely affected. Pending and future patent litigation could be costly and disruptive to us and may have an adverse effect on our financial condition and results of operations. Pending and future product liability claims and litigation may adversely affect our financial condition and results of operations. Our product liability insurers may refuse to cover certain losses on the grounds that such losses are outside the scope of our product liability insurance policies or may agree that such losses are covered losses, but may not be able to meet their current or future payment obligations to us. Our self-insurance program may not be adequate to cover future losses. The loss of any of our sole-source suppliers or an increase in the price of inventory supplied to us could have an adverse effect on our business, financial condition and results of operations. Cost containment pressures and domestic and foreign legislative or administrative reforms resulting in restrictive reimbursement practices of third-party payors or preferences for alternate therapies could decrease the demand for products purchased by our customers, the prices which they are willing to pay for those products and the number of procedures using our devices. Our failure to comply with restrictions relating to reimbursement and regulation of healthcare goods and services may subject us to penalties and adversely affect our financial condition and results of operations. Consolidation in the healthcare industry could lead to demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments. Failure to integrate acquired businesses into our operations successfully could adversely affect our business. The success of many of our products depends upon strong relationships with physicians. Instability in international markets or foreign currency fluctuations could adversely affect our results of operations. The medical device industry is the subject of numerous governmental investigations into marketing and other business practices. These investigations could result in the commencement of civil and/or criminal proceedings, substantial fines, penalties and/or administrative remedies, divert the attention of our management and have an adverse effect on our financial condition and results of operations. Regulatory actions arising from the concern over Bovine Spongiform Encephalopathy may limit our ability to market products containing bovine material. We are not insured against all potential losses. Natural disasters or other catastrophes could adversely affect our business, financial condition and results of operations. Our operations are subject to environmental, health and safety laws and regulations that could require us to incur material costs. Failure to successfully implement a new enterprise resource planning (ERP) system could adversely affect our business. The disruption in the global financial markets and the economic downturn may adversely impact the availability and cost of credit and customer purchasing and payment patterns. Our business, financial condition, results of operations and cash flows could be significantly and adversely affected if certain types of healthcare reform programs are adopted and other administration and legislative proposals are enacted into law.

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203077--3/2/2010--ST_JUDE_MEDICAL_INC