We are a global leader in the development, manufacture and sale of healthcare
products for use in clinical and home settings. Our products are found in almost
every hospital in the United States, and we have a significant and growing presence
in non-U.S. markets. Our mission is to create and deliver innovative healthcare
solutions, developed in collaboration with medical professionals, which enhance
the quality of life for patients and improve outcomes for our customers and
our shareholders.
We operate our business through five segments:
• Medical Devices, which includes the development, manufacture and sale of
endomechanical instruments, soft tissue repair products, energy devices, oximetry
and monitoring products, airway and ventilation products, vascular devices,
sharpsafety products, clinical care products and other medical device products;
• Pharmaceutical Products, which includes the development, manufacture and
distribution of dosage pharmaceuticals, active pharmaceutical ingredients and
specialty chemicals;
• Imaging Solutions, which includes the development, manufacture and marketing
of radiopharmaceuticals and contrast products;
• Medical Supplies, which includes the development, manufacture and sale of
nursing care products, medical surgical products, original equipment manufacturer
products (OEM), incontinence products in Europe and other medical supply products;
and
• Retail Products, which includes the development, manufacture and marketing
of infant care products, incontinence products in the United States, feminine
hygiene products and other retail products.
Customers
Our customers include hospitals, surgi-centers, imaging centers, alternate
site facilities, drug manufacturers and major retailers throughout the world.
We often negotiate with GPOs and integrated delivery networks (IDNs), which
enter into supply contracts for the benefit of their member facilities. We serve
customers in over 130 countries and we maintain a strong local presence in each
of the geographic areas in which we operate.
Raw Materials
We use a wide variety of resin, pulp, plastics, textiles and electrical components
for production of our products. We purchase these materials from external suppliers,
some of which are single-source suppliers. We also purchase certain other raw
materials used in the bulk pharmaceutical business from non-U.S. governments
and suppliers that meet U.S. State Department requirements. We purchase materials
from selected suppliers based on quality assurance, cost effectiveness or constraints
resulting from regulatory requirements and work closely with our suppliers to
assure continuity of supply while maintaining high quality and reliability.
Competition
We generally compete in medical device, pharmaceutical and other healthcare
product markets around the world. These global markets are characterized by
continuous change resulting from technological innovations. Our market position
depends on our ability to develop and commercialize products that meet clinician
needs, while offering reliable product quality, cost-effectiveness and dependable
service. Our competitors range from large manufacturers with multiple business
lines, including Johnson & Johnson, Becton Dickinson and C.R. Bard, among
others, to smaller manufacturers that focus on a limited selection of products.
Medical Devices. The medical devices market is highly fragmented and competitive.
According to the International Trade Administration, there are approximately
8,000 companies in the United States operating in the medical devices market.
There is no single company, however, that competes with us over the full breadth
of products offered by our Medical Devices segment. Our competition includes
both diversified healthcare companies, such as Johnson & Johnson, C.R. Bard
and Becton Dickinson, and other companies that are more focused on specific
fields, including Respironics and ConMed.
Pharmaceutical Products. Our major competitors of our active ingredients product
line include Johnson & Johnson, Siegfried and Johnson Matthey, and major
competitors of our dosage product line include Teva, Mylan and Watson. Although
competition is steadily increasing and we expect new entrants into this market,
we believe our ability to meet strict production and licensing requirements
for controlled substances will enable us to compete effectively. Purchasing
decisions in this segment of the industry are based on price and the ability
to ensure a stable and sufficient supply of pharmaceuticals to customers. Our
secure sources of raw opiate material, manufacturing capabilities, comprehensive
generic pain management offering and established relationships with retail pharmacies
enable us to compete effectively against larger generics manufacturers such
as Teva and Watson. In addition, we believe that our experience with the U.S.
Food and Drug Administration (“FDA”) and U.S Drug Enforcement Agency (“DEA”)
provides us with the knowledge to successfully navigate a tightening regulatory
environment.
Imaging Solutions. Our main competitors include GE Healthcare for contrast
and nuclear medicine products, Schering AG and its U.S. affiliate Berlex, as
well as Bracco for contrast agents, and Bristol-Myers Squibb for nuclear medicine
cardiology agents. Cardinal Health is our main competitor for our radiopharmacy
network. Unlike most of our competition, we offer a full line of contrast agents,
contrast delivery systems and radiopharmaceuticals. Our broad product portfolio
allows us to be a complete source for all imaging agent needs.
Medical Supplies. The markets in which our Medical Supplies segment participates
are characterized by strong pricing competition. While customers may choose
our products based upon our reputation for quality, we face strong competition
from low-cost suppliers. Our Medical Supplies segment competes against branded
products, including ones sold by 3M, ConMed and First Quality, as well as private-label
products provided by low-cost suppliers, such as Cardinal and Medline.
Retail Products. The market in which our Retail Products segment participates
is highly competitive, as our private-label products compete directly with national
brands. Our retail competitors include national branded manufacturers, including
Kimberly-Clark, Procter & Gamble and Johnson & Johnson. We also compete
with other private-label producers, such as Arquest and Associated Hygienic
Products. We believe that our high-quality products, product innovation, packaging
solutions and customer service provide us a competitive advantage. However,
we expect continued and severe price pressure in this segment.
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